POOLING AND SERVICING AGREEMENT
                          Dated as of December 23, 1998

                                     between

                               Marine Midland Bank
                                    (Trustee)

                                       and

                           BUSINESS LOAN CENTER, INC.
                              (Seller and Servicer)




                      Business Loan Center SBA Loan-Backed
                  Adjustable Rate Certificates, Series 1998-1,
                               Class A and Class B


<PAGE>



                                TABLE OF CONTENTS

Section                                                             Page
--------                                                           ------


                                    ARTICLE I


                                   DEFINITIONS


                                   ARTICLE II


                      SALE AND CONVEYANCE OF THE TRUST FUND

Section 2.01  Sale and Conveyance of Trust Fund....................   1
Section 2.02  Possession of SBA Files..............................   1
Section 2.03  Books and Records....................................   1
Section 2.04  Delivery of SBA Loan Documents.......................   2
Section 2.05  Acceptance by Trustee of the Trust Fund;.............   4
Section 2.06  [Intentionally Omitted]..............................   5
Section 2.07  Authentication of Certificates.......................   5
Section 2.08  Fees and Expenses of the Trustee.....................   6
Section 2.09  Sale and Conveyance of the Subsequent SBA Loans......   6
Section 2.10  Optional Purchase of Defaulted SBA Loans.............   8


                                   ARTICLE III


                         REPRESENTATIONS AND WARRANTIES
Section 3.01  Representations of the Seller........................   1
Section 3.02  Individual SBA Loans.................................   4
Section 3.03  Purchase and Substitution of Defective...............   9


                                   ARTICLE IV


                                THE CERTIFICATES
Section 4.01  The Certificates......................................  1
Section 4.02  Registration of Transfer and Exchange of Certificates.  1
Section 4.03  Mutilated, Destroyed, Lost or Stolen Certificates.....  5
Section 4.04  Persons Deemed Owners.................................  5


                                    ARTICLE V


                    ADMINISTRATION AND SERVICING OF SBA LOANS
Section 5.01  Duties of the Servicer................................. 1
Section 5.02  Liquidation of SBA Loans............................... 4


                                       i
<PAGE>

Section 5.03  Establishment of Principal and......................... 5
Section 5.04  Permitted Withdrawals From the......................... 6
Section 5.05  [Intentionally Omitted]................................ 8
Section 5.06  Transfer of Accounts................................... 8
Section 5.07  Maintenance of Hazard Insurance........................ 8
Section 5.08  [Intentionally Omitted]................................ 8
Section 5.09  Fidelity Bond.......................................... 8
Section 5.10  Title,Management and Disposition....................... 9
Section 5.11  [Intentionally Omitted.]...............................10
Section 5.12  Collection of Certain SBA Loan Payments................10
Section 5.13  Access to Certain Documentation and....................10
Section 5.14  Superior Liens.........................................11


                                   ARTICLE VI


                       PAYMENTS TO THE CERTIFICATEHOLDERS
Section 6.01  Establishment of Certificate Account;.................. 1
Section 6.02  Establishment of Spread Account;....................... 2
Section 6.03  Establishment of Expense Account;...................... 3
Section 6.04  Establishment of Pre-Funding Account; Deposits in Pre-
     Funding Account; Permitted Withdrawals from Pre-Funding
     Account......................................................... 5
Section 6.05.  Establishment of Capitalized Interest Account;
     Deposits in Capitalized Interest Account; Permitted
     Withdrawals from Capitalized Interest Account................... 5
Section 6.06  Investment of Accounts................................. 6
Section 6.07  Distributions.......................................... 7
Section 6.08  [Intentionally Omitted]................................ 8
Section 6.09  Statements............................................. 9
Section 6.10  Advances by theServicer................................11
Section 6.11  Compensating Interest..................................12
Section 6.12  Reports of Foreclosure and Abandonment.................12


                                   ARTICLE VII


                           GENERAL SERVICING PROCEDURE
Section 7.01  [Omitted].............................................. 1
Section 7.02  Satisfaction of Mortgages and Collateral............... 1
Section 7.03  Servicing Compensation................................. 2
Section 7.04  Annual Statement as to Compliance...................... 2
Section 7.05  Annual Independent Public.............................. 3
Section 7.06  SBA's, and Trustee's Right to Examine.................. 3
Section 7.07  Reports to the Trustee; Principal and
     Interest Account Statements..................................... 3
Section 7.08  Premium Protection Fee and Servicing Fee............... 4


                                       ii
<PAGE>

                                  ARTICLE VIII


                       REPORTS TO BE PROVIDED BY SERVICER
Section 8.01  Financial Statements................................... 1


                                   ARTICLE IX


                                  THE SERVICER
Section 9.01  Indemnification; Third Party Claims.................... 1
Section 9.02  Merger or Consolidation of the Servicer................ 2


Section 9.03  Limitation on Liability of the......................... 2
Section 9.04  Servicer Not to Resign................................. 2


                                    ARTICLE X


                                     DEFAULT
Section 10.01  Events of Default..................................... 1
Section 10.02  Trustee to Act; Appointment of Successor.............. 2
Section 10.03  Waiver of Defaults.................................... 4
Section 10.04.  Control by Majority Certificateholders............... 4


                                   ARTICLE XI


                                   TERMINATION
Section 11.01  Termination..........................................  1
Section 11.02  Accounting Upon Termination of Servicer..............  2


                                   ARTICLE XII


                                   THE TRUSTEE
Section 12.01  Duties of Trustee..................................... 1
Section 12.02  Certain Matters Affecting the Trustee................. 2
Section 12.03  Trustee Not Liable for Certificates................... 3
Section 12.04  Trustee May Own Certificates.......................... 4
Section 12.05  Servicer To Pay Trustee's Fees........................ 4
Section 12.06  Eligibility Requirements for Trustee.................. 4
Section 12.07  Resignation and Removal of the Trustee................ 5
Section 12.08  Successor Trustee..................................... 6
Section 12.09  Merger or Consolidation of Trustee.................... 6
Section 12.10  Appointment of Co-Trustee or Separate................. 7
Section 12.11  Authenticating Agent.................................. 8

                                       iii
<PAGE>

Section 12.12  Tax Returns and Reports............................... 9
Section 12.13  Protection of Trust Fund.............................. 9
Section 12.14  Representations, Warranties and Covenants of Trustee..10

                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS
Section 13.01  Acts of Certificateholders...........................  1
Section 13.02  Amendment............................................  1
Section 13.03  Recordation of Agreement.............................  2
Section 13.04  Duration of Agreement................................  2
Section 13.05Governing Law..........................................  2
Section 13.06  Notices..............................................  2
Section 13.07  Severability of Provisions...........................  3
Section 13.08  No Partnership.......................................  3
Section 13.09  Counterparts.........................................  3
Section 13.10  Successors and Assigns...............................  3
Section 13.11  Headings.............................................  3
Section 13.12  Paying Agent.........................................  3
Section 13.13  Notification to Rating Agency........................  4
Section 13.14  Third Party Rights...................................  4


                                       iv

<PAGE>


                                                             EXHIBIT INDEX

EXHIBIT A                         Contents of SBA File
EXHIBIT B-1                       Form of Class A Certificate
EXHIBIT B-2                       Form of Class B Certificate
EXHIBIT C                         Principal and Interest Account
                                    Letter Agreement
EXHIBIT D                         [Omitted]
EXHIBIT E                         [Omitted]
EXHIBIT E(1)                      Wiring Instructions Form
EXHIBIT F-1                       Initial Certification
EXHIBIT F-2                       Final Certification
EXHIBIT G                         [Omitted]
EXHIBIT H                         SBA Loan Schedule
EXHIBIT I                         Request for Release of Documents
EXHIBIT J                         Form of Liquidation Report
EXHIBIT K                         Form of Delinquency Report
EXHIBIT L                         Servicer's Monthly Computer Tape Format
EXHIBIT M                         Multi-Party Agreement
EXHIBIT N                         Spread Account Agreement
EXHIBIT O-1                       Form of Transferee Letter
EXHIBIT O-2                       Form of Rule 144A Certification

                                       v
<PAGE>




         Agreement dated as of December 23, 1998 between Marine Midland Bank, as
trustee  (the  "Trustee"),  and  Business  Loan  Center,  Inc.,  as Seller  (the
"Seller") and as Servicer (the "Servicer"):

                              PRELIMINARY STATEMENT

         The Seller,  in the ordinary  course of its  business,  originates  and
acquires  SBA ss. 7(a) Loans (the "SBA ss. 7(a) Loans") to small  businesses  in
compliance  with the  provisions  of the  Small  Business  Act and the rules and
regulations thereunder,  which SBA ss. 7(a) Loans are evidenced by the SBA Notes
in favor of the Seller.

         Pursuant to and in accordance with the provisions of the Small Business
Act and the Loan  Guaranty  Agreement,  a portion of each SBA ss.  7(a) Loan has
been guaranteed by the Small Business Administration (the "SBA").

         The Seller has  previously  sold the  Guaranteed  Interest  (as defined
herein) in the SBA ss. 7(a) Loans to certain  Registered Holders pursuant to SBA
Form 1086 Agreements  between such Registered  Holders,  the SBA and the Seller.
The  parties  hereto  acknowledge  that the SBA is the  party in  interest  with
respect to the Guaranteed Interest.

         Pursuant to and in accordance with policies of the SBA, the Servicer is
required to retain a portion of the interest received on the Guaranteed Interest
of each SBA ss.  7(a) Loan sold to the Trust Fund (such  portion,  the  "Premium
Protection Fee").

         To facilitate the sale of the Unguaranteed  Interest (as defined below)
in the SBA ss.7(a) Loans, net of the Servicing Fee, and the servicing of the SBA
Loans by the  Servicer,  the  Seller and the  Servicer  are  entering  into this
Agreement with the Trustee. The Seller is transferring the Unguaranteed Interest
in  the  SBA  Loans  to  the  Trustee  for  the  benefit  of  the  SBA  and  the
Certificateholders  under this  Agreement,  pursuant to which  Certificates  are
being  issued,  denominated  on the face  thereof as  Business  Loan  Center SBA
Loan-Backed  Adjustable Rate Certificates,  Series 1998-1,  Class A and Class B,
representing in the aggregate a 100% undivided  beneficial ownership interest in
the right to receive the principal portion of the Unguaranteed  Interests of the
SBA Loans together with interest thereon at the then applicable Class A or Class
B Remittance Rate, as the case may be. The Unguaranteed  Interest of the Initial
SBA Loans have an aggregate  outstanding  principal balance of $21,431,228.10 as
of  December  23,  1998 (the  "Cut-Off  Date"),  after  application  of payments
received by the Servicer on or before such date.

         The parties hereto agree as follows:


<PAGE>


                                      I-22
                                    ARTICLE I

                                   DEFINITIONS

         Whenever  used herein,  the  following  words and  phrases,  unless the
context otherwise requires,  shall have the following  meanings.  This Agreement
relates  to a Trust Fund  evidenced  by  Business  Loan  Center SBA  Loan-Backed
Adjustable  Rate  Certificates,  Series  1998-1,  Class A and  Class  B.  Unless
otherwise  provided,  all  calculations  of interest  pursuant to this Agreement
including,  but not  limited  to, the Class A and Class B Interest  Distribution
Amounts, are based on a 360-day year and twelve 30-day months.

         ACCOUNT:  The  Certificate  Account,  the  Pre-Funding  Account and the
Capitalized  Interest Account  established by the Trustee for the benefit of the
Certificateholders;  the  Expense  Account  established  by the  Trustee for the
benefit of the  Trustee;  and the  Spread  Account  held by the  Spread  Account
Custodian pursuant to the Spread Account Agreement.  The Trustee's obligation to
establish and maintain the Certificate Account is not delegable.

         ACCOUNT NUMBER:  The number assigned to each SBA Loan by the Seller, as
set forth in Exhibit H hereto.

         ACCOUNT PROPERTY:  Has the meaning set forth in Section 3 of the Spread
Account Agreement.

         ADDITION  NOTICE:  With respect to the transfer of Subsequent SBA Loans
to the Trust Fund pursuant to Section 2.09 herein,  notice, which shall be given
not later than three  Business  Days prior to the  related  Subsequent  Transfer
Date,  of the Seller's  designation  of  Subsequent  SBA Loans to be sold to the
Trust Fund and the aggregate Principal Balance of such Subsequent SBA Loans.

         ADDITIONAL  FEE: With respect to each  Additional Fee SBA Loan, the fee
payable to the SBA by the Seller equal to 40 basis points or 50 basis points per
annum, as the case may be, on the outstanding balance of the Guaranteed Interest
of such Additional Fee SBA Loan.

         ADDITIONAL  FEE SBA LOAN:  An SBA ss.  7(a) Loan sold in the  secondary
market on or after  September  1, 1993 (unless the related SBA ss. 7(a) Loan was
approved  by the SBA on or after  October  12,  1995),  for  which  the  related
Additional Fee is 40 basis points per annum, or an SBA ss. 7(a) Loan approved by
the SBA on or after October 12, 1995  (regardless  of whether it was sold in the
secondary  market),  for which the related Additional Fee is 50 basis points per
annum.

         ADJUSTED  CLASS A INTEREST  DISTRIBUTION  AMOUNT:  With respect to each
Remittance  Date,  the product of (A) the aggregate  amount of interest  payable
with respect to each SBA Loan in accordance with its terms,  net of the interest
payable to the Registered Holder, the Premium Protection Fee, the Excess Spread,
the Servicing Fee, the FTA's Fee, the Additional Fee, the Extra Interest and the


                                      1-1
<PAGE>

Annual  Expense  Escrow  Amount  allocable  to  such  interest  (plus,  for  the
Remittance  Dates  occurring in January 1999,  February 1999 and March 1999, any
amounts  transferred from the Pre-Funding  Account and the Capitalized  Interest
Account for such  Remittance  Date to be applied as a payment of interest on the
Certificates)  and (B) a  fraction,  the  numerator  of which is the amounts set
forth in clauses (i) and (ii) of the definition of Class A Interest Distribution
Amount with respect to such Remittance Date, and the denominator of which is the
sum of the amounts set forth in clauses (i) and (ii) of the  definition of Class
A Interest Distribution Amount and the amounts set forth in clauses (i) and (ii)
of the definition of Class B Interest  Distribution Amount, each with respect to
such Remittance Date.

         ADJUSTED  CLASS B INTEREST  DISTRIBUTION  AMOUNT:  With respect to each
Remittance  Date,  the product of (A) the aggregate  amount of interest  payable
with respect to each SBA Loan in accordance with its terms,  net of the interest
payable to the Registered Holder, the Premium Protection Fee, the Excess Spread,
the Servicing Fee, the FTA's Fee, the Additional Fee, the Extra Interest and the
Annual  Expense  Escrow  Amount  allocable  to  such  interest  (plus,  for  the
Remittance  Dates  occurring in January 1999,  February 1999 and March 1999, any
amounts  transferred from the Pre-Funding  Account and the Capitalized  Interest
Account for such  Remittance  Date to be applied as a payment of interest on the
Certificates)  and (B) a  fraction,  the  numerator  of which is the amounts set
forth in clauses (i) and (ii) of the definition of Class B Interest Distribution
Amount with respect to such Remittance Date, and the denominator of which is the
sum of the amounts set forth in clauses (i) and (ii) of the  definition of Class
A Interest Distribution Amount and the amounts set forth in clauses (i) and (ii)
of the definition of Class B Interest  Distribution Amount, each with respect to
such Remittance Date.

         ADJUSTED  SBA LOAN  REMITTANCE  RATE:  With  respect to any SBA Loan, a
percentage  per  annum  equal  to the sum of (i) the  then  applicable  weighted
average Class A and Class B Remittance Rates and (ii) 0.05% per annum,  relating
to the Annual Expense Escrow Amount.

         ADJUSTMENT  DATE:  For  the  Interest  Accrual  Periods  commencing  in
February,  March and April,  the Adjustment Date shall be the first Business Day
of the preceding  January.  For the Interest Accrual Periods  commencing in May,
June and  July,  the  Adjustment  Date  shall be the first  Business  Day of the
preceding  April.  For  the  Interest  Accrual  Periods  commencing  in  August,
September and October,  the  Adjustment  Date shall be the first Business Day of
the preceding  July. For the Interest  Accrual  Periods  commencing in November,
December and January, the Adjustment Date shall be the first Business Day of the
preceding October.  However,  for the January 1999 Remittance Date,  interest on
the Class A and Class B  Certificates  will accrue  based upon the Prime Rate in
effect on the first Business Day of December, 1998.

         AGGREGATE  CLASS A  CERTIFICATE  PRINCIPAL  BALANCE:  As of any date of
determination,  the Original Class A Certificate  Principal Balance less the sum
of all  amounts  previously  distributed  to the Class A  Certificateholders  in
respect of principal.

         AGGREGATE  CLASS B  CERTIFICATE  PRINCIPAL  BALANCE:  As of any date of
determination,  the Original Class B Certificate  Principal Balance less the sum
of all  amounts  previously  distributed  to the Class B  Certificateholders  in
respect of principal.

                                      1-2
<PAGE>

          AGREEMENT:  This Pooling and Servicing  Agreement  and all  amendments
hereof and supplements hereto.

          ANNUAL  EXPENSE  ESCROW  AMOUNT:  $7,500 per annum plus  out-of-pocket
expenses (estimated to be approximately $300 per annum).

          ASSIGNMENT  OF MORTGAGE:  With respect to those SBA Loans secured by a
Mortgaged  Property,  an  assignment  of the  Mortgage,  notice of  transfer  or
equivalent  instrument sufficient under the laws of the jurisdiction wherein the
related  Mortgaged  Property is located to reflect of record the transfer of the
related SBA Loan to the Trustee subject to the Multi-Party Agreement.

          AUTHENTICATING AGENT:  Initially,  Marine Midland Bank and thereafter,
any successor appointed pursuant to Section 12.11.

         AVAILABLE  FUNDS:  With respect to each Remittance Date, the sum of (i)
the  Unguaranteed  Percentage  of all  amounts  received  from any source by the
Servicer or any  Subservicer  during the  preceding  calendar  month  (including
Excess  Spread) with respect to principal  and interest on the SBA Loans (net of
the amount payable to the Registered  Holders,  the Premium  Protection Fee, the
FTA's Fee, the  Additional  Fee, and the  Servicing  Fee),  (ii) advances by the
Servicer,  (iii)  amounts to be  transferred  from the  Pre-Funding  Account and
Capitalized Interest Account with respect to the January 1999, February 1999 and
March 1999  Remittance  Dates,  (iv) amounts in the Spread  Account and (v) with
respect to the First Remittance Date, the Initial Certificate Deposit Amount.

         BIF:  The Bank Insurance Fund, or any successor thereto.

         BUSINESS  DAY:  Any day other than (i) a Saturday or Sunday,  or (ii) a
day on which  banking  institutions  in the States of New York or  Delaware  are
authorized or obligated by law or executive order to be closed.

         CAPITALIZED INTEREST ACCOUNT:  As described in Section 6.05.

         CAPITALIZED INTEREST REQUIREMENT:  With respect to the Remittance Dates
in January  1999,  February 1999 and March 1999,  the excess,  if any, of (i) 30
days'  interest (or, with respect to the  Remittance  Date in January 1999,  the
actual number of days from the Closing Date to but not including such Remittance
Date) calculated at the weighted average Class A and Class B Remittance Rates on
the  excess  of (a) the  Aggregate  Class A and  Class B  Certificate  Principal
Balances for such Remittance Date over (b) the aggregate  Principal  Balances of
the SBA Loans for such Remittance Date over (ii) any Pre-Funding  Earnings to be
transferred  to the  Certificate  Account on such  Remittance  Date  pursuant to
Section 6.04(d).

                                      1-3
<PAGE>

         CERTIFICATE:  Any  Class  A or  Class  B  Certificate  executed  by the
Servicer  and  authenticated  by  the  Trustee  or  the   Authenticating   Agent
substantially in the form annexed hereto as Exhibits B-1 and B-2.

         CERTIFICATE ACCOUNT:  As described in Section 6.01.

         CERTIFICATEHOLDER  or  HOLDER:  Each  Person in whose name a Class A or
Class B  Certificate  is registered in the  Certificate  Register,  except that,
solely  for the  purposes  of giving  any  consent,  waiver,  request  or demand
pursuant  to this  Agreement,  any  Certificate  registered  in the  name of the
Seller, the Servicer,  any Subservicer or any affiliate of any of them, shall be
deemed not to be outstanding  and the undivided  Percentage  Interest  evidenced
thereby  shall not be taken into account in  determining  whether the  requisite
percentage of Certificates necessary to effect any such consent, waiver, request
or demand has been obtained.

         CERTIFICATE REGISTER:  As described in Section 4.02.

         CERTIFICATE REGISTRAR:  Initially, Marine Midland Bank, and thereafter,
any successor appointed pursuant to Section 4.02.

         CLASS A  CARRY-FORWARD  AMOUNT:  The  amount,  if any, by which (i) the
Class A Principal  Distribution Amount with respect to any preceding  Remittance
Date exceeded (ii) the amount of the actual principal  distribution to the Class
A Certificates on such Remittance Date.

         CLASS  A   CERTIFICATE:   A  Certificate   denominated  as  a  Class  A
Certificate.

         CLASS A CERTIFICATEHOLDER:  A holder of a Class A Certificate.

         CLASS A INTEREST  DISTRIBUTION  AMOUNT: With respect to each Remittance
Date,  the sum of (i) the  interest  accrued  for the related  Interest  Accrual
Period at the then  applicable  Class A Remittance Rate on the Aggregate Class A
Certificate  Principal Balance outstanding  immediately prior to such Remittance
Date and (ii) the amount of the  shortfall,  if any,  of the  interest  that the
Class A Certificates were entitled to receive on a preceding Remittance Date but
did not receive plus interest  thereon at the then applicable Class A Remittance
Rate compounded monthly;  provided,  however, that on each Remittance Date after
the first Remittance Date the amount set forth in Clause (i) of Class A Interest
Distribution Amount will be increased or decreased, as the case may be, to equal
the Adjusted Class A Interest Distribution Amount for such Remittance Date.

          CLASS A  PERCENTAGE:  With  respect  to  each  Remittance  Date,  92%,
representing  the beneficial  ownership  interest of the Class A Certificates in
the Trust Fund.

         CLASS A PRINCIPAL  DISTRIBUTION AMOUNT: With respect to each Remittance
Date, the Class A Percentage multiplied by the sum of, without duplication,  (i)
the Unguaranteed Percentage of all payments and other recoveries of principal of


                                      1-4
<PAGE>

an SBA Loan  (net of  amounts  reimbursable  to the  Servicer  pursuant  to this
Agreement)  received  by the  Servicer  or any  Subservicer  in the  related Due
Period,  excluding  amounts  received  relating  to SBA  Loans  which  have been
delinquent 24 months or have been determined to be uncollectible, in whole or in
part,  by the  Servicer to the extent that the Class A  Certificateholders  have
previously  received the Class A Percentage of the Principal Balance of such SBA
Loans;  (ii)  the  principal  portion  of  any  Unguaranteed  Interest  actually
purchased  by the Seller for breach of a  representation  and  warranty or other
defect and  actually  received by the  Trustee as of the  related  Determination
Date; (iii) any Substitution Adjustments deposited in the Principal and Interest
Account  and  transferred  to  the   Certificate   Account  as  of  the  related
Determination Date; (iv) the Unguaranteed  Percentage of all losses on SBA Loans
which were finally  liquidated  during the  applicable  Due Period;  and (v) the
Unguaranteed  Percentage of the then  outstanding  principal  balance of any SBA
Loan which,  as of the first day of the related Due Period,  has been delinquent
24 months or has been  determined to be  uncollectible,  in whole or in part, by
the Servicer and (vi) the amount, if any, released from the Pre-Funding  Account
on the January 1999, February 1999 and March 1999 Remittance Dates.

         CLASS A REMITTANCE  RATE:  During the initial  Interest  Accrual Period
6.75% per annum.  During each subsequent Interest Accrual Period, the Prime Rate
in effect on the preceding Adjustment Date minus 1.00% per annum.

         CLASS B  CARRY-FORWARD  AMOUNT:  The  amount,  if any, by which (i) the
Class B Principal  Distribution Amount with respect to any preceding  Remittance
Date exceeded (ii) the amount of the actual principal  distribution to the Class
B Certificates on such Remittance Date.

         CLASS B CARRY-FORWARD  INTEREST AMOUNT: For the Class B Certificates on
any Remittance  Date, an amount equal to the product of (i) the Class B Interest
Distribution  Amount  for  such  Remittance  Date  times  (ii) a  fraction,  the
numerator  of  which  is the  Class  B  Carry-Forward  Amount  for  the  Class B
Certificates  and the  denominator of which is the Aggregate Class B Certificate
Principal Balance.

          CLASS  B  CERTIFICATE:   A  Certificate   denominated  as  a  Class  B
Certificate.

         CLASS B CERTIFICATEHOLDER:  A holder of a Class B Certificate.

         CLASS B INTEREST  DISTRIBUTION  AMOUNT: With respect to each Remittance
Date,  the sum of (i) the  interest  accrued  for the related  Interest  Accrual
Period at the then  applicable  Class B Remittance Rate on the Aggregate Class B
Certificate  Principal Balance outstanding  immediately prior to such Remittance
Date and (ii) the amount of the  shortfall,  if any,  of the  interest  that the
Class B Certificates were entitled to receive on a preceding Remittance Date but
did not receive plus interest  thereon at the then applicable Class B Remittance
Rate compounded monthly;  provided,  however, that on each Remittance Date after
the first Remittance Date the amount set forth in Clause (i) of Class B Interest
Distribution Amount will be increased or decreased, as the case may be, to equal
the Adjusted Class B Interest Distribution Amount for such Remittance Date.

                                      1-5
<PAGE>

          CLASS  B  PERCENTAGE:  With  respect  to  each  Remittance  Date,  8%,
representing  the beneficial  ownership  interest of the Class B Certificates in
the Trust Fund.

         CLASS B PRINCIPAL  DISTRIBUTION AMOUNT: With respect to each Remittance
Date, the Class B Percentage multiplied by the sum of, without duplication,  (i)
the Unguaranteed Percentage of all payments and other recoveries of principal of
an SBA Loan  (net of  amounts  reimbursable  to the  Servicer  pursuant  to this
Agreement)  received  by the  Servicer  or any  Subservicer  in the  related Due
Period,  excluding  amounts  received  relating  to SBA  Loans  which  have been
delinquent 24 months or have been determined to be uncollectible, in whole or in
part,  by the  Servicer to the extent that the Class B  Certificateholders  have
previously  received the Class B Percentage of the Principal Balance of such SBA
Loans;  (ii)  the  principal  portion  of  any  Unguaranteed  Interest  actually
purchased  by the Seller for breach of a  representation  or  warranty  or other
defect and  actually  received by the  Trustee as of the  related  Determination
Date; (iii) any Substitution Adjustments deposited in the Principal and Interest
Account  and  transferred  to  the   Certificate   Account  as  of  the  related
Determination Date; (iv) the Unguaranteed  Percentage of all losses on SBA Loans
which were finally  liquidated  during the  applicable  Due Period;  and (v) the
Unguaranteed  Percentage of the then  outstanding  principal  balance of any SBA
Loan which,  as of the first day of the related Due Period,  has been delinquent
24 months or has been  determined to be  uncollectible,  in whole or in part, by
the Servicer, and (vi) the amount, if any, released from the Pre-Funding Account
on the January 1999, February 1999 and March 1999 Remittance Dates.

         CLASS B REMITTANCE  RATE:  During the initial  Interest  Accrual Period
6.95% per annum.  During each subsequent Interest Accrual Period, the Prime Rate
in effect on the preceding Adjustment Date minus 0.80% per annum.

         CLOSING DATE:  December 30,  1998

         CODE: The Internal  Revenue Code of 1986, as amended,  or any successor
legislation thereto.

         COLLATERAL:  All items of property  (including  a Mortgaged  Property),
whether real or personal,  tangible or intangible,  or otherwise,  pledged by an
Obligor or others to a Seller (including guarantees on behalf of the Obligor) to
secure payment under an SBA Loan.

         COMMERCIAL PROPERTY: Real property (other than agricultural property or
Residential  Property)  that  generally is used by the Obligor in the conduct of
its business.

         COMPENSATING INTEREST:  As defined in Section 6.11.

         CONFIDENTIAL  PLACEMENT MEMORANDUM:  The Confidential Private Placement
Memorandum dated December 28, 1998 prepared by the Seller in connection with the
offer and sale of the Class A Certificates.

                                      1-6
<PAGE>

         CORPORATE TRUST OFFICE: The principal office of the Trustee at which at
any particular  time its corporate  trust business shall be  administered  which
office at the date of the  execution  of this  Agreement  is  located  at Marine
Midland Bank,  140 Broadway,  New York,  New York 10005,  12th Floor,  Attention
Corporate  Trust  Department  or at any other time at such other  address as the
Trustee may designate from time to time by notice to the parties hereto.

         CURTAILMENT:  With  respect to an SBA Loan,  any  payment of  principal
received  during a Due  Period  as part of a  payment  that is in excess of five
times the amount of the Monthly Payment due for such Due Period and which is not
intended to satisfy the SBA Loan in full, nor is intended to cure a delinquency.

         CUT-OFF DATE:  December 23, 1998.

         DEFINITIVE   CERTIFICATES:   Certificates   of  any  Class   issued  in
definitive,  full  registered,  certificated  form without  interest  coupons in
minimum  denominations of $100,000 and integral multiples of $1,000 in excess of
such minimum amount.

         DEFAULTED SBA LOAN:  Any SBA Loan as to which the Obligor has failed to
make payment in full of three or more consecutive Monthly Payments.

         DELETED SBA LOAN:  An SBA Loan replaced by a Qualified  Substitute  SBA
Loan.

         DESIGNATED  DEPOSITORY  INSTITUTION:  With respect to the Principal and
Interest  Account,  or items of Account  Property held in deposit  accounts,  an
entity which is an  institution  whose deposits are insured by either the BIF or
SAIF administered by the FDIC, the unsecured and uncollateralized long-term debt
obligations  of which  shall be rated A or better by the Rating  Agency or A1 by
the Rating Agency,  and which is either (i) a federal savings  association  duly
organized, validly existing and in good standing under the federal banking laws,
(ii) an institution duly organized,  validly existing and in good standing under
the applicable banking laws of any state,  (iii) a national banking  association
duly organized,  validly existing and in good standing under the federal banking
laws,  or (iv) a principal  subsidiary of a bank holding  company,  in each case
acting or  designated  by the  Servicer as the  depository  institution  for the
Principal and Interest Account.

          DETERMINATION DATE: That day of each month which is the third Business
Day prior to the Remittance Date.

          DUE DATE:  The day of the month on which the  Monthly  Payment  is due
from the Obligor on an SBA Loan.

          DUE PERIOD:  With respect to each Remittance  Date, the calendar month
preceding the month in which such Remittance Date occurs.

         ERISA: The Employee Retirement Income Security Act of 1974, as amended,
or any successor legislation thereto.

                                      1-7
<PAGE>

         EVENT OF DEFAULT:  As described in Section 10.01.

         EXCESS PAYMENTS:  With respect to a Due Period, any amounts received on
an SBA Loan in excess of the  Monthly  Payment  due on the Due Date  relating to
such Due Period which does not  constitute  either a Curtailment  or a Principal
Prepayment or a payment with respect to an overdue  amount.  Excess Payments are
payments of principal for purposes of this Agreement.

         EXCESS  PROCEEDS:  As of  any  Remittance  Date,  with  respect  to any
Liquidated SBA Loan, the excess,  if any, of (a) the Unguaranteed  Percentage of
the total Net Liquidation Proceeds,  over (b) the Unguaranteed Percentage of the
Principal  Balance  of such  SBA Loan as of the  date  such  SBA  Loan  became a
Liquidated  SBA  Loan  plus 30 days  interest  thereon  at the  then  applicable
Adjusted SBA Loan Remittance Rate; provided,  however, that such excess shall be
reduced by the amount by which interest accrued on the advance,  if any, made by
the Servicer at the related SBA Loan Interest  Rate(s) exceeds  interest accrued
on such  advance at the then  applicable  weighted  average  Class A and Class B
Remittance Rates.

         EXCESS SPREAD: With respect to any Remittance Date, the amount, if any,
by which (i) the interest  collected by the Servicer or any  Subservicer  on the
principal  portion of the  Guaranteed  Interest of each SBA ss.7(a) Loan exceeds
(ii) the sum of (a) the interest payable to the Registered Holder, (b) the FTA's
Fee, (c) the Premium  Protection Fee, (d) with respect to the Additional Fee SBA
Loans,  the Additional Fee and (e) the Servicing Fee allocable to the Guaranteed
Interest.

         EXPENSE ACCOUNT:  The expense account established and maintained by the
Trustee in accordance with Section 6.03 hereof.

         EXTRA INTEREST: With respect to each SBA Loan, for each Remittance Date
the product of (i) the principal  portion of the  Unguaranteed  Interest of such
SBA Loan for such Remittance Date and (ii)  one-twelfth of the applicable  Extra
Interest Percentage.

         EXTRA INTEREST PERCENTAGE: With respect to each SBA Loan, the excess of
(i) the SBA Loan  Interest  Rate that would be in effect for such SBA Loan as of
the Cut-Off Date without giving effect to any applicable lifetime floors or caps
over (ii) the sum of the rates used in  determining  the  Servicing  Fee and the
Annual  Expense Escrow Amount and 6.766% per annum (i.e.,  the initial  weighted
average  Class A and  Class B  Remittance  Rates  without  giving  effect to any
applicable lifetime floors or caps on the SBA Loans).

         FDIC:  The Federal  Deposit  Insurance  Corporation  and any  successor
thereto.

         FHLMC:  The Federal Home Loan  Mortgage  Corporation  and any successor
thereto.

         FIDELITY BOND:  As described in Section 5.09.

         FNMA:  The Federal  National  Mortgage  Association  and any  successor
thereto.

                                      1-8
<PAGE>

         FORECLOSED PROPERTY:  As described in Section 5.10.

         FORECLOSED  PROPERTY  DISPOSITION:  The  final  sale  of  a  Foreclosed
Property acquired in foreclosure or by deed in lieu of foreclosure. The proceeds
of any  Foreclosed  Property  Disposition  constitute  part of the definition of
Liquidation Proceeds.

         FTA:  Colson Services Corp., in its capacity as the Fiscal and Transfer
Agent of the SBA under  the  Multi-Party  Agreement,  or any  successor  thereto
appointed by the SBA.

         FTA'S FEE: With respect to the Guaranteed Interest of each SBA ss. 7(a)
Loan sold into the  secondary  market,  the  monthly  fee  payable to the FTA in
accordance with Form 1086 and the SBA Rules and Regulations.

         FUNDING PERIOD: The period commencing on the Closing Date and ending on
the  earliest  to occur of (i) the date on which the  amount on  deposit  in the
Pre-Funding  Account is less than  $100,000,  (ii) the date on which an Event of
Default occurs or (iii) at the close of business on March 26, 1999.

         GUARANTEED INTEREST:  As to any SBA ss. 7(a) Loan, the right to receive
the guaranteed  portion of the principal  balance thereof together with interest
thereon at the then applicable SBA Loan Interest Rate.  Certificateholders  have
no right or interest in the Guaranteed Interest.

         INDIVIDUAL  CERTIFICATE:  Any  Certificate  registered in the name of a
holder.

         INITIAL CERTIFICATE DEPOSIT AMOUNT: A deposit of $64,484.18 required to
be    made     by    the     Seller     into     the     Certificate     Account
on the Closing Date.

         INITIAL SPREAD ACCOUNT DEPOSIT: A deposit of $535,780.70 required to be
made by the Spread  Account  Depositor  into the Spread  Account on the  Closing
Date, such deposit being equal to 2.5% of the Original Pool Principal Balance.

         INITIAL  SBA  LOANS:  The SBA  Loans  listed on  Exhibit  H hereto  and
delivered to the Trustee on the Closing Date.

         INSTITUTIONAL ACCREDITED INVESTOR: Any Person satisfying the definition
of "Accredited  Investor" within the meaning of Rule 501(a)(1),  (2), (3) or (7)
of Regulation D under the Securities Act.

         INSURANCE  PROCEEDS:  Proceeds  paid  by any  insurer  pursuant  to any
insurance  policy  covering  an SBA Loan,  Collateral  or  Foreclosed  Property,
including  but not  limited  to title,  hazard,  life,  health  and/or  accident
insurance policies.

                                      1-9
<PAGE>

         INTEREST  ACCRUAL  PERIOD:  With respect to each  Remittance  Date, the
period  commencing on the 15th day of the month  preceding such  Remittance Date
and ending on the 14th day of the month of such Remittance  Date.  However,  for
the  Remittance  Date  occurring in January 1999,  the period  commencing on the
Closing Date and ending on January 14, 1998.

         LIQUIDATED SBA LOAN:  Any defaulted SBA Loan or Foreclosed  Property as
to which the Servicer has determined that all amounts which it reasonably and in
good faith expects to recover have been recovered from or on account of such SBA
Loan.

         LIQUIDATION PROCEEDS:  Cash, including Insurance Proceeds,  proceeds of
any  Foreclosed  Property  Disposition,  revenues  received  with respect to the
conservation  and  disposition of a Foreclosed  Property,  and any other amounts
received in connection  with the  liquidation  of defaulted  SBA Loans,  whether
through trustee's sale, foreclosure sale or otherwise.

         LOAN  GUARANTY   AGREEMENT:   The  Loan  Guaranty  Agreement  (Deferred
Participation)  (SBA Form 750) dated March 27, 1997 between the SBA and Business
Loan Center,  Inc., as such agreement may be amended,  supplemented  or replaced
from time to time.

         LOAN-TO-VALUE  RATIO OR LTV:  With  respect  to any SBA  Loan,  (a) the
outstanding principal amount of such SBA Loan as of the Cut-off Date, divided by
(b) the  excess of (i) the  total net  collateral  value (as  determined  by the
Seller  in  accordance  with  its  underwriting  criteria)  of the  primary  and
secondary Collateral securing such loan at the time of origination over (ii) the
principal balance of any Prior Lien as of the date of origination of the related
SBA Loan.

         MAJORITY CERTIFICATEHOLDERS: The Holder or Holders of Class A and Class
B Certificates evidencing an Aggregate Class A Certificate Principal Balance and
Aggregate  Class  B  Certificate  Principal  Balance  in  excess  of  50% of the
Aggregate  Class  A  Certificate   Principal   Balance  and  Aggregate  Class  B
Certificate Principal Balance.

          MONTHLY ADVANCE:  An advance made by the Servicer  pursuant to Section
6.10 hereof.

         MONTHLY  PAYMENT:  The monthly  payment of  principal  and/or  interest
required to be made by an Obligor on the related SBA Loan, as adjusted  pursuant
to the terms of the related SBA Note.

         MORTGAGE:  The mortgage,  deed of trust or other instrument  creating a
lien on a Mortgaged Property.

         MORTGAGED PROPERTY:  The underlying real property,  if any, securing an
SBA Loan,  consisting of a Commercial  Property or Residential  Property and any
improvements thereon.

                                      1-10
<PAGE>

         MULTI-PARTY  AGREEMENT:  That certain Multi-Party Agreement dated as of
December  23,  1998  among  the  Seller,  the  Trustee,  the SBA  and  the  FTA,
substantially  in the form of Exhibit M hereto,  as amended from time to time by
the parties thereto.

         NET  LIQUIDATION   PROCEEDS:   Liquidation  Proceeds  net  of  (i)  any
reimbursements  to the Servicer made therefrom  pursuant to Section  5.04(b) and
(ii)  amounts  required  to be  released  to the  related  Obligor  pursuant  to
applicable law.

         1933 ACT: The Securities Act of 1933, as amended.

         OBLIGOR:  The obligor on an SBA Note.

         OFFICER'S CERTIFICATE: A certificate delivered to the Trustee signed by
the Chairman of the Board,  the President,  an Executive Vice President,  a Vice
President, an Assistant Vice President,  the Treasurer, the Secretary, or one of
the  Assistant  Secretaries  of a Seller or the  Servicer  as  required  by this
Agreement.

         OPINION OF  COUNSEL:  A written  opinion of counsel,  who may,  without
limitation, be counsel for the Seller or Servicer,  reasonably acceptable to the
Trustee and experienced in matters relating thereto.

         ORIGINAL CLASS A CERTIFICATE PRINCIPAL BALANCE:  $24,316,729.85.

         ORIGINAL CLASS B CERTIFICATE PRINCIPAL BALANCE:  $2,114,498.25.

         ORIGINAL POOL PRINCIPAL BALANCE: $21,431,228.10.

         ORIGINAL   PRE-FUNDED  AMOUNT:   $5,000,000   representing  the  amount
deposited in the Pre-Funding Account on the Closing Date.

         OVERFUNDED  INTEREST AMOUNT:  With respect to each Subsequent  Transfer
Date  occurring  in January  1999,  the  difference  between  (i)  three-months'
interest  on the  aggregate  Principal  Balances  of the  Subsequent  SBA  Loans
acquired by the Trust Fund on such Subsequent  Transfer Date,  calculated at the
weighted average Class A and Class B Remittance  Rates,  and (ii)  three-months'
interest  on the  aggregate  Principal  Balances  of the  Subsequent  SBA  Loans
acquired by the Trust Fund on such Subsequent  Transfer Date,  calculated at the
rate at which  Pre-Funding  Account  moneys are  invested as of such  Subsequent
Transfer Date.

         With respect to each  Subsequent  Transfer  Date  occurring in February
1999, the difference between (i) two-months' interest on the aggregate Principal
Balances  of the  Subsequent  SBA  Loans  acquired  by the  Trust  Fund  on such
Subsequent Transfer Date, calculated at the weighted average Class A and Class B
Remittance  Rates,  and (ii)  two-months'  interest on the  aggregate  Principal
Balances  of the  Subsequent  SBA  Loans  acquired  by the  Trust  Fund  on such
Subsequent  Transfer Date,  calculated at the rate at which Pre-Funding  Account
moneys are invested as of such Subsequent Transfer Date.

                                      1-11
<PAGE>

         With respect to each Subsequent  Transfer Date occurring in March 1999,
the  difference  between (i)  one-month's  interest on the  aggregate  Principal
Balances  of the  Subsequent  SBA  Loans  acquired  by the  Trust  Fund  on such
Subsequent Transfer Date, calculated at the weighted average Class A and Class B
Remittance  Rates,  and (ii)  one-month's  interest on the  aggregate  Principal
Balances  of the  Subsequent  SBA  Loans  acquired  by the  Trust  Fund  on such
Subsequent  Transfer Date,  calculated at the rate at which Pre-Funding  Account
moneys are invested as of such Subsequent Transfer Date.

         PAYING AGENT: Initially, Marine Midland Bank, and thereafter, any other
Person that meets the  eligibility  standards for the Paying Agent  specified in
Section  13.12 hereof and is  authorized  by the Trustee to make payments on the
Certificates on behalf of the Trustee.

         PERCENTAGE INTEREST:  With respect to a Class A or Class B Certificate,
the portion of the Trust Fund  evidenced by such Class A or Class B Certificate,
expressed  as  a  percentage,   the  numerator  of  which  is  the  denomination
represented by such Class A or Class B Certificate  and the denominator of which
is the  Original  Class A  Certificate  Principal  Balance or  Original  Class B
Certificate Principal Balance, as the case may be. The Certificates are issuable
only in the minimum Percentage Interest  corresponding to a minimum denomination
of $100,000 and integral  multiples of $1,000 in excess thereof,  except for one
Certificate  of each Class  which may be issued in a different  denomination  to
equal the  remainder of the Original  Class A Certificate  Principal  Balance or
Original Class B Certificate Principal Balance, as the case may be.

         PERMITTED  INSTRUMENTS:  As used herein,  Permitted  Instruments  shall
include the following:

                    (i) direct general  obligations of, or obligations fully and
         unconditionally  guaranteed  as to the timely  payment of principal and
         interest  by,  the  United  States  or any  agency  or  instrumentality
         thereof,  provided  such  obligations  are backed by the full faith and
         credit of the United  States,  FHA  debentures,  Federal Home Loan Bank
         consolidated senior debt obligations, and FNMA senior debt obligations,
         but  excluding  any of such  securities  whose terms do not provide for
         payment of a fixed dollar amount upon maturity or call for redemption;

                    (ii) federal funds,  certificates of deposit,  time deposits
         and banker's  acceptances  (having original maturities of not more than
         365 days) of any bank or trust company  incorporated  under the laws of
         the United States or any state  thereof,  provided that the  short-term
         debt  obligations  of  such  bank  or  trust  company  at the  date  of
         acquisition  thereof  have been  rated  Duff 1+ or better by the Rating
         Agency;

                    (iii)  deposits of any bank or savings and loan  association
         which has combined  capital,  surplus and undivided profits of at least
         $3,000,000 which deposits are held only up to the limits insured by the
         BIF or SAIF  administered  by the  FDIC,  provided  that the  unsecured
         long-term debt obligations of such bank or savings and loan association
         have been rated AAA or better by the Rating Agency;

                                      1-12
<PAGE>
                    (iv)  commercial  paper (having  original  maturities of not
         more than 365 days) rated Duff 1+ or better by the Rating Agency;

                    (v) debt  obligations  rated AAA by the Rating Agency (other
         than any such  obligations  that do not have a fixed par  value  and/or
         whose  terms do not promise a fixed  dollar  amount at maturity or call
         date);

                    (vi)  investments  in money market funds rated AAA or better
         by the  Rating  Agency  the  assets  of which  are  invested  solely in
         instruments  described in clauses  (i)-(v)  above;  including,  without
         limitation,  any fund which the Trustee or an  affiliate of the Trustee
         serves as an investment advisor, administrator,  shareholder, servicing
         agent and/or custodian or sub-custodian,  notwithstanding  that (a) the
         Trustee or an  affiliate of the Trustee  charges and collects  fees and
         expenses from such funds for services rendered, (b) the Trustee charges
         and collects fees and expenses for services  rendered  pursuant to this
         Agreement,  and (c) services  performed  for such funds and pursuant to
         this   Agreement   may  converge  at  any  time  (the  parties   hereto
         specifically  authorize  the Trustee or an  affiliate of the Trustee to
         charge and collect all fees and  expenses  from such funds for services
         rendered  to such  funds,  in  addition  to any fees and  expenses  the
         Trustee may charge and collect for services  rendered  pursuant to this
         Agreement).

                  (vii)   guaranteed   investment   contracts  or  surety  bonds
         providing  for the  investment  of funds in an  account  or  insuring a
         minimum rate of return on investments of such funds,  which contract or
         surety bond shall:

                           (a) be an obligation of an insurance company or other
                  corporation  whose debt  obligations  or  insurance  financial
                  strength  or claims  paying  ability  are  rated  "AAA" by the
                  Rating Agency; and

                           (b) provide  that the Trustee may exercise all of the
                  rights of the  Seller  under  such  contract  or  surety  bond
                  without  the  necessity  of the  taking  of any  action by the
                  Seller;

                    (viii) A repurchase  agreement  that satisfies the following
         criteria:

                         (a) Must be between  the  Trustee  and a dealer bank or
                  securities firm described in 1. or 2. below:

                              1.   Primary   dealers  on  the  Federal   Reserve
                                   reporting  dealer list which are rated AA" or
                                   better by the Rating Agency, or

                              2.   Banks  rated  "AA" or  better  by the  Rating
                                   Agency.

                         (b) The written  repurchase  agreement must include the
                  following:

                                      1-13
<PAGE>

                              1.   Securities   which  are  acceptable  for  the
                                   transfer are:

                                   A.   Direct U.S. government securities, or

                                   B.   Securities of Federal Agencies backed by
                                        the full  faith  and  credit of the U.S.
                                        government (and FNMA & FHLMC)

                              2.   the term of the  repurchase  agreement may be
                                   up to 60 days

                              3.   the  collateral  must  be  delivered  to  the
                                   Trustee or third  party  custodian  acting as
                                   agent for the  Trustee  by  appropriate  book
                                   entries and confirmation statements must have
                                   been delivered  before or  simultaneous  with
                                   payment    (perfection   by   possession   of
                                   certificated securities)

                              4.   Valuation of collateral

                                                 The  securities  must be valued
                                                 weekly,   marked-to-market   at
                                                 current   market   price   plus
                                                 accrued interest.  The value of
                                                 the collateral must be equal to
                                                 at least  104% of the amount of
                                                 cash transferred by the Trustee
                                                 or custodian for the Trustee to
                                                 the  dealer  bank  or  security
                                                 firm   under   the   repurchase
                                                 agreement      plus     accrued
                                                 interest.   If  the   value  of
                                                 securities  held as  collateral
                                                 slips  below  104% of the value
                                                 of the cash  transferred by the
                                                 Trustee plus accrued  interest,
                                                 then   additional  cash  and/or
                                                 acceptable  securities  must be
                                                 transferred.  If, however,  the
                                                 securities  used as  collateral
                                                 are  FNMA or  FHLMC,  then  the
                                                 value of collateral  must equal
                                                 at least 105%; and

                    (ix) any other  investment  acceptable to the Rating Agency,
         written  confirmation  of which shall be furnished to the Trustee prior
         to any such investment.  Provided that if such Permitted  Instrument is
         not so rated by the Rating Agency,  there must be an equivalent  rating
         by a Substitute Rating Agency.

         PERSON:  Any individual,  corporation,  partnership,  limited liability
company,  joint  venture,  association,  joint-stock  company,  trust,  national
banking association,  unincorporated organization or government or any agency or
political subdivision thereof.

         POOL PRINCIPAL BALANCE: The aggregate Principal Balances as of any date
of determination.

                                      I-14
<PAGE>


         PRE-FUNDED  AMOUNT:  With  respect  to any date of  determination,  the
amount on deposit in the Pre-Funding Account.

         PRE-FUNDING  ACCOUNT: The Pre-Funding Account established in accordance
with Section 6.04 hereof and maintained by the Trustee.

         PRE-FUNDING  EARNINGS:  With respect to the Remittance  Date in January
1999, the actual  investment  earnings earned during the period from the Closing
Date through the Business Day immediately  preceding the  Determination  Date in
January  1999  (inclusive)  on  the  Pre-Funded  Amount.  With  respect  to  the
Remittance Dates in February 1999 and March 1999, the actual investment earnings
earned  during  the  period  from the  Determination  Date in  January  1999 and
February 1999, respectively,  through the Business Day immediately preceding the
Determination Date in February 1999 and March 1999, respectively (inclusive), on
the Pre-Funded Amount.

         PREMIUM   PROTECTION   FEE:  As  to  any  SBA  Loan  and  any  date  of
determination,  an  amount  equal to  0.60%  per  annum of the then  outstanding
principal balance of the related Guaranteed Interest.

         PRIME RATE: With respect to any date of determination, the lowest prime
lending rate published in the Money Rate Section of The Wall Street Journal,  on
the next succeeding Business Day.

         PRINCIPAL AND INTEREST  ACCOUNT:  The  principal  and interest  account
established     by     the     Servicer     pursuant     to     Section     5.03
hereof.

         PRINCIPAL  BALANCE:  With respect to any SBA Loan or related Foreclosed
Property, at any date of determination,  (i) the Unguaranteed  Percentage of the
principal  balance  of the SBA  Loan  outstanding  as of the  Cut-Off  Date  (or
applicable  Subsequent  Cut-Off Date with respect to Subsequent SBA Loans) after
application of principal  payments  received on or before such date,  minus (ii)
the sum of (a) the  Unguaranteed  Percentage  of the  principal  portion  of the
Monthly Payments received during each Due Period ending prior to the most recent
Remittance Date, which were distributed pursuant to Section 6.07 on any previous
Remittance  Date,  and  (b)  the   Unguaranteed   Percentage  of  all  Principal
Prepayments,   Curtailments,   Excess  Payments,  Insurance  Proceeds,  Released
Mortgaged  Property  Proceeds,  Net  Liquidation  Proceeds and net income from a
Foreclosed  Property  to the extent  applied by the  Servicer as  recoveries  of
principal in  accordance  with the  provisions  hereof,  which were  distributed
pursuant to Section 6.07 on any previous  Remittance Date. The Principal Balance
of any Liquidated SBA Loan or any SBA Loan that has been paid off will equal $0.

         PRINCIPAL PREPAYMENT:  Any payment or other recovery of principal on an
SBA Loan equal to the outstanding principal balance thereof, received in advance
of the final  scheduled  Due Date  which is  intended  to satisfy an SBA Loan in
full.

                                      I-15
<PAGE>

         PRIOR  LIEN:  With  respect  to any  SBA  Loan  secured  by a lien on a
Mortgaged Property which is not a first priority lien, each lien relating to the
corresponding Mortgaged Property having a prior priority lien.

         QUALIFIED INSTITUTIONAL BUYER: As used herein, has the meaning ascribed
to such term in Rule 144A under the Securities Act.

         QUALIFIED SUBSTITUTE SBA LOAN: An SBA loan or SBA loans substituted for
a Deleted SBA Loan  pursuant to Section  2.05 or 3.03  hereof,  which (i) has or
have an SBA Loan  interest rate or rates of not less than (and not more than two
percentage  points  more than) the SBA Loan  Interest  Rate for the  Deleted SBA
Loan, (ii) substantially relates or relate to the same type of Collateral as the
Deleted SBA Loan,  (iii)  matures or mature no later than (and not more than one
year earlier than) the Deleted SBA Loan, (iv) has or have a Loan-to-Value  Ratio
or  Loan-to-Value  Ratios at the time of such  substitution  no higher  than the
Loan-to  Value  Ratio of the  Deleted  SBA Loan at such time,  (v) has or have a
principal balance or principal balances relating to an unguaranteed  interest or
unguaranteed  interests (after  application of all payments received on or prior
to the date of substitution)  equal to or less than the Principal Balance of the
Unguaranteed  Interest or Unguaranteed  Interests as of such date of the Deleted
SBA  Loan,  (vi)  has or have the same  Unguaranteed  Percentage  at the time of
substitution  as the Deleted SBA Loan;  (vii) was or were  originated  under the
same program type as the Deleted SBA Loan; and (viii)  complies or comply as the
date of substitution with each  representation and warranty set forth in Section
3.02.

         RATING  AGENCY:  Duff &  Phelps  Credit  Rating  Co.  or any  successor
thereto.

         RATING AGENCY CONDITION: With respect to any specified action, that the
Rating  Agency shall have  notified  the Servicer and the Trustee,  orally or in
writing,  that such action will not result in a reduction or  withdrawal  of the
rating assigned by the Rating Agency to either Class of Certificates.

         RECORD DATE: With respect to any Remittance Date, the close of business
on the last day of the month  immediately  preceding  the  month of the  related
Remittance  Date (or with  respect to the first  Remittance  Date,  the close of
business on the Closing Date).
With respect to the Special Remittance Date, February 28, 1999.

         REGISTERED  HOLDER:  With respect to any SBA ss. 7(a) Loan,  the Person
identified as such in the applicable SBA Form 1086, and any permitted  assignees
thereof.

         REIMBURSABLE  AMOUNTS:  As of any  date  of  determination,  an  amount
payable  to the  Servicer  and/or  the Seller  with  respect to (i) the  Monthly
Advances and Servicing Advances  reimbursable  pursuant to Section 5.04(b), (ii)
any advances reimbursable pursuant to Section 9.01 and not previously reimbursed
pursuant to Section 6.03(c)(i),  and (iii) any other amounts reimbursable to the
Servicer or the Seller pursuant to this Agreement.

                                      I-16
<PAGE>

         RELEASED MORTGAGED  PROPERTY PROCEEDS:  As to any SBA Loan secured by a
Mortgaged  Property,  proceeds received by the Servicer in connection with (a) a
taking of an entire  Mortgaged  Property  by  exercise  of the power of  eminent
domain or condemnation or (b) any release of part of the Mortgaged Property from
the lien of the  related  Mortgage,  whether  by partial  condemnation,  sale or
otherwise,  which are not released to the Obligor in accordance  with applicable
law,  the SBA or the  Registered  Holder  in  accordance  with the SBA Rules and
Regulations,  the Servicer's  customary SBA loan  servicing  procedures and this
Agreement.

         REMITTANCE DATE: The 15th day of any month or if such 15th day is not a
Business  Day,  the first  Business Day  immediately  following,  commencing  in
January 1999.

         RESIDENTIAL  PROPERTY:  Any one or more of the  following,  (i)  single
family  dwelling unit not attached in any way to another  unit,  (ii) row house,
(iii) two-family house, (iv) low-rise condominium, (v) planned unit development,
(vi) three- or four-family house, (vii) high-rise condominium,  (viii) mixed use
building   or  (ix)   manufactured   home   (as   defined   in  the   FNMA/FHLMC
Seller-Servicers'  Guide) to the extent that it constitutes real property in the
state in which it is located.

         RESPONSIBLE OFFICER: When used with respect to the Trustee, any officer
assigned  to  the  Corporate  Trust  Division,  including  any  Vice  President,
Assistant Vice President any Assistant Secretary, any trust officer or any other
officer  of the  Trustee  customarily  performing  functions  similar  to  those
performed by any of the above  designated  officers and also,  with respect to a
particular  matter, any other officer to whom such matter is referred because of
such officer's  knowledge of and familiarity with the particular  subject.  When
used with respect to the Seller,  the President,  any Vice President,  Assistant
Vice President, Treasurer or any Secretary or Assistant Secretary.

         RULE 144A  CERTIFICATION:  A letter  substantially in the form attached
hereto as Exhibit O-2-A or Exhibit O-2-B.

         SAIF: The Savings Association Insurance Fund, or any successor thereto.

         SBA: The United States Small Business Administration,  an agency of the
United States Government.

         SBA FILE:  As described in Exhibit A.

         SBA Form 1086:  The  Secondary  Participation  Guaranty  Agreement  and
Certification  on SBA Form  1086,  pursuant  to which  investors  purchased  the
Guaranteed Interest.

         SBA LOAN: An individual  loan,  the  Unguaranteed  Interest of which is
transferred  to the Trust Fund  pursuant to this  Agreement,  together  with the
rights and  obligations  of a holder  thereof and payments  thereon and proceeds
therefrom,  the SBA Loans originally  subject to this Agreement being identified
on the SBA Loan  Schedule  as set forth on Exhibit H. Any loan  which,  although
intended  by the  parties  hereto  to have  been,  and  which  purportedly  was,


                                      I-17
<PAGE>

transferred  and  assigned to the Trust Fund by the Seller (as  indicated by the
SBA Loan  Schedule),  in fact was not transferred and assigned to the Trust Fund
for any reason whatsoever,  including,  without limitation, the incorrectness of
the  statement  set forth in Section  3.02(h)  hereof with  respect to the loan,
shall  nevertheless  be  considered  an  "SBA  Loan"  for all  purposes  of this
Agreement.  For the  purposes  of this  Agreement,  references  to SBA Loans are
equivalent to references to SBA ss. 7(a) Loans.

         SBA LOAN INTEREST RATE: With respect to any date of determination,  the
then  applicable  annual rate of interest borne by an SBA Loan,  pursuant to its
terms, which, as of the Cut-Off Date, is shown on the SBA Loan Schedule.

         SBA LOAN  SCHEDULE:  The  schedule  of SBA Loans  listed  on  Exhibit H
attached  hereto and delivered to the Trustee on the Closing Date, or Subsequent
Transfer  Date, as the case may be, such schedule  identifying  each SBA Loan by
address of the related  premises,  and the name of the Obligor and setting forth
as to each Initial SBA Loan the following information: (i) the Principal Balance
as of the close of business on the Cut-Off Date, (ii) the Account Number,  (iii)
the  original  principal  amount  of the SBA  Loan,  (iv) the SBA Loan  date and
original number of months to maturity, in months, (v) the SBA Loan Interest Rate
as of the  Cut-Off  Date or  Subsequent  Cut-Off  Date,  as the case may be, and
guaranteed  rate  payable to the  Registered  Holder and the FTA,  (vi) when the
first Monthly Payment was due, (vii) the Monthly Payment as of the Cut-Off Date,
or Subsequent  Cut-Off Date, as the case may be, (viii) the remaining  number of
months to maturity as of the Cut-Off Date,  or  Subsequent  Cut-Off Date, as the
case may be (ix) the Unguaranteed Percentage,  (x) the SBA loan number, (xi) the
margin which is added to the Prime Rate to determine  the SBA Loan Interest Rate
or, in the case of fixed rate SBA Loans,  the rate of interest  specified in the
related SBA Note,  and (xii) the lifetime  minimum and maximum SBA Loan Interest
Rates, if applicable.

         SBA NOTE:  The note or other  evidence of  indebtedness  evidencing the
indebtedness of an Obligor under an SBA Loan.

         SBA RULES AND REGULATIONS: The Small Business Act, as amended, codified
at 15 U.S.C. 631 et. seq., the Loan Guarantee Agreement, all legislation binding
on  the  SBA  regarding  financial  transactions,   all  rules  and  regulations
promulgated  from time to time thereunder,  the Loan Guaranty  Agreement and SBA
Standard  Operating  Procedures and official notices as from time to time are in
effect.

         SBA ss. 7(a) LOAN: An SBA Loan  originated  pursuant to Section 7(a) of
the SBA Rules and Regulations. For purposes of this Agreement, references to SBA
ss. 7(a) Loans are equivalent to references to SBA Loans.

         SECURITIES ACT: The Securities Act of 1933, as amended.

         SECURITIES  LEGEND:  "THIS  CERTIFICATE  HAS NOT  BEEN  AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT"),
OR UNDER ANY STATE  SECURITIES OR BLUE SKY LAW OF ANY STATE.  THE HOLDER HEREOF,


                                      I-18
<PAGE>

BY PURCHASING THIS  CERTIFICATE,  AGREES THAT THIS CERTIFICATE MAY BE REOFFERED,
RESOLD,  PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) IN CERTIFICATED  FORM (A) PURSUANT TO
RULE 144A UNDER THE  SECURITIES  ACT ("RULE  144A") TO A PERSON  THAT THE HOLDER
REASONABLY  BELIEVES IS A QUALIFIED  INSTITUTIONAL  BUYER  WITHIN THE MEANING OF
RULE 144A (A "QIB"),  PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE
ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED,  IN EACH CASE, THAT THE REOFFER,
RESALE,  PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (B)
TO  AN  "INSTITUTIONAL   ACCREDITED   INVESTOR"  (WITHIN  THE  MEANING  OF  RULE
501(a)(1)-(3) or (7) UNDER THE SECURITIES ACT) PURCHASING FOR INVESTMENT AND NOT
FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN EACH CASE SUBJECT TO (A)
THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE
AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER  EVIDENCE  ACCEPTABLE
TO THE TRUSTEE THAT SUCH  REOFFER,  RESALE,  PLEDGE OR TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT AND OTHER  APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND SECURITIES AND BLUE
SKY  LAWS  OF  ANY  STATE  OF  THE  UNITED  STATES  AND  ANY  OTHER   APPLICABLE
JURISDICTION,  (2) PURSUANT TO ANOTHER EXEMPTION  AVAILABLE UNDER THE SECURITIES
ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (3) PURSUANT
TO A VALID REGISTRATION STATEMENT. "

         SELLER:  Business Loan Center,  Inc., a Delaware  corporation,  and its
respective successors and assigns as Seller hereunder.

         SERIES:  1998-1.

         SERVICER:  Business Loan Center, Inc., a Delaware corporation,  and its
successors and permitted assigns as Servicer hereunder.

         SERVICER'S CERTIFICATE:  The certificate as defined in Section 6.09.

         SERVICING ADVANCES: All reasonable and customary  "out-of-pocket" costs
and  expenses  incurred in the  performance  by the  Servicer  of its  servicing
obligations,  including,  but not limited to, the cost of (i) the  preservation,
restoration and protection of the Mortgaged  Property or other Collateral,  (ii)
any  enforcement  or judicial  proceedings,  including  foreclosures,  (iii) the
management and liquidation of the Foreclosed Property,  (iv) compliance with the
obligations  under clause (iv) of Section  5.01(a) and  Sections  5.02 and 5.07,
which Servicing Advances are reimbursable to the Servicer to the extent provided
in Section  5.04(b) and (v) in connection  with the  liquidation of an SBA Loan,
expenditures  relating to the purchase or maintenance of any Prior Lien pursuant
to Section 5.14, for all of which costs and expenses the Servicer is entitled to


                                      I-19
<PAGE>

reimbursement  thereon up to a maximum  rate per annum  equal to the related SBA
Loan Interest Rate, except that any amount of such interest accrued at a rate in
excess of the weighted average Class A and Class B Remittance Rates with respect
to the Remittance Date on or prior to which the  Unguaranteed  Percentage of the
Net Liquidation  Proceeds will be distributed  shall be  reimbursable  only from
Excess Proceeds.

         SERVICING  FEE:  As to each SBA Loan,  the  annual  fee  payable to the
Servicer.  Such fee shall be  calculated  and payable  monthly  from the amounts
received in respect of interest on the Guaranteed  Interest and the Unguaranteed
Interest  of such SBA Loan,  shall  accrue at the rate of 0.40% per annum on the
entire principal  balance of such SBA Loan and shall be computed on the basis of
the same  principal  amount  and for the  period  respecting  which any  related
interest payment on an SBA Loan is computed. The Servicing Fee is payable solely
from the  interest  portion of related (i) Monthly  Payments,  (ii)  Liquidation
Proceeds  or  (iii)  Released  Mortgaged  Property  Proceeds  collected  by  the
Servicer,  or as otherwise  provided in Section 5.04. The Servicing Fee includes
any servicing fees owed or payable to any Subservicer.

         SERVICING  OFFICER:  Any  officer  of  the  Servicer  involved  in,  or
responsible  for, the  administration  and servicing of the SBA Loans whose name
appears on a list of servicing officers furnished to the Trustee by the Servicer
on the Closing Date hereof and as such list may from time to time be amended.

         SPECIAL REMITTANCE DATE:  March 30, 1999.

         SPECIFIED  SPREAD  ACCOUNT  REQUIREMENT:  The maximum  amount of Spread
Account  Balance  required  to be on deposit  at any time in the Spread  Account
which, with respect to any Remittance Date, shall be equal to the sum of (i) the
then  outstanding  Principal  Balance  with respect to all SBA Loans 180 days or
more  delinquent and (ii) the greater of (a) 5.0% of the then  outstanding  Pool
Principal Balance or (b) 2.5% of the Original Pool Principal Balance;  provided,
however,  that for purposes of clauses (i) and (ii)(a),  there shall be excluded
the Principal  Balance of SBA Loans which have been delinquent 24 months or have
been determined to be  uncollectible,  in whole or in part, by the Servicer,  to
the extent that the  Certificateholders  have previously  received the Principal
Balance of such SBA Loans provided,  however,  that in no event shall the Spread
Account Balance exceed the then outstanding Class A Certificate Balance.

         SPREAD ACCOUNT:  The Spread Account  established in accordance with the
terms of the Spread  Account  Agreement  and  maintained  by the Spread  Account
Custodian for  distribution  in accordance  with the  provisions of Section 6.02
hereof.

         SPREAD ACCOUNT  AGREEMENT:  The Agreement dated as of December 30, 1998
by and among the Spread  Account  Depositor  and the Spread  Account  Custodian,
substantially  in the form attached hereto as Exhibit N, as amended from time to
time by the parties thereto.

         SPREAD ACCOUNT BALANCE: As of any date of determination, the sum of the
aggregate amount then on deposit in the Spread Account.

                                      I-20
<PAGE>

         SPREAD  ACCOUNT  CUSTODIAN:  Marine  Midland  Bank,  in its capacity as
Spread Account  Custodian under the Spread Account  Agreement,  or any successor
thereto.

         SPREAD ACCOUNT  DEPOSITOR:  Business Loan Center  Financial Corp. II, a
Delaware corporation, a wholly owned subsidiary of Business Loan Center, Inc.

         SPREAD ACCOUNT EXCESS:  As defined in Section 6.02(b)(iii).

         SUBSEQUENT  CUT-OFF  DATE:  The  beginning  of  business  on each  date
specified in a Subsequent  Transfer  Agreement with respect to those  Subsequent
SBA Loans which are  transferred  and assigned to the Trust Fund pursuant to the
related Subsequent Transfer Agreement.

         SUBSEQUENT SBA LOANS:  The SBA Loans sold to the Trust Fund pursuant to
Section 2.09, which shall be listed on the Schedule of SBA Loans attached to the
related Subsequent Transfer Agreement.

         SUBSEQUENT TRANSFER AGREEMENT: Each Subsequent Transfer Agreement dated
as of a  Subsequent  Transfer  Date  executed by the Trustee and the Seller,  by
which Subsequent SBA Loans are sold and assigned to the Trust Fund.

         SUBSEQUENT TRANSFER DATE: The date specified as such in each Subsequent
Transfer Agreement.


         SUBSERVICER:  Any person  with whom the  Servicer  has  entered  into a
Subservicing  Agreement and who satisfies any  requirements set forth in Section
5.01(b) hereof in respect of the qualification of a Subservicer.

         SUBSERVICING  AGREEMENT:  Any  agreement  between the  Servicer and any
Subservicer relating to subservicing and/or  administration of certain SBA Loans
as provided in Section 5.01(b),  a copy of which shall be delivered,  along with
any modifications thereto, to the Trustee and the SBA.

         SUBSTITUTE  RATING  AGENCY:  Moody's  Investors  Service,  Inc.  and/or
Standard & Poor's Rating Services, a division of the McGraw-Hill Companies.

         SUBSTITUTION ADJUSTMENT:  As to any date on which a substitution occurs
pursuant to Sections  2.05 or 3.03,  the amount (if any) by which the  aggregate
unguaranteed  portions of the principal balances (after application of principal
payments  received  on or  before  the date of  substitution)  of any  Qualified
Substitute SBA Loans as of the date of substitution  are less than the aggregate
of the Principal Balance of the related Deleted SBA Loans.

         TAX RETURN:  The federal income tax return to be filed on behalf of the
Trust Fund together with any and all other  information  reports or returns that
may be  required to be  furnished  to the  Certificateholders  or filed with the


                                      I-21
<PAGE>
Internal  Revenue Service or any other  governmental  taxing authority under any
applicable provision of federal, state or local tax laws.

         TERMINATION PRICE:  The price defined in Section 11.01
hereof.

         TRANSFEREE  LETTER: A letter  substantially in the form attached hereto
as Exhibit O-1.

         TRUST FUND: The segregated pool of assets subject hereto,  constituting
the trust created hereby and to be  administered  hereunder,  consisting of: (i)
the Unguaranteed  Interest of such SBA Loans as from time to time are subject to
this Agreement,  together with,  subject to the Multi-Party  Agreement,  the SBA
Files relating thereto and all proceeds thereof,  (ii) the Unguaranteed Interest
of such assets  (including any Permitted  Instruments)  as from time to time are
identified  as  Foreclosed  Property  or  are  deposited  in or  constitute  the
Certificate  Account,  (iii) the Trustee's  rights under all insurance  policies
with  respect  to the SBA  Loans  required  to be  maintained  pursuant  to this
Agreement  and the  Unguaranteed  Interest of any Insurance  Proceeds,  (iv) the
Unguaranteed  Interest  of any  Liquidation  Proceeds  and (v) the  Unguaranteed
Interest of any Released  Mortgaged  Property  Proceeds,  including all earnings
thereon and proceeds  thereof.  Amounts  deposited in the Principal and Interest
Account,  Pre-Funding  Account,  Capitalized  Interest  Account  and the  Spread
Account  shall be held by the Trustee or the Spread  Account  Custodian,  as the
case may be, but shall not constitute part of the Trust Fund. Also,  neither the
Servicing Fee nor the Premium  Protection Fee shall constitute part of the Trust
Fund.

         TRUSTEE:  Marine  Midland Bank,  or its  successor in interest,  or any
successor trustee appointed as herein provided.

         TRUSTEE'S  DOCUMENT FILE: The documents  delivered  pursuant to Section
2.04.

         UNGUARANTEED  INTEREST:  The sum of (i) that portion of an SBA Loan not
guaranteed  by the  SBA  pursuant  to the  SBA  Rules  and  Regulations  and not
constituting  the Premium  Protection  Fee,  the FTA's Fee,  with respect to the
Additional Fee SBA Loans, the Additional Fee and the Servicing Fee, and (ii) the
Excess Spread.

         UNGUARANTEED  PERCENTAGE:  With  respect to any SBA ss. 7(a) Loan,  the
quotient,  expressed  as a  percentage,  the  numerator  of  which  shall be the
principal  portion of the Unguaranteed  Interest of such SBA ss. 7(a) Loan as of
the Cut-Off Date (or, in the case of a Subsequent SBA Loan, as of the Subsequent
Cut-Off  Date) and the  denominator  of which shall be the sum of the  principal
portion of the Unguaranteed Interest and the principal portion of the Guaranteed
Interest of such SBA ss. 7(a) Loan as of the Cut-Off  Date (or, in the case of a
Subsequent SBA Loan, as of the Subsequent Cut-Off Date).



                                      I-22
<PAGE>

                                   ARTICLE II


                      SALE AND CONVEYANCE OF THE TRUST FUND

         Section 2.01.  Sale and Conveyance of Trust Fund.

                  (a) The Seller hereby sells, transfers, assigns, sets over and
conveys to the Trustee  without  recourse and for the benefit of the SBA and the
Certificateholders,  as their interests may appear, subject to the terms of this
Agreement and the Multi-Party Agreement, all of the right, title and interest of
the Seller in and to the Unguaranteed Interests of the Initial SBA Loans and the
Subsequent  SBA Loans,  and all other  assets  included or to be included in the
Trust Fund.

                  (b) The rights of the  Certificateholders  to receive payments
with respect to the SBA Loans in respect of the Certificates,  and all ownership
interests of the  Certificateholders in such payments,  shall be as set forth in
this  Agreement.  The Servicing Fee shall not constitute  part of the Trust Fund
and  Certificateholders  shall  have no  interest  in, and are not  entitled  to
receive any portion of, the Servicing Fee.

         Section 2.02.  Possession of SBA Files.

                  (a) Upon the issuance of the  Certificates,  the  ownership of
each SBA Note, the Mortgage and the contents of the related SBA File relating to
the Initial SBA Loans is, and upon each  Subsequent  Transfer Date the ownership
of each  Mortgage  Note,  the Mortgage and the contents of the related  Mortgage
File  relating to the  applicable  Subsequent  SBA Loans will be,  vested in the
Trustee  for  the  benefit  of the  SBA and  the  Certificateholders,  as  their
interests may appear.

                  (b) Pursuant to Section 2.04,  with respect to the Initial SBA
Loans,  the  Seller  has  delivered  or caused  to be  delivered,  and,  on each
Subsequent Transfer Date, the Seller will deliver or cause to be delivered, each
SBA Note relating to an SBA ss. 7(a) Loan to the FTA.

         Section 2.03.  Books and Records.

                  The sale of the  Unguaranteed  Interest of each SBA Loan shall
be reflected on the Seller's balance sheets 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 in each SBA Loan by the Trustee for the benefit of
the SBA and the Certificateholders, as its interests may appear.

                                      II-1
<PAGE>


         Section 2.04.  Delivery of SBA Loan Documents.

         The Seller, (i) contemporaneously  with the delivery of this Agreement,
has  delivered  or caused to be delivered to the Trustee or, with respect to the
SBA Notes  relating to the SBA ss. 7(a) Loans  being  delivered  pursuant to (a)
below, to the FTA, each of the following documents for each Initial SBA Loan and
(ii) on each Subsequent  Transfer Date, will deliver or cause to be delivered to
the Trustee or with respect to the SBA Notes  relating to the SBA ss. 7(a) Loans
being  delivered  pursuant  to  paragraph  (a)  below,  to the FTA,  each of the
following documents for each Subsequent SBA Loan originated by the Seller:

                  (a) The original SBA Note,  endorsed by means of an allonge as
follows:  "Pay to the order of  Marine  Midland  Bank,  and its  successors  and
assigns,  as trustee under that certain Pooling and Servicing Agreement dated as
of December  23,  1998,  for the  benefit of the United  States  Small  Business
Administration and holders of Business Loan Center SBA Loan-Backed Certificates,
Series 1998-1,  Class A and Class B, 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;

                  (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:  "Marine  Midland Bank,  ("Assignee")  its  successors  and
assigns,  as trustee  under the  Pooling  and  Servicing  Agreement  dated as of
December 23, 1998 subject to the Multi-Party  Agreement dated as of December 23,
1998"  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  Trustee,  each  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


                                      II-2
<PAGE>

recording until such time as the originals are returned by the public  recording
office,  or (iii) copies of any  assignments  certified by the public  recording
officer 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) For all SBA Loans,  blanket  assignment of all  Collateral
securing the SBA Loan, including without limitation, all rights under applicable
guarantees and insurance policies;

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

                  (h) 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  Trustee as secured  party and the Seller as the  debtor.  The UCC-1
financing  statements  will be filed promptly  following the Closing Date in New
York and Delaware 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 Closing  Date (or with  respect to the
Subsequent SBA Loans,  within one year of the related Subsequent Transfer Date),
deliver or cause to be  delivered  to the  Trustee:  (i) the  original  recorded
Mortgage in those  instances  where a copy  thereof  certified by the Seller was
delivered to the Trustee; (ii) the original recorded Assignment of Mortgage from
the Seller to the Trustee,  which, together with any intervening  assignments of
Mortgage, evidences a complete chain of title from the originator to the Trustee
in those instances  where copies thereof  certified by the Seller were delivered
to the  Trustee;  and (iii) any  intervening  assignments  of  Mortgage in those
instances  where copies  thereof  certified by the Seller were  delivered to the
Trustee.  Notwithstanding  anything to the  contrary  contained  in this Section
2.04, in those instances where the public  recording office retains the original
Mortgage,  Assignment of Mortgage or the intervening assignments of the Mortgage
after it has been  recorded,  the Seller shall be deemed to have  satisfied  its
obligations  hereunder  upon delivery to the 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  Trustee or the FTA, as the case may be, as to each
SBA Loan are referred to herein as the "Trustee's Document File."

                                      II-3
<PAGE>

         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 of 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 Trustee for the benefit of the  Certificateholders  and the SBA a
first priority  perfected  security interest in all of the Seller's right, title
and  interest in, to and under the  Unguaranteed  Interests of 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  Trustee  of  the  Trust  Fund;  Certain
Substitutions; Certification by Trustee.

                  (a) The SBA shall  cause the FTA to execute and deliver on the
Closing  Date (or,  with  respect to the  Subsequent  SBA Loans,  on the related
Subsequent  Transfer  Date),  for each SBA ss. 7(a) Loan, an  acknowledgment  of
receipt  of the SBA Note by the FTA in the form  attached  as  Exhibit  1 to the
Multi-Party  Agreement,  and declares that the FTA will hold such  documents and
any amendments, replacements or supplements thereto, as agent for the benefit of
the SBA and the  Certificateholders.  The Trustee agrees, for the benefit of the
SBA and the Certificateholders, to review each Trustee's Document File within 90
days after the Closing Date or Subsequent Transfer Date, as the case may be (or,
with respect to any Subsequent SBA Loan or Qualified Substitute SBA Loan, within
45 days after the assignment thereof), and to deliver to the Certificateholders,
the Seller, the SBA and the Servicer a certification in the form attached hereto
as Exhibit F-1.  Within 360 days after the Closing Date (or, with respect to any
Qualified  Substitute SBA Loan,  within 360 days after the assignment  thereof),
the Trustee  shall  deliver to the  Servicer,  the Seller,  the SBA,  the Rating
Agency and any  Certificateholder  who  requests a copy from the Trustee a final
certification  in the  form  attached  hereto  as  Exhibit  F-2  evidencing  the
completeness of the Trustee's Document Files.

                  (b) If the Trustee or the SBA, as the case may be,  during the
process  of  reviewing   the  Trustee's   Document   Files  finds  any  document
constituting a part of a 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  Trustee  or the SBA,  as the case may be,  shall  promptly  so  notify  the
Servicer and the Seller. In performing any such review,  the Trustee or the SBA,
as the case may be,  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 Trustee's and the SBA's review of the SBA Files is limited
solely  to  confirming  that the  documents  listed  in  Section  2.04 have been
executed  and received  and relate to the SBA Loans  identified  in the SBA Loan
Schedule.  The  Seller  agrees to use  reasonable  efforts  to remedy a material
defect in a document constituting part of an SBA File of which it is so notified
by the Trustee or the SBA, as the case may be. If, however, within 60 days after


                                      II-4
<PAGE>

the  Trustee's or the SBA'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 Adjusted SBA Loan Remittance Rate as of
the next succeeding  Determination Date, plus any accrued unpaid Servicing Fees,
Monthly  Advances 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 Trustee and the SBA 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 Trustee and the SBA
shall  release to the Servicer  for release to the Seller the related  Trustee's
Document File and the Trustee and the SBA 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  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 Trustee and the
SBA a certificate to such effect in the form attached as Exhibit I hereto.  Upon
receipt of such certification, the Trustee or the SBA, as the case may be, shall
deliver to the  Servicer  the  requested  documentation  and the  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 Trustee shall deliver
to  the  Seller,  the  SBA  and  the  Servicer  a  certification  detailing  all
transactions  with  respect  to the SBA  Loans for  which  the  Trustee  holds a
Trustee's  Document File pursuant to this  Agreement  during the prior  calendar
year or part thereof. Such certification shall list all Trustee's Document Files
which were  released  by or  returned to the 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.  [Intentionally Omitted]

         Section 2.07.  Authentication of Certificates.

         The Trustee  acknowledges  the  assignment to it on behalf of the Trust
Fund of the  Unguaranteed  Interests  in the SBA Loans and the  delivery  to the
Trustee and the FTA of the Trustee's Document Files and,  concurrently with such
delivery,  has  authenticated or caused to be authenticated  and delivered to or
upon the order of the Seller, in exchange for the Unguaranteed  Interests in the
SBA Loans,  the Trustee's  Document  Files and the other assets  included in the


                                      II-5
<PAGE>

definition  of Trust Fund,  Certificates  duly  authenticated  by the Trustee in
authorized denominations.

         Section 2.08.  Fees and Expenses of the Trustee.

         The fees and expenses of the Trustee  including  (i) the annual fees of
the Trustee, payable quarterly in advance, and subject to rebate to the Servicer
as additional  servicing  compensation  hereunder for any fraction of a calendar
quarter in which this Agreement terminates,  (ii) any other fees and expenses to
which  the  Trustee  is  entitled  pursuant  to this  Agreement  or its  written
agreement  with the Seller,  and (iii)  reimbursements  to the  Servicer for any
advances  made by the Servicer to the Expense  Account  pursuant to Section 6.03
hereof,  shall be paid  from the  Expense  Account  in the  manner  set forth in
Section 6.03 hereof; provided,  however, that the Seller shall be liable for any
expenses of the Trust Fund incurred  prior to the Closing Date. The Servicer and
the Trustee  hereby  covenant with the  Certificateholders  that every  material
contract  or  other  material  agreement  entered  into by the  Trustee,  or the
Servicer,  acting as  attorney-in-fact  for the Trustee,  on behalf of the Trust
Fund shall expressly state therein that no Certificateholder shall be personally
liable in connection with such contract or agreement.

         Section 2.09. Sale and Conveyance of the Subsequent SBA Loans.

                  (a)  Subject  to the  conditions  set forth in  paragraph  (b)
below,  in  consideration  of the Trustee's  delivery on the related  Subsequent
Transfer  Dates to or upon the order of the  Seller  of all or a portion  of the
balance of funds in the Pre-Funding  Account, the Seller shall on any Subsequent
Transfer Date sell,  transfer,  assign,  set over and otherwise  convey  without
recourse,  to the Trustee all right,  title and interest of the Seller in and to
the  Unguaranteed  Interest of each  Subsequent  SBA Loan listed on the SBA Loan
Schedule  delivered  by the Seller on such  Subsequent  Transfer  Date,  all its
right, title and interest in and to principal collected and interest accruing on
the  Unguaranteed  Interest  of each such  Subsequent  SBA Loan on and after the
related  Subsequent  Cut-Off  Date and all its right,  title and interest in the
Unguaranteed  Interest  in all  insurance  policies;  provided,  that the Seller
reserves  and retains all of its right,  title and  interest in and to principal
(including Principal  Prepayments)  collected and interest accruing on each such
Subsequent SBA Loan prior to the related  Subsequent  Cut-Off Date. The transfer
by the Seller of the Unguaranteed Interest of the Subsequent SBA Loans set forth
on the SBA Loan  Schedule to the Trustee shall be absolute and shall be intended
by all parties hereto to be treated as a sale by the Seller.

         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 of 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 Trustee for the benefit of the  Certificateholders and the Trustee
a first priority perfected security interest in all of the Seller's right, title
and  interest in, to and under the  Unguaranteed  Interests of the SBA Loans and
other  assets in the Trust Fund,  and that this  Agreement  shall  constitute  a
security agreement under applicable law.

                                      II-6
<PAGE>

         The amount released from the  Pre-Funding  Account shall be one-hundred
percent (100%) of the aggregate  Principal Balances as of the related Subsequent
Cut-Off  Date  of the  Subsequent  SBA  Loans  so  transferred  on  the  related
Subsequent Transfer Date.

                  (b) The Seller shall transfer to the Trustee the  Unguaranteed
Interest of the  Subsequent  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 Subsequent Transfer Date:

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

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

                           (iii)  the  Seller   shall  have   deposited  in  the
                  Principal and Interest  Account all  collections in respect of
                  the  Subsequent  SBA Loans  received  on or after the  related
                  Subsequent Cut-Off Date;

                           (iv) as of each Subsequent Transfer Date, none of the
                  Seller,  the  Servicer  or the Spread  Account  Depositor  was
                  insolvent  nor will any of them have been  made  insolvent  by
                  such  transfer  nor is  any  of  them  aware  of  any  pending
                  insolvency;

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

                            (vi) the Funding Period shall not have terminated;

                            (vii) the Seller shall have delivered to the Trustee
                  an Officer's  Certificate  confirming the satisfaction of each
                  condition precedent specified in this paragraph (b) and in the
                  related Subsequent Transfer Agreement;

                           (viii) the Seller shall have  delivered to the Rating
                  Agency and the  Trustee,  Opinions of Counsel  with respect to
                  the transfer of the Subsequent SBA Loans  substantially in the
                  form of the  Opinions of Counsel  delivered  to the Trustee on
                  the Closing Date (bankruptcy, corporate and tax opinions);

                           (ix)  the  FTA  shall  have  delivered,  pursuant  to
                  Section 2.05(a) hereof,  an  acknowledgment  of receipt of the
                  SBA  Note  relating  to such  SBA ss.  7(a)  Loan in the  form
                  attached as Exhibit 1 to the Multi-Party Agreement; and

                                      II-7
<PAGE>

                            (x) the Transfer of the  Subsequent SBA Loans to the
                  Trust Fund will not result in a change to the top 5 Obligors.

                  (c)  The   obligation  of  the  Trust  Fund  to  purchase  the
Unguaranteed  Interest of a Subsequent SBA Loan on any Subsequent  Transfer Date
is subject to the requirement,  as evidenced by a certificate from a Responsible
Officer of the Seller,  that such  Subsequent  SBA Loan conforms in all material
respects to the representations and warranties concerning the individual Initial
SBA Loans set forth in Sections 3.01 and 3.02 (except that any reference therein
to the Cut-Off  Date shall be deemed a reference  to the  applicable  Subsequent
Cut-Off  Date)  and  that  the  inclusion  of all  Subsequent  SBA  Loans  being
transferred to the Trust Fund on such Subsequent  Transfer Date will not change,
in any material respect,  the  characteristics  of the Initial SBA Loans, in the
aggregate,  set forth in Sections 3.01 and 3.02 or in the Confidential Placement
Memorandum  under the headings  "Summary of Terms -- The SBA Loan Pool" and "The
SBA Loan Pool."  Further,  each Subsequent SBA Loan must be an SBA ss.7(a) Loan.
Additionally,  following each  Subsequent  Transfer  Date, the weighted  average
number of months since  origination of all the SBA ss.7(a) Loans  (including the
SBA ss.7(a) Loans being purchased on such Subsequent  Transfer Date) shall be no
less than approximately four months.

                  (d) In  connection  with the  transfer and  assignment  of the
Subsequent  SBA Loans,  the Seller agrees to satisfy the conditions set forth in
Sections 2.01, 2.02, 2.03, 2.04 and 2.05.

                  (e) In connection with each  Subsequent  Transfer Date, on the
Remittance  Dates in January 1999,  February 1999 and March 1999 and the Special
Remittance  Date, the Seller shall  determine,  and the Trustee shall  cooperate
with the Seller in determining  (i) the amount and correct  dispositions  of the
Capitalized Interest Requirements,  Overfunded Interest Amounts, and Pre-Funding
Earnings  and  (ii)  any  other   necessary   matters  in  connection  with  the
administration  of the  Pre-Funding  Account  and of  the  Capitalized  Interest
Account.  If any  amounts  are  incorrectly  released  to the  Seller  from  the
Capitalized Interest Account, the Seller shall immediately repay such amounts to
the Trustee.

                  Section 2.10.  Optional Purchase of Defaulted SBA Loans.

          The Servicer shall have the right, but not the obligation, to purchase
the  Unguaranteed  Interest of any Defaulted SBA Loan for a purchase price equal
to the  Principal  Balance  of  such  Unguaranteed  Interest  as of the  date of
repurchase,  plus 30 days' interest on such Principal  Balance,  computed at the
Adjusted SBA Loan Remittance Rate as of the next succeeding  Determination Date,
plus any accrued unpaid Servicing Fees,  Monthly Advances 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. Any
such  repurchase  shall be  accomplished  in the  manner  specified  in  Section
2.05(b).  In no event shall the aggregate  Principal Balance of the Unguaranteed
Interests of all  Defaulted  SBA Loans  purchased  pursuant to this Section 2.10
exceed 5% of the sum of (i) the  Original  Pool  Principal  Balance and (ii) the
Original Pre-Funded Amount.


                                      II-8
<PAGE>

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         Section 3.01.  Representations of the Seller.

         The Seller  hereby  represents  and  warrants  to the  Trustee  and the
Certificateholders that as of the Closing Date:

                  (a)  The  Seller  is a  corporation  duly  organized,  validly
existing,  and in  good  standing  under  the  laws of the  jurisdiction  of its
incorporation  and has all  licenses  necessary  to carry on its business as now
being  conducted  and is licensed,  qualified and in good standing 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 corporate  power and authority to execute and deliver
this  Agreement  and to  perform  in  accordance  herewith  and  therewith;  the
execution, delivery and performance of this Agreement (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
evidences the valid,  binding and enforceable  obligation of the Seller; and all
requisite  action  has been taken by the  Seller to make this  Agreement  valid,
binding and enforceable upon the Seller in accordance with its 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 SBA Loans by the Trustee,
as trustee.

                  (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  Certificates 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 the other
documents  on the part of the  Seller and the  performance  by the Seller of its
obligations  under this Agreement and such of the other documents to which it is
a party;

                  (c) The consummation of the transactions  contemplated by this
Agreement  will not  result  in the  breach of any  terms or  provisions  of the
articles of incorporation or bylaws 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



                                     III-1
<PAGE>

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 nor any statement,  report or other
document  furnished  or  to  be  furnished  pursuant  to  this  Agreement  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;

                  (f)  There  is  no  action,   order,   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) except as described in the Confidential Placement Memorandum,  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 (ii)  which  would draw into
question the validity of this Agreement or the SBA Loans;

                  (g) The Trust Fund 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  statements  contained in the  Confidential  Placement
Memorandum  which  describe the Seller or the SBA Loans or matters or activities
for  which  the  Seller  is  responsible  in  accordance  with the  Confidential
Placement  Memorandum,  this Agreement and all documents  referred to therein or
herein  or  delivered  in  connection  therewith  or  herewith,   or  which  are
attributable  to the  Seller  therein  or  herein  are true and  correct  in all
material respects,  and the Confidential  Placement  Memorandum does not contain
any untrue  statement  of a material  fact with respect to the Seller or the SBA
Loans  and  does  not  omit to  state a  material  fact  necessary  to make  the
statements  contained  therein  with  respect to the Seller or the SBA Loans not
misleading in light of the circumstances  under which they were made. The Seller
is not aware that the  Confidential  Placement  Memorandum  contains  any untrue
statement of a material  fact or omits to state any material  fact  necessary to
make  the  statements   contained   therein  not  misleading  in  light  of  the
circumstances  under  which they were  made.  There is no fact  peculiar  to the


                                     III-2
<PAGE>

Seller  or the SBA  Loans  and known to the  Seller  that  materially  adversely
affects or in the future may (so far as the Seller can now  reasonably  foresee)
materially  adversely  affect  the  Seller  or the SBA  Loans  or the  ownership
interests therein represented by the Certificates that has not been set forth in
the Confidential Placement Memorandum;

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

                  (k) The transfer,  assignment  and conveyance of the SBA Notes
and the  Mortgages  by the Seller  pursuant to this  Agreement  are not, or with
respect to the Subsequent  SBA Loans,  will not be, 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  relating to the Initial SBA
Loans have been, and the origination and collection  practices to be used by the
Seller with respect to each  Subsequent  SBA Loan and Mortgage  relating to each
Subsequent  SBA Loan will  have been in all  material  respects  legal,  proper,
prudent and customary in the SBA loan origination and servicing business;

                  (m) Each  Initial  SBA Loan was and each  Subsequent  SBA Loan
will be, selected from among the existing SBA loans in the Seller's portfolio at
the date  hereof,  or in the case of the  Subsequent  SBA Loans,  at the related
Subsequent  Cut-Off  Date,  in a manner not  designed  to  adversely  affect the
Certificateholders;

                  (n) The Seller  received  fair  consideration  and  reasonably
equivalent value or, in the case of the Subsequent SBA Loans, will have received
fair consideration and reasonably  equivalent value, in exchange for the sale of
the Unguaranteed Interest of the SBA Loans evidenced by the Certificates;

                  (o) Neither the Seller nor any of its  affiliates  sold, or in
the case of the  Subsequent  SBA Loans will have sold,  any  interest in any SBA
Loan evidenced by the Certificates  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 SBA Loans to the Trust Fund or the
sale of the Certificates, the Seller is paying its debts and after giving effect
to the transactions  contemplated  herein, the Seller will have adequate capital
to conduct its business;

                  (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(h), 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. The Seller
has no trade names,  fictitious names, or "doing business as" names,  except for
"Business Loan Center;"

                                     III-3
<PAGE>

                  (r) The Seller  will treat the  transfer of the SBA Loans as a
sale for federal income tax and accounting purposes;

                  (s) To the best of Seller's  knowledge,  all tax returns  have
been filed on a timely basis;

                  (t) The Seller will maintain separate books and records,  will
not  commingle  assets and will hold  itself out as a separate  entity  from the
Spread Account Depositor; and

                  (u) The Class A  Certificates  shall have been rated  "AAA" by
DCR.

         Section 3.02.  Individual SBA Loans.

         The Seller  hereby  represents  and  warrants to the  Trustee,  and the
Certificateholders, with respect to each Initial SBA Loan originated or acquired
by the Seller,  as of the Closing Date, and with respect to each  Subsequent SBA
Loan originated by the Seller, as of the related Subsequent 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 Trustee or the FTA, on behalf of the  Trustee,  on the
Closing Date or as otherwise provided in Section 2.04;

                  (c)  Each  Mortgaged  Property  is  improved  by a  Commercial
Property  or a  Residential  Property  and does not  constitute  other than real
property under state law;

                  (d) Except  with  respect to no more than 1% of the SBA Loans,
each SBA Loan has been originated by the Seller or its predecessors and is being
serviced by the Servicer;

                  (e) Except  with  respect to no more than 5% of the SBA Loans,
each SBA Loan is an SBA ss.  7(a) Loan and is  secured  by one or more  items of
collateral;

                  (f) Except for approximately 4.95% which adjust monthly,  each
SBA Note will, with respect to principal payments,  adjust quarterly and provide
for a schedule of Monthly  Payments  which are, if timely  paid,  sufficient  to
fully amortize the principal balance of such SBA Note on its 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


                                     III-4
<PAGE>

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
as set  forth  in  Section  3.02(g)  or  other  liens  which  will  be  released
simultaneously  with such  transfer and  assignment;  and  immediately  upon the
transfer  and  assignment  herein  contemplated,  the Trustee 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 (i) as set
forth in Section  3.02(g),  (ii) the  interests  of the SBA or (iii) other liens
which will be released simultaneously with such transfer and assignment;

                  (i) As of the Cut-Off Date (or, with respect to any Subsequent
SBA Loan, as of the related  Subsequent Cut-Off Date), no SBA Loan is 30 or more
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,  and each Mortgaged
Property is free of material damage and is in good repair;

                  (k) The SBA Loan is not  subject  to any right of  rescission,
subordination, 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, 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
the Closing 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, if applicable, the SBA Rules and
Regulations;

                  (m) Each SBA Loan  originated by the Seller was  originated in
accordance  with  the  underwriting  criteria  set  forth  in  the  Confidential
Placement Memorandum.

                  (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 5.07;

                  (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


                                     III-5
<PAGE>

Property with a generally acceptable carrier in an amount representing  coverage
described in Section 5.07;

                  (p)  Each  SBA  Note,  any  related  Mortgage  and  any  other
agreement  pursuant  to which  Collateral  is  pledged to a Seller 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 Servicer 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 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  Trustee or
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)  Each  SBA Loan  conforms,  and all such SBA  Loans in the
aggregate  conform,  to the  description  thereof set forth in the  Confidential
Placement Memorandum;

                  (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 and
the Certificateholders and which has been delivered to the Trustee;

                  (u) To  the  best  of  the  Seller's  knowledge  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)  To  the  best  of  the  Seller's  knowledge  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


                                     III-6
<PAGE>

Mortgaged  Property  as  security  for the SBA  Loan  or the use for  which  the
premises were intended;

                  (w) Each Mortgaged  Property  which is the primary  collateral
for the related SBA Loan was, at the time of  origination  of such SBA Loan, and
to the best of the  Seller's  knowledge,  is, as of the  Cut-off  Date,  free of
contamination from toxic substances or hazardous wastes or 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 fact
provided by the Seller or omits to state a fact necessary to make the statements
contained  therein  provided  by the  Seller  not  misleading  in  light  of the
circumstances under which they were made;

                  (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  Certificateholders 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 and that is not a first  mortgage  loan,  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;

                  (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


                                     III-7
<PAGE>

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  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 neither
the Servicer nor the Seller have 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 was not  selected for  inclusion  under this
Agreement from the Seller's portfolio of comparable SBA loans on any basis which
would have a material adverse affect on a Certificateholder;

                  (jj) All amounts  received  on and after the Cut-Off  Date or,
with  respect to the  Subsequent  SBA Loans,  received  on and after the related
Subsequent  Cut-Off Date, with respect to the SBA Loans have been, to the extent
required by this  Agreement,  deposited into the Principal and Interest  Account
and are, as of the Closing Date,  or, with respect to the  Subsequent SBA Loans,
as of the related  Subsequent  Transfer  Date,  in the  Principal  and  Interest
Account;

                  (kk) With  respect to those SBA Loans  secured  by  Collateral
other than a Mortgaged Property, the related 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 Note, security agreement and UCC-1;

                  (ll)  Each  SBA  Loan  is  secured  by one or  more  items  of
Collateral  and at the time the related SBA Loan was  originated,  the aggregate
value of all  Collateral  securing  such  SBA  Loan  was at  least  equal to the
original  principal  amount of the related SBA Loan and all Prior Liens securing
the related Collateral;

                                     III-8
<PAGE>

                  (mm)  To  the  best  of  Seller's  knowledge,   there  are  no
governmental  proceedings or  investigations  pending or threatened  which would
adversely affect payment on the SBA Loans;

                  (nn) Each SBA Loan is personally  guaranteed by a principal of
the Obligor; and

                  (oo) Each SBA Loan qualifies to be guaranteed by the SBA.

          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  Certificates
to the  Certificateholders.  Upon discovery by the Servicer,  any Subservicer or
the  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  Certificateholders  or the SBA therein or which  materially  and  adversely
affects the interests of the  Certificateholders  and the SBA 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  of such  SBA Loan by  depositing  in the  Principal  and
Interest Account,  on the next succeeding  Determination  Date, an amount and in
the  manner  specified  in  Section  2.05(b),  or (c) if within two years of the
Closing  Date,  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  Trustee  and the FTA a  certification  in the form  attached
hereto as Exhibit I, executed by a Servicing Officer,  and shall also deliver to
the Trustee and the FTA, as applicable, the documents constituting the 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 Protection Fee and the
Servicing Fee allocable to such  Qualified  Substitute SBA Loan or Loans 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


                                     III-9
<PAGE>

SBA Loan.  The  Servicer  shall give  written  notice to the  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
Section 2.05 and this Section 3.03, the Seller shall indemnify and hold harmless
the  Trust  Fund,  the  Trustee  and the  Certificateholders  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
2.05 and 3.03 to cure,  purchase or  substitute  for a defective SBA Loan and to
indemnify  the  Certificateholders  and the Trustee as provided in Sections 2.05
and 3.03 constitute the sole remedies of the Trustee and the  Certificateholders
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  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 Trustee for all amounts  payable  hereunder in respect of such
SBA Loan.





                                     III-10
<PAGE>



                                   ARTICLE IV

                                THE CERTIFICATES

         Section 4.01.  Certificates.


                  The Class A and Class B Certificates shall be substantially in
the forms annexed hereto as Exhibits B-1 and B-2 and shall, upon original issue,
be executed and delivered by the Servicer to the Trustee for  authentication and
redelivery  to or upon the order of the Seller,  upon receipt by the Trustee and
the FTA of the documents  specified in Section 2.04. All  Certificates  shall be
executed on behalf of the Servicer by its President,  its Treasurer,  one of its
Executive Vice  Presidents,  one of its Vice  Presidents or one of its Assistant
Vice Presidents,  in the denominations specified in the definition of Percentage
Interest,  and shall be  authenticated  on behalf of the  Trustee  by one of its
Responsible  Officers.  Certificates  bearing the signatures of individuals  who
were at the time of the  execution or  authentication  of the  Certificates  the
proper officers of the Servicer or a Responsible  Officer of the Trustee, as the
case  may be,  shall  bind  the  Servicer  or the  Trustee,  as the case may be,
notwithstanding  that such  individuals  or any of them have ceased to hold such
offices prior to the delivery of such  Certificates or did not hold such offices
at the date of such  Certificates.  All  Certificates  issued hereunder shall be
dated the date of their authentication.

          Section 4.02. Registration of Transfer and Exchange of Certificates.

                  (a) The  Trustee  shall  cause to be kept at the office of the
Certificate  Registrar,  in New York, New York, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, it shall provide for
the  registration of Certificates and of transfers and exchanges of Certificates
as herein provided.  The Certificate Register shall contain the name, remittance
instructions,  Class and Percentage Interest of each Certificateholder,  as well
as the Series and the number in the Series.  Marine  Midland  Bank is  initially
appointed Certificate Registrar for the purpose of registering  Certificates and
transfers and exchanges of Certificates as herein provided.

                  (b) Each  Class of  Certificates  shall be issued  in  minimum
denominations of $100,000  original  principal amount and integral  multiples of
$1,000 in excess  thereof,  except that one Class A Certificate  and one Class B
Certificate  may  be  in a  different  denomination  so  that  the  sum  of  the
denominations  of all outstanding  Class A Certificates and Class B Certificates
shall equal the Original Class A Certificate  Principal Balance and the Original
Class B Certificate  Principal Balance,  respectively.  On the Closing Date, the
Trustee will authenticate  Individual Certificates all in an aggregate principal
amount that shall equal the Original Class A Certificate  Principal  Balance and
the Original Class B Certificate Principal Balance.

                  (c)      [Intentionally Omitted.]

                  (d)      [Intentionally Omitted.]


                                      IV-1
<PAGE>


                  (e)      [Intentionally Omitted.]

                  (f)      [Intentionally Omitted.]

                  (g) Subject to the preceding  paragraphs,  upon  surrender for
registration  of transfer of any  Certificate  at the office of the  Certificate
Registrar and, upon satisfaction of the conditions set forth below, the Servicer
shall execute in the name of the  designated  transferee or  transferees,  a new
Certificate of the same Percentage Interest and dated the date of authentication
by the  Trustee.  The  Certificate  Registrar  shall notify the Servicer and the
Trustee of any such transfer.

                  At the option of the  Certificateholders,  Certificates may be
exchanged for other Certificates in authorized denominations of a like Class and
aggregate  Percentage  Interest,  upon  surrender  of  the  Certificates  to  be
exchanged  at such office.  Whenever any  Certificates  are so  surrendered  for
exchange,    the   Servicer   shall   execute   the   Certificates   which   the
Certificateholder  making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall be accompanied by wiring
instructions, if applicable, in the form of Exhibit E(1).

                  (h) No  service  charge  shall  be made  for any  transfer  or
exchange of  Certificates,  but prior to transfer the Certificate  Registrar may
require  payment  by the  transferor  of a sum  sufficient  to cover  any tax or
governmental  charge  that may be imposed in  connection  with any  transfer  or
exchange of Certificates.

                  All  Certificates  surrendered for transfer and exchange shall
be marked  canceled by the  Authenticating  Agent and  retained for one year and
destroyed thereafter.

                  (i) By acceptance of an Individual  Certificate,  whether upon
original  issuance or  subsequent  transfer,  each holder of such a  Certificate
acknowledges  the  restrictions on the transfer of such Certificate set forth in
the Securities  Legend and agrees that it will transfer such a Certificate  only
as  provided  herein.  In  addition  to the  provisions  of Section  4.02(n) the
following restrictions shall apply with respect to the transfer and registration
of transfer of an Individual  Certificate to a transferee that takes delivery in
the form of an Individual Certificate:

                           (i) The  Certificate  Registrar  shall  register  the
                  transfer  of  an  Individual   Certificate  if  the  requested
                  transfer is being made to a  transferee  who has  provided the
                  Certificate Registrar with a Rule 144A Certification.

                           (ii) The  Certificate  Registrar  shall  register the
                  transfer of any Individual Certificate (other than the initial
                  delivery  of the Class B  Certificates  to the Spread  Account
                  Depositor) if (x) the transferor  has advised the  Certificate
                  Registrar in writing that the Certificate is being transferred
                  to an Institutional  Accredited Investor; and (y) prior to the
                  transfer the transferee furnishes to the Certificate Registrar
                  a Transferee  Letter,  provided that, if based upon an Opinion
                  of  Counsel  to the effect  that the  delivery  of (x) and (y)


                                      IV-2
<PAGE>

                  above are not sufficient to confirm that the proposed transfer
                  is  being  made  pursuant  to  an  exemption  from,  or  in  a
                  transaction not subject to, the  registration  requirements of
                  the Securities Act and other  applicable laws, the Certificate
                  Registrar may as a condition of the  registration  of any such
                  transfer    require   the    transferor   to   furnish   other
                  certifications,  legal opinions or other  information prior to
                  registering the transfer of an Individual Certificate.

                  (j)      [Intentionally Omitted.]

                  (k)      [Intentionally Omitted.]

                  (l)      [Intentionally Omitted.]

                  (m) The  Securities  Legend shall be placed on any  Individual
Certificate  issued in  exchange  for or upon  transfer  of  another  Individual
Certificate or of a beneficial interest in the Global Certificate.

                  (n) Subject to the  restrictions  on transfer and exchange set
forth in this  Section  4.02,  the  holder  of any  Individual  Certificate  may
transfer  or  exchange  the same in whole or in part (in an initial  certificate
balance equal to the minimum authorized denomination or any integral multiple of
$1,000 in excess  thereof) by  surrendering  such  Certificate  at the Corporate
Trust Office, or at the office of any transfer agent,  together with an executed
instrument of assignment and transfer  satisfactory in form and substance to the
Certificate Registrar in the case of transfer and a written request for exchange
in the  case of  exchange.  The  holder  of a  beneficial  interest  in a Global
Certificate  may,  subject to the rules and procedures of the Depository,  cause
the Depository (or its nominee) to notify the  Certificate  Registrar in writing
of a request  for  transfer  or  exchange  of such  beneficial  interest  for an
Individual Certificate or Certificates.  Following a proper request for transfer
or exchange,  the Certificate Registrar shall, within five Business Days of such
request made at such Corporate  Trust Office,  cause the Trustee to authenticate
and the Certificate  Registrar to deliver at such Corporate Trust Office, to the
transferee (in the case of transfer) or holder (in the case of exchange) or send
by first class mail at the risk of the  transferee  (in the case of transfer) or
holder (in the case of exchange) to such address as the transferee or holder, as
applicable, may request, an Individual Certificate or Certificates,  as the case
may require,  for a like aggregate  Percentage  Interest and in such  authorized
denomination or denominations as may be requested. The presentation for transfer
or exchange of any Individual  Certificate shall not be valid unless made at the
Corporate  Trust  Office  by  the  registered  holder  in  person,  or by a duly
authorized attorney-in-fact.

                  (o) No transfer of any  Certificate  shall be made unless such
transfer is exempt from the registration  requirements of the Securities Act and
any applicable  state securities laws or is made in accordance with said Act and
laws.  In the  event of any  such  transfer,  unless  such  transfer  is made in
reliance  upon Rule 144A under the  Securities  Act and  except for the  initial
issuance of the Class B Certificates  to the Spread Account  Depositor,  (i) the
Trustee may require a written Opinion of Counsel (which may be in-house counsel)


                                      IV-3
<PAGE>

acceptable to and in form and substance  reasonably  satisfactory to the Trustee
that  such  transfer  may be  made  pursuant  to an  exemption,  describing  the
applicable exemption and the basis therefor,  from said Act and laws or is being
made  pursuant to said Act and laws,  which  Opinion of Counsel  shall not be an
expense of the Trustee,  the Seller, the Servicer or the Trust Fund and (ii) the
Trustee shall require the transferee to execute a Transferee  Letter  certifying
to the  Seller  and the  Trustee  the facts  surrounding  such  transfer,  which
Transferee  Letter  shall not be an  expense of the  Trustee,  the  Seller,  the
Servicer or the Trust Fund. The holder of a Certificate  desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee,  the Seller and
the  Servicer  against any  liability  that may result if the transfer is not so
exempt or is not made in  accordance  with such federal and state laws.  None of
the Seller, the Servicer,  the Trustee or the Trust Fund intends or is obligated
to register or qualify any  Certificate  under the  Securities  Act or any state
securities laws.

                  (p) No  Class  B  Certificate  may  be  acquired  directly  or
indirectly,  for or on  behalf  of:  (i)  an  employee  benefit  plan  or  other
retirement  arrangement  subject to ERISA,  and/or  Section 4975 of the Code, or
(ii) any  entity,  the assets of which  would be deemed  plan  assets  under the
Department of Labor regulations set forth at 29 C.F.R. ss.2510.3-101, other than
an "insurance  company  general  account"  within the meaning of Section V(e) of
Prohibited  Transaction  Class  Exemption  95-60  (collectively,  a "Plan").  No
transfer of a Class B Certificate  representing an Individual  Certificate shall
be made  unless  the  Trustee  shall  have  received  a  certification  from the
transferee  of  such  Individual  Certificate,  acceptable  to and in  form  and
substance  satisfactory  to the Trustee and the Seller,  to the effect that such
transferee  is either:  (i) not  acquiring  a Class B  Certificate,  directly or
indirectly,  for or on  behalf  of a Plan,  or (ii) is  acquiring  such  Class B
Certificate,  directly or indirectly,  for or on behalf of an "insurance company
general  account"  within the meaning of Section V(e) of Prohibited  Transaction
Class Exemption 95-60.  Notwithstanding anything else to the contrary herein, in
the event any  purported  transfer of any Class B  Certificate  representing  an
Individual Certificate is made without delivery of the certification referred to
above, such certification shall be deemed to have been made by the Transferee by
its  acceptance  of such  Individual  Certificate.  In addition,  any  purported
transfer  of a  Class  B  Certificate  representing  an  Individual  Certificate
directly  or  indirectly  to or on behalf  of a Plan  other  than an  "insurance
company  general  account"  within the  meaning of  Section  V(e) of  Prohibited
Transaction  Class  Exemption  95-60  shall  be  void  and  of  no  effect.  The
acquisition  of a Class B  Certificate  representing  an  interest  in a  Global
Certificate  shall be deemed a representation by the acquirer that it is either:
(i) not  acquiring  a Class B  Certificate,  directly or  indirectly,  for or on
behalf of a Plan,  or (ii) is  acquiring  such Class B  Certificate  directly or
indirectly,  for or on behalf of an "insurance  company general  account" within
the meaning of Section V(e) of Prohibited Transaction Class Exemption 95-60.

                  (q)  Notwithstanding  any other provision of this Agreement to
the contrary,  on the Closing Date, the Trustee shall  authenticate  in the name
of, and deliver to, the Spread Account Depositor, the Class B Certificate in the
form of a single Individual  Certificate in an aggregate  principal amount equal
to the Original Class B Principal  Balance.  The Class B Certificate  may not be
sold, pledged, transferred, assigned or otherwise conveyed, in whole or in part,
without the prior written approval of the SBA, a copy of which approval shall be
furnished to the Trustee. A legend to such effect shall be placed on the Class B


                                      IV-4
<PAGE>

Certificate.  The  holder of the Class B  Certificate  shall at all times be the
Spread Account  Depositor  unless the SBA has consented and a written Opinion of
Counsel acceptable to and in form and substance  reasonably  satisfactory to the
SBA and the Trustee is delivered.

          Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates.

                  If  (i)  any  mutilated  Certificate  is  surrendered  to  the
Certificate  Registrar,  or the Trustee and the Certificate  Registrar  receives
evidence  to  its  satisfaction  of  the  destruction,  loss  or  theft  of  any
Certificate,  and (ii) there is delivered to the  Servicer,  the Trustee and the
Certificate  Registrar  such security or indemnity as may be required by each of
them to save  each of them  harmless,  then,  in the  absence  of  notice to the
Servicer,  the Trustee and the Certificate  Registrar that such  Certificate has
been acquired by a bona fide purchaser,  the Servicer shall execute and deliver,
and the  Trustee  shall  authenticate,  in  exchange  for or in lieu of any such
mutilated,  destroyed,  lost or stolen  Certificate,  a new  Certificate of like
Class, tenor and Percentage Interest, but bearing a number not contemporaneously
outstanding.  Upon the issuance of any new Certificate  under this Section 4.03,
the  Servicer  and the Trustee may  require the payment of a sum  sufficient  to
cover any tax or other  governmental  charge  that may be  imposed  in  relation
thereto and any other expenses connected  therewith.  Any duplicate  Certificate
issued pursuant to this Section 4.03 shall constitute  complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the mutilated, destroyed, lost or stolen Certificate shall be found at any time.

                  Section 4.04.  Persons Deemed Owners.

                  Prior to due presentation of a Certificate for registration of
transfer,  the  Servicer,  the Seller,  the  Trustee,  the Paying  Agent and the
Certificate  Registrar  may treat the  Person in whose name any  Certificate  is
registered  as the  owner  of such  Certificate  for the  purpose  of  receiving
remittances pursuant to Section 6.07 and for all other purposes whatsoever,  and
the Seller, the Servicer, the Trustee and the Certificate Registrar shall not be
affected by notice to the contrary.





                                      IV-5
<PAGE>




                                    ARTICLE V

                    ADMINISTRATION AND SERVICING OF SBA LOANS

          Section 5.01. Duties of the Servicer.

                  (a) The  Servicer  covenants  and agrees  that it shall act as
agent (and the  Servicer is hereby  appointed  to act as agent) on behalf of the
Trust Fund and that, in such capacity,  it shall: (i) prepare and file, or cause
to be prepared  and filed,  in a timely  manner,  any Tax Return  required to be
filed by the Trust Fund;  (ii) prepare and forward,  or cause to be prepared and
forwarded,  to the Trustee, the  Certificateholders  and to the Internal Revenue
Service and any other relevant  governmental  taxing  authority all  information
returns or reports as and when  required to be  provided  to them in  accordance
with any  provision  of federal,  state or local  income tax laws;  (iii) to the
extent that the affairs of the Trust Fund are within its  control,  conduct such
affairs at all times that any Certificates are outstanding so as to maintain the
status of the Trust Fund as a grantor trust under any applicable federal,  state
and local laws;  (iv) pay the amount of any and all  federal,  state,  and local
taxes,  imposed on the Trust Fund when and as the same shall be due and  payable
(but such  obligation  shall not prevent the  Servicer or any other  appropriate
Person from  contesting  any such tax in appropriate  proceedings  and shall not
prevent the Servicer from withholding  payment of such tax, if permitted by law,
pending the outcome of such  proceedings);  (v) ensure that any such  returns or
reports  filed  on  behalf  of the  Trust  Fund  are  properly  executed  by the
appropriate  person;  and (vi) represent the Trust Fund in any administrative or
judicial  proceedings  relating to an examination  or audit by any  governmental
taxing authority, request an administrative adjustment as to any taxable year of
the Trust Fund, enter into settlement  agreements with any  governmental  taxing
agency, extend any statute of limitations relating to any item of the Trust Fund
and  otherwise  act on behalf of the Trust  Fund in  relation  to any tax matter
involving the Trust Fund. The Servicer shall indemnify the Trustee and the Trust
Fund for any  liability it may incur in  connection  with this Section  5.01(a),
which indemnification shall survive the termination of the Trust Fund; provided,
however,  that the Servicer  shall not  indemnify  the Trustee for the Trustee's
negligence, willful misconduct or bad faith.

                  (b) 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 and the Multi-Party Agreement and the SBA Rules
and  Regulations.  The Servicer may enter into  Subservicing  Agreements for any
servicing and administration of SBA ss. 7(a) Loans with any entity approved with
prior  written  consent  by the SBA.  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 ss. 7(a) Loans or enter into a  Subservicing  Agreement  with a
successor subservicer which qualifies hereunder.

                                      V-1
<PAGE>

                  (c)  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
Trustee,  for  itself and on behalf of the  Certificateholders,  the SBA and the
Certificateholders  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.

                  (d) 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  Trustee,   the  SBA  and
Certificateholders 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 5.01(e).

                  (e) In the event the  Servicer  shall for any reason no longer
be the Servicer (including by reason of an Event of Default), the Trustee or its
designee shall,  subject to Section 10.02 hereof and the Multi-Party  Agreement,
thereupon  assume all of the rights and  obligations  of the Servicer under each
Subservicing  Agreement  that the  Servicer may have  entered  into,  unless the
Trustee is then permitted and elects to terminate any Subservicing  Agreement in
accordance with its terms. The Trustee,  its designee or the successor  servicer
for the Trustee shall be deemed to have assumed all of the  Servicer's  interest
therein  and to have  replaced  the  Servicer  as a party  to each  Subservicing
Agreement to the same extent as if the Subservicing Agreements had been assigned
to the assuming party, except that the Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreements.  The Servicer at
its expense and without right of reimbursement therefor,  shall, upon request of
the Trustee, deliver to the assuming party all documents and records relating to
each  Subservicing  Agreement  and the SBA  Loans  then  being  serviced  and an
accounting  of  amounts  collected  and  held by it and  otherwise  use its best
efforts  to effect  the  orderly  and  efficient  transfer  of the  Subservicing
Agreements to the assuming party.

                  (f) 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
and the Certificateholders,  provided,  however, that (unless (x) the Obligor is


                                      V-2
<PAGE>

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  5.12),  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 Certificateholders
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   Trustee,   the  SBA  and  each
Certificateholder,  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,  each  Certificateholder
and/or the Trustee 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 Trustee
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 management procedures) and exercise the same
care that it  customarily  employs and exercises in servicing and  administering
SBA Loans for its own account,  in accordance with the SBA Rules and Regulations
and giving due consideration to the  Certificateholders'  and the SBA's reliance
on the Servicer.

                  (g)  On and  after  such  time  as the  Trustee  receives  the
resignation  of, or notice of the removal of, the  Servicer  from its rights and
obligations  under this Agreement,  and with respect to resignation  pursuant to
Section  9.04,  after  receipt of the  Opinion of Counsel  required  pursuant to
Section 9.04  addressed to the SBA and the Trustee,  the Trustee or its designee
shall  assume all of the  rights and  obligations  of the  Servicer,  subject to
Section 10.02 hereof and the Multi-Party  Agreement.  The Servicer  shall,  upon
request  of the  Trustee  but at the  expense  of the  Servicer,  deliver to the
Trustee all  documents  and records  (including  computer  tapes and  diskettes)
relating to the SBA Loans and an accounting of amounts collected and held by the
Servicer and  otherwise use its best efforts to effect the orderly and efficient
transfer of servicing rights and obligations to the assuming party.

                  (h) For so long as any of the Certificates are outstanding and
are  "restricted  securities"  within  the  meaning  of  Rule  144(a)(3)  of the
Securities  Act,  (1) the  Servicer  will provide or cause to be provided to any
holder of such Certificates and any prospective  purchaser thereof designated by
such a holder,  upon the request of such holder or  prospective  purchaser,  the
information  required to be provided to such holder or prospective  purchaser by


                                      V-3
<PAGE>

Rule 144A(d)(4) under the Securities Act; and (2) the Servicer shall update such
information from time to time in order to prevent such information from becoming
false and misleading and will take such other actions as are necessary to ensure
that  the  safe  harbor  exemption  from the  registration  requirements  of the
Securities  Act under  Rule 144A is and will be  available  for  resales of such
Certificates conducted in accordance with Rule 144A.

          Section 5.02. Liquidation of SBA Loans.

          In the event that any payment due under any SBA Loan and not postponed
pursuant to Section 5.01 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  shall  take such  action  in  accordance  with the
applicable  SBA  Rules  and  Regulations  as it  shall  deem  to be in the  best
interests of the  Certificateholders  and the SBA.  With respect to any such SBA
ss. 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 Trustee shall, upon written direction of the Servicer, deliver
to the SBA or its designee  all or any portion of the  Trustee's  Document  File
relating to such SBA ss. 7(a) Loan and the Trustee shall execute such documents,
including  but not  limited to an  endorsement  of the  related  SBA Note and an
assignment of the related  Mortgage,  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 Certificate 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 ss. 7(a) Loans for which the related SBA ss. 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  5.10.  In
connection  with  such  foreclosure  or other  conversion,  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 or use under the circumstances
in the conduct of its own affairs.  The  Unguaranteed  Percentage of any amounts
advanced in connection  with such  foreclosure or other action shall  constitute
"Servicing  Advances." The Servicer shall take into account the existence of any
hazardous  substances,  hazardous wastes or solid wastes on Mortgaged Properties
in  determining  whether to foreclose upon or otherwise  comparably  convert the
ownership  of such  Mortgaged  Property,  and will not  foreclose on a Mortgaged
Property  where it has cause to  believe  such  substances  exist  unless it has
received a Phase I environmental report and such report reveals no environmental
problems,   or  such   Mortgaged   Property  is  subject  to  an   environmental
rehabilitation for which the Seller is not responsible.

          After an SBA Loan has become a Liquidated SBA Loan, the Servicer shall
promptly  prepare and forward to the Trustee and the SBA and upon  request,  any
Certificateholder,  a Liquidation Report, in the form attached hereto as Exhibit
J,  detailing the  Liquidation  Proceeds  received from the Liquidated SBA Loan,
expenses  incurred  with respect  thereto,  and any loss  incurred in connection
therewith.

                                      V-4
<PAGE>

          Section 5.03.  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  Designated
Depository  Institutions,  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  "Business  Loan
Center,  Inc., in trust for the registered  holders of Business Loan Center, SBA
Loan-Backed  Adjustable Rate Certificates,  Series 1998-1, Class A and Class B."
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
Trustee, the SBA and, upon request, any Certificateholder.

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

                           (i)  the  Unguaranteed  Percentage  of  all  payments
                  received after the Cut-Off Date on account of principal on the
                  SBA Loans, including the Unguaranteed Percentage of all Excess
                  Payments,  Principal  Prepayments and  Curtailments  collected
                  after the Cut-Off Date;

                           (ii) all payments  received after the Cut-Off 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   customary   servicing
                  procedures);

                          (v)  the  Unguaranteed   Percentage  of  all  Released
                  Mortgaged Property Proceeds;

                                      V-5
<PAGE>

                           (vi)  any  amounts  paid  in   connection   with  the
                  repurchase  of the  Unguaranteed  Interest of any SBA Loan and
                  the amount of any Substitution Adjustment received pursuant to
                  Sections 2.05 and 3.03;

                           (vii) any  amount  required  to be  deposited  in the
                  Principal and Interest Account pursuant to Section 5.10; 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, the Premium Protection Fee, the FTA's Fee and the Servicing
Fee, with respect to each SBA Loan and 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,  need 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 Trustee  pursuant to Section  5.04(a).  Any  reference  herein to amounts on
deposit in the Principal and Interest Account shall refer to amounts net of such
investment earnings.

          Section 5.04.  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  Trustee  on  each
Determination  Date for deposit in the Certificate  Account,  the portion of the
Available  Funds for the  related  Remittance  Date that is net of  Compensating
Interest, Monthly Advances and 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,  unreimbursed  Monthly
Advances 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, except as
provided in the  following  sentence,  Servicing  Advances and Monthly  Advances
shall be limited to Liquidation Proceeds,  Released Mortgaged Property Proceeds,
Insurance  Proceeds  and such other  amounts as may be collected by the Servicer
from the Obligor or otherwise  relating to the SBA Loan in respect of which such
unreimbursed  amounts  are  owed.  The  Servicer's  right to  reimbursement  for


                                      V-6
<PAGE>

Servicing  Advances  and  Monthly  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;

                  (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 5.03(d),  interest paid in respect of
Permitted  Instruments  or  by a  Designated  Depository  Institution  on  funds
deposited in the Principal and Interest Account;

                  (e) to  withdraw  any funds  deposited  in the  Principal  and
Interest  Account  that  were  not  required  to be  deposited  therein  or were
deposited therein in error;

                  (f) to pay itself servicing  compensation  pursuant to Section
7.03 hereof or interest as permitted  under the  definition of Excess  Proceeds;
and

                  (g) to clear and terminate the Principal and Interest  Account
upon the termination of this Agreement.

                  So long as no default or Event of Default  shall have occurred
and be  continuing,  and  consistent  with any  requirements  of the  Code,  the
Principal  and Interest  Account  shall either be  maintained  with a Designated
Depository  Institution as an interest-bearing  account meeting the requirements
set forth in Section  5.03(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 "Business
Loan Center,  Inc. in trust for the  registered  holders of Business Loan Center
SBA Loan-Backed  Adjustable Rate  Certificates,  Series 1998-1." All interest or
other  earnings from funds on deposit in the Principal and Interest  Account (or
any  Permitted  Instruments  thereof)  shall be the  exclusive  property  of the
Servicer,  and may be withdrawn from the Principal and Interest Account pursuant
to clause (d) above.  The amount of any losses  incurred in connection  with the
investment  of  funds  in  the  Principal  and  Interest  Account  in  Permitted
Instruments  shall be deposited  in the  Principal  and Interest  Account by the
Servicer  from its own  funds  immediately  as  realized  without  reimbursement
therefor.

          Section   5.05. [Intentionally Omitted]

                                      V-7
<PAGE>

          Section   5.06. Transfer of Accounts.

                  The Servicer may,  upon written  notice to the Trustee and the
SBA,  transfer  any  Principal  and Interest  Account to a different  Designated
Depository Institution.

          Section   5.07. 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  Servicer's
policies on Foreclosed  Property  constituting  real  property,  fire and hazard
insurance in the amounts  described above and liability  insurance.  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  5.04.  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   5.08. [Intentionally Omitted]

          Section   5.09. 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 $500,000,  and a maximum deductible of $25,000,  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
Trustee,  its officers and  employees  against  losses  resulting  from forgery,
theft,  embezzlement  or  fraud  by such  Servicer  Employees.  The  errors  and
omissions  policy  shall  insure  against  losses  resulting  from  the  errors,
omissions and negligent  acts of such Servicer  Employees.  No provision of this
Section 5.09  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 Trustee, the SBA or any Certificateholder, the Servicer shall


                                      V-8
<PAGE>

cause  to be  delivered  to the  Trustee,  the SBA or such  Certificateholder  a
certified  true copy of such  fidelity bond and  insurance  policy.  The current
issuer of such  fidelity  bond is Travelers  Casualty and Surety and the current
issuer of such insurance policy is Lloyds of London.

          Section 5.10. Title, Management and Disposition of Foreclosed Property

          In the  event  that  title to a  Mortgaged  Property  is  acquired  in
foreclosure or by deed in lieu of foreclosure  (a  "Foreclosed  Property"),  the
deed or certificate of sale may be taken in the name of the Trustee on behalf of
the Trust Fund for the benefit of the  Certificateholders  and the SBA, as their
interests  may appear  under the  Multi-Party  Agreement  dated the date of this
Agreement.

          Unless the servicing of a Foreclosed  Property  relating to an SBA ss.
7(a) Loan is assumed by the SBA pursuant to the SBA Rules and  Regulations,  the
Servicer,  subject to Sections  5.01 and 5.02 hereof,  shall  manage,  conserve,
protect   and   operate   each   Foreclosed   Property   for  the  SBA  and  the
Certificateholders  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 in the
same manner that it manages,  conserves,  protects and operates other foreclosed
property  for its own account,  and in the same manner that similar  property in
the same  locality as the  Foreclosed  Property 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 and the
Certificateholders.

          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 net of Servicing
Advances.

          The  disposition  of Foreclosed  Property  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 and the  Certificateholders.  The  Unguaranteed
Percentage of the proceeds of sale of the Foreclosed  Property  shall  promptly,
but in no event later than two Business Days after receipt,  be deposited in the
Principal  and  Interest  Account as received  from time to time and, as soon as
practicable  thereafter,  the expenses of such sale shall be paid.  The Servicer
shall,  subject to Section 5.04,  reimburse itself for any related  unreimbursed
Servicing Advances, unpaid Servicing Fees and unreimbursed Monthly Advances, and
the  Servicer   shall  deposit  in  the  Principal  and  Interest   Account  the
Unguaranteed  Percentage of the net cash proceeds of such sale to be distributed
to the Certificateholders in accordance with Section 6.07 hereof.

          In the event any  Mortgaged  Property  is  acquired  as  aforesaid  or
otherwise in connection  with a default or imminent  default on an SBA Loan, the
Servicer shall dispose of such Mortgaged Property within two years after its


                                      V-9
<PAGE>

acquisition  unless the Servicer and the Trustee  shall have received an Opinion
of Counsel also  addressed  to the SBA to the effect that such longer  retention
will not cause the Trust Fund to be subject to Federal income tax.

          Section 5.11. [Intentionally Omitted.]

          Section 5.12. 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
Obligors under the SBA Loans, 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,  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
provided that the Servicer  determines  such extension would not be considered a
new mortgage  loan for federal  income tax  purposes.  In the event the Servicer
shall consent to the deferment of the due dates for payments due on an SBA Note,
the Servicer shall nonetheless make payment of any required Monthly Advance with
respect to the  payments so  extended to the same extent as if such  installment
were due, owing and delinquent and had not been deferred,  and shall be entitled
to reimbursement therefor in accordance with Section 5.04(b) hereof.

          Section   5.13.  Access  to  Certain   Documentation  and  Information
                           Regarding the SBA Loans.

          The  Servicer  shall  provide to the Trustee and the SBA 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.

          Section 5.14. Superior Liens.

          If  the  Servicer  is  notified  that  any  superior   lienholder  has
accelerated or intends to accelerate the obligations secured by a Prior Lien, or
has  declared  or  intends  to  declare a  default  under  the  mortgage  or the
promissory note secured thereby,  or has filed or intends to file an election to
have the Mortgaged  Property  sold or  foreclosed,  the Servicer  shall take, on
behalf of the SBA and the Trust Fund,  whatever actions are necessary to protect
the  interests  of the  Certificateholders  and the SBA,  and/or to preserve the
security of the related SBA Loan.  The  Servicer  shall  immediately  notify the
Trustee, the Rating Agency and the SBA of any such action or circumstances.  The
Servicer will advance the  necessary  funds to cure the default or reinstate the
superior   lien,   if  such   advance   is  in  the   best   interests   of  the
Certificateholders  and the SBA. The Servicer shall  thereafter take such action
as is necessary to recover the amount so advanced.



                                      V-10
<PAGE>
                                   ARTICLE VI

                       PAYMENTS TO THE CERTIFICATEHOLDERS

          Section 6.01.  Establishment of Certificate Account; Deposits in
                         Certificate   Account;   Permitted   Withdrawals   from
                         Certificate Account.

                  (a) No later than the Closing Date, the Trustee will establish
and maintain with itself in its trust  department a trust  account,  which shall
not be interest-bearing,  titled "Certificate  Account,  Marine Midland Bank, as
trustee  for the  registered  holders of Business  Loan  Center SBA  Loan-Backed
Adjustable  Rate  Certificates,  Series  1998-1,  Class  A  and  Class  B"  (the
"Certificate Account"). The Trustee shall, promptly upon receipt, deposit in the
Certificate Account and retain therein:

                           (i) the Available Funds (net of the amount of Monthly
                  Advances  and  Compensating  Interest  deposited  pursuant  to
                  subclause (ii) below and amounts then on deposit in the Spread
                  Account) remitted by the Servicer;

                           (ii) the Compensating Interest and the portion of the
                  Monthly Advance remitted to the Trustee by the Servicer;

                           (iii)  amounts  transferred  from the Spread  Account
                  pursuant to Section 6.02(b)(i);

                           (iv)  amounts  required  to be paid  by the  Servicer
                  pursuant  to Section  6.06(e)  in  connection  with  losses on
                  investments of amounts in the Certificate Account; and

                           (v) amounts  transferred from the Pre-Funding Account
                  pursuant to Section 6.04 and the Capitalized  Interest Account
                  pursuant to Section 6.05, respectively.

         (b) Amounts on deposit in the Certificate Account shall be withdrawn on
each  Remittance  Date by the Trustee,  or the Paying Agent,  on its behalf,  to
effect the  distribution  described  in Section  6.07(b) and  thereafter  by the
following parties in no particular order of priority:

                           (i) by the Trustee,  to invest  amounts on deposit in
                  the Certificate Account in Permitted  Instruments  pursuant to
                  Section 6.06;

                           (ii) by the 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  Trustee,  to  withdraw  any  amount not
                  required  to  be  deposited  in  the  Certificate  Account  or
                  deposited therein in error; and

                                      VI-1
<PAGE>

                           (iv) by the  Trustee,  to  clear  and  terminate  the
                  Certificate  Account upon the termination of this Agreement in
                  accordance with the terms of Section 11.01 hereof.

          Section 6.02.  Establishment  of Spread  Account;  Deposits  in
                         Spread  Account;   Permitted  Withdrawals  from  Spread
                         Account.

                  (a) No later than the Closing Date, the Trustee will establish
with the Spread Account Custodian an Account in accordance with the terms of the
Spread Account Agreement (the "Spread Account"). The Spread Account shall be the
property of the Spread Account Depositor, subject to the terms hereof and of the
Spread  Account  Agreement,  and the  funds  held  therein  may be  invested  in
Permitted Instruments. The Spread Account shall not constitute part of the Trust
Fund.  The Trustee or the Spread Account  Custodian,  as the case may be, shall,
promptly  upon receipt,  deposit into the Spread  Account or, in the case of the
Trustee,  transfer  to the Spread  Account  Custodian  for deposit in the Spread
Account:

                            (i) on the Closing Date,  the Initial Spread Account
                  Deposit made by the Spread Account Depositor;

                           (ii) on each  Remittance  Date,  that  portion of the
                  Available  Funds,  if any,  required to be deposited  into the
                  Spread  Account  pursuant  to Section  6.07(b)(iii)  until the
                  Spread Account  Balance equals the then  applicable  Specified
                  Spread Account Requirement; and

                           (iii)  amounts  required  to be paid by the  Servicer
                  pursuant  to Section  6.06(e)  in  connection  with  losses on
                  investments of amounts in the Spread Account.

                  (b)  Amounts  on  deposit  in  the  Spread  Account  shall  be
withdrawn by the Spread  Account  Custodian and  transferred  to the Trustee for
distribution  in the manner set forth in subclause (c) below on each  Remittance
Date in the following order of priority:

                           (i) to deposit in the  Certificate  Account an amount
                  by  which  (a) the sum of the  Class A  Interest  Distribution
                  Amount,  the Class A  Principal  Distribution  Amount  and the
                  Class A Carry Forward Amount  exceeds (b) the Available  Funds
                  for such  Remittance  Date (but excluding from such definition
                  of Available Funds, amounts in the Spread Account); and

                           (ii) to the extent that the amount then on deposit in
                  the  Spread  Account  after  giving  effect  to  all  required
                  transfers from the Spread Account to the  Certificate  Account
                  on such  Remittance  Date then  exceeds the  Specified  Spread
                  Account Requirement as of such Remittance Date (such excess, a
                  "Spread  Account  Excess"),  an  amount  equal to such  Spread
                  Account  Excess  shall be  distributed  by the Spread  Account


                                      VI-2
<PAGE>

                  Custodian  to the  Certificate  Account  to pay  interest  and
                  principal to the Class B Certificateholders, as payment of the
                  Trustee's  fees and  expenses,  to pay the  Servicer up to the
                  Reimbursable  Amounts and then to the Spread Account Depositor
                  in the priority as set forth in Section 6.07(b);

and also, in no particular order of priority:

                            (iii) to invest  amounts  on  deposit  in the Spread
                  Account in Permitted Instruments pursuant to Section 6.06;

                           (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 11.01.

                  (c) Any amounts  which are required to be  withdrawn  from the
Spread  Account  pursuant to  paragraph  (b) above shall be  withdrawn  from the
Spread  Account  in the  following  order  of  priority:  (i)  first,  from  any
uninvested funds therein,  and (ii) second, from the proceeds of the liquidation
of any investments therein pursuant to Section 6.06(b).

                  (d) Any amounts which are  distributed  by the Spread  Account
Custodian to the Spread Account  Depositor  pursuant to paragraph  (b)(ii) above
will not be required to be refunded,  regardless of whether there are sufficient
funds on a subsequent  Remittance Date to make a full distribution to holders of
the Certificates on such Remittance Date.

          Section 6.03.  Establishment  of Expense  Account;  Deposits in
                         Expense  Account;  Permitted  Withdrawals  from Expense
                         Account

                  (a) No later than the Closing Date, the Trustee will establish
with  itself an  account  for the  benefit  of the  Trustee  to pay its fees and
expenses related to the Trust Fund (the "Expense Account").  The Expense Account
shall  not  constitute  part of the  Trust  Fund and is for the  benefit  of the
Trustee  and,  on a  subordinate  basis,  for the  benefit  of the  Servicer  as
described in (b)(ii) and (c) below.  The Trustee  shall deposit into the Expense
Account:

                           (i) on each  Remittance  Date  from  the  amounts  on
                  deposit  in the  Certificate  Account  or as stated in Section
                  6.02(b)(ii),  an amount  equal to  one-twelfth  of the  Annual
                  Expense Escrow Amount; and

                           (ii) upon receipt, amounts required to be paid by the
                  Servicer pursuant to Section 6.06(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  Account  shall be
insufficient  to pay in full the fees and  expenses of the Trustee then due, the


                                      VI-3
<PAGE>

Trustee  shall  make  demand  on the  Servicer  to  advance  the  amount of such
insufficiency,  and the  Servicer  shall  promptly  advance  such  amount to the
Trustee.  Thereafter,  the Servicer shall be entitled to reimbursement  from the
Expense  Account  for the  amount  of any such  advance  from any  excess  funds
available  pursuant to subclause (c)(ii) below.  Without limiting the obligation
of the Servicer to advance such  insufficiency,  in the event the Servicer  does
not  advance  the  full  amount  of  such  insufficiency  by  the  Business  Day
immediately  preceding the Determination  Date, the amount of such insufficiency
shall be deposited into the Expense Account for payment to the Trustee  pursuant
to Section  6.07(b)(vi),  to the extent of  available  funds in the  Certificate
Account.

                  (b) The Trustee, at the direction of the Servicer,  may invest
amounts on deposit in the Expense Account in Permitted  Instruments  pursuant to
Section 6.06 hereof,  and the Trustee shall  withdraw  amounts on deposit in the
Expense Account to:

                           (i) pay the Trustee's  fees and expenses as described
                  in Section 2.08 hereof;

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

                           (iii)   withdraw  any  amounts  not  required  to  be
                  deposited  in the  Expense  Account  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 11.01.

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

                           (i)  reimburse  the Servicer  and/or the Seller,  for
                  reimbursable advances made pursuant to Section 9.01;

                           (ii)  reimburse  the Servicer for advances made by it
                  pursuant to the last paragraph of subclause (a) above; and

                           (iii) remit to the Servicer as  additional  servicing
                  compensation  any amounts  remaining  in the  Expense  Account
                  after  payments made pursuant to subclauses  (b)(i),  (b)(ii),
                  (b)(iii), (c)(i) and (c)(ii), above.

                                      VI-4
<PAGE>

          Section  6.04. Establishment of Pre-Funding Account; Deposits in
                         Pre-Funding   Account;   Permitted   Withdrawals   from
                         Pre-Funding Account.

                    (a) No later  than the  Closing  Date,  the  Spread  Account
Depositor shall establish and maintain with the Trustee in its trust  department
a trust  account,  which shall not be  interest-bearing,  titled  "Business Loan
Center  SBA  Pre-Funding  Account  1998-1"  (the  "Pre-Funding  Account").   The
Pre-Funding  Account  shall not  constitute  part of the Trust Fund.  The Spread
Account  Depositior  shall be deemed the owner of the  Pre-Funding  Account  for
Federal income tax purposes.  The Trustee shall, promptly upon receipt,  deposit
into the Pre-Funding  Account and retain therein the Original  Pre-Funded Amount
from the proceeds of the sale of the Certificates.

                    (b) On each  Subsequent  Transfer  Date,  the Servicer shall
instruct the Trustee to withdraw from the Pre-Funding Account an amount equal to
100% of the aggregate  Principal  Balances of the Subsequent SBA Loans as of the
related  Subsequent  Cut-Off  Date  sold to the  Trust  Fund on such  Subsequent
Transfer  Date  and pay such  amount  to or upon the  order of the  Seller  with
respect to such transfer.

                    (c) If at the end of the Funding Period amounts still remain
in the Pre-Funding  Account, the Servicer shall instruct the Trustee to withdraw
from the Pre-Funding  Account on the immediately  following  Remittance Date and
deposit such amounts in the  Certificate  Account.  However,  if at the close of
business on March 26, 1999, amounts still remain in the Pre-Funding Account, the
Servicer shall instruct the Trustee to withdraw from the Pre-Funding  Account on
the  Special  Remittance  Date  and  deposit  in  the  Certificate  Account  any
Pre-Funded  Amount  then  remaining  in the  Pre-Funding  Account,  and then the
Pre-Funding Account shall be closed.

                    (d) On the  Remittance  Dates  occurring  in  January  1999,
February 1999 and March 1999,  the Trustee shall  transfer from the  Pre-Funding
Account to the Certificate Account, the Pre-Funding Earnings, if any, applicable
to each such Remittance Date.

          Section 6.05.  Establishment of Capitalized  Interest  Account;
                         Deposits in  Capitalized  Interest  Account;  Permitted
                         Withdrawals from Capitalized Interest Account.

                    (a) No  later  than  the  Closing  Date,  the  Seller  shall
establish and maintain with the Trustee in its trust department a trust account,
which  shall  not  be  interest  bearing,   titled  "Business  Loan  Center  SBA
Capitalized Interest Account 1998-1" (the "Capitalized  Interest Account").  The
Capitalized  Interest  Account shall not constitute  part of the Trust Fund. The
Seller shall be deemed the owner of the Capitalized Interest Account for Federal
income tax purposes. The Trustee shall, promptly upon receipt,  deposit into the
Capitalized  Interest  Account  $59,625.00.  If prior to the end of the  Funding
Period  the funds on  deposit  in the  Pre-Funding  Account  are  invested  in a
guaranteed  investment  contract,  repurchase  agreement  or  other  arrangement
acceptable to the Rating Agency,  that constitutes a Permitted  Instrument,  the
Trustee  shall,  within  one  Business  Day of its  receipt of  notification  of


                                      VI-5
<PAGE>

satisfaction  of the Rating  Agency  Condition,  withdraw  from the  Capitalized
Interest   Account  and  pay  to  the  Seller  the  amount  set  forth  in  such
notification.

                    (b) On each Subsequent Transfer Date the Seller may instruct
the Trustee to withdraw from the  Capitalized  Interest  Account and pay on such
Subsequent  Transfer Date to the Seller the Overfunded  Interest Amount for such
Subsequent  Transfer  Date,  as  calculated  by the Seller  pursuant  to Section
2.09(e) hereof.

                    (c) On the  Remittance  Dates  occurring  in  January  1999,
February  1999 and March 1999 the Trustee shall  transfer  from the  Capitalized
Interest  Account  to  the  Certificate   Account,   the  Capitalized   Interest
Requirement, if any, for such Remittance Dates.

                    (d)  On the  Special  Remittance  Date,  the  Trustee  shall
transfer from the Capitalized  Interest  Account to the Certificate  Account the
Capitalized Interest Requirement,  if any, for such Special Remittance Date. Any
amounts remaining in the Capitalized  Interest Account after taking into account
such transfer shall be paid on such Special  Remittance Date to the Seller,  and
the Capitalized Interest Account shall be closed.

         Section 6.06.  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  which is not by the terms of this  Agreement to
be held  uninvested  by the  Trustee or the Spread  Account  Custodian  shall be
invested  and  reinvested  by the Trustee or the Spread  Account  Custodian,  as
directed in writing by the Servicer, in one or more Permitted Instruments in the
name of the Trustee or the Spread Account Custodian, as the case may be, bearing
interest or sold at a discount.  No such investment in the Certificate  Account,
the Pre-Funding  Account,  the Capitalized Interest Account, the Expense Account
and the Spread  Account  shall mature  later than the  Business Day  immediately
preceding the next Remittance Date and no such investment in the Expense Account
shall mature later than the Business  Day  immediately  preceding  the date such
funds will be needed to pay fees or premiums;  provided, however, the 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 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  Trustee or the Spread  Account  Custodian  and  sufficient
uninvested funds are not available to make such disbursement, the Trustee or the
Spread  Account  Custodian,  as the  case  may  be,  shall  cause  to be sold or
otherwise  converted  to cash a  sufficient  amount of the  investments  in such
Account.  Neither the Trustee nor the Spread Account  Custodian  shall be liable
for any investment loss or other charge resulting therefrom.

                  (c) Subject to Section 12.01  hereof,  neither the Trustee nor
the Spread  Account  Custodian  shall in any way be held liable by reason of any
insufficiency in any Account held by the Trustee or the Spread Account Custodian


                                      VI-6
<PAGE>

resulting from any investment loss on any Permitted  Instrument included therein
(except to the extent that the Trustee is the obligor thereon).

                  (d) The Trustee and the Spread Account  Custodian shall invest
and  reinvest  funds in the Accounts  held by the Trustee or the Spread  Account
Custodian,  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,   provided,  however  that  any  amounts  held  uninvested  in  the
Pre-Funding  Account shall be, as soon as  practicable,  invested in one or more
Permitted Instruments.

                  (e) All income or other gain from  investments  in any Account
held by the Trustee or the Spread Account  Custodian  shall be deposited in such
Account,  as the case may be,  immediately  on  receipt,  and the Trustee or the
Spread  Account  Custodian  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 Trustee or the Spread Account
Custodian, as the case may be, 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 6.07.  Distributions.

                  (a)  The   rights  of  the   Certificateholders   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) On each  Remittance  Date the Trustee shall  withdraw from
the  Certificate  Account  the sum of (A) that  portion of the  Available  Funds
received  from the  Servicer  pursuant  to Section  6.01(a)(i),  (B) the amounts
received pursuant to Section  6.01(a)(ii) and (iv) and (C) the amounts deposited
therein pursuant to Section  6.02(b)(i),  and make distributions  thereof in the
following order of priority:

                            (i) First,  to the Class A Certificates in an amount
                  up to the Class A Interest Distribution Amount;

                           (ii) Second, to the Class A Certificates in an amount
                  up to the sum of (a) the Class A Principal Distribution Amount
                  and (b) the Class A Carry Forward Amount;

                           (iii) Third,  to the Spread  Account,  any  remaining
                  Available Funds unless and until the amount therein equals the
                  Specified Spread Account Requirement;

                           (iv) Fourth, to the Class B Certificates in an amount
                  up to the Class B Interest Distribution Amount minus the Class
                  Carry Forward Interest Amount for the Class B Certificates;

                                      VI-7
<PAGE>

                           (v) Fifth, to the Class B Certificates,  in an amount
                  up to the sum of (a) the Class B Principal Distribution Amount
                  and (b) the Class B Carry Forward Amount;

                           (vi) Sixth, to the Expense Account in an amount up to
                  one-twelfth  of the  Annual  Expense  Escrow  Amount  plus any
                  amount required to be paid to the Trustee  pursuant to Section
                  6.03(a) resulting from insufficiencies in the Expense Account;

                            (vii)  Seventh,  to the  Class B  Certificates,  the
                  Class  Carry   Forward   Interest   Amount  for  the  Class  B
                  Certificates;

                            (viii)  Eighth,  to the  Servicer in an amount up to
                  the Reimbursable Amounts;

                            (ix)  Ninth,  any  remaining  amounts  to the Spread
                  Account Depositor.

          Additionally,  on the  Special  Remittance  Date,  the  Trustee  shall
withdraw from the  Certificate  Account the amount,  if any,  deposited  therein
pursuant to Section 6.01(a)(v) and make distributions  thereof as follows:  from
amounts transferred from the Pre-Funding Account,  distributions of principal to
the Class A and Class B Certificates pro rata based upon the Class A and Class B
Percentages.

                  (c)  All  distributions  made to the  Certificateholders  of a
particular  Class will be made on a pro rata basis among the  Certificateholders
of record of the applicable Class on the next preceding Record Date based on the
Percentage Interest  represented by their respective  Certificates on such date,
and shall be made by check or,  upon  request  by a  Certificateholder,  by wire
transfer of immediately available funds to the account of such Certificateholder
at a bank or other entity having appropriate  facilities  therefor,  and, in the
case of wire  transfers,  at the expense of such  Certificateholder  unless such
Certificateholder   shall  own  of  record   Certificates   which  have  initial
Certificate Principal Balances aggregating at least $5,000,000.

         Section 6.08.  [Intentionally Omitted]

         Section 6.09.  Statements.

         Each   month,   not  later  than  12:00  noon  New  York  time  on  the
Determination Date, the Servicer shall deliver to the Trustee, by telecopy,  for
distribution  to the  Certificateholders,  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),  the Series
number of the Certificates,  the date of this Agreement, and, as of the close of
business on the Record Date for such month:

                                      VI-8
<PAGE>

                            (i) Available Funds for the related Remittance Date,
                  in the aggregate and by component;

                           (ii)  The  Aggregate  Class A  Certificate  Principal
                  Balance,  the Aggregate Class B Certificate  Principal Balance
                  and the  Pool  Principal  Balance  as  reported  in the  prior
                  Servicer's  Certificate pursuant to subclause (xii) below, or,
                  in the case of the  first  Determination  Date,  the  Original
                  Class A and  Class B  Certificate  Principal  Balance  and the
                  Original Pool Principal Balance;

                           (iii) The number and  Principal  Balances  of all SBA
                  Loans which were the subject of Principal  Prepayments  during
                  the Due Period and the number and  Principal  Balances  of all
                  Defaulted SBA Loans  purchased by the Servicer  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  Excess  Payments  and 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
                  each SBA Loan net of the FTA's  Fee,  the  Premium  Protection
                  Fee, the Additional Fee and the portion thereof payable to the
                  Registered Holders;

                           (vii) The amount of the  Monthly  Advances to be made
                  on  the  Determination  Date  and  the  Compensating  Interest
                  payment to be made on the Determination Date;

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

                           (ix)  The  product  of  the  Unguaranteed  Percentage
                  multiplied  by  the  amount  of  any  losses   realized  on  a
                  Liquidated SBA Loan;

                           (x) The  Class A and  Class B  Interest  Distribution
                  Amounts and Principal  Distribution Amounts for the Remittance
                  Date with the components thereof stated separately;

                           (xi) The amount,  if any, to be transferred  from the
                  Spread Account to the Certificate  Account pursuant to Section
                  6.02(b)(i);

                           (xii) The  Aggregate  Class A  Certificate  Principal
                  Balance,  Aggregate Class B Certificate  Principal Balance and
                  the  Pool  Principal   Balance  after  giving  effect  to  the
                  distribution to be made on the Remittance Date;

                                      VI-9
<PAGE>

                            (xiii) The Excess Spread, the Spread Account Balance
                  and the Specified  Spread Account  Requirement with respect to
                  such Remittance Date;

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

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

                           (xvi) The amount of all payments  and  reimbursements
                  to the Servicer  pursuant to Section 5.04 (b),  (c),  (d)(ii),
                  (e) and (f);

                           (xvii) The Class A and Class B Remittance  Rates with
                  respect to such Remittance Date;

                           (xviii)  During the  Funding  Period,  the  aggregate
                  Principal Balance of the Subsequent SBA Loans purchased during
                  the  prior  Due  Period  and  the  amount  on  deposit  in the
                  Pre-Funding Account and the Capitalization Interest Account as
                  of the end of such Due Period; and

                           (xix)     Such    other     information     as    the
                  Certificateholders,  the  Trustee  or the  Rating  Agency  may
                  reasonably require; provided, however, that the Servicer shall
                  have no obligation to distribute such information  directly to
                  any Certificateholder.

         The Trustee shall forward such report to the Certificateholders and the
Rating Agency on the Remittance Date, together with a separate report indicating
the amount of funds  deposited in the  Certificate  Account  pursuant to Section
6.01(a)(iv);  and the  amounts  which are  reimbursable  to the  Servicer or the
Seller  pursuant to Sections  6.03(c)(i),  6.03(c)(ii)  and  6.07(b)(viii)  (all
reports  prepared by the Trustee of such  withdrawals and deposits will be based
in  whole  or in part  upon  the  information  provided  to the  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 Trustee  shall be
entitled  to rely  upon  the  telecopy.  In the  case of  information  furnished
pursuant to subclauses (ii), (iii), (iv), (v), (x) and (xii), above, the amounts
shall be  expressed in a separate  section of the report as a dollar  amount for
each Class per $1,000 original dollar amount as of the Cut-Off Date.

         Additionally,  on the Special  Remittance Date the Trustee shall, based
upon information received from the Servicer,  forward to the  Certificateholders
and the  Rating  Agency a report  setting  forth  the  amount of  principal  and
interest,  if any,  being  paid to each  Class of  Certificates  on the  Special
Remittance Date.

                  (a) Within a  reasonable  period of time after the end of each
calendar  year, the Servicer  shall furnish to the Trustee for  distribution  to


                                     VI-10
<PAGE>

each Person who at any time  during the  calendar  year was a  Certificateholder
such  information  as is  reasonably  necessary  to  provide  to such  Person  a
statement  containing the  information  set forth in subclauses  (vi),  (x), and
(xiv),  above,  aggregated for such calendar year or applicable  portion thereof
during  which  such  Person  was a  Certificateholder.  Such  obligation  of the
Servicer shall be deemed to have been satisfied to the extent that substantially
comparable  information  shall  be  provided  by the  Servicer  pursuant  to any
requirements of the Code as from time to time are in force.

                  (b) Upon  reasonable  advance notice in writing,  the Servicer
will provide to each Certificateholder  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
Certificateholder to comply with applicable  regulations of the Office of Thrift
Supervision or other  regulatory  authorities  with respect to investment in the
Certificates.

                  (c) The  Servicer  shall  furnish  to each  Certificateholder,
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  Certificateholder  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 Certificateholder may reasonably require;  provided,  that the
Servicer  shall be entitled to be reimbursed by such  Certificateholder  for the
Servicer's  actual  expenses  incurred in providing such reports if such reports
are not producible in the ordinary course of the Servicer's business. The Rating
Agency shall receive copies of any such reports or information  furnished to the
Certificateholders.

         Section 6.10.  Advances by the Servicer.

         Not later than the close of business on each  Determination  Date,  the
Servicer  may  in  its  sole  discretion,   if  it  determines  such  amount  is
recoverable,  remit to the  Trustee for  deposit in the  Certificate  Account an
amount (as indicated in the Servicer's  Certificate prepared pursuant to Section
6.09),  to be  distributed  on the related  Remittance  Date pursuant to Section
6.07,  equal to the amount by which (i) 30 days' interest at a rate equal to the
then  applicable  Adjusted SBA Loan Remittance Rate on the aggregate Class A and
Class B Principal  Balances  immediately  prior to the related  Remittance  Date
(plus or minus the  difference,  if any,  between (A) the sum of the Class A and
Class B Interest  Distribution  Amounts and (B) the sum of the Adjusted  Class A
and Adjusted Class B Interest  Distribution  Amounts for the related  Remittance
Date) exceeds (ii) the amount  received by the Servicer as of the related Record
Date in respect of interest on the Unguaranteed  Interest of the SBA Loans minus
the  Servicing  Fee  allocable  to the  Unguaranteed  Interest  (plus,  for  the
Remittance  Dates in January 1999,  February 1999 and March 1999, the sum of (i)
all funds to be  transferred  to the  Certificate  Account from the  Capitalized
Interest  Account for such  Remittance Date pursuant to Section 6.05(c) and (ii)
the  Pre-Funding  Earnings  for the  applicable  Remittance  Date),  the Premium
Protection  Fee, the Additional  Fee, the Servicing Fee, and the FTA's Fee, such
excess being defined herein as the "Monthly Advance." The Servicer may reimburse
itself for Monthly Advances made pursuant to Section 5.04.  Notwithstanding  the
foregoing,  the  Servicer  shall not be required to make a Monthly  Advance with


                                     VI-11
<PAGE>

respect to an SBA Loan if it determines,  in good faith, that such advance would
be nonrecoverable from amounts received in respect of the SBA Loans.

         Section 6.11.  Compensating Interest.

         The Certificateholders  shall be entitled to a full month's interest on
the principal portion of the Unguaranteed  Interest of each SBA Loan at the then
applicable  Class A or Class B  Remittance  Rate,  as the case may be. Not later
than the close of business on each Determination  Date, with respect to each SBA
Loan for which a Principal  Prepayment or  Curtailment  was received  during the
related Due Period,  the Servicer  shall remit to the Trustee for deposit in the
Certificate   Account  from  amounts   otherwise  payable  to  it  as  servicing
compensation,  an amount (such amount required to be delivered to the Trustee is
referred to herein as  "Compensating  Interest") (as indicated in the Servicer's
Certificate  prepared pursuant to Section 6.09) equal to the difference  between
(a) 30 days' interest at the Adjusted SBA Loan  Remittance Rate on the Principal
Balance of each such SBA Loan as of the  beginning of the Due Period  applicable
to the  Remittance  Date on which such amount will be  distributed,  and (b) the
amount of interest actually  received on the Unguaranteed  Interest of each such
SBA  Loan  for  such  Due  Period  net of the  portion  thereof  payable  to the
Registered  Holder, the Premium Protection Fee, the FTA's Fee, the Servicing Fee
and the Excess Spread and,  with respect to each  Additional  Fee SBA Loan,  the
Additional Fee.

          Section 6.12.  Reports of Foreclosure  and  Abandonment of Mortgaged
                         Property

         Each year the  Servicer  shall  make the  reports of  foreclosures  and
abandonments  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 Trustee with an Officer's Certificate certifying that
such report has been filed.


                                     VI-12
<PAGE>


                                   ARTICLE VII

                           GENERAL SERVICING PROCEDURE

         Section 7.01.  [Intentionally Omitted]

          Section 7.02.  Satisfaction  of Mortgages and Collateral and Release
                         of SBA Files

         The  Servicer  shall  maintain  the  Fidelity  Bond as provided  for in
Section 5.09 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,  or the  receipt  by the
Servicer  of a  notification  that  payment in full will be escrowed in a manner
customary for such purposes,  the Servicer will  immediately  notify the FTA and
the 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 5.03 have
been or will be so deposited) of a Servicing  Officer and shall request delivery
to it of the Trustee's  Document File.  Upon receipt of such  certification  and
request,  the FTA and the Trustee shall  release,  within 3 Business  Days,  the
related Trustee's Document File to the Servicer. Expenses incurred in connection
with any instrument of  satisfaction  or deed of  reconveyance  shall be payable
only  from  and to  the  extent  of  servicing  compensation  and  shall  not be
chargeable to the Principal and Interest Account or the Certificate Account.

         Subject  to  the  Multi-Party  Agreement,  from  time  to  time  and as
appropriate  for the servicing or  foreclosure  of any SBA Loan, the FTA and the
Trustee  shall,  upon  request of the  Servicer  and delivery to the FTA and the
Trustee of a certification  in the form of Exhibit I attached hereto signed by a
Servicing  Officer,  release the related Trustee's Document File to the Servicer
within 3 Business Days, and the Trustee shall execute such documents as shall be
necessary to the prosecution of any such proceedings.  The Servicer shall return
the Trustee's Document File to the FTA and the 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
have been  deposited in the Principal  and Interest  Account and remitted to the
Trustee for deposit in the Certificate  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 other
Collateral either judicially or  non-judicially,  and the Servicer has delivered
to the FTA and the 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 shall be released by the Trustee to the Servicer.

                                     VII-1
<PAGE>

         The  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 Trustee a certificate
of a Servicing  Officer  requesting that such pleadings or documents be executed
by the Trustee and  certifying as to the reason such  documents or pleadings are
required and that the  execution  and  delivery  thereof by the 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 Trustee  shall,  upon receipt of a
written request from a Servicing  Officer,  execute any document provided to the
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 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 Trustee's receipt of such certificate or documents. Such certificate
or documents shall establish to the 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   7.03. Servicing Compensation.

         As  compensation  for its services  hereunder,  the  Servicer  shall be
entitled to withdraw from the  Principal and Interest  Account or to retain from
interest payments on the SBA Loans the Servicer's  Servicing Fee and the Premium
Protection  Fee  in  accordance  with  Section  5.04(b).   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  6.03(c)(iii)  and late payment charges shall be retained by or remitted
to the  Servicer  to the extent not  required  to be remitted to the Trustee for
deposit in the  Certificate  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.

          Section   7.04. Annual Statement as to Compliance.

         The Servicer will deliver to the Trustee, the SBA and the Rating Agency
on or  before  September  30 of each  year  beginning  September  30,  1999,  an
Officer's  Certificate stating that (i) the Servicer has fully complied with the
provisions  of  Articles  V 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,  (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


                                     VII-2
<PAGE>

default known to such officers and the nature and status  thereof and the action
being taken by the  Servicer to cure such  default and (iv) the Servicer has not
lost its  license to  originate  or sell SBA ss.  7(a) Loans or had its  license
suspended.  The Seller will deliver to the Trustee on or before  September 30 of
each year beginning September 30, 1999 an Officer's  Certificate  describing the
status of  compliance  with the  requirements  under  this  Agreement.  Upon the
reasonable request to the Trustee by a Certificateholder,  and at the expense of
the  Seller,  the  Trustee  shall  deliver  to the  Certificateholder  the above
referenced Officer's Certificates.

          Section 7.05.  Annual  Independent  Public  Accountants'   Servicing
                         Report

         On or before  September  30 of each year  relating  to the fiscal  year
ending on the preceding June 30th  (commencing  with the fiscal year ending June
30,  1999),  the Servicer,  at its expense,  shall cause (i) Richard A. Eisner &
Company,  LLP  or  (ii) a  firm  of  nationally  recognized  independent  public
accountants  reasonably acceptable to the Trustee to furnish a letter or letters
to the  Trustee  and the  Rating  Agency 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. Upon the
reasonable request to the Trustee by a Certificateholder,  and at the expense of
the  Seller,  the  Trustee  shall  deliver  to the  Certificateholder  the above
referenced Officer's Certificate.


          Section 7.06.  SBA's, and Trustee's Right to Examine Servicer Records
                         and Audit Operations

         The SBA and the  Trustee  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 7.07.  Reports to the Trustee; Principal and Interest Account
                         Statements.

         Not later than 20 days after  each  Record  Date,  the  Servicer  shall
forward  to the  Trustee  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  5.03,  the
aggregate  of  withdrawals  from the  Principal  and  Interest  Account for each
category of  withdrawal  specified  in Section  5.04,  the  aggregate  amount of
permitted  withdrawals not made in the related Due Period, and the amount of any
Monthly  Advances or payments of  Compensating  Interest,  in each case, for the
related Due Period.

                                     VII-3
<PAGE>

          Section   7.08. 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 ss. 7(a) Loan.  The Premium  Protection  Fee and the  Servicing Fee
shall not constitute part of the Trust Fund 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  Servicer 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.



<PAGE>

                                     VIII-1
                                  ARTICLE VIII

                       REPORTS TO BE PROVIDED BY SERVICER

         Section 8.01.  Financial Statements.

         The Servicer  understands  that, in connection with the transfer of the
Certificates, Certificateholders may request that the Servicer make available to
prospective  Certificateholders  the annual audited financial  statements of the
Servicer for one or more of the most recently completed five fiscal years, which
request shall not be unreasonably denied.

         The Servicer also agrees to make available on a reasonable basis to any
prospective  Certificateholder  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 to permit
any prospective Certificateholder to inspect the Servicer's servicing facilities
during  normal  business  hours for the purpose of satisfying  such  prospective
Certificateholder  that the Servicer has the ability to service the SBA Loans in
accordance with this Agreement.




                                     VIII-1
<PAGE>

                                   ARTICLE IX

                                  THE SERVICER

         Section 9.01.  Indemnification; Third Party Claims.

                  (a) The Servicer agrees to indemnify and hold the Trustee, the
SBA, and each  Certificateholder  harmless  against any and all claims,  losses,
penalties, fines, forfeitures,  legal fees and related costs, judgments, and any
other   costs,   fees  and  expenses   that  the  Trustee,   the  SBA,  and  any
Certificateholder  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 Trustee,  the SBA and
each  Certificateholder  if a claim is made by any party  with  respect  to this
Agreement,  and the Servicer  shall assume (with the consent of the Trustee) 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 Trustee,  the
SBA,  and/or a  Certificateholder  in respect of such  claim.  The  Trustee  may
reimburse the Servicer from the Expense Account  pursuant to Section  6.03(c)(i)
for all amounts  advanced by it pursuant to the preceding  sentence  except when
the claim  relates  directly  to the  failure of the  Servicer  to  service  and
administer the SBA Loans in compliance with the terms of this Agreement.

                  (b) The Seller agrees to indemnify  and hold the Trustee,  the
SBA and each  Certificateholder  harmless  against any and all  claims,  losses,
penalties, fines, forfeitures,  legal fees and related costs, judgments, and any
other   costs,   fees  and  expenses   that  the  Trustee,   the  SBA,  and  any
Certificateholder may sustain in any way related to the failure of the Servicer,
if it is an  affiliate  thereof,  or the  failure of the  Seller to perform  its
respective duties in compliance with the terms of this Agreement and in the best
interests of the SBA and the  Certificateholders.  The Seller shall  immediately
notify the Trustee, the SBA, and each  Certificateholder if a claim is made by a
third party with  respect to this  Agreement,  and the Seller shall assume (with
the consent of the  Trustee)  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 Trustee, the SBA and/or a Certificateholder in respect
of such claim.  The Trustee may  reimburse  the Seller from the Expense  Account
pursuant to Section  6.03(c)(i) for all amounts advanced by them pursuant to the
preceding  sentence  except  when the claim  relates  directly  to the  Seller's
indemnification  pursuant to Section  2.05 and Section 3.03 or to the failure of
the Servicer,  if it is an affiliate of a Seller,  to perform its obligations to
service  and  administer  the  Mortgages  in  compliance  with the terms of this
Agreement, or 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 and the
Certificateholders.

                                      IX-1
<PAGE>

         Section 9.02.  Merger or Consolidation of the Servicer.

         The  Servicer  will  keep in full  effect  its  existence,  rights  and
franchises as a corporation,  and 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.   The  Servicer  shall  send  notice  of  any  such  merger  or
consolidation to the Trustee, the Rating Agency and the SBA.


          Section 9.03. 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 9.01 herein,  the Servicer  shall have no  obligation to appear
with respect to, prosecute or defend any legal action which is not incidental to
the Servicer's duty to service the SBA Loans in accordance with this Agreement.

          Section 9.04. Servicer Not to Resign.

         The Servicer  shall not resign from the  obligations  and duties hereby
imposed on it except (i) by mutual consent of the Servicer, the SBA, the Trustee
and  the  Majority  Certificateholders,   (ii)  in  connection  with  a  merger,
conversion  or  consolidation  permitted  pursuant to Section  9.02 and with the
consent of the SBA and  written  notice to the Rating  Agency (in which case the
Person  resulting  from the merger,  conversion  or  consolidation  shall be the
successor of the Servicer),  or (iii) 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  Trustee,  the  SBA  and to  each
Certificateholder,  which  Opinion  of  Counsel  shall be in form and  substance
acceptable to the Trustee.  No such  resignation  shall become effective until a
successor has assumed the Servicer's  responsibilities and obligations hereunder
in accordance with Section 10.02.

                                      IX-2
<PAGE>

                                    ARTICLE X

                                     DEFAULT

         Section 10.01.  Events of Default.

                    (a) In case one or more of the  following  Events of Default
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
                  Certificateholders;  (B) the  failure by the  Servicer to make
                  any  required  Monthly  Advance  to the  extent  such  failure
                  materially   and  adversely   affects  the  interests  of  the
                  Certificateholders;  (C) the failure by the  Servicer to remit
                  any   Compensating   Interest  to  the  extent  such   failure
                  materially   and  adversely   affects  the  interests  of  the
                  Certificateholders;  or (D) any  failure  by the  Servicer  to
                  remit to Certificateholders, or to the Trustee for the benefit
                  of the  Certificateholders,  any  payment  required to be made
                  under the terms of this Agreement which  continues  unremedied
                  after  the date upon  which  written  notice of such  failure,
                  requiring  the same to be  remedied,  shall have been given to
                  the Servicer by the Trustee or to the Servicer and the Trustee
                  by any Certificateholder; 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 this Agreement, which failure continues
                  unremedied  for a period  of 60 days  after  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 Trustee or to the Servicer,  or the
                  Seller,   as  the  case  may  be,  and  the   Trustee  by  any
                  Certificateholder; 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


                                      X-1
<PAGE>

                  advantage  of  any  applicable  insolvency  or  reorganization
                  statute,  make an assignment for the benefit of its creditors,
                  or voluntarily suspend payment of its obligations.

                  (b) then, and in each and every such case, so long as an Event
of  Default  shall not have been  remedied,  and in the case of clause (i) above
(except  for  clause  (i)(B)),  if such  Event of  Default  shall  not have been
remedied  within 30 days after the Servicer has received notice of such Event of
Default, (x) with respect solely to clause (i)(B) above, if such Monthly Advance
is not made earlier than 4:00 p.m. New York time on the Determination  Date, the
Trustee shall give  immediate  telephonic  notice of such failure to a Servicing
Officer of the Servicer and, unless such failure is cured,  either by receipt of
payment or receipt of evidence  (e.g., a wire reference  number  communicated by
the sending bank) that such funds have been sent, by 12:00 Noon New York time on
the second  Business  Day  thereafter,  the Trustee  shall  immediately  assume,
pursuant to Section 10.02 hereof, the duties of a successor Servicer; and (y) in
the case of clauses (i)(A),  (i)(C),  (i)(D),  (iii), (iv) and (v), the Majority
Certificateholders, 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  Certificateholders  may have at law or equity  including
damages,  injunctive relief and specific  performance,  in each case immediately
terminate all the rights and  obligations  of the Servicer  under this Agreement
and in and to the SBA Loans and the proceeds  thereof,  as  Servicer.  Upon such
receipt  by  the  Servicer  of  a  second   written  notice  from  the  Majority
Certificateholders stating that they or it intend to terminate the Servicer as a
result of such Event of Default,  all authority and power of the Servicer  under
this  Agreement,  whether  with  respect to the SBA Loans or  otherwise,  shall,
subject to Section 10.02 and the Multi-Party Agreement, pass to and be vested in
the Trustee and the 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  Trustee in  effecting  the  termination  of the  Servicer's
responsibilities  and  rights  hereunder,  including,  without  limitation,  the
transfer to the 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 Trustee  shall provide
notice to the SBA of any Event of Default hereunder.

          Section 10.02. Trustee to Act; Appointment of Successor

         On and after the time of the Servicer's immediate  termination,  or the
Servicer's receipt of notice if required by Section 10.01, or at any time if the
Trustee  receives the  resignation  of the  Servicer  evidenced by an Opinion of
Counsel pursuant to Section 9.04 or the Servicer is removed as Servicer pursuant
to this  Article X, the 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 Trustee shall
not be liable for any actions of any Servicer  prior to it, and that the Trustee
shall not be obligated to make advances or payments  pursuant to Sections  6.03,
6.10,  6.11,  5.10 or  5.14  but  only  to the  extent  the  Trustee  determines
reasonably and in good faith that such advances would not be  recoverable,  such


                                      X-2
<PAGE>

determination   to  be  evidenced  with  respect  to  each  such  advance  by  a
certification of a Responsible Officer of the Trustee. As compensation therefor,
the 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 5.04, the Servicing Fee and the Premium  Protection
Fee, 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 7.01 and 7.03.

         Notwithstanding the above, the Trustee shall, if it is unable to so act
or if the SBA so  requests  in writing to the  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
satisfying  the Rating  Agency  Condition  that has a net worth of not less than
$15,000,000,  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 Trustee  and  remitted  directly to the Trustee or, at the
direction  of the Trustee,  to the  successor  servicer.  As  compensation,  any
successor servicer  (including,  without  limitation,  the 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  5.04 if the  Servicer  had  continued  to act as
Servicer  hereunder  and shall be entitled to the  Servicing Fee and the Premium
Protection  Fee,  together  with  other  servicing  compensation  in the form of
assumption  fees, late payment charges or otherwise as provided in Section 7.03.
In the event the  Trustee is required to solicit  bids as provided  herein,  the
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 Trustee shall negotiate and effect the
sale,  transfer and  assignment  of the  servicing  rights and  responsibilities
hereunder to the qualified  party  submitting  the highest  qualifying  bid. The
Trustee  shall deduct from any sum received by the 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 and Monthly Advances. After such deductions, the
remainder of such sum shall be paid by the Trustee as a servicing fee to the SBA
at the time of such sale,  transfer and assignment to the Servicer's  successor.
The 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 Trustee and any successor servicer in effecting the
termination of the Servicer's  servicing  responsibilities  and rights hereunder
and  shall  promptly  provide  the  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 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


                                      X-3
<PAGE>

Spread Account by the Servicer or which are thereafter  received with respect to
the SBA Loans.  Neither the 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 Trustee to each  Certificateholder  and the SBA
and the Trustee and the SBA shall have consented thereto.  The Trustee shall not
resign as servicer until a successor servicer  reasonably  acceptable to the SBA
has been appointed.

         Pending  appointment  of a successor  to the  Servicer  hereunder,  the
Trustee shall act in such capacity as hereinabove  provided.  In connection with
such appointment and assumption,  the 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 7.03 or otherwise as
provided in this Agreement.  The Servicer,  the Trustee and such successor shall
take such  action,  consistent  with this  Agreement,  as shall be  necessary to
effectuate any such succession.

          Section 10.03. Waiver of Defaults.

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

          Section 10.04. Control by Majority Certificateholders and Others.

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

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

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



                                      X-4
<PAGE>

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



                                      X-5
<PAGE>


                                   ARTICLE XI

                                   TERMINATION

         Section 11.01.  Termination.

         This  Agreement  shall  terminate  upon  notice to the  Trustee  of the
earlier of the following  events:  (a) the final payment or other liquidation 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 consent of the Servicer and all Certificateholders
in writing; provided, however, that in no event shall the Trust Fund established
by this Agreement  terminate later than twenty-one  years after the death of the
last surviving  lineal  descendant of Joseph P. Kennedy,  late Ambassador of the
United States to the Court of St. James, alive as of the date hereof.

         The Servicer may, at its option,  terminate  this Agreement on any date
on  which  the Pool  Principal  Balance  is less  than 10% of the sum of (i) the
Original  Pool  Principal  Balance and (ii) the  Original  Pre-Funded  Amount 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  Aggregate  Class A and Class B Certificate
Principal  Balances,  and (ii) 30 days' interest  thereon at the then applicable
Class A and  Class B  Remittance  Rates,  as the case  may be (the  "Termination
Price").  Notwithstanding  the  prior  sentence,  if at the  time  the  Servicer
determines to exercise such option the unsecured  long-term debt  obligations of
the  Servicer  are not rated at least BBB by the  Rating  Agency,  if the Rating
Agency is still  rating the  Certificates,  the  Servicer  shall give the Rating
Agency prior written  notice of the  Servicer's  determination  to exercise such
option and shall not  exercise  such  option,  without the consent of the Rating
Agency,  prior to furnishing  the Rating  Agency with an Opinion of Counsel,  in
form and  substance  reasonably  satisfactory  to the  Rating  Agency,  that the
exercise  of such  option  would not be deemed a  fraudulent  conveyance  by the
Servicer.

         Notice of any  termination,  specifying the Remittance  Date upon which
the Trust Fund will terminate and that the  Certificateholders  shall  surrender
their  Certificates  to the Trustee for  payment of the final  distribution  and
cancellation   shall  be  given   promptly   by  the   Servicer   by  letter  to
Certificateholders 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 Certificates  will be made upon  presentation and surrender
of Certificates at the office of the 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  Certificates  at the office of the Trustee
therein  specified.  The Servicer shall give such notice to the Trustee  therein
specified.  The Servicer  shall give such notice to the Trustee at the time such
notice is given to  Certificateholders.  Any  obligation  of the Servicer to pay
amounts due to the Trustee shall survive the termination of this Agreement.

         In the event  that all of the  Certificateholders  shall not  surrender
their  Certificates for cancellation  within six months after the time specified


                                      XI-1
<PAGE>

in the above-mentioned  written notice, the Servicer shall give a second written
notice to the remaining  Certificateholders  to surrender their Certificates for
cancellation and receive the final  distribution  with respect thereto and shall
at the expense of the Trust Fund cause to be  published  once,  in the  national
edition of The Wall Street Journal notice that such money remains unclaimed.  If
within six months after the second notice all of the Certificates shall not have
been surrendered for  cancellation,  the Trustee may take appropriate  steps, or
may  appoint  an agent to take  appropriate  steps,  to  contact  the  remaining
Certificateholders  concerning  surrender  of  their  Certificates  and the cost
thereof  shall be paid out of the funds and other assets  which  remain  subject
hereto.  If within the period then specified in the escheat laws of the State of
New York  after  the  second  notice  all the  Certificates  shall not have been
surrendered  for  cancellation,  the Seller  shall be entitled to all  unclaimed
funds and other assets which remain subject hereto and the Trustee upon transfer
of such funds shall be discharged of any  responsibility  for such funds and the
Certificateholders shall look to the Seller for payment.

         Section 11.02.  Accounting Upon Termination of Servicer

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

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

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

                  (c) deliver to its  successor  or, if none shall yet have been
appointed,  to the Trustee and, upon request, to the  Certificateholders  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.


                                      XI-2
<PAGE>


                                   ARTICLE XII

                                   THE TRUSTEE

         Section 12.01.  Duties of Trustee.

         The Trustee,  prior to the  occurrence of an Event of Default and after
the curing of all  Events of  Default  which may have  occurred,  undertakes  to
perform such duties and only such duties as are  specifically  set forth in this
Agreement. If an Event of Default has occurred and has not been cured or waived,
the Trustee  shall  exercise  such of the rights and powers vested in it by this
Agreement,  and use the same  degree  of care and  skill  in its  exercise  as a
prudent person would exercise or use under the  circumstances  in the conduct of
such person's own affairs.

          The   Trustee,   upon  receipt  of  all   resolutions,   certificates,
statements,  opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically  required to be furnished  pursuant to any
provision  of this  Agreement,  shall  examine  them to  determine  whether they
conform  to the  requirements  of this  Agreement,  provided,  however  that the
Trustee shall not be responsible  for the accuracy or content of any resolution,
certificate,  statement,  opinion,  report,  document, order or other instrument
furnished by the Servicer or the Seller  hereunder.  If any such  instrument  is
found not to conform to the requirements of this Agreement in a material manner,
the Trustee  shall take action as it deems  appropriate  to have the  instrument
corrected, and if the instrument is not corrected to the Trustee's satisfaction,
the  Trustee  will  provide  notice  thereof to the  Certificateholders  and the
Servicer.

         No  provision  of this  Agreement  shall be  construed  to relieve  the
Trustee from liability for its own negligent  action,  its own negligent failure
to act or its own willful misconduct or bad faith; provided, however, that:

                  (a) Prior to the occurrence of an Event of Default,  and after
the curing of all such Events of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express  provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement,  no
implied  covenants or obligations  shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively  rely, as to the truth of the statements and the correctness of
the opinions expressed  therein,  upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Agreement;

                  (b) The Trustee shall not be personally liable for an error of
judgment  made in good  faith by  officers  of the  Trustee,  unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;

                  (c) The Trustee shall not be personally liable with respect to
any  action  taken,  suffered  or  omitted  to be taken  by it in good  faith in
accordance  with the direction of the Majority  Certificateholders,  relating to


                                     XII-1
<PAGE>

the time, method and place of conducting any proceeding for any remedy available
to the Trustee,  or exercising  any trust or power  conferred  upon the Trustee,
under this Agreement;

                  (d) In the  absence of actual  knowledge  of an officer of the
Trustee in its Corporate Trust Office of an Event of Default,  the Trustee shall
not be required to take notice or be deemed to have notice or  knowledge  of any
default or Event of Default unless the Trustee shall be specifically notified in
writing by the  Servicer  or any of the  Certificateholders.  In the  absence of
actual knowledge or receipt of such notice, the Trustee may conclusively  assume
that there is no default or Event of Default; and

                  (e) The  Trustee  shall not be  required to expend or risk its
own funds or otherwise incur  financial  liability for the performance of any of
its duties  hereunder or the exercise of any of its rights or powers if there is
reasonable  ground for  believing  that the  repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.

          Section 12.02. Certain Matters Affecting the Trustee.

                  (a)      Except as otherwise provided in Section 12.01:

                           (i) The  Trustee  may  request  and rely and shall be
                  protected  in  acting  or  refraining  from  acting  upon  any
                  resolution, Officer's Certificate,  certificate of auditors or
                  any other certificate, statement, instrument, opinion, report,
                  notice,  request,  consent,  order,  appraisal,  bond or other
                  paper or  document  believed  by it to be genuine  and to have
                  been signed or presented by the proper party or parties;

                           (ii) The  Trustee may  consult  with  counsel and any
                  opinion of counsel  shall be full and  complete  authorization
                  and  protection  in respect of any action taken or suffered or
                  omitted by it hereunder in good faith and in  accordance  with
                  such opinion of counsel;

                           (iii) The  Trustee  shall be under no  obligation  to
                  exercise  any of the  trusts  or  powers  vested in it by this
                  Agreement  or to  institute,  conduct or defend by  litigation
                  hereunder  or in  relation  hereto  at the  request,  order or
                  direction   of  the   Certificateholders,   pursuant   to  the
                  provisions of this Agreement,  unless such  Certificateholders
                  shall  have  offered to the  Trustee  reasonable  security  or
                  indemnity  against the costs,  expenses and liabilities  which
                  may be incurred therein or thereby;  nothing  contained herein
                  shall,  however,  relieve the Trustee of the obligation,  upon
                  the  occurrence  of an Event of  Default  (which  has not been
                  cured), to exercise such of the rights and powers vested in it
                  by this  Agreement,  and to use the  same  degree  of care and
                  skill in its exercise as a prudent  person  would  exercise or
                  use under the  circumstances  in the conduct of such  person's
                  own affairs;

                                     XII-2
<PAGE>

                           (iv) The Trustee shall not be  personally  liable for
                  any action taken,  suffered or omitted by it in good faith and
                  believed by it to be  authorized  or within the  discretion or
                  rights or powers conferred upon it by this Agreement;

                           (v) Prior to the  occurrence  of an Event of  Default
                  hereunder  and after the curing of all Events of Default which
                  may have occurred,  the Trustee shall not be bound to make any
                  investigation   into  the  facts  or  matters  stated  in  any
                  resolution,   certificate,   statement,  instrument,  opinion,
                  report, notice,  request,  consent,  order, approval,  bond or
                  other paper or document,  unless requested in writing to do so
                  by Holders of  Certificates  evidencing  Percentage  Interests
                  aggregating not less than 25% provided,  however,  that if the
                  payment within a reasonable  time to the Trustee of the costs,
                  expenses  or  liabilities  likely to be  incurred by it in the
                  making  of  such  investigation  is,  in  the  opinion  of the
                  Trustee, not reasonably assured to the Trustee by the security
                  afforded to it by the terms of this Agreement, the Trustee may
                  require reasonable indemnity against such expense or liability
                  as a  condition  to taking  any such  action.  The  reasonable
                  expense  of  every  such  examination  shall  be  paid  by the
                  Servicer  or, if paid by the  Trustee,  shall be repaid by the
                  Servicer upon demand from the Servicer's own funds;

                           (vi)  The  right  of  the   Trustee  to  perform  any
                  discretionary  act enumerated in this  Agreement  shall not be
                  construed as a duty,  and the Trustee  shall not be answerable
                  for other than its  negligence  or willful  misconduct  or bad
                  faith in the performance of such act;

                           (vii) The  Trustee  shall not be required to give any
                  bond or  surety  in  respect  of the  execution  of the  trust
                  created hereby or the powers granted hereunder;

                           (viii) The  Trustee  may execute any of the trusts or
                  powers  hereunder  or  perform  any  duties  hereunder  either
                  directly or by or through agents or attorneys; and

                           (ix) In the event that the  Trustee is also acting as
                  Paying  Agent;  Registrar  or Spread  Account  Custodian,  the
                  rights  and  protections  afforded  to the  Trustee  shall  be
                  afforded to such Paying  Agent,  Registrar  or Spread  Account
                  Custodian.

                  Section 12.03.  Trustee Not Liable for Certificates
                                  or SBA Loans.

                  The recitals  contained herein and in the Certificates  (other
than the certificate of authentication  on the  Certificates)  shall be taken as
the statements of the Servicer,  and the Trustee assumes no  responsibility  for
their  correctness.  The Trustee makes no  representations as to the validity or
sufficiency  of this  Agreement  or of the  Certificates  or of any SBA  Loan or
related  document.  The  Trustee  shall  not  be  accountable  for  the  use  or
application  by the  Servicer of any of the  Certificates  or of the proceeds of


                                     XII-3
<PAGE>

such  Certificates,  or for  the use or  application  of any  funds  paid to the
Servicer  in  respect of the SBA Loans or  deposited  in or  withdrawn  from the
Principal  and  Interest  Account  by the  Servicer.  The  Trustee  shall not be
responsible  for the  legality  or validity of the  Agreement  or the  validity,
priority,  perfection or sufficiency of the security for the Certificates issued
or intended to be issued hereunder.

          Section 12.04. Trustee May Own Certificates.

          The Trustee in its  individual  or any other  capacity  may become the
owner or pledgee of  Certificates  with the same rights it would have if it were
not Trustee, and may otherwise deal with the parties hereto.

          Section 12.05. Servicer To Pay Trustee's Fees and Expenses.

          The Servicer  covenants  and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be  limited  by any  provision  of law in  regard to the  compensation  of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts  hereby  created and in the  exercise and  performance  of any of the
powers  and  duties  hereunder  of the  Trustee,  and the  Servicer  will pay or
reimburse   the  Trustee   upon  its  request  for  all   reasonable   expenses,
disbursements  and advances  incurred or made by the Trustee in accordance  with
any of the provisions of this Agreement  (including the reasonable  compensation
and the  expenses  and  disbursements  of its  counsel  and of all  persons  not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith,  provided that the Trustee shall have no
lien on the Trust Fund for the payment of its fees and  expenses.  To the extent
that actual fees and  expenses of the Trustee  exceed the amount  available  for
payment  thereof on deposit in the Expense  Account as of the date such fees and
expenses are due and payable,  the Servicer shall reimburse the Trustee for such
shortfall  out of its  own  funds  without  reimbursement  therefor,  except  as
provided in Section  6.03.  The Trustee and any director,  officer,  employee or
agent of the Trustee and the Spread Account Custodian and any director, officer,
employee or agent of the Spread  Account  Custodian  shall be indemnified by the
Servicer and held harmless  against any loss,  liability or expense (i) incurred
in  connection  with  any  legal  action  relating  to  this  Agreement  or  the
Certificates,  other than any loss,  liability or expense  incurred by reason of
willful  misfeasance,  bad  faith or  negligence  in the  performance  of duties
hereunder  or  by  reason  of  reckless  disregard  of  obligations  and  duties
hereunder,  and (ii) resulting  from any error in any tax or information  return
prepared by the Servicer.  The  obligations  of the Servicer  under this Section
12.05  shall  survive  payment  of the  Certificates,  and  shall  extend to any
co-trustee appointed pursuant to this Article XII.

          Section 12.06. Eligibility Requirements for Trustee.

          The  Trustee  hereunder  shall at all times be (i) a national  banking
association or banking corporation or trust company organized and doing business
under the laws of any state or the United  States of  America,  (ii)  authorized
under such laws to exercise  corporate  trust  powers,  (iii)  having a combined


                                     XII-4
<PAGE>

capital  and  surplus  of  at  least  $30,000,000,  (iv)  having  unsecured  and
unguaranteed long-term debt obligations rated at least Baa2 by Moody's Investors
Service,  Inc.,  BBB by the Rating Agency  (provided the Rating Agency is rating
the unsecured and  unguaranteed  long-term  debt  obligations of the Trustee) or
such other rating as is acceptable to the SBA, (v) is subject to  supervision or
examination  by federal or state  authority,  (vi) is an approved SBA guaranteed
lender in good  standing,  operating  pursuant  to an  effective  Loan  Guaranty
Agreement,  and  (vii) is  reasonably  acceptable  to the SBA.  If such  banking
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid  supervising or examining  authority,  then
for the  purposes of this  Section  its  combined  capital and surplus  shall be
deemed to be as set forth in its most recent  report of condition so  published.
In case at any time the Trustee  shall cease to be eligible in  accordance  with
the provisions of this Section,  the Trustee shall (a) give prompt notice to the
SBA and each  Certificateholder  that it has so ceased to be  eligible to be the
Trustee  and  (b)  resign,   upon  the  request  of  the  SBA  or  the  Majority
Certificateholders,  in the  manner  and with the  effect  specified  in Section
12.07.

          Section 12.07. Resignation and Removal of the Trustee.

          The Trustee may at any time resign and be  discharged  from the trusts
hereby created by giving written notice thereof to the Servicer, the SBA, and to
all Certificateholders.  Upon receiving such notice of resignation, the Servicer
shall  with the  consent  of the SBA  promptly  appoint a  successor  trustee by
written  instrument,  in duplicate,  which  instrument shall be delivered to the
resigning Trustee and to the successor  trustee. A copy of such instrument shall
be  delivered  to the  Certificateholders  by the  Servicer.  Unless a successor
trustee  shall have been so appointed and have  accepted  appointment  within 60
days after the giving of such notice of resignation,  the resigning  Trustee may
petition any court of competent  jurisdiction for the appointment of a successor
trustee.  If the resigning  Trustee fails to petition an appropriate  court, the
SBA may, after such 60 day period,  petition any court of competent jurisdiction
for the appointment of a successor trustee.

          If at any time the Trustee  shall  cease to be eligible in  accordance
with the  provisions  of Section  12.06 and shall fail to resign  after  written
request  therefor by the  Servicer,  or if at any time the Trustee  shall become
incapable of acting, or shall be adjudged  bankrupt or insolvent,  or a receiver
of the Trustee or of its  property  shall be  appointed,  or any public  officer
shall take  charge or control of the  Trustee or of its  property or affairs for
the purpose of  rehabilitation,  conservation or liquidation,  then the Servicer
may remove the  Trustee  and  appoint,  subject  to the  approval  of the SBA, a
successor trustee by written instrument, in duplicate, which instrument shall be
delivered to the Trustee so removed and to the successor trustee. A copy of such
instrument  shall  be  delivered  to the  Certificateholders  and the SBA by the
Servicer.

          The  Majority  Certificateholders  with the consent of the SBA,  which
consent will not be unreasonably  withheld,  and upon satisfaction of the Rating
Agency  Condition,  or the SBA may at any time  remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their  attorneys-in-fact  duly  authorized,  one complete set of
which  instruments  shall be delivered to the Servicer,  one complete set to the
Trustee so removed and one complete set to the successor Trustee so appointed.

                                     XII-5
<PAGE>

          Any  resignation  or  removal  of the  Trustee  and  appointment  of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 12.08.

          Section 12.08. Successor Trustee.

          Any  successor  trustee  appointed as provided in Section  12.07 shall
execute,  acknowledge and deliver to the Servicer and to its predecessor trustee
an  instrument   accepting  such  appointment   hereunder,   and  thereupon  the
resignation  or removal of the  predecessor  trustee shall become  effective and
such  successor  trustee,  without any further act,  deed or  conveyance,  shall
become fully vested with all the rights,  powers,  duties and obligations of its
predecessor  hereunder,  with the like effect as if originally  named as trustee
herein.  The predecessor  trustee shall deliver to the successor trustee all SBA
Files  and  related  documents  and  statements  held by it  hereunder,  and the
Servicer and the predecessor  trustee shall execute and deliver such instruments
and do such  other  things as may  reasonably  be  required  for more  fully and
certainly  vesting and  confirming  in the  successor  trustee all such  rights,
powers, duties and obligations.

          No  successor  trustee  shall accept  appointment  as provided in this
Section unless at the time of such  acceptance  such successor  trustee shall be
eligible under the provisions of Section 12.06.

          Upon  acceptance of appointment by a successor  trustee as provided in
this Section,  the Servicer  shall mail notice of the succession of such trustee
hereunder  to all Holders of  Certificates  at their  addresses  as shown in the
Certificate  Register.  If the Servicer fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee,  the successor trustee
shall cause such notice to be mailed at the expense of the Servicer.

          Section 12.09. Merger or Consolidation of Trustee.

          Any Person into which the Trustee may be merged or  converted  or with
which it may be consolidated or any corporation or national banking  association
resulting  from any merger,  conversion  or  consolidation  to which the Trustee
shall be a party, or any corporation or national banking association  succeeding
to the business of the trustee, shall be the successor of the Trustee hereunder,
provided such  corporation  or national  banking  association  shall be eligible
under the  provisions of Section  12.06,  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.  The Trustee  shall send notice of any
such merger or consolidation to the Rating Agency.

                                     XII-6
<PAGE>

          Section 12.10. Appointment of Co-Trustee or Separate Trustee.

          Notwithstanding  any other  provisions  hereof,  at any time,  for the
purpose of meeting any legal  requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located,  the
Servicer and the Trustee  acting  jointly shall have the power and shall execute
and  deliver all  instruments  to appoint  one or more  Persons  approved by the
Trustee  and the SBA  pursuant  to the  procedure  set  forth  below,  to act as
co-trustee  or  co-trustees,  jointly with the Trustee,  or separate  trustee or
separate  trustees,  of all or any part of the Trust  Fund,  and to vest in such
Person or Persons,  in such capacity,  such title to the Trust Fund, or any part
thereof,  and,  subject to the other  provisions  of this  Section  12.10,  such
powers, duties,  obligations,  rights and trusts as the Servicer and the Trustee
may consider  necessary or desirable.  If the Servicer  shall not have joined in
such  appointment  within 15 days after the receipt by it of a request so to do,
or in case an Event of  Default  shall  have  occurred  and be  continuing,  the
Trustee  alone shall have the power to make such  appointment.  No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor  trustee  under  Section  12.06  hereunder.  No notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required  under Section 12.08 hereof.  The Trustee shall notify the SBA prior to
the appointment of any  co-trustee(s)  or separate  trustee(s) and the SBA shall
have ten  Business  Days from its  receipt of such  notice to notify the Trustee
whether it, in its reasonable  judgment,  disapproves of such  co-trustee(s)  or
separate  trustee(s).  If the SBA does not notify the  Trustee  within such time
frame,  it will be  deemed  to have  approved  such  co-trustee(s)  or  separate
trustee(s).  If the SBA notifies the Trustee  within such time frame that it, in
its  reasonable   judgment,   disapproves  of  such  co-trustee(s)  or  separate
trustee(s)  (which  notice  shall be  accompanied  by the  name(s)  of the SBA's
alternative proposed  co-trustee(s) or separate  trustee(s)),  such appointments
shall not be effective.

          In the case of any  appointment  of a co-trustee  or separate  trustee
pursuant to this  Section  12.10,  all rights,  powers,  duties and  obligations
conferred  or imposed  upon the trustee  shall be  conferred or imposed upon and
exercised or performed by the Trustee and such  separate  trustee or  co-trustee
jointly except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed  (whether as Trustee  hereunder or as
successor  to the  Servicer  hereunder),  the Trustee  shall be  incompetent  or
unqualified  to perform such act or acts,  in which event such  rights,  powers,
duties and obligations  (including the holding of title to the Trust Fund or any
portion  thereof in any such  jurisdiction)  shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.

          Any notice,  request or other  writing  given to the Trustee  shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as  effectively  as if given to each of them.  Every  instrument  appointing any
separate  trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XII. Each separate  trustee and co-trustee,  upon its acceptance
of the trusts conferred,  shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided  therein,  subject to all the  provisions of this  Agreement,
specifically including every provision of this Agreement relating to the conduct


                                     XII-7
<PAGE>

of, affecting the liability of, or affording  protection to, the Trustee.  Every
such instrument shall be filed with the Trustee.

          Any separate  trustee or co-trustee  may, at any time,  constitute the
Trustee,  its agent or attorney-in-fact,  with full power and authority,  to the
extent not  prohibited  by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name.  The Trustee  shall not be  responsible
for any action or inaction of any such separate  trustee or  co-trustee.  If any
separate trustee or co-trustee shall die, become incapable of acting,  resign or
be removed, all of its estates,  properties,  rights,  remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.

          Section 12.11. Authenticating Agent.

          Upon the  request  of the  Servicer,  the  Trustee  shall  appoint  an
Authenticating Agent,  initially,  Marine Midland Bank, with power to act on the
Trustee's behalf and subject to its direction in the authentication and delivery
of the  Certificates  in connection  with transfers and exchanges  under Section
4.02,  as fully to all intents and purposes as though the  Authenticating  Agent
had been  expressly  authorized  by that  Section to  authenticate  and  deliver
Certificates.  For  all  purposes  of this  Agreement,  the  authentication  and
delivery of  Certificates by the  Authenticating  Agent pursuant to this Section
shall be deemed to be the  authentication  and delivery of  Certificates  by the
Trustee.  Such  Authenticating  Agent shall at all times be a Person meeting the
requirements for the Trustee set forth in Section 12.06.

          Any  corporation  or  national  banking  association  into  which  any
Authenticating  Agent  may be  merged  or  converted  or  with  which  it may be
consolidated,  or any corporation or national banking association resulting from
any merger,  consolidation or conversion to which any Authenticating Agent shall
be a party, or any corporation or national banking association succeeding to the
corporate trust business of any Authenticating  Agent, shall be the successor of
the Authenticating  Agent hereunder,  if such successor  corporation or national
banking  association  is  otherwise  eligible  under this  Section,  without the
execution or filing of any further act on the part of the parties  hereto or the
Authenticating Agent or such successor corporation.

          Any  Authenticating  Agent may at any time resign by giving  notice of
resignation  to the  Trustee  and the  Servicer.  The  Trustee  may at any  time
terminate the agency of any  Authenticating  Agent by giving  written  notice of
termination to such Authenticating Agent and the Servicer. Upon receiving such a
notice of  resignation  or upon such a  termination,  or in case at any time any
Authenticating  Agent shall cease to be eligible under this Section, the Trustee
shall promptly appoint a successor  Authenticating  Agent and shall give written
notice  of  such  appointment  to all  Certificateholders  as  their  names  and
addresses appear on the Certificate Register.  The Servicer agrees to pay to the
Authenticating Agent from time to time reasonable compensation for its services.
The   provisions  of  Sections  4.04  and  12.03  shall  be  applicable  to  any
Authenticating Agent.

                                     XII-8
<PAGE>

          Section 12.12. Tax Returns and Reports.

          The Trustee,  upon  request,  will furnish the Servicer  with all such
information  as may be  reasonably  required in connection  with the  Servicer's
preparation  of all Tax Returns of the Trust Fund and, upon request  within five
(5)  Business  Days after its receipt  thereof,  shall (i) sign on behalf of the
Trust Fund any Tax Return  that the  Trustee is  required  to sign  pursuant  to
applicable  federal,  state or local tax laws, and (ii) cause such Tax Return to
have been returned to the Servicer for filing;  provided,  however,  the Trustee
shall have no liability for any taxes required pursuant to any such Tax Return.

          The  Servicer  shall  prepare  and file or cause to be filed  with the
Internal  Revenue Service  Federal tax  information  returns with respect to the
Trust Fund and the Certificates containing such information and at the times and
in the manner as may be required by the Code or applicable Treasury regulations,
and shall furnish to each Holder of Certificates at any time during the calendar
year for which such returns or reports are made such  statements or  information
at the times and in the manner as may be required  thereby.  The  Trustee  shall
sign all tax  information  returns filed  pursuant to this Section and any other
returns as may be  required  by the Code,  and in doing so shall  rely  entirely
upon, and shall have no liability for  information  provided by, or calculations
provided by, the Servicer.

          Section 12.13. Protection of Trust Fund.

                  (a) The Trustee will hold the Trust Fund and such other assets
as may from time to time be deposited with it hereunder in trust for the benefit
of the Holders and the SBA and at the request of the Seller or the SBA will from
time to time  execute and deliver all such  supplements  and  amendments  hereto
pursuant to Section 13.02 hereof and all  instruments  of further  assurance and
other instruments, and will take such other action upon such request as it deems
reasonably necessary or advisable, to:

                            (i)  more  effectively  hold  in  trust  all  or any
                  portion of the Trust Fund or such other assets;

                            (ii)  perfect,  publish  notice of, or  protect  the
                  validity of any grant made or to be made by this Agreement;

                           (iii)  enforce any of the SBA Loans; or

                           (iv)  preserve and defend title to the Trust Fund and
                  the rights of the Trustee,  and the ownership interests of the
                  Certificateholders  represented  thereby,  in such  Trust Fund
                  against the claims of all Persons and parties.

          The Trustee shall send copies of any request  received from the Seller
or the SBA to take any action pursuant to this Section 12.13 to the Holders.

                                     XII-9
<PAGE>

                  (b) Subject to Article X hereof,  the  Trustee  shall have the
power to enforce, and shall enforce the obligations of the other parties to this
Agreement by action,  suit or proceeding  at law or equity,  and shall also have
the power to enjoin, by action or suit in equity,  any acts or occurrences which
may be unlawful or in violation of the rights of the Holders; provided, however,
that  nothing in this  Section  12.13  shall  require  any action by the Trustee
unless the Trustee shall first (i) have been furnished indemnity satisfactory to
it and (ii) when required by this  Agreement,  have been  requested to take such
action by the Majority  Certificateholders,  the SBA or the Seller in accordance
with the terms of this Agreement.

                  (c) The Trustee shall execute any instrument required pursuant
to this Section so long as such instrument does not conflict with this Agreement
or with the Trustee's fiduciary duties.

          Section 12.14. Representations, Warranties and
                         Covenants of Trustee.

          The Trustee hereby makes the following representations, warranties and
covenants on which the Seller, the Servicer,  the SBA and the Certificateholders
shall rely:

                  (a) The  Trustee is a banking  corporation  and trust  company
duly  organized,  validly  existing and in good  standing  under the laws of the
State of New York.

                  (b) The Trustee has full power,  authority  and legal right to
execute,  deliver and perform this Agreement, and shall have taken all necessary
action to  authorize  the  execution,  delivery  and  performance  by it of this
Agreement.

                  (c) The execution,  delivery and performance by the Trustee of
this  Agreement  shall not (i)  violate any  provision  of any law or any order,
writ,  judgment or decree of any court,  arbitrator  or  governmental  authority
applicable  to the Trustee or any of its assets,  (ii) violate any  provision of
the  corporate  charter or By-laws of the Trustee or (iii) violate any provision
of, or constitute,  with or without notice or lapse of time, a default under, or
result in the creation or imposition of any lien on any  properties  included in
the Trust Fund pursuant to the provisions of, any mortgage, indenture, contract,
agreement or other undertaking to which it is a party, which violation,  default
or lien could  reasonably  be expected to materially  and  adversely  affect the
Trustee's  performance  or ability to perform its duties under this Agreement or
the transactions contemplated in this Agreement.

                  (d) The execution,  delivery and performance by the Trustee of
this Agreement shall not require the authorization,  consent or approval of, the
giving of notice to, the filing or registration  with or the taking of any other
action in respect of any governmental authority or agency regulating the banking
and corporate trust activities of the Trustee.

                  (e) This Agreement has been duly executed and delivered by the
Trustee and constitutes the legal,  valid and binding  agreement of the Trustee,
enforceable in accordance  with its terms,  subject to the effect of bankruptcy,


                                     XII-10
<PAGE>

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.  The Trustee hereby agrees and
covenants  that it will not at any time in the future,  deny that this Agreement
constitutes the legal, valid and binding agreement of the Trustee.

                  (f) The Trustee shall not take any action, or fail to take any
action, if such action or failure to take action will materially  interfere with
the  enforcement of any rights of the SBA or the  Certificateholders  under this
Agreement or the Certificates.

                  (g) The Trustee  will comply at all times with the  provisions
of the SBA Rules and Regulations in respect of its activities concerning the SBA
Loans, and will at all times hold an effective Loan Guaranty Agreement.





                                     XII-11
<PAGE>

                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

          Section 13.01. Acts of Certificateholders.

          Except   as   otherwise   specifically   provided   herein,   whenever
Certificateholder  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  Certificateholders  if the Majority
Certificateholders agree to take such action or give such consent or approval.

          Section 13.02. Amendment.

                  (a) This  Agreement  may be  amended  from time to time by the
Seller,  the  Servicer  and the  Trustee  by written  agreement,  upon the prior
written  consent  of  the  SBA,   without  the  notice  to  or  consent  of  the
Certificateholders,  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   Trustee,   adversely   affect   the   interests   of  any
Certificateholder 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  Certificate
without the consent of the Holder of such  Certificate,  or change the rights or
obligations of any other party hereto without the consent of such party.

                  (b) This  Agreement  may be  amended  from time to time by the
Seller, the Servicer, the Trustee and the Majority Certificateholders,  upon the
prior written consent of the SBA, 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 Certificate  without the
consent of the Holder of such  Certificate  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 Certificates affected thereby and, provided further, that
no amendment affecting only one class of Certificates shall require the approval
of Holders of Certificates of the other Class.

                  (c) It shall not be necessary for the consent of Holders under
this Section to approve the particular  form of any proposed  amendment,  but it
shall be sufficient if such consent shall approve the substance thereof.

                                     XIII-1
<PAGE>

          Section 13.03. 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  Certificateholders'  expense  on  direction  of  the  Majority
Certificateholders,  but only when  accompanied  by an Opinion of Counsel to the
effect that such recordation  materially and beneficially  affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the SBA Loans.

          Section 13.04. Duration of Agreement.

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

          SECTION 13.05. GOVERNING LAW.

          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 13.06. 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, Business Loan Center, Inc., 645 Madison
Avenue,  18th Floor, New York, New York 10022, Attn: Robert Tannenhauser or such
other  addresses as may  hereafter be  furnished  to the  Certificateholders  in
writing by the Seller and the Servicer,  (ii) in the case of the Trustee, Marine
Midland Bank,  140 Broadway,  New York, New York 10005,  12th Floor,  Attention:
Corporate Trust Department, (iii) in the case of the Certificateholders,  as set
forth in the  Certificate  Register,  (iv) in the  case of Duff & Phelps  Credit
Rating Co. to 55 East Monroe Street,  Chicago,  Illinois,  60603, to, and (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.  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 Certificateholders shall be effective upon mailing or
personal delivery.

                                     XIII-2
<PAGE>

          Section 13.07. 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.

          Section 13.08. 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 Certificateholders.

          Section 13.09. 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 13.10. Successors and Assigns.

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

          Section 13.11. 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 13.12. Paying Agent.

          The Trustee hereby appoints  Marine Midland Bank as Paying Agent.  The
Trustee may appoint one or more other Paying  Agents or successor  Paying Agents
meeting the  eligibility  requirements  of a Trustee set forth in Section  12.06
(i), (ii), (iii), (iv), (v) and (vii) hereof.

          Each Paying Agent,  immediately upon such  appointment,  shall signify
its acceptance of the duties and  obligations  imposed upon it by this Agreement
by written instrument of acceptance deposited with the Trustee.

          Each such  Paying  Agent  other than the  Trustee  shall  execute  and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee,  subject to the provisions of Section 6.06,  that such Paying Agent
will:

                                     XIII-3
<PAGE>

                  (a) allocate all sums received for distribution to the Holders
of  Certificates  for which it is acting as Paying Agent on each Remittance Date
among such Holders in the proportion specified by the Trustee; and

                  (b) hold all sums held by it for the  distribution  of amounts
due with  respect to the  Certificates  in trust for the  benefit of the Holders
entitled  thereto  until  such sums shall be paid to such  Holders or  otherwise
disposed  of as  herein  provided  and pay such sums to such  Persons  as herein
provided.

          Any Paying  Agent other than the Trustee may at any time resign and be
discharged of the duties and obligations  created by this Agreement by giving at
least sixty (60) days written  notice to the Trustee.  Any such Paying Agent may
be removed at any time by an  instrument  filed with such Paying Agent signed by
the Trustee.

          In the event of the  resignation  or removal of any Paying Agent other
than the Trustee such Paying Agent shall pay over, assign and deliver any moneys
held by it as Paying Agent to its successor, or if there be no successor, to the
Trustee.

          Upon the  appointment,  removal or notice of resignation of any Paying
Agent, the Trustee shall notify the Certificateholders by mailing notice thereof
to their addresses appearing on the Certificate Register.

          Section 13.13. Notification to Rating Agency.

          The  Trustee  shall give  prompt  notice to the  Rating  Agency 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 Trustee,
the Servicer or the Paying Agent, (3) any Event of Default or waiver of an Event
of Default,  (4) that any  superior  lienholder  has  accelerated  or intends to
accelerate the obligations secured by a Prior Lien, and (5) the final payment of
all the Certificates. The Servicer shall promptly deliver to the Rating Agency a
copy of each of the Servicer's  Certificates.  Further,  the Servicer shall give
prompt  notice to the Rating  Agency if the  Servicer  or any of its  affiliates
acquire any Certificates.

          Section 13.14. Third Party Rights

          The Trustee,  the FTA, the Spread  Account  Custodian and the Servicer
agree that the SBA shall be deemed a third-party  beneficiary  of this Agreement
entitled to all the rights and  benefits set forth herein as fully as if it were
a party hereto.

                                     XIII-4
<PAGE>



<PAGE>


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

                                       BUSINESS LOAN CENTER, INC.,
                                        as Seller and Servicer


                                       By:
                                          ------------------------------
                                          Name:
                                          Title:



                                        MARINE MIDLAND BANK,
                                         as Trustee


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



                                     XIII-5
<PAGE>


                        Acceptance of Marine Midland Bank

                  Marine Midland Bank hereby accepts its  appointment  under the
within  instrument  to  serve  as  initial  Authenticating  Agent,   Certificate
Registrar and Paying Agent. In connection therewith,  Marine Midland Bank agrees
to be bound by all applicable provisions of such instrument.


                                          MARINE MIDLAND BANK, as initial
                                             Authenticating Agent,
                                             Certificate Registrar and
                                             Paying Agent



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






                                     XIII-6
<PAGE>



STATE OF NEW YORK    )
                                 : ss.:
COUNTY OF NEW YORK)

                  On the ____ day of ____________  before me, a Notary Public in
and for said State, personally appeared  ____________________  known to me to be
an  officer  of  the  Trustee,  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.



                    ---------------------------------
                             Notary Public

                        My Commission expires
                                             --------




                                     XIII-7
<PAGE>




STATE OF ____________)
                                 : ss.:
COUNTY OF __________)


                  On the ____ day of  ______________  before me, a Notary Public
in and for the State of New York, personally appeared ___________ known to me to
be the  ____________  of Business  Loan Center,  Inc.,  one of the entities that
executed  the  within  instrument  and  also  known to me to be the  person  who
executed it on behalf of said entity,  and  acknowledged  to me that such entity
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.


                    ---------------------------------
                             Notary Public

                        My Commission expires
                                             --------



                                     XIII-8
<PAGE>


                                    EXHIBIT A

                              CONTENTS OF SBA FILE

          With  respect to each SBA Loan,  the SBA File shall  include a copy of
any of the following  items delivered to the Trustee or, with respect to 1 below
for the SBA ss. 7(a) Loans, the FTA:

                  1.       The  original  SBA  Note,  endorsed  by  means  of an
                           allonge  as  follows:  "Pay to the  order  of  Marine
                           Midland  Bank,  and its  successors  and assigns,  as
                           trustee  under that  certain  Pooling  and  Servicing
                           Agreement  dated  as of  December  23,  1998  for the
                           benefit  of  the   United   States   Small   Business
                           Administration  and holders of  Business  Loan Center
                           SBA Loan-Backed Adjustable Rate Certificates,  Series
                           1998-1,  Class A and  Class  B, 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;

                  2.       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;

                  3.       With respect to those SBA Loans  secured by Mortgaged
                           Properties,  either:  (i) the original  Assignment of
                           Mortgage from the Seller endorsed as follows: "Marine
                           Midland  Bank,   ("Assignee")   its   successors  and
                           assigns,  as trustee  under the Pooling and Servicing
                           Agreement  dated as December  23, 1998 subject to the
                           Multi-Party  Agreement dated as of December 23, 1998"
                           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


                                      A-1
<PAGE>


                           being delivered to the Trustee, each 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);

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

                  5.       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 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;

                  6.       For  all  SBA  Loans,   blanket   assignment  of  all
                           Collateral  securing the SBA Loan,  including without
                           limitation,  all rights under  applicable  guarantees
                           and insurance policies;

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

                  8.       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  Trustee  as
                           Secured Party and the Seller as the Debtor. The UCC-1
                           financing statements will be filed promptly following
                           the Closing Date in New York and Delaware and will be
                           in the nature of  protective  notice  filings  rather
                           than a true financing statement.


                                      A-2
<PAGE>



                                   EXHIBIT B-1

                          [FORM OF CLASS A CERTIFICATE]

THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR
BLUE SKY LAW OF ANY STATE.  THE HOLDER HEREOF,  BY PURCHASING THIS  CERTIFICATE,
AGREES THAT THIS  CERTIFICATE  MAY BE  REOFFERED,  RESOLD,  PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
AND ONLY (1) IN CERTIFICATED FORM (A) PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL  BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),  PURCHASING  FOR
ITS OWN ACCOUNT OR A QIB  PURCHASING  FOR THE ACCOUNT OF A QIB,  WHOM THE HOLDER
HAS INFORMED,  IN EACH CASE, THAT THE REOFFER,  RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, OR (B) TO AN  "INSTITUTIONAL  ACCREDITED
INVESTOR" WITHIN THE MEANING THEREOF IN RULE  501(a)(1)-(3) or (7) OF REGULATION
D UNDER THE SECURITIES ACT PURCHASING FOR INVESTMENT AND NOT FOR DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, IN EACH CASE, SUBJECT TO (A) THE RECEIPT BY THE
TRUSTEE OF A LETTER  SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B)
THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT
SUCH REOFFER,  RESALE,  PLEDGE OR TRANSFER IS IN COMPLIANCE  WITH THE SECURITIES
ACT AND OTHER  APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES  LAWS OF THE UNITED  STATES AND  SECURITIES  AND BLUE SKY LAWS OF ANY
STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE  JURISDICTION,  (2) PURSUANT
TO ANOTHER  EXEMPTION  AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH
ANY APPLICABLE STATE  SECURITIES  LAWS, OR (3) PURSUANT TO A VALID  REGISTRATION
STATEMENT.

THIS  CERTIFICATE  IS NOT  GUARANTEED OR INSURED BY ANY  GOVERNMENTAL  AGENCY OR
INSTRUMENTALITY OR BY ANY OTHER PERSON.


                                     B-1-1
<PAGE>



       BUSINESS LOAN CENTER SBA LOAN-BACKED ADJUSTABLE RATE CERTIFICATES

               Series 1998-1                 Original Class A Certificate

               Class A                       Principal Balance:

               No. 1                         $24,316,729.85

                                                  Original Dollar Amount as
                                                  of the Cut-Off Date
                                                  Represented by this
                                                  Certificate: 100%

                                             $24,316,729.85

               Remittance Rate:              Percentage Interest of
                  Variable                     the Class A Certificates
                                               Evidenced by this
                                               Certificate: 100%

                  Date of Pooling and         Servicer:
                    Servicing Agreement        Business Loan Center, Inc.
                    and Cut-Off Date:
                    December 23, 1998

                  First Remittance Date:     Latest Maturity Date:
                    January 15, 1999           January 2025

                                             CUSIP No.:  123280 AC 3

                  Closing Date:              Trustee:
                    December 30, 1998        Marine Midland Bank

          Business Loan Center, Inc. certifies that ABN AMRO Incorporated is the
registered  owner of a percentage  interest (the  "Percentage  Interest") in the
Unguaranteed  Interest in a pool of loans partially guaranteed by the U.S. Small
Business  Administration (the "SBA Loans") and serviced by Business Loan Center,
Inc.  (hereinafter  called the "Servicer," in its capacity as the Servicer,  and
the  "Seller," in its capacity as the Seller,  which terms include any successor
entity under the Agreement  referred to below). The SBA Loans were originated or
purchased  by the Seller.  The SBA Loans will be serviced  pursuant to the terms
and  conditions  of that certain  Pooling and  Servicing  Agreement  dated as of
December 23, 1998 (the "Agreement") between Marine Midland Bank, as trustee (the
"Trustee")  and Business Loan Center,  Inc., as Seller and Servicer,  certain of
the  pertinent  provisions  of which are set forth  herein.  To the  extent  not
defined herein,  the capitalized terms used herein have the meanings assigned in
the  Agreement.  This  Certificate  is issued under and is subject to the terms,


                                     B-1-2
<PAGE>

provisions  and conditions of the  Agreement,  to which  Agreement the holder of
this  Certificate by virtue of the  acceptance  hereof assents and by which such
holder is bound.

          On each Remittance  Date,  commencing on January 15, 1999, the Trustee
or Paying Agent shall distribute to the Person in whose name this Certificate is
registered at the close of business on the last day of the month next  preceding
the month of such  distribution (or on the Closing Date for the First Remittance
Date) (the  "Record  Date"),  an amount  equal to the product of the  Percentage
Interest  of the Class A  Certificates  evidenced  by this  Certificate  and the
amount  required to be distributed  to Holders of Class A  Certificates  on such
Remittance Date pursuant to Section 6.07 of the Agreement.

          During the initial Interest Accrual Period, this Certificate will bear
interest at the rate of 6.75% per annum. During each subsequent Interest Accrual
Period,  this  Certificate  will bear  interest at a per annum rate equal to the
Prime Rate in effect on the  preceding  Adjustment  Date minus  1.00% per annum,
subject to the limits described in the Agreement.

                  Distributions  on this Certificate will be made by the Trustee
or Paying Agent by check mailed to the address of the Person entitled thereto as
such name and address shall appear on the Certificate  Register or, upon written
request to the Trustee,  by wire transfer of immediately  available funds to the
account  of the  Person  entitled  thereto  as shall  appear on the  Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation thereon, at a bank or other entity having appropriate facilities
therefor,  and,  in the case of wire  transfers,  at the  expense of such Person
unless  such  Person  shall  own  of  record  Certificates  which  have  initial
Certificate Principal Balances aggregating at least $5,000,000.

          Notwithstanding  the above, the final distribution on this Certificate
will  be  made  after  due  notice  by the  Trustee  of  the  pendency  of  such
distribution  and  only  upon   presentation  and  surrender  of  this  Class  A
Certificate  at  the  office  or  agency  maintained  for  that  purpose  by the
Certificate Registrar in New York, New York.

          This  Certificate is one of a duly  authorized  issue of  Certificates
designated   as  Business   Loan  Center  SBA   Loan-Backed,   Adjustable   Rate
Certificates,   Series   1998-1,   Class  A  and  Class  B  (herein  called  the
"Certificates") and representing undivided ownership in the right to receive the
principal  portion of the Unguaranteed  Interests of the SBA Loans together with
interest  thereon at the then applicable  Class A or Class B Remittance Rate, as
the case may be.

          Neither the Certificates nor the SBA Loans represent an obligation of,
or an interest  in, the  Servicer  and (except for the Excess  Spread,  which is
guaranteed by the SBA for up to 120 days of accrued interest) are not insured or
guaranteed by the Federal  Deposit  Insurance  Corporation,  the Small  Business
Administration,  the Government  National  Mortgage  Association or the Veterans
Administration or any other governmental agency. The Certificates are limited in
right of payment to certain collections and recoveries respecting the SBA Loans,
all as more  specifically  set forth herein and in the  Agreement.  In the event
Servicer  funds are  advanced  with  respect  to any SBA Loan,  such  advance is
reimbursable  to the Servicer from late  recoveries of interest on the SBA Loans
generally.

                                     B-1-3
<PAGE>

          As  provided  in the  Agreement,  deposits  and  withdrawals  from the
Certificate  Account,  the Spread Account and the Expense Account may be made by
the  Trustee  from  time  to time  for  purposes  other  than  distributions  to
Certificateholders,  such purposes  including  reimbursement  to the Servicer of
advances made, or certain expenses incurred,  by it, and investment in Permitted
Instruments.

          Subject to certain  restrictions,  the Agreement permits the amendment
thereof with respect to certain  modifications  (a) by the Seller,  the Servicer
and the Trustee  without the  consent of the  Certificateholders  and (b) by the
Seller,  the  Servicer  and  the  Trustee  with  the  consent  of  the  Majority
Certificateholders.  The Agreement  permits the Majority  Certificateholders  to
waive, on behalf of all  Certificateholders,  any default by the Servicer in the
performance of its obligations under the Agreement and its consequences,  except
in a default in making any  required  distribution  on a  Certificate.  Any such
consent or waiver by the Majority  Certificateholders  shall be  conclusive  and
binding on the holder of this  Certificate  and upon all future  holders of this
Certificate  and of any  Certificate  issued  upon  the  transfer  hereof  or in
exchange  herefor or in lieu hereof  whether or not  notation of such consent is
made   upon   this    Certificate.    The   Agreement   permits   the   Majority
Certificateholders to waive, on behalf of all Certificateholders, any default by
the Servicer in the performance of its  obligations  under the Agreement and its
consequences,  except in a default  in making  any  required  distribution  on a
Certificate. Any such consent or waiver by the Majority Certificateholders shall
be conclusive and binding on the holder of this  Certificate and upon all future
holders of this  Certificate  and of any  Certificate  issued upon the  transfer
hereof or in exchange  herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate.

          As  provided  in the  Agreement  and  subject to  certain  limitations
therein  set forth,  the  transfer of this  Certificate  is  registrable  in the
Certificate  Register upon surrender of this  Certificate  for  registration  of
transfer at the offices or agencies  maintained by the Certificate  Registrar in
New York, New York, duly endorsed by, or accompanied by a written  instrument of
transfer  in form  satisfactory  to, the  Trustee,  duly  executed by the holder
hereof or such holder's  attorney duly authorized in writing,  and thereupon one
or more  new  Certificates  in  authorized  denominations  evidencing  the  same
aggregate  undivided  Percentage  Interest  will  be  issued  to the  designated
transferee or transferees.

          The  Certificates  are issuable  only as registered  Certificates.  As
provided in the Agreement and subject to certain  limitations therein set forth,
the  Certificate  is  exchangeable  for a new  Certificate  evidencing  the same
undivided ownership interest, as requested by the holder surrendering the same.

          No service charge will be made for any such  registration  of transfer
or  exchange,  but  the  Certificate  Registrar  may  require  payment  of a sum
sufficient to cover any tax or other  governmental  charge payable in connection
therewith.

          The Servicer,  the Seller, the Trustee and the Certificate  Registrar,
and any agent of any of the  foregoing,  may treat the person in whose name this


                                     B-1-4
<PAGE>

Certificate is registered as the owner hereof for all purposes,  and none of the
foregoing shall be affected by notice to the contrary.

          Except for certain  obligations  of the Servicer to the  Trustee,  the
obligations  created by the Agreement shall terminate upon notice to the Trustee
of the later of the following events: (i) the final payment or other liquidation
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 (ii)  mutual  consent  of the  Servicer  and all
Certificateholders  in writing;  provided,  however,  that in no event shall the
Trust Fund  established by the Agreement  terminate later than twenty-one  years
after the death of the last  surviving  lineal  descendant of Joseph P. Kennedy,
late Ambassador of the United States to the Court of St. James,  alive as of the
date of the Agreement.





                                     B-1-5
<PAGE>



                  IN WITNESS  WHEREOF,  the Servicer has caused this Certificate
to be duly executed.

                                         Business Loan Center, Inc.
                                           Servicer


                                         By:
                                             -------------------------
                                             Name:
                                             Title:



Dated:
      -------------------------



This is one of the
Certificates referred
to in the within-mentioned
Agreement.


Marine Midland Bank,
      as Trustee


By:
    ----------------------------
    Authorized Signatory

          or

Marine Midland Bank,
as Authenticating Agent


By:
    ----------------------------
    Authorized Signatory




                                     B-1-6
<PAGE>





                                   EXHIBIT B-2

                          [FORM OF CLASS B CERTIFICATE]

THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR
BLUE SKY LAW OF ANY STATE.  THE HOLDER HEREOF,  BY PURCHASING THIS  CERTIFICATE,
AGREES THAT THIS  CERTIFICATE  MAY BE  REOFFERED,  RESOLD,  PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
AND ONLY (1) IN CERTIFICATED FORM (A) PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL  BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),  PURCHASING  FOR
ITS OWN ACCOUNT OR A QIB  PURCHASING  FOR THE ACCOUNT OF A QIB,  WHOM THE HOLDER
HAS INFORMED,  IN EACH CASE, THAT THE REOFFER,  RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, OR (B) TO AN  "INSTITUTIONAL  ACCREDITED
INVESTOR" WITHIN THE MEANING THEREOF IN RULE  501(a)(1)-(3) OR (7) OF REGULATION
D UNDER THE SECURITIES ACT PURCHASING FOR INVESTMENT AND NOT FOR DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, IN EACH CASE, SUBJECT TO (A) THE RECEIPT BY THE
TRUSTEE OF A LETTER  SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B)
THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT
SUCH REOFFER,  RESALE,  PLEDGE OR TRANSFER IS IN COMPLIANCE  WITH THE SECURITIES
ACT AND OTHER  APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES  LAWS OF THE UNITED  STATES AND  SECURITIES  AND BLUE SKY LAWS OF ANY
STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE  JURISDICTION,  (2) PURSUANT
TO ANOTHER  EXEMPTION  AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH
ANY APPLICABLE STATE  SECURITIES  LAWS, OR (3) PURSUANT TO A VALID  REGISTRATION
STATEMENT.

THIS CERTIFICATE MAY NOT BE ACQUIRED FOR OR ON BEHALF OF (1) AN EMPLOYEE BENEFIT
PLAN  OR  RETIREMENT  ARRANGEMENT  SUBJECT  TO THE  EMPLOYEE  RETIREMENT  INCOME
SECURITY ACT OF 1974, AS AMENDED,  AND/OR  SECTION 4975 OF THE INTERNAL  REVENUE
CODE OF 1986, AS AMENDED, OR (2) ANY ENTITY, THE ASSETS OF WHICH WOULD BE DEEMED
PLAN ASSETS UNDER THE  DEPARTMENT  OF LABOR  REGULATIONS  SET FORTH AT 29 C.F.R.
ss.2510.3-101,  OTHER THAN AN "INSURANCE  COMPANY  GENERAL  ACCOUNT"  WITHIN THE
MEANING OF SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60.

                                     B-2-1
<PAGE>

THIS  CERTIFICATE  IS NOT  GUARANTEED OR INSURED BY ANY  GOVERNMENTAL  AGENCY OR
INSTRUMENTALITY OR BY ANY OTHER PERSON.

THE RIGHTS OF THE HOLDERS OF THE CLASS B CERTIFICATES  TO RECEIVE  DISTRIBUTIONS
WITH RESPECT TO INTEREST AND PRINCIPAL  WILL BE  SUBORDINATED  TO SUCH RIGHTS OF
THE HOLDERS OF THE CLASS A CERTIFICATES  TO THE EXTENT  DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.

THIS CLASS B  CERTIFICATE  MAY NOT BE SOLD,  PLEDGED,  TRANSFERRED,  ASSIGNED OR
OTHERWISE  CONVEYED,  IN WHOLE OR IN PART, WITHOUT THE PRIOR WRITTEN APPROVAL OF
THE UNITED STATES SMALL BUSINESS ADMINISTRATION,  A COPY OF WHICH APPROVAL SHALL
BE FURNISHED TO THE TRUSTEE.





                                     B-2-2
<PAGE>




        BUSINESS LOAN CENTER SBA LOAN-BACKED ADJUSTABLE RATE CERTIFICATES

          Series 1998-1                   Original Class B Certificate
          Class B                         Principal Balance:

          No. 1                           $2,114,498.25

                                           Original Dollar Amount as
                                            of the Cut-Off Date
                                            Represented by this
                                            Certificate:

                                           $2,114,498.25

          Remittance Rate:                Percentage Interest of
            Variable                       the Class B Certificates
                                           Evidenced by this
                                           Certificate: 100%

          Date of Pooling and             Servicer:
           Servicing Agreement              Business Loan Center, Inc.
           and Cut-Off Date:
           December 23, 1998

          First Remittance:               Latest Maturity Date:  January 2025
            Date:
             January 15, 1999

                  Closing Date:            Trustee:
                    December 30, 1998                Marine Midland Bank

          Business  Loan  Center,  Inc.  certifies  that  Business  Loan  Center
Financial  Corp.  II is the  registered  owner  of a  percentage  interest  (the
"Percentage Interest") in the Unguaranteed Interest in a pool of loans partially
guaranteed  by the U.S.  Small  Business  Administration  (the "SBA  Loans") and
serviced by Business Loan Center,  Inc.  (hereinafter  called the "Servicer," in
its capacity as the  Servicer,  and the "Seller," in its capacity as the Seller,
which terms include any successor entity under the Agreement referred to below).
The SBA Loans were originated or purchased by the Seller.  The SBA Loans will be
serviced  pursuant  to the terms and  conditions  of that  certain  Pooling  and
Servicing  Agreement  dated as of December  23, 1998 (the  "Agreement")  between
Marine Midland Bank, as trustee (the "Trustee") and Business Loan Center,  Inc.,
as Seller and  Servicer,  certain of the  pertinent  provisions of which are set
forth  herein.  To the extent not defined  herein,  the  capitalized  terms used
herein have the meanings  assigned in the Agreement.  This Certificate is issued
under and is subject to the terms,  provisions  and conditions of the Agreement,
to which  Agreement the holder of this  Certificate  by virtue of the acceptance
hereof assents and by which such holder is bound.

                                     B-2-3
<PAGE>

          On each Remittance  Date,  commencing on January 15, 1998, the Trustee
or Paying Agent shall distribute to the Person in whose name this Certificate is
registered at the close of business on the last day of the month next  preceding
the month of such  distribution (or on the Closing Date for the First Remittance
Date) (the  "Record  Date"),  an amount  equal to the product of the  Percentage
Interest  of the Class B  Certificates  evidenced  by this  Certificate  and the
amount  required to be distributed  to Holders of Class B  Certificates  on such
Remittance Date pursuant to Section 6.07 of the Agreement.

          During the initial Interest Accrual Period, this Certificate will bear
interest at the rate of 6.95% per annum. During each subsequent Interest Accrual
Period,  this  Certificate  will bear  interest at a per annum rate equal to the
Prime Rate in effect on the preceding  Adjustment  Date minus 0.80%,  subject to
the limits described in the Agreement.

          Distributions  on this  Certificate  will be  made by the  Trustee  or
Paying  Agent by check mailed to the address of the Person  entitled  thereto as
such name and address shall appear on the Certificate  Register or, upon written
request to the Trustee,  by wire transfer of immediately  available funds to the
account  of the  Person  entitled  thereto  as shall  appear on the  Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation thereon, at a bank or other entity having appropriate facilities
therefor,  and,  in the case of wire  transfers,  at the  expense of such Person
unless  such  Person  shall  own  of  record  Certificates  which  have  initial
Certificate Principal Balances aggregating at least $5,000,000.

          Notwithstanding  the above, the final distribution on this Certificate
will  be  made  after  due  notice  by the  Trustee  of  the  pendency  of  such
distribution and only upon presentation and surrender of this Certificate at the
office or agency maintained for that purpose by the Certificate Registrar in New
York, New York.

          This  Certificate is one of a duly  authorized  issue of  Certificates
designated   as  Business   Loan  Center  SBA   Loan-Backed,   Adjustable   Rate
Certificates,   Series   1998-1,   Class  A  and  Class  B  (herein  called  the
"Certificates") and representing undivided ownership in the right to receive the
principal  portion of the Unguaranteed  Interests of the SBA Loans together with
interest  thereon at the then applicable  Class A or Class B Remittance Rate, as
the case may be.

          Neither the Certificates nor the SBA Loans represent an obligation of,
or an interest  in, the  Servicer  and (except for the Excess  Spread,  which is
guaranteed by the SBA for up to 120 days of accrued interest) are not insured or
guaranteed by the Federal  Deposit  Insurance  Corporation,  the Small  Business
Administration,  the Government  National  Mortgage  Association or the Veterans
Administration or any other governmental agency. The Certificates are limited in
right of payment to certain collections and recoveries respecting the SBA Loans,
all as more  specifically  set forth herein and in the  Agreement.  In the event
Servicer  funds are  advanced  with  respect  to any SBA Loan,  such  advance is
reimbursable  to the Servicer from late  recoveries of interest on the SBA Loans
generally.

                                     B-2-4
<PAGE>

          As  provided  in the  Agreement,  deposits  and  withdrawals  from the
Certificate  Account,  the Spread Account and the Expense Account may be made by
the  Trustee  from  time  to time  for  purposes  other  than  distributions  to
Certificateholders,  such purposes  including  reimbursement  to the Servicer of
advances made, or certain expenses incurred,  by it, and investment in Permitted
Instruments.

          Subject to certain  restrictions,  the Agreement permits the amendment
thereof with respect to certain  modifications  (a) by the Seller,  the Servicer
and the Trustee  without the  consent of the  Certificateholders  and (b) by the
Seller,  the  Servicer  and  the  Trustee  with  the  consent  of  the  Majority
Certificateholders.  The Agreement  permits the Majority  Certificateholders  to
waive, on behalf of all  Certificateholders,  any default by the Servicer in the
performance of its obligations under the Agreement and its consequences,  except
in a default in making any  required  distribution  on a  Certificate.  Any such
consent or waiver by the Majority  Certificateholders  shall be  conclusive  and
binding on the holder of this  Certificate  and upon all future  holders of this
Certificate  and of any  Certificate  issued  upon  the  transfer  hereof  or in
exchange  herefor or in lieu hereof  whether or not  notation of such consent is
made   upon   this    Certificate.    The   Agreement   permits   the   Majority
Certificateholders to waive, on behalf of all Certificateholders, any default by
the Servicer in the performance of its  obligations  under the Agreement and its
consequences,  except in a default  in making  any  required  distribution  on a
Certificate. Any such consent or waiver by the Majority Certificateholders shall
be conclusive and binding on the holder of this  Certificate and upon all future
holders of this  Certificate  and of any  Certificate  issued upon the  transfer
hereof or in exchange  herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate.

          As  provided  in the  Agreement  and  subject to  certain  limitations
therein  set forth,  the  transfer of this  Certificate  is  registrable  in the
Certificate  Register upon surrender of this  Certificate  for  registration  of
transfer at the offices or agencies  maintained by the Certificate  Registrar in
New York, New York, duly endorsed by, or accompanied by a written  instrument of
transfer  in form  satisfactory  to, the  Trustee,  duly  executed by the holder
hereof or such holder's  attorney duly authorized in writing,  and thereupon one
or more  new  Certificates  in  authorized  denominations  evidencing  the  same
aggregate  undivided  Percentage  Interest  will  be  issued  to the  designated
transferee or transferees.

          The  Certificates  are issuable  only as registered  Certificates.  As
provided in the Agreement and subject to certain  limitations therein set forth,
the  Certificate  is  exchangeable  for a new  Certificate  evidencing  the same
undivided ownership interest, as requested by the holder surrendering the same.

          No service charge will be made for any such  registration  of transfer
or  exchange,  but  the  Certificate  Registrar  may  require  payment  of a sum
sufficient to cover any tax or other  governmental  charge payable in connection
therewith.

          The Servicer,  the Seller, the Trustee and the Certificate  Registrar,
and any agent of any of the  foregoing,  may treat the person in whose name this


                                     B-2-5
<PAGE>

Certificate is registered as the owner hereof for all purposes,  and none of the
foregoing shall be affected by notice to the contrary.

                  Except for certain obligations of the Servicer to the Trustee,
the  obligations  created by the Agreement  shall  terminate  upon notice to the
Trustee of the later of the  following  events:  (i) the final  payment or other
liquidation  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 (ii) mutual  consent of the Servicer
and all Certificateholders in writing; provided, however, that in no event shall
the Trust Fund  established  by the Agreement  terminate  later than  twenty-one
years  after  the death of the last  surviving  lineal  descendant  of Joseph P.
Kennedy,  late Ambassador of the United States to the Court of St. James,  alive
as of the date of the Agreement.




                                     B-2-6
<PAGE>



                  IN WITNESS  WHEREOF,  the Servicer has caused this Certificate
to be duly executed.

                                         Business Loan Center, Inc.
                                           Servicer


                                         By:
                                             -------------------------
                                             Name:
                                             Title:



Dated:
      -------------------------



This is one of the
Certificates referred
to in the within-mentioned
Agreement.


Marine Midland Bank,
      as Trustee


By:
    ----------------------------
    Authorized Signatory

          or

Marine Midland Bank,
as Authenticating Agent


By:
    ----------------------------
    Authorized Signatory




                                     B-2-7
<PAGE>



                                    EXHIBIT C

                 PRINCIPAL AND INTEREST ACCOUNT LETTER AGREEMENT

                                     (date)


                  To:
                         -------------------------------

                         -------------------------------

                         -------------------------------
                         (the "Depository")



          As "Servicer" under the Pooling and Servicing  Agreement,  dated as of
December  23,  1998,  Business  Loan  Center  SBA  Loan-Backed  Adjustable  Rate
Certificates,  Series  1998-1 Class A and Class B (the  "Agreement"),  we hereby
authorize  and request you to establish an account,  as a Principal and Interest
Account  pursuant  to  Section  5.03  of  the  Agreement,  to be  designated  as
______________________________________  in trust for the  registered  holders of
Business  Loan  Center SBA  Loan-Backed  Adjustable  Rate  Certificates,  Series
1998-1." All deposits in the account shall be subject to withdrawal therefrom by
order signed by the  Servicer.  You may refuse any deposit which would result in
violation  of the  requirement  that the account be fully  insured as  described
below.  This letter is submitted to you in duplicate.  Please execute and return
one original to us.



                                        BUSINESS LOAN CENTER, INC.


                                        By:    _____________________
                                        Name:  _____________________
                                        Title: _____________________





                                      C-1
<PAGE>




          The  undersigned,  as  Depository,  hereby  certifies  that the  above
described account has been established under Account Number  __________,  at the
office of the depository  indicated  above,  and agrees to honor  withdrawals on
such account as provided above. The amounts deposited at any time in the account
will be insured to the maximum amount  provided by applicable law by the Federal
Deposit Insurance Corporation.




                                        -------------------------------
                                        (Name of Depository)


                                        By:    _____________________
                                        Name:  _____________________
                                        Title: _____________________




                                      C-2
<PAGE>


                                    EXHIBIT D


                                    [OMITTED]





                                      D-1
<PAGE>



                                    EXHIBIT E


                                    [OMITTED]





                                      E-1
<PAGE>



                                  EXHIBIT E(1)

                            WIRING INSTRUCTIONS FORM

                                                    _______________, 19__


[Paying Agent]
[Trustee]
------------------------
------------------------
------------------------

          Re:  Business   Loan   Center   SBA   Loan-Backed    Adjustable   Rate
               Certificates, Series 1998-1, [Class A] [Class B] Number


Dear Sir:

                  In connection with the sale of the above-captioned Certificate
by   ___________________________________  to  _________________________________,
("Transferee")  you, as Paying Agent,  are instructed to make all remittances to
Transferee as Certificateholder as of ____________,  19__ by wire transfer.  For
such wire transfer, the wiring instructions are as follows:

                            ------------------------
                            ------------------------
                            ------------------------


                                             --------------------------------
                                                       Transferee



Certificateholder's mailing address:


Name:

Address:


                                     E(1)-1
<PAGE>


                                   EXHIBIT F-1

                          FORM OF INITIAL CERTIFICATION

____________ , 199_

[Seller]

[Servicer]

[SBA]


                  Re:      Pooling and Servicing Agreement
                           Business Loan Center SBA Loan-Backed
                           Adjustable Rate Certificates,
                           Series 1998-1, dated as of December 23, 1998
                           between Business Loan Center, Inc.
                           and Marine Midland Bank, as Trustee


Gentlemen:

                  In accordance with Section 2.05 of the above-captioned Pooling
and Servicing Agreement (the "Agreement"),  the undersigned,  as Trustee, hereby
certifies  that,  except as noted on the  attachment  hereto,  if any (the "Loan
Exception  Report"),  it has  received  each  of the  documents  required  to be
delivered to it pursuant to Section 2.04 of the  Agreement  (not  including  the
original SBA Notes relating to the SBA ss. 7(a) Loans, which are to be delivered
to the FTA) with respect to each [Initial]  [Subsequent]  SBA Loan listed in the
SBA Loan Schedule and the documents  contained  therein  appear to bear original
signatures.

                  The Trustee has made no  independent  examination  of any such
documents  beyond  the  review  specifically  required  in the  above-referenced
Pooling and Servicing Agreement.





                                     F-1-1
<PAGE>




          The  Trustee  makes  no  representations  as  to:  (i)  the  validity,
legality,  sufficiency,  enforceability  or genuineness of any such documents or
any  of the  SBA  Loans  identified  on the  SBA  Loan  Schedule,  or  (ii)  the
collectibility, insurability, effectiveness or suitability of any such SBA Loan.


                                        MARINE MIDLAND BANK, as Trustee


                                        By:______________________________
                                        Name:____________________________
                                        Title:___________________________




                                     F-1-2
<PAGE>




                                   EXHIBIT F-2

                           FORM OF FINAL CERTIFICATION

                                     [date]

[Servicer]

[Seller]

[SBA]

                  Re:      Pooling and Servicing Agreement, Business Loan Center
                           SBA Loan-Backed Adjustable Rate Certificates,
                           Series 1998-1, dated as of December 23, 1998
                           between Business Loan Center, Inc.
                           and Marine Midland Bank, as Trustee


Gentlemen:

                  In accordance with Section 2.05 of the above-captioned Pooling
and Servicing  Agreement,  the undersigned,  as Trustee,  hereby certifies that,
except as noted on the attachment  hereto, as to each SBA Loan listed in the SBA
Loan Schedule  (other than any SBA Loan paid in full or listed on the attachment
hereto) it has reviewed the  documents  delivered to it pursuant to Section 2.04
of the Pooling and  Servicing  Agreement  and has  determined  that (i) all such
documents are in its  possession,  (ii) such  documents have been reviewed by it
and have not been mutilated,  damaged,  torn or otherwise physically altered and
relate to such SBA Loan and (iii) based on its examination or inquiry,  and only
as to the  foregoing  documents,  the  information  set  forth  in the SBA  Loan
Schedule  respecting  such  SBA  Loan  is  correct.  The  Trustee  has  made  no
independent   examination  or  inquiry  of  such  documents  beyond  the  review
specifically  required in the above-referenced  Pooling and Servicing Agreement.
The  Trustee  makes  no  representations  as to:  (i)  the  validity,  legality,
enforceability or genuineness of any such documents  contained in each or any of
the  Loans  identified  on the SBA Loan  Schedule,  or (ii) the  collectibility,
insurability,  effectiveness  or  suitability  of any such SBA Loan or (iii) the
compliance by such documents with statutory or regulatory guidelines.

                                        MARINE MIDLAND BANK, as Trustee


                                        By:______________________________
                                        Name:____________________________
                                        Title:___________________________





                                     F-2-1
<PAGE>



                                    EXHIBIT G

                                    [OMITTED]




                                      G-1
<PAGE>



                                    EXHIBIT H

                                SBA LOAN SCHEDULE

                                 [NOT ATTACHED]





                                      H-1
<PAGE>


                                    EXHIBIT I
                        REQUEST FOR RELEASE OF DOCUMENTS



To:  [Trustee]




               Re:  Pooling and  Servicing  Agreement,  Business Loan Center SBA
                    Loan-Backed  Adjustable  Rate  Certificates,  Series 1998-1,
                    dated as of December 23, 1998

          In connection with the administration of the pool of SBA Loans
held by you, we request the release,  and acknowledge receipt, of the (Trustee's
SBA  File/[specify  document]) for the SBA Loan described  below, for the reason
indicated.  Please execute the attached documents, if any, for the described SBA
Loan for the reasons indicated.

Obligor's Name, Address & Zip Code:


SBA Loan Number:


Business Loan Center, Inc. Loan Number:

Reason for Requesting Documents (check one)

____ 1.           SBA Loan Paid in Full
                           (Servicer hereby certifies that all amounts
                           received in connection  therewith  have been credited
                           to the Principal and Interest Account and remitted to
                           the Trustee for deposit into the Certificate  Account
                           pursuant to the Pooling and Servicing Agreement.)

____ 2.           SBA Loan Liquidated
                           (Servicer hereby certifies that all proceeds of
                           foreclosure, insurance or other liquidation have been
                           finally  received and credited to the  Principal  and
                           Interest  Account  and  remitted  to the  Trustee for
                           deposit into the Certificate  Account pursuant to the
                           Pooling and Servicing Agreement.)

____ 3.           SBA Loan in Foreclosure

_____4.           SBA Loan Repurchased Pursuant to Section 11.01
                           of the Pooling and Servicing Agreement.

                                      I-1
<PAGE>

_____5.           SBA  Loan  Repurchased  or  Substituted   Pursuant  to
                          Article  II  or  III  of  the  Pooling  and  Servicing
                          Agreement   (Servicer   hereby   certifies   that  the
                          repurchase  price or Substitution  Adjustment has been
                          credited to the Principal and Interest  Account and/or
                          remitted  to  the   Trustee   for  deposit   into  the
                          Certificate   Account  pursuant  to  the  Pooling  and
                          Servicing Agreement.)

____ 6.           Collateral Being Released Pursuant to Section 5.01(f) of
                          the Pooling and Servicing Agreement.

____ 7.           SBA Loan Collateral being substituted or subordinated.

                  If box 1 or 2  above  is  checked,  and if all or  part of the
Trustee's  SBA File was  previously  released  to us,  please  release to us our
previous  receipt on file with you, as well as any additional  documents in your
possession relating to the above specified SBA Loan.

                  If box 3, 4, 5, 6 or 7 above is  checked,  upon our  return of
all of the above documents to you, please acknowledge your receipt by signing in
the space indicated below, and returning this form.

                                        BUSINESS LOAN CENTER, INC.
                                         as Servicer


                                        By:______________________________
                                        Name:____________________________
                                        Date:____________________________


Documents returned to Trustee:

-------------------------------
         Trustee



By: ___________________________
Date:  _________________________





                                      I-2
<PAGE>


                                    EXHIBIT J

                           FORM OF LIQUIDATION REPORT

Customer Name:
Account number:
Original Principal Balance:

1.       Unguaranteed Percentage of Liquidation Proceeds

                  Principal Prepayment           $________
                  Property Sale Proceeds          ________
                  Insurance Proceeds              ________
                  Other (Itemize)                 ________

                  Unguaranteed Percentage of
                    Total Proceeds                               $_______

2.       Servicing Advances                      $________
         Monthly Advances                         ________

                  Total Advances                                 $_______

3.       Net Liquidation Proceeds                                $_______
         (Line 1 minus Line 2)

4.       Principal Balance of the SBA
           Loan on date of liquidation                            $_______

5.       Realized (Loss) or Gain                                  $_______
         (Line 3 minus Line 4)





                                      J-1
<PAGE>







                                    EXHIBIT K


                           FORM OF DELINQUENCY REPORT



DELINQUENCY AND FORECLOSURE INFORMATION


<TABLE>
<CAPTION>

            RANGES            #           GROSS       GROSS       CERT.      UNGTD
SERIES      (IN DAYS)         ACCT        AMOUNT      PCT         AMOUNT     PCT
<S>          <C>              <C>         <C>         <C>         <C>        <C>

            1 TO 29 DAYS
            30 TO 59 DAYS
            60 TO 89 DAYS
            90 TO 179  Days
            180 to 719 Days
            720 AND OVER
            FORECLOSURE REO
            PROPERTY DELINQUENCY
            OUTSTANDING


</TABLE>


                                      K-1
<PAGE>



                                    EXHIBIT L

                     SERVICER'S MONTHLY COMPUTER TAPE FORMAT

          The computer tape to be delivered to the Trustee pursuant to
Section 6.09 shall contain the following information for each SBA Loan as of the
related Record Date:

               1. Name of the Obligor,  address of the  Mortgaged  Property,  if
applicable, and Account Number.

               2.      The SBA Loan Interest Rate.

               3.      The Monthly Payment.

               4.      The dates on which the  payments  were  received  for the
                       applicable  Due Period  and the  amount of such  payments
                       segregated  into  the  following  categories;  (a)  total
                       interest  received  (including  Servicing  Fee,  interest
                       payable to holder of the Guaranteed Interest, the Premium
                       Protection Fee, FTA's Fee, Excess Spread,  Extra Interest
                       and, if applicable, Additional Fee); (b) interest payable
                       to the holder of the  Guaranteed  Interest and FTA's Fee;
                       (c)  principal   and  Excess   Payments   received;   (d)
                       Curtailments  received;  and  (e)  Principal  Prepayments
                       received.

               5. The SBA Loan principal balance.

               6. The SBA Loan date and original term to maturity.

               7.      A "Delinquency  Flag" noting that the SBA Loan is current
                       or delinquent. If delinquent, state the date on which the
                       last payment was received.

               8.      For any SBA Loan that is not either 24 months  delinquent
                       or   otherwise   determined   to  be   uncollectible,   a
                       "Foreclosure  Flag"  noting  that  the  SBA  Loan  is the
                       subject of foreclosure proceedings.

               9.      For any SBA Loan that is not either 24 months  delinquent
                       or  otherwise  determined  to be  uncollectible,  an "REO
                       Flag"  noting  that  the  Mortgaged  Property  is an  REO
                       Property.

               10.     A "Liquidated  SBA Loan Flag" noting that the SBA Loan is
                       a Liquidated  SBA Loan and the Net  Liquidation  Proceeds
                       received in connection therewith.

               11.  Any  additional  information  reasonably  requested  by  the
Trustee.




                                      L-1
<PAGE>



                                    EXHIBIT M


                              MULTI-PARTY AGREEMENT
             AMONG BUSINESS LOAN CENTER, INC., MARINE MIDLAND BANK,
                          COLSON SERVICES CORP. AND SBA

          This  Multi-Party  Agreement  is entered  into as of December 23, 1998
(this "Agreement"),  by and among Business Loan Center, Inc. (the "SBA Lender"),
Marine Midland Bank, as Trustee ("Trustee"),  Colson Services Corp. ("FTA"), and
the United States Small Business Administration ("SBA").

          The SBA Lender has made and intends to continue to make loans to small
businesses under the Small Business Act, as amended.

          SBA  guarantees a portion of each SBA Lender Loan (as defined  herein)
in accordance with 13 C.F.R. Part 120 and a Small Business  Administration  Loan
Guaranty  Agreement  (SBA Form  750),  dated  March 27,  1997,  between  SBA and
Business  Loan Center,  Inc. as amended,  supplemented  or replaced from time to
time ("the SBA Agreement").

          Because SBA  guarantees  a portion of each SBA Lender Loan (as defined
herein), SBA has an interest in the SBA Lender Loans, the underlying collateral,
and the Loan Documents (as defined herein).

          The SBA  Lender  has  entered  into  certain  Secondary  Participation
Guaranty Agreements on SBA Form 1086 (each, a "Participation  Agreement") with a
purchaser (each, a "Guaranteed  Holder"),  FTA and SBA. Under the  Participation
Agreements,  the SBA Lender has sold the  guaranteed  portion  (the  "Guaranteed
Interest")  in  certain  SBA  Lender  Loans.  SBA  has  caused  FTA to  issue  a
certificate to each  Guaranteed  Holder which entitles the Guaranteed  Holder to
receive  the  payments  and  other  recoveries  of  principal  relating  to  the
Guaranteed  Interest on the related SBA Lender Loans,  together with interest on
the  Guaranteed  Interest  at a per annum  rate in  effect  from time to time in
accordance with the Participation Agreement.

                                      M-1
<PAGE>

          The SBA  Lender  and the  Trustee  have  entered  into a  Pooling  and
Servicing  Agreement  dated as of December 23, 1998 (the  "Pooling and Servicing
Agreement")  which  establishes  a trust (the  "Trust").  Under the  Pooling and
Servicing  Agreement,  the SBA Lender  will  convey the  Conveyed  Interest  (as
defined  herein)  to  the  Trust.  The  Trust  will  issue   certificates   (the
"Certificates") evidencing the right to receive the Unguaranteed Interest in the
SBA Lender Loans together with interest.

          13 C.F.R. Section 120.420 and the SBA Agreement require the SBA Lender
to obtain SBA's written consent before it sells the Unguaranteed Interest.

          The SBA Lender, the Trustee and SBA want to assure consistency between
the SBA  Agreement  and the  Pooling  and  Servicing  Agreement  and clarify the
respective rights of the parties.

          The SBA Lender, Trustee, FTA and SBA agree as follows:

          1.  Definitions.  In this  Agreement,  the  following  terms  have the
following meanings:

                            a. "Conveyed  Interest":  the Unguaranteed  Interest
                  plus  the  amount  by  which  the  interest  collected  by the
                  Servicer on the principal  portion of the Guaranteed  Interest
                  of each SBA Lender  Loan in the Loan Pool  exceeds  the sum of
                  (a) the interest  payable to the  Registered  Holder,  (b) the
                  fees  payable to SBA and FTA,  (c) the  Servicing  Fee (d) the
                  Premium  Protection Fee and (e) with respect to Additional Fee
                  SBA Loans,  the Additional Fee (each as defined in the Pooling
                  and Servicing Agreement).

                                      M-2
<PAGE>

                            b. "Event of Default": as defined in the Pooling and
                  Servicing Agreement.

                            c. "Loan Documents":  all Notes, mortgages, deeds of
                  trust,  security deeds,  security  agreements,  instruments of
                  hypothecation,  guarantees and other  agreements and documents
                  that relate to the SBA Lender Loans.

                            d.  "Notes":  the notes  evidencing  the SBA  Lender
                  Loans.

                            e. "Premium  Protection Fee": 0.60% per annum of the
                  then outstanding principal balance of the Guaranteed Interest.

                            f. "SBA Lender Loan  Debtor":  any debtor  obligated
                  under an SBA Lender Loan.

                            g. "SBA Lender  Loans":  the loans listed on Exhibit
                  H, as  amended  or  supplemented  from  time to  time,  of the
                  Pooling and Servicing Agreement  (including any Subsequent SBA
                  Loans (as defined in the Pooling and Servicing Agreement)) and
                  any other loans  included in the Trust Fund (as defined in the
                  Pooling and Servicing Agreement).

                            h. "SBA Rules and  Regulations":  the Small Business
                  Act, as amended, the SBA Agreement, all legislation binding on
                  SBA with  respect  to  financial  transactions,  all rules and
                  regulations  promulgated  from  time to time  under  the Small
                  Business  Act,  and  SBA  Standard  Operating  Procedures  and
                  official Notices as from time to time in effect.

                                      M-3
<PAGE>

                            i.  "Servicer":  the  Servicer  (as  defined  in the
                  Pooling  and  Servicing  Agreement)  and, if  applicable,  any
                  Subservicer   (as  defined  in  the   Pooling  and   Servicing
                  Agreement).

                            j.  "Servicing  Fee":  0.40%  per  annum of the then
                  outstanding principal balance of the entire SBA Lender Loans.

                            k.  "Spread  Account  Excess":  as  defined  in  the
                  Pooling and Servicing Agreement.

                            l. "Unguaranteed  Interest": the portion of each SBA
                  Lender Loan not guaranteed by SBA.

          2. SBA's Guaranteed  Interest.  The SBA Lender, the Trustee (on behalf
of  itself  and the  holders  of the  Certificates)  and FTA  acknowledge  SBA's
interest in the Guaranteed  Interest of all SBA Lender Loans,  together with the
collateral  securing  the SBA Lender  Loans and the Loan  Documents,  and in all
payments and recoveries  with respect to the SBA Lender Loans and the collateral
or  any  other  source,   including   insurance  proceeds  and  recoveries  from
guarantees,  and agree to recognize and uphold such interest under SBA Rules and
Regulations.  The SBA Lender and Trustee will  execute any release,  assignment,
endorsement or other document that SBA may from time to time reasonably  request
with  respect to the  Guaranteed  Interest.  Each of SBA Lender and Trustee will
remit funds it receives in respect of the Guaranteed  Interest in the SBA Lender
Loans to FTA or SBA, as appropriate. If SBA purchases the Guaranteed Interest in
any SBA Lender  Loan,  any  recoveries  from the SBA Lender  Loan  Debtor or the
collateral  securing the SBA Lender Loan will be distributed  pro rata to SBA as
holder  of  the  Guaranteed  Interest  and  to  the  Trustee  as  holder  of the
Unguaranteed Interest.

                                      M-4
<PAGE>

          3. Unguaranteed  Interest. SBA acknowledges that it has no interest in
the Unguaranteed  Interest, the Servicing Fee or the Premium Protection Fee. SBA
further  acknowledges that it has no interest in any collateral that secures any
SBA  Lender  Loan or any Loan  Document,  except to the  extent  the  collateral
secures or a Loan Document  relates to the Guaranteed  Interest.  The collateral
for an SBA Lender Loan  secures the  Guaranteed  Interest  and the  Unguaranteed
Interest pari passu and all recoveries from  insurance,  guarantees or any other
source  will be shared pro rata.  If SBA  receives  any amount in respect of the
Conveyed  Interest,  SBA will remit the sum to Trustee for the credit of the SBA
Lender, provided that in no event will SBA have any obligation to pay any amount
not owed by SBA under SBA Rules and  Regulations.  If SBA receives any amount in
respect of the Servicing Fee or the Premium  Protection  Fee, SBA will remit the
sum to the SBA Lender,  for distribution to itself, or, if the SBA Lender is not
the Servicer,  the Servicer,  provided that Trustee shall have given FTA and SBA
15 days prior  written  notice  under this  Agreement of the change in Servicer.
This  Agreement  constitutes a notice of claims  assignment for the full term of
the Pooling and Servicing  Agreement under the Federal  Assignment of Claims Act
of 1940,  as  amended,  31 U.S.C.  Section  3727,  with  respect to any right to
payment  of any  Unguaranteed  Interest  or  the  Servicing  Fee or the  Premium
Protection Fee.

          4. SBA Consent to Pooling and Servicing Agreement.

                            (a) SBA consents to the SBA Lender's  execution  and
                  performance  of the Pooling and  Servicing  Agreement  and the
                  transactions contemplated in it including, but not limited to,
                  the  sales of the  Class A  Certificates  (as  defined  in the
                  Pooling and Servicing Agreement).

                                      M-5
<PAGE>

                            (b)   Notwithstanding   anything  to  the   contrary
                  contained in the Pooling and Servicing Agreement, a default by
                  the SBA  Lender  under  another  agreement  or a default by an
                  entity other than the SBA Lender under  another  agreement may
                  not be an event of default  under the  Pooling  and  Servicing
                  Agreement.  Trustee  waives any rights it may have,  including
                  rights of set-off and  banker's  liens,  to any account of the
                  SBA  Lender  into  which  payments  from the SBA  Lender  Loan
                  Debtors are received and the  Principal  and Interest  Account
                  (as defined in the Pooling and Servicing Agreement).

                            (c) It is a condition precedent to the effectiveness
                  of this Agreement that SBA receive opinions of counsel stating
                  that the  Multi-Party  Agreement  is  enforceable  against the
                  Trustee and the SBA Lender.

          5. SBA  Lender to Retain  Ultimate  Risk of Loss.  As  required  by 13
C.F.R. Section 120.420(b)(2), the SBA Lender must retain an economic risk in and
bear the ultimate risk of loss on the Unguaranteed Interest. The SBA Lender will
establish the Spread Account under the Pooling and Servicing Agreement and cause
a  wholly-owned  subsidiary  to be and remain the Spread  Account  Depositor (as
defined  in the  Pooling  and  Servicing  Agreement)  and  cause a  wholly-owned
subsidiary  to retain the Class B  Certificates  in  accordance  with Section 11
hereof.

          6. Premium  Protection Fee and Servicing Fee. The Servicer will retain
the Premium  Protection Fee and the Servicing Fee with respect to all SBA Lender
Loans.

          7. Restriction on Use of SBA Lender Loans. The SBA Lender will not use
the SBA Lender Loans or the  collateral  supporting the SBA Lender Loans for any
borrowing  or other  financing  not related to financing  of the  guaranteed  or
unguaranteed  portions  of the SBA Lender  Loans.

                                      M-6
<PAGE>

          8.  FTA  To  Hold  Original  SBA  Lender  Notes;  Possession  of  Loan
Documents.  (a) The SBA Lender will deliver all original  Notes  relating to the
Initial SBA Loans (as defined in the Pooling  and  Servicing  Agreement)  to FTA
prior to the  issuance of the  Certificates  and the SBA Lender will deliver all
original  Notes  relating to the Subsequent SBA Loans (as defined in the Pooling
and  Servicing  Agreement)  to FTA  prior  to each  Subsequent  Transfer  of the
Subsequent  SBA Loans.  Each Note will be  endorsed  by means of an allonge  (an
endorsement of the Note constituting a separate piece of paper) as follows: "Pay
to the order of Marine Midland Bank, and its successors and assigns,  as trustee
under the Pooling and Servicing Agreement dated as of December 23, 1998, for the
benefit of the United States Small  Business  Administration  and the holders of
Business Loan Center SBA Loan-Backed  Certificates,  Series 1998-1,  Class A and
Class B as their  respective  interests  may  appear,  without  recourse."  Upon
receiving the Note, FTA will deliver to SBA Lender and the Trustee a receipt for
such Note in the form of Exhibit 1.

                            (b) The  Notes are  being  delivered  to FTA for the
                  purposes of protecting  the SBA's and the  Certificateholders'
                  respective  interests.  SBA  appoints  FTA as its  fiscal  and
                  transfer agent and each of SBA and the Trustee  appoint FTA as
                  its agent to hold the Notes.  FTA does not and will not during
                  the term of this Agreement have any interest in the SBA Lender
                  Loans in the Loan Pool or the related Loan Documents.

                            (c) FTA will not  release any Note to either the SBA
                  Lender or any other  person  except (i) upon  receipt from the
                  SBA  Lender of a Request  for  Release  of Note in the form of
                  Exhibit 3, along with a consent to release  from the  Trustee,
                  or (ii) with SBA's prior written consent.  Upon receipt of the
                  required  request  and  consent,  FTA will  release,  within 3
                  Business  Days, the related Note. The Servicer will return the
                  Notes to FTA in accordance with the appropriate  provisions of


                                      M-7
<PAGE>

                  the Pooling  and  Servicing  Agreement  and when the Notes are
                  returned  to FTA,  FTA  will  issue a  receipt  in the form of
                  Exhibit 1  hereto.  SBA will  notify  Duff and  Phelps  Credit
                  Rating  Co.  if  FTA   releases   any  Note  solely  upon  the
                  instructions of SBA.

                            (d) Upon reasonable notice to FTA, SBA will have the
                  right  during  normal  business  hours to inspect the original
                  Notes at FTA's office.

                            (e) The SBA Lender  will  deliver to the Trustee the
                  Loan Documents and assignments of Loan Documents in accordance
                  with the Pooling and Servicing  Agreement.  All instruments of
                  assignment  will assign the  applicable  collateral to "Marine
                  Midland Bank  ("Assignee")  its  successors  and  assigns,  as
                  trustee under the Pooling and Servicing  Agreement dated as of
                  December 23, 1998, subject to the Multi-Party  Agreement dated
                  as of December 23, 1998".  All financing  statements will name
                  the Trustee as secured  party.  Any power of attorney from the
                  SBA Lender to Trustee  must  require  the Trustee to deal with
                  the collateral in accordance with the terms of the Pooling and
                  Servicing Agreement and this Agreement.

                            (f) If the  Servicer or SBA must be the record owner
                  or secured party with respect to any Note or any loan document
                  or any collateral securing any Note for any purpose including,
                  without  limitation,  to liquidate  (including by any judicial
                  means) or  otherwise  pursue  remedies  against any SBA Lender
                  Loan Debtor or any  collateral  securing any Note, the Trustee
                  will assign such Note or collateral  to the Servicer,  or SBA,
                  as necessary.

          9.  Servicing of SBA Lender  Loans.  The Servicer will service the SBA
Lender Loans.  The Servicer will remit funds to which the Guaranteed  Holders or
SBA is entitled in accordance  with the terms of the  Participation  Agreements,
and will remit to the  Trustee  funds  which are  required to be remitted to the
Trustee in accordance with the terms of the Pooling and Servicing Agreement. The


                                      M-8
<PAGE>

Servicer  must  proceed  with  all  collection,   enforcement  of  remedies  and
liquidation  actions  against SBA Lender Loan  Debtors in default in  accordance
with SBA  Rules  and  Regulations.  The  Servicer  must  perform  all  servicing
activities  in  accordance  with SBA Rules and  Regulations,  the  Participation
Agreements  and, to the extent there is no conflict,  the Pooling and  Servicing
Agreement.  Property acquired through foreclosure or deed in lieu of foreclosure
will be titled in the name of Trustee  for the benefit of SBA and the holders of
the  Certificates,  as their interests may appear,  subject to the terms of this
Agreement.  The Servicer will  continue to administer  such property and will be
responsible for its disposition in accordance with the SBA Rules and Regulations
and, to the extent there is no conflict,  the terms of the Pooling and Servicing
Agreement. The Servicer will distribute disposition proceeds to SBA, as party in
interest with respect to the Guaranteed  Interest,  and to Trustee in respect of
the Unguaranteed Interest, pro rata. SBA may, at its option, assume servicing of
any SBA Lender Loan in  accordance  with SBA Rules and  Regulations.  Unless the
Trustee becomes the Servicer, the Trustee will not take (i) any action regarding
the  servicing of any SBA Lender Loan or (ii) any action with respect to any SBA
Lender Loan Debtor or any  collateral  securing any SBA Lender Loan. Any actions
required  of SBA  Lender  under the  Pooling  and  Servicing  Agreement  or this
Agreement may be performed by or through a subservicer  approved by SBA under an
agreement approved by SBA, but any such subservicing  arrangement will not limit
or reduce the SBA Lender's  obligations  or  liabilities  as servicer  under the
Pooling and Servicing Agreement or this Agreement.

          10.  Default Under Pooling and Servicing  Agreement.  The Trustee will
give SBA prompt  written notice of an Event of Default and prompt written notice
of any  termination  of the Servicer as Servicer under the Pooling and Servicing
Agreement.  Upon an Event of Default and termination of the Servicer as Servicer
in accordance with the terms of the Pooling and Servicing Agreement, Trustee may
be  substituted  as  Servicer  so  long as  Trustee  is  then  an  approved  SBA


                                      M-9
<PAGE>

participating lender in good standing,  operating under a current Small Business
Administration Loan Guaranty Agreement (Deferred  Participation)  (Form 750). If
Trustee does not meet that condition or is otherwise unable to act or if the SBA
requests in writing,  Trustee will appoint  another  Servicer in accordance with
the Pooling and Servicing  Agreement.  Any  successor  Servicer must agree to be
bound by the terms of this  Agreement  and must execute an agreement in the form
of Exhibit 2. Any substitute  Servicer will be entitled to receive the Servicing
Fee and the Premium Protection Fee.

          11. Transferees. Other than the issuance of the Certificates,  Trustee
will not sell,  participate,  pledge,  hypothecate,  enter  into any  repurchase
agreement with respect to, or otherwise  transfer any of its interest in any SBA
Lender  Loan or any Note  without  SBA's prior  written  consent.  The  proposed
transferee  must be an  approved  SBA  participating  lender  in good  standing,
operating under a current Small Business  Administration Loan Guaranty Agreement
(Deferred  Participation)  (Form  750)  and  must be  acceptable  to  SBA.  Upon
consenting to any proposed  transfer,  SBA will give FTA prompt written  notice.
Any  transferee  must  agree to be bound by the  terms of this  Agreement.  Upon
initial  issuance,  the Class B Certificate  will be issued to and registered in
the name of Business Loan Center  Financial Corp. II, a wholly-owned  subsidiary
of the SBA Lender which will retain legal and beneficial  ownership of the Class
B Certificate.  The SBA Lender agrees that Business Loan Center  Financial Corp.
II will not sell, pledge,  transfer,  assign or otherwise convey, in whole or in
part, the Class B Certificate without the prior written consent of SBA.

                                      M-10
<PAGE>

          12. SBA Lender Acknowledgment of Continuing Obligation;  No Assumption
of  Liabilities.  No action  taken by Trustee,  SBA or the  Servicer  under this
Agreement,  the SBA  Agreement,  or the Pooling  and  Servicing  Agreement  will
release  or  relieve  SBA  Lender  of any of  its  obligations  to SBA or to the
Trustee.  None of SBA, Trustee,  FTA or the Servicer will incur any liability or
obligation to SBA Lender by reason of any  reasonable or customary  action taken
in carrying out the provisions of this Agreement.  Neither the execution of this
Agreement,  nor the taking of any action by Trustee,  SBA,  FTA or the  Servicer
under this Agreement will be an assumption by Trustee,  SBA, FTA or the Servicer
of any liabilities or obligations of SBA Lender.  The provisions of this Section
will survive termination of this Agreement.

          13. FTA's and SBA's Limited  Liability and Expenses.  (a) FTA may rely
upon any signature,  notice,  certificate, or other document reasonably believed
by it to be genuine and to have been signed by the party  purporting to sign it.
SBA Lender will assume liability for and indemnify,  protect,  and hold harmless
FTA from any liabilities or losses arising out of this Agreement,  except in the
case of FTA's gross negligence or willful misconduct.  SBA Lender will reimburse
FTA for all expenses,  taxes, and other charges that FTA incurs in administering
this Agreement.  SBA Lender will pay FTA its standard fee for its services under
this Agreement. In performing its obligations under this Agreement, FTA will not
follow  instructions from any party other than SBA or, pursuant to Section 8(c),
upon the request of the SBA Lender and concurring  instructions of Trustee.  The
SBA Lender will not hold FTA liable for any action taken in accordance with such
instructions.

                            (b)  SBA  may   rely  on  any   signature,   notice,
                  certificate,  request or other document reasonably believed by
                  it to be  genuine  and  to  have  been  signed  by  the  party
                  purporting  to sign it. SBA Lender will assume  liability  for


                                      M-11
<PAGE>

                  and  indemnify,   protect  and  hold  harmless  SBA  from  all
                  liabilities or losses arising out of this Agreement, except in
                  the case of  gross  negligence  or  willful  misconduct.  Upon
                  request by SBA, SBA Lender will reimburse SBA for all expenses
                  and other  charges  that SBA  incurs in  connection  with this
                  Agreement.

                            (c) The  provisions  of this Section 13 will survive
                  any termination of this Agreement.

          14.  Counterparts.  This  Agreement  may be  executed in any number of
counterparts  each of which will be an  original.

          15.   Inconsistencies.   If  any   provision  of  this   Agreement  is
inconsistent  with any  provision  in any  other  agreement,  including  but not
limited to the Pooling and Servicing Agreement,  the provision of this Agreement
controls. The Pooling and Servicing Agreement and any agreements entered into in
connection  with such  agreement  are  amended to the extent  necessary  to give
effect to the prior  sentence.  The SBA Agreement is amended to provide that FTA
will hold the Notes that are  transferred  pursuant to the Pooling and Servicing
Agreement  and that the Trustee may hold the Loan  Documents as provided in this
Agreement.

          16.  Amendment  and Term.  This  Agreement  may not be  terminated  or
amended  without  the prior  written  consent of the  parties.  Neither  the SBA
Agreement nor the Pooling and  Servicing  Agreement may be amended in any manner
that would  impair the  respective  rights of the SBA or the Trustee  under this
Agreement without the prior written consent of the party so affected.

          17. Governing Law. Except to the extent inconsistent with Federal Law,
in which case Federal Law will govern,  this Agreement  will be interpreted  and
construed  in  accordance  with  the  laws of the  State  of New  York,  without
reference to its conflict of laws rules.


                                      M-12
<PAGE>

          18.  Successors  and Assigns.  This  Agreement  binds and benefits the
parties and their respective successors and
                     assigns.

          19. Section  Headings.  The section headings in this Agreement are for
convenience only, and are without substantive meaning or content.

          20. Severability.  Any provision of this Agreement which is prohibited
or  unenforceable  in any  jurisdiction  will be  given no  effect  and will not
invalidate any other provision of this Agreement.

          21. Notices and Deliveries.  Except as otherwise expressly provided in
this document,  all notices or deliveries  under this Agreement will be given by
actual delivery to the parties at the addresses below or to such other addresses
that any party may designate  for itself by written  notice to each of the other
parties. All notices will be effective upon receipt by the applicable party.

                           If to the SBA Lender, at:
                                    Business Loan Center, Inc.
                                    645 Madison Avenue
                                    New York, New York  10022
                                    Telecopy No.:  212 751-9345
                                    Attention:  Robert Tannenhauser

                           If to the Trustee, at:
                                    Marine Midland Bank
                                    140 Broadway, 12th Floor
                                    New York, New York  10005
                                    Attention:  Corporate Trust Administration

                           If to FTA, at:
                                    Colson Services Corp.
                                    120 Broadway, 19th floor
                                    New York, New York  10271
                                    Attn:  President





                                      M-13
<PAGE>


                          If to SBA, at:
                                    U.S. Small Business Administration
                                    409 3rd Street, S.W.
                                    Washington, D.C.  20416
                                    Attn:  Associate Administrator for
                                           Financial Assistance

          Additionally,  the SBA Lender will  provide SBA with a copy of (i) the
SBA Loan Schedule included as Exhibit H to the Pooling and Servicing  Agreement,
as amended or supplemented from time to time, along with any amendments  thereto
delivered to the  Trustee,  and (ii) each  delinquency  and  foreclosure  report
prepared in  accordance  with clause  (viii) of Section  6.09 of the Pooling and
Servicing  Agreement.  Such  Schedules  and reports  will be sent (to the extent
practicable,  in  electronic  format)  to  Mr.  James  Hammersley,  Director  of
Secondary Market Sales (james.hammersley@sba.gov).


                                      M-14
<PAGE>


                  IN WITNESS WHEREOF the SBA Lender,  the Trustee,  FTA, and SBA
have executed this Agreement below.

                                        BUSINESS LOAN CENTER, INC.

                                        By:
                                            ------------------------------

                                        MARINE MIDLAND BANK, not in
                                        its individual capacity
                                        but solely as Trustee


                                        By:
                                             -----------------------------

                                        UNITED STATES SMALL BUSINESS
                                        ADMINISTRATION


                                        By:
                                             -----------------------------
                                        Name:  Jane Palsgrove Butler
                                        Title: Associate Administrator
                                                  for Financial Assistance


                                        COLSON SERVICES CORP.


                                        By:
                                             ------------------------------
                                        Name: Roy Simpson, Jr.
                                        Title: Executive Vice President






                                      M-15
<PAGE>

                                    EXHIBIT 1

                        ACKNOWLEDGMENT OF RECEIPT OF NOTE

                                                        ___________, 199_

                  In  accordance  with Section 8 of the  Multi-Party  Agreement,
dated as of December 23, 1998, by and among Business Loan Center,  Inc.,  Marine
Midland  Bank,  Colson  Services  Corp.  ("Colson")  and the United States Small
Business Administration ("SBA"),  Colson, hereby acknowledges receipt of the SBA
guaranteed Note described below with respect to the following:

                  MAKER:

                  ORIGINAL PRINCIPAL AMOUNT:

                  DATE OF NOTE:

                  SBA LOAN NUMBER (GP NUMBER):

                  BUSINESS LOAN CENTER, INC. ACCOUNT NUMBER:


                                          COLSON SERVICES CORP.


                                          By:_______________________________

                                          Its:______________________________


INSTRUCTIONS TO COLSON SERVICES CORP. One original executed copy of this receipt
should be made  available  for pick-up at the office of Colson or  delivered  to
Marine Midland Bank, as trustee,  140 Broadway,  12th Floor,  New York, New York
10005, and a copy to Business Loan Center,  Inc., 645 Madison Avenue,  New York,
New York 10022.



                                      1-1
<PAGE>


                                    EXHIBIT 2

                  The  undersigned  consents and agrees to be bound as successor
Servicer by the terms of foregoing  Multi-Party  Agreement  dated as of December
23, 1998 among  Business  Loan Center,  Inc.,  Marine  Midland Bank, as Trustee,
Colson Services Corp. and the United States Small Business Administration.



                                   -----------------------------------


                               By: ___________________________________
                                     Name:____________________________
                                     Title:___________________________





                                      2-1
<PAGE>




                                    EXHIBIT 3

                           REQUEST FOR RELEASE OF NOTE


_____________, 199_

Colson Services Corp.
 As Agent for the United States
 Small Business Administration
120 Broadway, 19th floor
New York, NY  10271

         In accordance with Section 8(c) of the  Multi-Party  Agreement dated as
of December 23, 1998 by and among  Business Loan Center,  Inc.,  Marine  Midland
Bank,  Colson  Services  Corp.  ("Colson")  and the United States Small Business
Administration  ("SBA") and,  subject to your receipt of concurrence from Marine
Midland Bank, as Trustee,  Business Loan Center, Inc. hereby requests release of
the Note described below:

OBLIGOR'S NAME AND ADDRESS:


SBA LOAN NUMBER (GP NUMBER):


Reason for Requesting Note
(ONE OF THESE MUST BE CHECKED)

____1.  SBA Loan Paid in Full

____2.  SBA Loan Liquidated

____3.  SBA Loan in Foreclosure

____4.  SBA Loan  repurchased  pursuant  to Section  11.01 of the  Pooling and
        Servicing  Agreement,  dated as of  December  23,  1998,  relating  to
        Business Loan Center SBA  Loan-Backed  Adjustable  Rate  Certificates,
        Series 1998-1 (The "Pooling and Servicing Agreement")

____5.  SBA Loan  repurchased or substituted  pursuant to Article II or
        Article III of the Pooling and Servicing Agreement

____6.  Collateral  being released  pursuant to Section  5.01(f) of the
        Pooling and Servicing Agreement


                                      3-1
<PAGE>

____7.  SBA Loan collateral  being substituted or subordinated


                                   BUSINESS LOAN CENTER, INC.


                                   By: ________________________
                                   Its:  ________________________




                                      3-2
<PAGE>


                                    EXHIBIT N

                            SPREAD ACCOUNT AGREEMENT


                  This Spread Account Agreement is dated as of December 30, 1998
(the  "Agreement")  among  Business Loan Center  Financial  Corp. II, a Delaware
corporation,  as Spread  Account  Depositor  (the "Spread  Account  Depositor"),
Marine Midland Bank, as trustee (the "Trustee"), and Marine Midland Bank, in its
capacity  as  custodian   hereunder  (the  "Spread  Account   Custodian").   All
capitalized  terms used but not otherwise defined herein shall have the meanings
set forth in the Pooling and Servicing Agreement referred to below.

                  WHEREAS, Business Loan Center, Inc. (the "Seller"), and Marine
Midland  Bank,  in its  capacity as  Trustee,  have  entered  into a Pooling and
Servicing  Agreement,  dated as of December 23, 1998 (the "Pooling and Servicing
Agreement"),  in connection with the  establishment of a Trust (the "Trust") and
the  issuance  of  Business  Loan  Center  SBA   Loan-Backed,   Adjustable  Rate
Certificates,  Series 1998-1,  representing  an undivided  beneficial  ownership
interest in the Trust;

                  WHEREAS,  the Spread Account Depositor wishes to establish the
Spread Account (the "Account") with the Spread Account Custodian,  to be used in
accordance  with the  provisions  of Section  6.02 of the Pooling and  Servicing
Agreement; and

                  WHEREAS,   the  Spread  Account  Custodian  herein  agrees  to
maintain  the Account in  accordance  with the terms of this  Agreement  and the
Pooling and Servicing Agreement.

                  NOW,  THEREFORE,  in  consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:

         Section 1.  Definitions.  In  addition  to those  terms  defined in the
Pooling and Servicing  Agreement and otherwise  herein,  the following words and
phrases,  unless  the  context  otherwise  requires,  shall  have the  following
meanings:

                         "Account"  has the  meaning  set  forth  in the  second
                    WHEREAS clause hereof.

                         "Account Property" has the meaning set forth in Section
                    3 hereof.

                         "Certificated  Securities" has the meaning set forth in
                    Section 8-102(4) of the UCC.

                         "Clearing  Corporation"  has the  meaning  set forth in
                    Section 8-102(5) of the UCC.

                                      N-1
<PAGE>

                           "Eligible   Deposit   Account"  means  either  (a)  a
                  segregated  account with a Designated  Depository  Institution
                  (as defined in the Pooling and  Servicing  Agreement) or (b) a
                  segregated  trust account with the corporate trust  department
                  of a depository  institution  organized  under the laws of the
                  United  States of  America  or any one of the  States  (or any
                  domestic  branch of a foreign bank),  having  corporate  trust
                  powers  and  acting as  trustee  for funds  deposited  in such
                  account.

                         "Delivery"  when used with respect to Account  Property
                    means:

               (a) with  respect  to  bankers'  acceptances,  commercial  paper,
     negotiable  certificates of deposit and other  obligations  that constitute
     instruments and are susceptible of physical delivery ("Physical Property"):

                    (i)  transfer of  possession  thereof to the Spread  Account
                         Custodian,  endorsed to, or  registered in the name of,
                         the Spread Account Custodian or its nominee or endorsed
                         in blank;

               (b) with respect to a certificated security:

                    (i)  delivery  thereof in bearer form to the Spread  Account
                         Custodian; or

                    (ii) delivery  thereof  in  registered  form  to the  Spread
                         Account Custodian and

                         (A)  the  certificate is endorsed to the Spread Account
                              Custodian or in blank by effective endorsement; or

                         (B)  the  certificate  is registered in the name of the
                              Spread Account  Custodian,  upon original issue or
                              registration of transfer by the issuer;

               (c) with respect to an uncertificated security:

                    (i)  the  delivery  of the  uncertificated  security  to the
                         Spread Account Custodian; or

                    (ii) the  issuer  has  agreed   that  it  will  comply  with
                         instructions originated by the Spread Account Custodian
                         without further consent by the registered owner;

               (d) with respect to any security issued by the U.S. Treasury that
is a book-entry  security held through the Federal  Reserve  System  pursuant to
Federal book-entry regulations:

                                      N-2
<PAGE>

                    (i)  a  Federal  Reserve  Bank by  book  entry  credits  the
                         book-entry  security  to  the  securities  account  (as
                         defined  in 31  CFR  Part  357)  of a  participant  (as
                         defined in 31 CFR Part 357) which is also a  securities
                         intermediary; and

                    (ii) the  participant  indicates  by  book  entry  that  the
                         book-entry  security  has been  credited  to the Spread
                         Account Custodian's securities account;

               (e) with respect to a security entitlement:

                    (i)  the Spread Account  Custodian  becomes the  entitlement
                         holder; or

                    (ii) the  securities  intermediary  has agreed  that it will
                         comply with entitlement orders originated by the Spread
                         Account   Custodian  without  further  consent  by  the
                         entitlement holder;

               (f) for the  purpose  of clauses  (b) and (c)  hereof  "delivery"
means:

                    (i)  with respect to a certificated security:

                         (A)  the Spread Account Custodian  acquires  possession
                              thereof;

                         (B)  another    person   (other   than   a   securities
                              intermediary)  either acquires  possession thereof
                              on  behalf of the  Spread  Account  Custodian  or,
                              having  previously  acquired  possession  thereof,
                              acknowledges  that it holds for the Spread Account
                              Custodian; or

                         (C)  a securities  intermediary acting on behalf of the
                              Spread Account  Custodian  acquires  possession of
                              thereof,  only if the certificate is in registered
                              form and has been specially endorsed to the Spread
                              Account Custodian by an effective endorsement;

                    (ii) with respect to an uncertificated security:

                         (A)  the issuer registers the Spread Account  Custodian
                              as the  registered  owner,  upon original issue or
                              registration of transfer; or

                         (B)  another    person   (other   than   a   securities
                              intermediary)  either becomes the registered owner
                              thereof on behalf of the Spread Account  Custodian
                              or, having previously become the registered owner,
                              acknowledges  that it holds for the Spread Account
                              Custodian;

               (g)  for  purposes  of  this  definition,   except  as  otherwise
indicated, the following terms shall have the meaning assigned to each such term
in the UCC:

                           (i)      "certificated security"

                                      N-3
<PAGE>

                           (ii)     "effective endorsement"

                           (iii)    "entitlement holder"

                           (iv)     "instrument"

                           (v)      "securities account"

                           (vi)     "securities entitlement"

                           (vii)    "securities intermediary"

                           (viii)   "uncertificated security"

               (h) in each case of  Delivery  contemplated  herein,  the  Spread
Account  Custodian shall make  appropriate  notations on its records,  and shall
cause  the  same to be made on the  records  of its  nominees,  indicating  that
securities are held in trust pursuant to and as provided in this Agreement.

                           "Depositary"  has the  meaning set forth in 31 C.F.R.
                  306.118 or similar federal regulations  governing the transfer
                  of securities  issued by the United States  Treasury which are
                  maintained in book-entry form.

                            "Securities  Intermediary" has the meaning set forth
                  in Section 8-102 (a)(14) of the UCC.

                           "Instruments"  has the  meaning  set forth in Section
                  9-105(l)(ii)  of the UCC but excludes any  "instruments"  that
                  are  "certificated  securities" as defined in Section 8-102(l)
                  (a) of the UCC.

                           "Physical  Property"  has the  meaning  set  forth in
                  clause (i) of the definition of "Delivery" in this Section 1.

                           "UCC" means the New York Uniform Commercial Code.

                            "Uncertificated  Security" has the meaning set forth
                  in Section 8-102(a)(18) of the UCC.

         Section 2. Appointment of Spread Account Custodian.  The Spread Account
Depositor  and the Trustee  hereby  appoint  Marine  Midland Bank as their agent
under this Agreement to act on their behalf in accordance with the terms of this
Agreement  with  respect to their  interests  in the Account and all amounts and
investments  deposited therein or credited  thereto.  Marine Midland Bank hereby
accepts  and  acknowledges  its  appointment  as agent on behalf  of the  Spread
Account Depositor and the Trustee.

                                      N-4
<PAGE>

         Section 3. Pledge of Security  Interest.  The Spread Account  Depositor
hereby assigns, sells, conveys and transfers to the Spread Account Custodian and
its  successors and assigns,  and grants thereto a security  interest in, all of
its  right,  title and  interest  in and to all  amounts  payable  to the Spread
Account  pursuant to Section 6.02 of the Pooling and  Servicing  Agreement,  the
Account,  all amounts deposited therein or credited thereto,  from time to time,
and all proceeds of the  foregoing,  including,  without  limitation,  all other
amounts and  investments  held from time to time in the Account  (whether in the
form  of   deposit   accounts,   Physical   Property,   book-entry   securities,
Uncertificated  Securities,  or  otherwise)  in  consideration  of its  right to
receive  Excess  Spread in  accordance  with  Section  6.02 of the  Pooling  and
Servicing   Agreement  (all  of  the  foregoing,   collectively,   the  "Account
Property"),  to  have  and to  hold  all  the  aforesaid  property,  rights  and
privileges  unto the Spread Account  Custodian,  its successors and assigns,  in
trust for the benefit of the Trustee and the Certificateholders,  subject to the
terms and provisions,  set forth in this Agreement. The Spread Account Custodian
hereby  acknowledges such transfer and, upon receipt,  shall hold and distribute
the  Account  Property  in  accordance  with the  terms and  provisions  of this
Agreement.

         Section 4. Establishment of the Account.  In consideration of its right
to receive  Excess  Spread in  accordance  with  Section 6.02 of the Pooling and
Servicing  Agreement,  the Spread Account Depositor hereby establishes and shall
hereafter  maintain with the Spread Account  Custodian the Account as a separate
trust account to include the money and other property deposited and held therein
pursuant hereto.  The Account shall be a segregated trust account  maintained in
New  York and  initially  established  with the  Spread  Account  Custodian  and
maintained with the Spread Account  Custodian in the Corporate Trust  Department
of the Spread Account Custodian.  The Spread Account Custodian  acknowledges the
interest of the Trustee in the Account, as set forth herein and in Article VI of
the  Pooling and  Servicing  Agreement.  The Spread  Account  Custodian  further
acknowledges  and agrees  that (i) any  deposits  to the  Account  shall be made
solely by the Servicer or the Trustee in accordance  with Section 6.02(a) of the
Pooling and Servicing Agreement;  (ii) any withdrawals from the Account shall be
made by the Spread Account Custodian solely upon instructions  therefor given by
the  Trustee as  specifically  set forth in Section  6.02(b) of the  Pooling and
Servicing  Agreement;  and (iii) the Seller, the Servicer and the Spread Account
Depositor  shall have no rights to receive any amounts in the Account other than
as  specifically  set forth  herein and in Section  6.02(b) of the  Pooling  and
Servicing Agreement.

          Section 5. Delivery of Account  Property.  With respect to the Account
Property,  the Spread Account  Depositor and the Spread Account  Custodian agree
that:

                           (a) any  Account  Property  that  is held in  deposit
                  accounts shall be held solely in an Eligible  Deposit Account;
                  and  each  such  deposit  account  shall  be  subject  to  the
                  exclusive   dominion   and  control  of  the  Spread   Account
                  Custodian,  and the Spread Account  Custodian  shall have sole
                  signature authority with respect thereto;

                                      N-5
<PAGE>

                           (b) any Account  Property  that is Physical  Property
                  shall  be  delivered  to  the  Spread  Account   Custodian  in
                  accordance  with paragraph (a) of the definition of "Delivery"
                  and shall be held, pending maturity or disposition,  solely by
                  the Spread Account Custodian or a securities  intermediary (as
                  such term is defined in Section  8-102(a)(14)  of the Relevant
                  UCC);

                           (c) any  Account  Property  that  is a  "certificated
                  security"  under  Article  8 of  the  Relevant  UCC  shall  be
                  delivered to the Spread Account  Custodian in accordance  with
                  paragraph (b) of the  definition  of  "Delivery"  and shall be
                  held,  pending  maturity or disposition,  solely by the Spread
                  Account  Custodian or a securities  intermediary (as such term
                  is defined in Section 8-102(a)(14) of the Relevant UCC);

                           (d) any Account  Property that is an  "uncertificated
                  security"  under  Article  8 of  the  Relevant  UCC  shall  be
                  delivered to the Spread Account  Custodian in accordance  with
                  paragraph (c) of the  definition  of  "Delivery"  and shall be
                  maintained by the Spread Account  Custodian,  pending maturity
                  or disposition,  through  continued  registration on the books
                  and  records of the issuer  thereof of the  ownership  of such
                  security by the Spread Account Custodian (or its nominee) or a
                  securities  intermediary  (as such term is  defined in Section
                  8-102(a)(14) of the Relevant UCC);

                           (e)  any  Account   Property  that  is  a  book-entry
                  security held through the Federal  Reserve System  pursuant to
                  Federal  book-entry  regulations  shall  be  delivered  to the
                  Spread Account  Custodian in accordance  with paragraph (d) of
                  the  definition of  "Delivery"  and shall be maintained by the
                  Spread Account  Custodian,  pending  maturity or  disposition,
                  through  continued  book-entry  registration  of such  Account
                  Property  in the name of the  Spread  Account  Custodian  or a
                  securities  intermediary  (as such term is  defined in Section
                  8-102(a)(14) of the Relevant UCC), and

                           (f) any Account  Property  held  through a securities
                  intermediary (as such term is defined in Section  8-102(a)(14)
                  of the Relevant UCC) shall be held in a securities account (as
                  such term is defined in Section  8-501(a) of the Relevant UCC)
                  that is established  by such  securities  intermediary  in the
                  name of the  Spread  Account  Custodian  for which the  Spread
                  Account  Custodian is the sole entitlement  holder (as defined
                  in Section 8-102(a)(7) of the Relevant UCC).

         Section 6. Investment. Amounts held in the Account shall be invested in
Permitted  Instruments in accordance  with the provisions of Section 6.06 of the
Pooling and Servicing Agreement.  All such investments shall be made in the name
of the Spread Account Custodian or its nominee, and all income and gain realized
thereon shall be retained in the Account until  withdrawals  are permitted under
Section 6.02(b)(iii) of the Pooling and Servicing Agreement.

                                      N-6
<PAGE>

          Section 7. Statement of Account. On or before each Determination Date,
the Spread Account Custodian shall deliver to the Trustee,  the Servicer and the
Spread Account  Depositor an account  statement of the Spread Account  Custodian
setting forth,  as of such date, (i) the amount on deposit in the Account,  (ii)
the activity in the Account for the preceding  month and (iii) the amount of any
income or gain (or loss) on amounts held in the Account.

          Section 8. Termination. This Agreement shall terminate upon
the  termination of the Pooling and Servicing  Agreement in accordance  with its
terms. Upon termination of this Agreement, any amounts on deposit in the Account
shall be paid by the Spread Account Custodian to the Spread Account Depositor in
accordance with the terms of the Pooling and Servicing Agreement.

          Section  9.  Amendment.  This  Agreement  may be amended by the Spread
Account  Depositor  and the Spread  Account  Custodian  with the  consent of the
Trustee. The parties hereto agree to make any changes to this Agreement required
by the Rating Agency in order to obtain an investment-grade rating.

          Section 10.  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.  GOVERNING  LAW.  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  UNDER  THIS  AGREEMENT  SHALL BE  DETERMINED  IN
ACCORDANCE  WITH SUCH LAWS WITHOUT  GIVING  EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW.

          Section 12. Notices.  All demands,  notices and communications upon or
to the Spread Account Depositor,  the Servicer,  the Spread Account Custodian or
the Trustee under this Agreement  shall be in writing,  personally  delivered or
mailed by certified mail, return receipt requested,  and shall be deemed to have
been duly given upon  receipt  (a) in the case of the  Trustee,  at the  address
therefor set forth in Section 13.06 of the Pooling and Servicing Agreement;  (b)
in the case of the Spread  Account  Custodian,  c/o Marine  Midland  Bank at 140
Broadway,  New York,  New York 10005,  12th Floor,  Attention:  Corporate  Trust
Department;  and (c) in the case of the Spread Account  Depositor,  c/o Business
Loan Center, Inc., 645 Madison Avenue, New York, New York 10022.

          Section  13.  Severability  of  Provisions.  If any one or more of the
agreements,  provisions  or terms  of this  Agreement  shall  be for any  reason
whatsoever  held  invalid,  then such  agreements,  provisions or terms shall be
deemed  severable  from the  remaining  agreements,  provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.

                                      N-7
<PAGE>

          Section 14. Assignment; Benefit of Agreement. Notwithstanding anything
to the contrary  contained  herein,  this  Agreement  may not be assigned by the
Spread  Account  Depositor  Spread Account  Custodian  without the prior written
consent of the Trustee.  Subject to the foregoing,  this Agreement will inure to
the benefit of and be binding upon the parties  hereto and the Trustee and their
respective successors and permitted assigns.




                                      N-8
<PAGE>



                  IN WITNESS WHEREOF, the Spread Account Depositor,  the Trustee
and the Spread Account Custodian have caused this Spread Account Agreement to be
duly  executed by their  respective  officers as of the day and year first above
written.
                                        MARINE MIDLAND BANK,
                                        as Trustee

                                        By:
                                            ------------------------------
                                             Authorized Officer


                                        MARINE MIDLAND BANK,
                                        as Spread Account Custodian

                                        By:
                                            ------------------------------
                                             Name:________________________
                                             Title:_______________________


                                        BUSINESS LOAN CENTER FINANCIAL CORP. II
                                           as Spread Account Depositor


                                        By:
                                             -----------------------------
                                        Name:  ___________________________
                                        Title: ___________________________


                                      N-9
<PAGE>

                                   EXHIBIT O-1


                    FORM OF TRANSFEREE LETTER [NON-RULE 144A]



Marine Midland Bank, as Trustee
140 Broadway, 12th Floor
New York, New York  10005

Business Loan Center, Inc.,
  as Servicer
645 Madison Avenue
New York, New York  10022

Attention:  Corporate Trust Administration

                                                              __________, 199_

              Re:  Business Loan Center SBA Loan-Backed Adjustable Rate
                   Certificates, Series 1998-1, Class

Ladies and Gentlemen:

         In connection with our acquisition of the above-captioned Certificates,
we certify that (a) we understand that the Certificates are not being registered
under  the  Securities  Act of  1933,  as  amended  (the  "Act"),  or any  state
securities laws and are being  transferred to us in a transaction that is exempt
from the  registration  requirements of the Act and any such laws, (b) we are an
institutional  "Accredited  Investor,"  as defined in the Pooling and  Servicing
Agreement pursuant to which the Certificates were issued (the "Agreement"),  and
have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of  investments in the  Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Seller  concerning  the purchase of the  Certificates  and all matters  relating
thereto or any  additional  information  deemed  necessary  to our  decision  to
purchase the Certificates,  (d) we are acquiring the Certificates for investment
for our own account and not with a view to any distribution of such Certificates
(but without prejudice to our right at all times to sell or otherwise dispose of
the  Certificates in accordance with clause (f) below),  (e) we have not offered
or sold any Certificates  to, or solicited offers to buy any Certificates  from,
any person,  or otherwise  approached or negotiated with any person with respect
thereto,  or taken any other action which would result in a violation of Section
5 of the  Act,  (f) we will not  sell,  transfer  or  otherwise  dispose  of any
Certificates  unless  (1)  such  sale,  transfer  or other  disposition  is made
pursuant to an effective  registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel  satisfactory to the addressees of this  Certificate  that
such sale,  transfer or other  disposition  may be made pursuant to an exemption



                                     O-1-1
<PAGE>



from the Act, (2) the purchaser or transferee of such  Certificate  has executed
and  delivered to you a  certificate  to  substantially  the same effect as this
certificate  if required by the  Agreement,  and (3) the purchaser or transferee
has  otherwise  complied  with any  conditions  for  transfer  set  forth in the
Agreement  and (g) with respect to a Class B  Certificate,  the purchaser is not
acquiring a Class B Certificate,  directly or  indirectly,  for or on behalf of:
(i) an employee  benefit  plan or other  retirement  arrangement  subject to the
Employee Retirement Income Security Act of 1974, as amended, and/or Section 4975
of the Internal Revenue Code of 1986, as amended, or (ii) any entity, the assets
of which would be deemed plan assets under the  Department of Labor  regulations
set forth at 29 C.F.R. ss.2510.3-101.


                                        Very truly yours,


                                        -------------------------
                                        Print Name of Transferee


                                        By:
                                           ----------------------
                                           Authorized Officer


                                     O-1-2
<PAGE>




                                  EXHIBIT O-2-A

                         FORM OF RULE 144A CERTIFICATION


Business Loan Center, Inc.,
  as Servicer
645 Madison Avenue
New York, New York  10022

Marine Midland Bank, as Trustee
140 Broadway, 12th Floor
New York, New York  10005
Attention:  Corporate Trust Administration

                                                 _________, 199_

                 Re:  Business Loan Center SBA Loan-Backed Adjustable Rate
                      Certificates, Series 1998-1, Class A



Ladies and Gentlemen:

         In connection with our acquisition of the above Certificates we certify
that (a) we understand that the  Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are  being  transferred  to  us  in  a  transaction  that  is  exempt  from  the
registration  requirements  of the Act and any  such  laws,  (b) we have had the
opportunity to ask questions of and receive  answers from the Seller  concerning
the  purchase  of the  Certificates  and all  matters  relating  thereto  or any
additional  information  deemed  necessary  to  our  decision  to  purchase  the
Certificates,  (c) we have not,  nor has anyone  acting on our  behalf  offered,
transferred,  pledged,  sold or  otherwise  disposed  of the  Certificates,  any
interest in the  Certificates or any other similar security to, or solicited any
offer  to  buy  or  accept  a  transfer,  pledge  or  other  disposition  of the
Certificates,  any interest in the  Certificates  or any other similar  security
from, or otherwise  approached or negotiated  with respect to the  Certificates,
any interest in the  Certificates or any other similar security with, any person
in any manner, or made any general  solicitation by means of general advertising
or in any other  manner,  or taken any other  action,  that would  constitute  a
distribution  of the  Certificates  under  the  Act or  that  would  render  the
disposition  of the  Certificates a violation of Section 5 of the Act or require
registration  pursuant  thereto,  nor  will  act,  nor  has  authorized  or will
authorize  any person to act, in such manner with  respect to the  Certificates,
(d) we are a  "qualified  institutional  buyer" as that term is  defined in Rule
144A under the Act and have completed the form of  certification  to that effect




                                    O-2-A-1
<PAGE>



attached  hereto as Annex 1. We are aware  that the sale to us is being  made in
reliance on Rule 144A. We are acquiring the  Certificates for our own account or
for resale pursuant to Rule 144A and further,  understand that such Certificates
may be resold,  pledged or transferred only (i) to a person reasonably  believed
to be a qualified  institutional buyer that purchases for its own account or for
the account of a qualified  institutional buyer to whom notice is given that the
resale,  pledge or  transfer  is being made in  reliance  on Rule 144A,  or (ii)
pursuant to another exemption from registration under the Act.



                                    O-2-A-2
<PAGE>


                            ANNEX 1 TO EXHIBIT O-2-A





                                     [Date]


[Placement Agent]
[Address]

[Issuer]
[Address]

             Re:      Business Loan Center SBA Loan-Backed Adjustable
                      Rate Certificates, Series 1998-1, Class A and Class B
                      (the "Confidentially Offered Securities")

Ladies and Gentlemen:

         In connection with our purchase of Confidentially  Offered  Securities,
the  undersigned  certifies  to  each of the  parties  to whom  this  letter  is
addressed  that it is a qualified  institutional  buyer (as defined in Rule 144A
under the Securities Act of 1933, as amended (the "Act")) as follows:

1.      It owns and/or  invests on a  discretionary  basis  eligible  securities
        (excluding  affiliate's  securities,  bank deposit notes and CD's,  loan
        participations, repurchase agreements, securities owned but subject to a
        repurchase  agreement and currency,  interest rate and commodity swaps),
        as described below:

        Amount:(1)  $_________________; and

2.      The dollar amount set forth above is:

          a.   greater  than  $100  million  and the  undersigned  is one of the
               following entities:

               (1)  |_|       an  insurance  company  as  defined in Section
                              2(13)  of  the  Act;*  or


-----------------

    1    Must  be  calculated  using  only  securities  which  the  undersigned
          beneficially held as of the date below.


                                    O-2-A-3
<PAGE>

               (2)  |_|       an  investment  company  registered  under the
                              Investment Company Act or any business development
                              company  as defined  in  Section  2(a)(48)  of the
                              Investment  Company  Act of 1940 or as  defined in
                              Section 202(a)(22) of the Investment  Advisers Act
                              of 1940; or


               (3)  |_|       a Small Business  Investment  Company licensed
                              by the U.S.  Small Business  Administration  under
                              Section  301(c)  or  (d)  of  the  Small  Business
                              Investment Act of 1958; or

               (4)  |_|       a plan (i)  established  and  maintained  by a
                              state, its political  subdivisions,  or any agency
                              or  instrumentality  of a state  or its  political
                              subdivisions,   the  laws  of  which   permit  the
                              purchase  of  securities  of  this  type,  for the
                              benefit of its  employees  and (ii) the  governing
                              investment guidelines of which permit the purchase
                              of securities of this type; or

               (5)  |_|       a corporation (other than a U.S. bank, savings
                              and  loan   association   or  equivalent   foreign
                              institution),    partnership,   Massachusetts   or
                              similar   business   trust,   or  an  organization
                              described  in Section  501(c)(3)  of the  Internal
                              Revenue Code; or (6) |_| a U.S. bank,  savings and
                              loan    association    or    equivalent    foreign
                              institution,  which has an audited net worth of at
                              least $25  million as  demonstrated  in its latest
                              annual financial  statements as of a date not more
                              than 16 months  preceding  the date of sale in the
                              case of a U.S.  institution  or 18  months  in the
                              case of a foreign institution.; or



-------------------------

*
   A purchase by an insurance company for one or more of its separate  accounts,
   as defined by section  2(a)(37) of the Investment  Company Act of 1940, which
   are neither  registered  nor required to be registered  thereunder,  shall be
   deemed to be a purchase for the account of such insurance company.


                                    O-2-A-4
<PAGE>





               (7)  |_|       an  investment  adviser  registered  under the
                              Investment Advisers Act; or

          b.   |_|       greater than $10 million,  and the undersigned is a
                         broker-dealer registered with the SEC; or

          c.   |_|       less than $10 million, and the undersigned is a
                         broker-dealer  registered  with the SEC and  will  only
                         purchase  Rule 144A  securities  in riskless  principal
                         transactions (as defined in Rule 144A); or

          d.   |_|       less than $100 million,  and the  undersigned is an
                         investment  company  registered  under  the  Investment
                         Company Act of 1940,  which,  together with one or more
                         registered  investment  companies having the same or an
                         affiliated  investment  adviser,  owns  at  least  $100
                         million of eligible securities; or

          e.   |_|       less than $100 million,  and the  undersigned is an
                         entity,  all the equity  owners of which are  qualified
                         institutional buyers.

                The  undersigned   further   certifies  that  it  is  purchasing
Confidentially  Offered  Securities  for its own  account or for the  account of
others that independently qualify as "Qualified Institutional Buyers" as defined
in Rule 144A. It is aware that the sale of the Confidentially Offered Securities
are being made in reliance on its  continued  compliance  with Rule 144A.  It is
aware that the  transferor  may rely on the  exemption  from the  provisions  of
Section 5 of the Act provided by Rule 144A. The undersigned understands that the
Confidentially  Offered Securities may be resold, pledged or transferred only to
a  person  reasonably  believed  to  be a  Qualified  Institutional  Buyer  that
purchases  for its own account or for the  account of a Qualified  Institutional
Buyer to whom notice is given that the resale,  pledge or transfer is being made
in reliance in Rule 144A.

                The  undersigned   agrees  that  if  at  some  time  before  the
expiration of the holding  period  described in Rule 144 it wishes to dispose of
or exchange any of the Confidentially  Offered Securities,  it will not transfer
or  exchange  any  of  the  Confidentially  Offered  Securities  to a  Qualified
Institutional Buyer without first obtaining a letter in the form hereof from the
transferee and delivering such certificate to the addressees hereof.



                                    O-2-A-5
<PAGE>



                IN WITNESS  WHEREOF,  this  document  has been  executed  by the
undersigned  who is  duly  authorized  to do so on  behalf  of  the  undersigned
Qualified Institutional Buyer on the _____ day of ___________, 1998.


                                   Name of Institution



                                   Signature



                                   Name



                                   Title**



-------------------------

**
     Must be President, Chief Financial Officer, or other executive officer.


<PAGE>

                                  EXHIBIT O-2-B

                         FORM OF RULE 144A CERTIFICATION


Business Loan Center, Inc.,
  as Servicer
645 Madison Avenue
New York, New York  10022

Marine Midland Bank, as Trustee
140 Broadway, 12th Floor
New York, New York  10005
Attention:  Corporate Trust Administration

                                                              _________, 199_

           Re:  Business Loan Center SBA Loan-Backed Adjustable Rate
                Certificates, Series 1998-1, Class B



Ladies and Gentlemen:

         In connection with our acquisition of the above Certificates we certify
that (a) we understand that the  Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are  being  transferred  to  us  in  a  transaction  that  is  exempt  from  the
registration  requirements  of the Act and any  such  laws,  (b) we have had the
opportunity to ask questions of and receive  answers from the Seller  concerning
the  purchase  of the  Certificates  and all  matters  relating  thereto  or any
additional  information  deemed  necessary  to  our  decision  to  purchase  the
Certificates,  (c) we have not,  nor has anyone  acting on our  behalf  offered,
transferred,  pledged,  sold or  otherwise  disposed  of the  Certificates,  any
interest in the  Certificates or any other similar security to, or solicited any
offer  to  buy  or  accept  a  transfer,  pledge  or  other  disposition  of the
Certificates,  any interest in the  Certificates  or any other similar  security
from, or otherwise  approached or negotiated  with respect to the  Certificates,
any interest in the  Certificates or any other similar security with, any person
in any manner, or made any general  solicitation by means of general advertising
or in any other  manner,  or taken any other  action,  that would  constitute  a
distribution  of the  Certificates  under  the  Act or  that  would  render  the
disposition  of the  Certificates a violation of Section 5 of the Act or require
registration  pursuant  thereto,  nor  will  act,  nor  has  authorized  or will
authorize  any person to act, in such manner with  respect to the  Certificates,
(d) we are a  "qualified  institutional  buyer" as that term is  defined in Rule
144A under the Act and have completed the form of  certification  to that effect
attached hereto as Annex 1 and (e) with respect to a Class B Certificate, we are
not acquiring a Class B Certificate,  directly or  indirectly,  for or on behalf
of: (i) an employee benefit plan or other retirement  arrangement subject to the
Employee Retirement Income Security Act of 1974, as amended, and/or Section 4975
of the Internal Revenue Code of 1986, as amended, or (ii) any entity, the assets
of which would be deemed plan assets under the  Department of Labor  regulations
set forth at 29 C.F.R. ss.2510.3-101.  We are aware that the sale to us is being
made in reliance on Rule 144A.  We are acquiring  the  Certificates  for our own
account or for resale  pursuant to Rule 144A and further,  understand  that such
Certificates  may be  resold,  pledged  or  transferred  only  (i)  to a  person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the  resale,  pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the Act.



                                    O-2-B-1
<PAGE>


                            ANNEX 1 TO EXHIBIT O-2-B





                                     [Date]


[Placement Agent]
[Address]

[Issuer]
[Address]

                  Re:      Business Loan Center SBA Loan-Backed Adjustable
                           Rate Certificates, Series 1998-1, Class A and Class B
                           (the "Confidentially Offered Securities")

Ladies and Gentlemen:

         In connection with our purchase of Confidentially  Offered  Securities,
the  undersigned  certifies  to  each of the  parties  to whom  this  letter  is
addressed  that it is a qualified  institutional  buyer (as defined in Rule 144A
under the Securities Act of 1933, as amended (the "Act")) as follows:

1.      It owns and/or  invests on a  discretionary  basis  eligible  securities
        (excluding  affiliate's  securities,  bank deposit notes and CD's,  loan
        participations, repurchase agreements, securities owned but subject to a
        repurchase  agreement and currency,  interest rate and commodity swaps),
        as described below:

        Amount:2  $_________________; and

2.      The dollar amount set forth above is:

          a.  greater  than  $100  million  and  the  undersigned  is one of the
following entities:

               (1)  |_|       an  insurance  company  as  defined in Section
                              2(13) of the Act;* or

               (2)  |_|       an  investment  company  registered  under the
                              Investment Company Act or any business development
                              company  as defined  in  Section  2(a)(48)  of the
                              Investment  Company  Act of 1940 or as  defined in
                              Section 202(a)(22) of the Investment  Advisers Act
                              of 1940; or
-------------------------

   2 Must be calculated using only securities which the undersigned beneficially
     held as of the date below.





                                    O-2-B-3
<PAGE>


               (3)  |_|       a Small Business  Investment  Company licensed
                              by the U.S.  Small Business  Administration  under
                              Section  301(c)  or  (d)  of  the  Small  Business
                              Investment Act of 1958; or

               (4)  |_|       a plan (i)  established  and  maintained  by a
                              state, its political  subdivisions,  or any agency
                              or  instrumentality  of a state  or its  political
                              subdivisions,   the  laws  of  which   permit  the
                              purchase  of  securities  of  this  type,  for the
                              benefit of its  employees  and (ii) the  governing
                              investment guidelines of which permit the purchase
                              of securities of this type; or

               (5)  |_|       a corporation (other than a U.S. bank, savings
                              and  loan   association   or  equivalent   foreign
                              institution),    partnership,   Massachusetts   or
                              similar   business   trust,   or  an  organization
                              described  in Section  501(c)(3)  of the  Internal
                              Revenue Code; or

               (6)  |_|       a U.S. bank,  savings and loan  association or
                              equivalent  foreign  institution,   which  has  an
                              audited  net  worth of at  least  $25  million  as
                              demonstrated   in  its  latest  annual   financial
                              statements  as of a date not more  than 16  months
                              preceding  the  date of sale in the case of a U.S.
                              institution  or 18 months in the case of a foreign
                              institution.; or




                                    O-2-B-4
<PAGE>





               (7)  |_|  an  investment  adviser  registered  under the
                         Investment Advisers Act; or

          b.   |_|  greater  than $10  million,  and the  undersigned  is a
                    broker-dealer registered with the SEC; or

          c.   |_|  less than $10 million, and the undersigned is a
                    broker-dealer registered with the SEC and will only purchase
                    Rule 144A securities in riskless principal  transactions (as
                    defined in Rule 144A); or

          d.   |_|  less  than  $100  million,  and the  undersigned  is an
                    investment  company  registered under the Investment Company
                    Act of 1940,  which,  together  with one or more  registered
                    investment  companies  having  the  same  or  an  affiliated
                    investment  adviser,  owns at least $100 million of eligible
                    securities; or

          e.   |_|  less  than  $100  million,  and the  undersigned  is an
                    entity,  all  the  equity  owners  of  which  are  qualified
                    institutional buyers.

                The  undersigned   further   certifies  that  it  is  purchasing
Confidentially  Offered  Securities  for its own  account or for the  account of
others that independently qualify as "Qualified Institutional Buyers" as defined
in Rule 144A. It is aware that the sale of the Confidentially Offered Securities
are being made in reliance on its  continued  compliance  with Rule 144A.  It is
aware that the  transferor  may rely on the  exemption  from the  provisions  of
Section 5 of the Act provided by Rule 144A. The undersigned understands that the
Confidentially  Offered Securities may be resold, pledged or transferred only to
a  person  reasonably  believed  to  be a  Qualified  Institutional  Buyer  that
purchases  for its own account or for the  account of a Qualified  Institutional
Buyer to whom notice is given that the resale,  pledge or transfer is being made
in reliance in Rule 144A.

                The  undersigned   agrees  that  if  at  some  time  before  the
expiration of the holding  period  described in Rule 144 it wishes to dispose of
or exchange any of the Confidentially  Offered Securities,  it will not transfer
or  exchange  any  of  the  Confidentially  Offered  Securities  to a  Qualified
Institutional Buyer without first obtaining a letter in the form hereof from the
transferee and delivering such certificate to the addressees hereof.




                                    O-2-B-5
<PAGE>





                IN WITNESS  WHEREOF,  this  document  has been  executed  by the
undersigned  who is  duly  authorized  to do so on  behalf  of  the  undersigned
Qualified Institutional Buyer on the _____ day of ___________, 1998.



                                   Name of Institution



                                   Signature



                                   Name



                                   Title**



-------------------------

**
     Must be President, Chief Financial Officer, or other executive officer.


                                    O-2-B-6
<PAGE>