Document:

<PAGE>   1
                                                                   Exhibit 10.19

                                                                  EXECUTION COPY

                          SALE AND SERVICING AGREEMENT
                           Dated as of October 1, 1999

                                     Between

                                FIB FUNDING TRUST
                                     (Trust)

                                       and

                            FIRST INTERNATIONAL BANK
                              (Seller and Servicer)

                             FIB FUNDING TRUST NOTES
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                                     Page
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                                    ARTICLE I

                                   DEFINITIONS

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

                                   ARTICLE II

                      SALE AND CONVEYANCE OF THE TRUST FUND

Section 2.01        Sale and Conveyance of Trust Fund.............................................................3
Section 2.02        Possession of Business Files..................................................................3
Section 2.03        Books and Records.............................................................................3
Section 2.04        Delivery of SBA Loan Documents................................................................4
Section 2.05        Acceptance by Trustee of the Trust Fund; Certain Substitutions; Certification by
                    Indenture Trustee.............................................................................6
Section 2.06        [Reserved]....................................................................................7
Section 2.07        [Reserved]....................................................................................7
Section 2.08        Fees and Expenses of the Owner Trustee and the Indenture Trustee..............................8
Section 2.09        Transfer and Conveyance of the SBA Loans......................................................8
Section 2.10        Optional Repurchase or Substitution of SBA Loans..............................................9
Section 2.11        Securitizations..............................................................................10

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

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

                                   ARTICLE IV

                    ADMINISTRATION AND SERVICING OF SBA LOANS
</TABLE>

(i)
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<TABLE>
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Section 4.01        Duties of the Servicer.......................................................................20
Section 4.02        Liquidation of SBA Loans.....................................................................23
Section 4.03        Establishment of Principal and Interest Accounts; Deposits in Principal and Interest
                    Accounts.....................................................................................24
Section 4.04        Permitted Withdrawals From the Principal and Interest Account................................25
Section 4.05        [Intentionally Omitted]......................................................................27
Section 4.06        Transfer of Accounts.........................................................................27
Section 4.07        Maintenance of Hazard Insurance..............................................................27
Section 4.08        [Intentionally Omitted]......................................................................27
Section 4.09        Fidelity Bond................................................................................27
Section 4.10        Title, Management and Disposition of Foreclosed Property.....................................28
Section 4.11        [Intentionally Omitted]......................................................................29
Section 4.12        Collection of Certain SBA Loan Payments......................................................29
Section 4.13        Access to Certain Documentation and Information Regarding the SBA Loans......................29

                                    ARTICLE V

                           PAYMENTS TO THE NOTEHOLDERS

Section 5.01        Establishment of Note Distribution Account; Deposits in Note Distribution Account;
                    Permitted Withdrawals from Note Distribution Account.........................................30
Section 5.02        Establishment of Spread Account; Deposits in Spread Account; Permitted Withdrawals
                    from Spread Account..........................................................................31
Section 5.03        Establishment of Expense Account; Deposits in Expense Account; Permitted Withdrawals
                    from Expense Account.........................................................................32
Section 5.04        Funding Account..............................................................................33
Section 5.05        [Intentionally Omitted]......................................................................33
Section 5.06        Investment of Accounts.......................................................................33
Section 5.07        Distributions................................................................................34
Section 5.08        [Intentionally Omitted]......................................................................35
                                          -
Section 5.09        Statements...................................................................................35
Section 5.10        Reports of Foreclosure and Abandonment.......................................................38

                                   ARTICLE VI

                           GENERAL SERVICING PROCEDURE

Section 6.01        [Intentionally Omitted]......................................................................39
Section 6.02        Satisfaction of Mortgages and Collateral and Release of SBA Files............................39
Section 6.03        Servicing Compensation.......................................................................40
Section 6.04        Annual Statement as to Compliance............................................................41
Section 6.05        Annual Independent Public Accountants' Servicing Report......................................41
</TABLE>

                                      (ii)
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<TABLE>
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Section 6.06        SBA's and Indenture Trustee's Right to Examine Servicer Records and Audit Operations.........41
Section 6.07        Reports to the Indenture Trustee; Principal and Interest Account Statements..................41
Section 6.08.       Premium Protection Fee and Servicing Fee.....................................................42

                                   ARTICLE VII

                       REPORTS TO BE PROVIDED BY SERVICER

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

                                  ARTICLE VIII

                                  THE SERVICER

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

                                   ARTICLE IX

                              SERVICER TERMINATION

Section 9.01        Servicer Termination Events..................................................................47
Section 9.02        Trustee to Act; Appointment of Successor.....................................................49
Section 9.03        Waiver of Defaults...........................................................................50
Section 9.04.       Control by Majority Noteholders..............................................................51

                                    ARTICLE X

                                   TERMINATION

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

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

Section 11.01       Acts of Noteholders..........................................................................54
Section 11.02       Amendment....................................................................................54
</TABLE>

                                     (iii)
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<TABLE>
<S>                                                                                                              <C>
Section 11.03       Recordation of Agreement.....................................................................54
Section 11.04       Duration of Agreement........................................................................55
Section 11.05       Governing Law................................................................................55
Section 11.06       Notices......................................................................................55
Section 11.07       Severability of Provisions...................................................................55
Section 11.08       No Partnership...............................................................................56
Section 11.09       Counterparts.................................................................................56
Section 11.10       Successors and Assigns.......................................................................56
Section 11.11       Headings.....................................................................................56
Section 11.12       Notification to Administrative Agent.........................................................56
Section 11.13       Inconsistencies..............................................................................56
Section 11.14       Limitation of Liability......................................................................56
</TABLE>

                                      (iv)
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APPENDIX A                          Definitions and Usage

                                  EXHIBIT INDEX

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

                                      (v)
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         Sale and Servicing Agreement dated as of October 1, 1999, between FIB
Funding Trust (the "Trust"), and First International Bank, as Seller (the
"Seller") and as Servicer (the "Servicer").

                              PRELIMINARY STATEMENT

         The Trust was formed for the purpose of issuing asset backed notes and
asset backed certificates secured by the Unguaranteed Interests in the SBA
Loans. The Issuer has entered into a trust indenture, dated as of October 1,
1999 (the "Indenture"), between the Trust and the Indenture Trustee, pursuant to
which the Trust intends to issue from time to time its FIB Funding Trust Notes
in an aggregate principal amount not to exceed $60,000,000 (the "Notes").
Pursuant to the Indenture, as security for the indebtedness represented by the
Notes and any Hedging Agreements, the Issuer is and will be pledging to the
Indenture Trustee, and granting the Indenture Trustee a security interest in,
among other things, the Unguaranteed Interests in the SBA Loans and its rights
under this Agreement.

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

                                   DEFINITIONS

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

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

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

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                                   ARTICLE II

                      SALE AND CONVEYANCE OF THE TRUST FUND

                  Section 2.01      Sale and Conveyance of Trust Fund.

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

                  (b) The rights of the Noteholders, Certificateholders and the
Hedge Counterparties to receive payments with respect to the SBA Loans in
respect of the Notes, the Certificates and the Hedging Agreement, and all
interests of the Noteholders and Certificateholders in such payments, shall be
as set forth in the Basic Documents. The Servicing Fee and the Premium
Protection Fee shall not constitute part of the Trust Fund and the Noteholders,
Certificateholders and the Hedge Counterparties shall have no interest in, and
are not entitled to receive any portion of, the Servicing Fee or the Premium
Protection Fee.

                  Section 2.02      Possession of Business Files.

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

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

                  Section 2.03      Books and Records.

                  The transfer of the Unguaranteed Interest of each SBA Loan
shall be reflected on the Seller's balance sheet and other financial statements
as a sale of assets by the Seller and the Seller shall respond to any
third-party inquiry that such transfer is so reflected as a sale. The Seller
shall be responsible for maintaining, and shall maintain, a complete set of
books and records for each SBA Loan which shall be clearly marked to reflect the
ownership of the Unguaranteed Interest of each SBA Loan by the Trust for the
benefit of the SBA, the Noteholders, the Certificateholders and the Hedge
Counterparties, as their interests may appear.

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                  Section 2.04      Delivery of SBA Loan Documents.

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

                  (a) The original SBA Note, endorsed by means of an allonge as
follows: "Pay to the order of First Union Trust Company, National Association,
and its successors and assigns, not in its individual capacity but solely as
Owner Trustee under that certain Trust Agreement dated as of October 1, 1999 for
the benefit of the Certificateholders and the United States Small Business
Administration, as their respective interests may appear, without recourse" and
signed, by facsimile or manual signature, in the name of the Seller by a
Responsible Officer, with all prior and intervening endorsements showing a
complete chain of endorsement from the originator to the Seller, if the Seller
was not the originator (such allonge shall bear a legend stating "HSBC Bank USA,
as Indenture Trustee, has a security interest in the Unguaranteed Interest in
this Note");

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

                  (c) With respect to those SBA Loans secured by Mortgaged
Properties, either: (i) the original Assignment of Mortgage from the Seller
endorsed as follows: "HSBC Bank USA, ("Assignee") its successors and assigns, as
indenture trustee under the Indenture dated as of October 1, 1999 subject to the
Multi-Party Agreement dated as of October 1, 1999" with evidence of recording
thereon (provided, however, that where permitted under the laws of the
jurisdiction wherein the Mortgaged Property is located, the Assignment of
Mortgage may be effected by one or more blanket assignments for SBA Loans
secured by Mortgaged Properties located in the same county), or (ii) a copy of
such Assignment of Mortgage certified as a true copy by a Responsible Officer of
the Seller where the original has been transmitted for recording (provided,
however, that where the original Assignment of Mortgage is not being delivered
to the Indenture Trustee, such Responsible Officer may complete one or more
blanket certificates attaching copies of one or more Assignments of Mortgage
relating to the Mortgages originated by the Seller);

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

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certified by the public recording office in any instances where the original
recorded assignments have been lost;

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

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

                  (g) For all SBA Loans, blanket assignment of all Collateral
securing the SBA Loan, including without limitation, all rights under applicable
guarantees and insurance policies, such assignment shall be in the name of HSBC
Bank USA, its successors and assigns, as indenture trustee under the Indenture
dated as of October 1, 1999, subject to the Multi-Party Agreement dated as of
October 1, 1999;

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

                  (i) For all SBA Loans, blanket UCC-1 financing statements
identifying by type all Collateral for the SBA Loans in the SBA Loan Pool and
naming the Indenture Trustee, as assignee of the Trust, as "Secured Party" and
the Seller as the "Debtor". The UCC-1 financing statements will be filed
promptly following the Closing Date in Connecticut and will be in the nature of
protective notice filings rather than true financing statements.

                  The Seller shall, within ten Business Days after the receipt
thereof, and in any event, within one year of the related Transfer Date, deliver
or cause to be delivered to the Indenture Trustee: (i) the original recorded
Mortgage in those instances where a copy thereof certified by the Seller was
delivered to the Indenture Trustee; (ii) the original recorded Assignment of
Mortgage from the Seller to the Indenture Trustee, which, together with any
intervening assignments of Mortgage, evidences a complete chain of title from
the originator to the Indenture Trustee in those instances where copies thereof
certified by the Seller were delivered to the Indenture Trustee; and (iii) any
intervening assignments of Mortgage in those instances where copies thereof
certified by the Seller were delivered to the Indenture Trustee. Notwithstanding
anything to the contrary contained in this Section 2.04, in those instances
where the public recording office retains the original Mortgage, Assignment of
Mortgage or the intervening assignments of the Mortgage after it has been
recorded, the Seller shall be deemed to

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have satisfied its obligations hereunder upon delivery to the Indenture Trustee
of a copy of such Mortgage, Assignment of Mortgage or assignments of Mortgage
certified by the public recording office to be a true copy of the recorded
original thereof. All SBA Loan documents held by the Indenture Trustee or the
FTA, as the case may be, as to each SBA Loan are referred to herein as the
"Indenture Trustee's Document File."

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

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

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

                  (a) The Multi-Party Agreement provides for the FTA to deliver
an acknowledgement of receipt for each SBA Note in accordance with the terms and
conditions of the Multi-Party Agreement. The Indenture Trustee agrees, for the
benefit of the SBA, the Noteholders, the Certificateholders and the Hedge
Counterparties, to review each Indenture Trustee's Document File (with the
exception of the SBA Notes held by the FTA), on or prior to the applicable
Transfer Date (or, with respect to any Qualified Substitute SBA Loan, on or
prior to the assignment thereof), and to deliver to the Seller and the Servicer
a certification in the form attached hereto as Exhibit F on or prior to such
Transfer Date (or, with respect to any Qualified Substitute SBA Loan, on or
prior to the assignment thereof). Within 360 days after each Transfer Date (or,
with respect to any Qualified Substitute SBA Loan, within 360 days after the
assignment thereof), the Indenture Trustee shall deliver to the Servicer, the
Seller, the SBA, and any Noteholder who requests a copy from the Indenture
Trustee a final certification in the form attached hereto as Exhibit F-1
evidencing the completeness of the Indenture Trustee's Document Files with
respect to the SBA Loans being transferred on such Transfer Date.

                  (b) If the Indenture Trustee during the process of reviewing
the Indenture Trustee's Document Files finds any document constituting a part of
an Indenture Trustee's Document File which is not properly executed, has not
been received, is unrelated to an SBA Loan identified in the SBA Loan Schedule,
or does not conform in a material respect to the requirements of Section 2.04 or
the description thereof as set forth in the SBA Loan Schedule, the Indenture
Trustee shall promptly so notify the Seller and the Servicer. In performing any
such review, the Indenture Trustee may conclusively rely on the Seller as to the
purported genuineness of any such document and any signature thereon. It is
understood that the scope of the Indenture Trustee's

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review of the SBA Files is limited solely to confirming that the documents
listed in Section 2.04 have been executed and received and relate to the SBA
Loans identified in the SBA Loan Schedule. The Seller agrees to use reasonable
efforts to remedy a material defect in a document constituting part of an SBA
File of which it is so notified by the Indenture Trustee. If, however, within 60
days after the Indenture Trustee's notice to it respecting such material defect
the Seller has not remedied the defect and such defect materially and adversely
affects the value of the related SBA Loan, the Seller will (i) substitute in
lieu of such SBA Loan a Qualified Substitute SBA Loan in the manner and subject
to the conditions set forth in Section 3.03 or (ii) purchase the Unguaranteed
Interest of such SBA Loan at a purchase price equal to the Principal Balance of
such Unguaranteed Interest as of the date of purchase, plus 30 days' interest on
such Principal Balance, computed at the sum of the applicable Interest Rate and
the Program Fee as of the next succeeding Determination Date, plus any accrued
unpaid Servicing Fees and Servicing Advances reimbursable to the Servicer, which
purchase price shall be deposited in the Principal and Interest Account on the
next succeeding Determination Date.

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

                  (d) If in connection with taking any action the Servicer
requires any item constituting part of the Indenture Trustee's Document File, or
the release from the lien of the related SBA Loan of all or part of any
Mortgaged Property or other Collateral, the Servicer shall deliver to the
Indenture Trustee a certificate to such effect in the form attached as Exhibit I
hereto. The Servicer shall comply with the SBA Rules and Regulations in
connection with such action, including the giving of any necessary notice. Upon
receipt of such certification, the Indenture Trustee, shall deliver to the
Servicer the requested documentation and the Indenture Trustee shall execute,
without recourse, and deliver such instruments of transfer necessary to release
all or the requested part of the Mortgaged Property or other Collateral from the
lien of the related SBA Loan.

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

                  Section 2.06      [Reserved].

                  Section 2.07      [Reserved].

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

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

                  Section 2.09      Transfer and Conveyance of the SBA Loans.

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

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

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

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<PAGE>   15
                           (i) the Seller shall have provided the Indenture
                  Trustee and the Administrative Agent with a timely Addition
                  Notice and shall have provided any information reasonably
                  requested by them with respect to the SBA Loans;

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

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

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

                           (v) the Termination Date shall not have occurred;

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

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

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

                  Section 2.10      Optional Purchase or Substitution of SBA
                                    Loans.

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

                                       9
<PAGE>   16
the Unguaranteed Interests of all SBA Loans purchased or substituted for
pursuant to this Section 2.10 exceed, in any one year, 15% of the Facility
Limit.

                  Section 2.11      Securitizations.

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

                                       10
<PAGE>   17
                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         Section 3.01.     Representations of the Seller.

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

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

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

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

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

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

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

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

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

                  (i) The Seller is "well capitalized" as defined in 12 CFR Part
325;

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

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

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

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

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

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

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

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

                  Section 3.02      Individual SBA Loans.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  (ii) The SBA Loan is risk rated "3W" or better by the Seller;

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

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

                  Section 3.03      Purchase and Substitution of Defective
                                    SBA Loans.

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

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

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

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

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

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

                                       19
<PAGE>   26
                                   ARTICLE IV

                    ADMINISTRATION AND SERVICING OF SBA LOANS

                  Section 4.01      Duties of the Servicer.

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

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

                  (c) Any Subservicing Agreement that may be entered into and
any transactions or services relating to the SBA Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Servicer alone, and the Indenture Trustee, the SBA, the
Noteholders and any Hedge Counterparty shall not be deemed parties thereto and
shall have no claims, rights, obligations, duties or liabilities with respect to
the Subservicer except as set forth in Section 4.01(d). Notwithstanding the
foregoing, the Servicer shall (i) at its expense and without reimbursement,
deliver to the Indenture Trustee and the SBA a copy of each Subservicing
Agreement and (ii) provide notice of the termination of any Subservicer within a
reasonable time after such Subservicer's termination to the Indenture Trustee
and the SBA.

                                       20
<PAGE>   27
                  (d) In the event the Servicer shall for any reason no longer
be the Servicer, the Servicer at its expense and without right of reimbursement
therefor, shall, upon request of the Indenture Trustee, deliver to the successor
servicer all documents and records relating to each Subservicing Agreement and
the SBA Loans then being serviced and an accounting of amounts collected and
held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of the Subservicing Agreements to the assuming party.

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

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

                                       21
<PAGE>   28
                  (f) The Servicer shall, upon request of the Indenture Trustee
but at the expense of the Servicer, deliver to any successor servicer all
documents and records (including computer tapes and diskettes) relating to the
SBA Loans and an accounting of amounts collected and held by the Servicer and
otherwise use its best efforts to effect the orderly and efficient transfer of
servicing rights and obligations to the assuming party.

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

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

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

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

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

                                       22
<PAGE>   29
                  (l) The Servicer shall furnish to the Administrative Agent
from time to time such additional information regarding the Issuer or the Basic
Documents as the Administrative Agent shall reasonably request.

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

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

                  Section 4.02      Liquidation of SBA Loans.

                  In the event that any payment due under any SBA Loan and not
postponed pursuant to Section 4.01 is not paid when the same becomes due and
payable, or in the event the Obligor fails to perform any other covenant or
obligation under the SBA Loan, the Servicer in accordance with the SBA Rules and
Regulations shall take such action as it shall deem to be in the best interests
of the Noteholders and the SBA. With respect to any such SBA Section 7(a) Loan
for which the SBA has expressed to the Servicer the SBA's desire to assume
servicing of such SBA Loan consistent with the SBA Rules and Regulations, the
Indenture Trustee shall, upon written direction of the Servicer, deliver to the
SBA or its designee all or any portion of the Indenture Trustee's Document File
relating to such SBA Section 7(a) Loan and the Indenture Trustee shall execute
such documents as the Servicer or the SBA shall request. Expenses incurred in
connection with any such action shall be the responsibility of the Servicer and
shall not be chargeable to the Principal and Interest Account or the Note
Distribution Account. Subject to the SBA Rules and Regulations and with the
prior written consent of the SBA (if required by the SBA Rules and Regulations),
the Servicer shall foreclose upon or otherwise comparably effect the ownership
of Mortgaged Properties or other Collateral relating to defaulted SBA Section
7(a) Loans for which the related SBA Section 7(a) Loan is still outstanding, as
to which no satisfactory arrangements can be made for collection of delinquent
payments in accordance with the provisions of Section 4.10. In connection with
such foreclosure or other conversion and any other liquidation action, the
Servicer shall exercise collection and foreclosure procedures with the same
degree of care and skill in its exercise or use as it would exercise with
respect to its own affairs, in accordance with prudent servicing standards, and
in accordance with the applicable SBA Rules and Regulations. Prior to
undertaking foreclosure of any Mortgaged Property, the Servicer must investigate
environmental conditions, including the performance of a Phase I and/or Phase II
environmental site assessment, to ascertain the actual or potential presence of
any hazardous material on or under such property. For purposes of this
Agreement, the term hazardous material includes (1) any hazardous substance, as
defined by the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund

                                       23
<PAGE>   30
Amendments and Reauthorization Act of 1986, 42 U.S.C. 9601-9675, and (2)
petroleum (as that term is defined at 42 U.S.C. Section 6991) including any
derivative, fraction, by-product, constituent or breakdown product thereof, or
additive thereto. In the event that the environmental investigation determines
the existence of any hazardous material on or under the Mortgaged Property in
excess of minimum action levels established by relevant regulatory agencies,
title to such property shall not be taken without prior written approval from
the SBA.

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

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

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

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

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

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

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

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

                                       24
<PAGE>   31
                           (v) the Unguaranteed Percentage of all Released
                  Mortgaged Property Proceeds and any other proceeds from any
                  other Collateral securing the SBA Loans;

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

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

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

                  (c) The foregoing requirements for deposit in the Principal
and Interest Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments with respect to the
Guaranteed Interest to be paid to the Registered Holders, the Premium Protection
Fee, the FTA's Fee and the Servicing Fee, with respect to each SBA Loan, and
additionally the Additional Fee with respect to each Additional Fee SBA Loan,
together with the difference between any Liquidation Proceeds and the related
Net Liquidation Proceeds, may not be deposited by the Servicer in the Principal
and Interest Account.

                  (d) Any interest earnings on funds held in the Principal and
Interest Account paid by a Designated Depository Institution shall be for the
account of the Servicer and may only be withdrawn from the Principal and
Interest Account by the Servicer immediately following its monthly remittance to
the Indenture Trustee pursuant to Section 4.04(a). Any reference herein to
amounts on deposit in the Principal and Interest Account shall refer to amounts
net of such investment earnings.

                  Section 4.04      Permitted Withdrawals From the
                                    Principal and Interest Account.

                  The Servicer shall withdraw funds from the Principal and
Interest Account for the following purposes:

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

                  (b) to reimburse itself for any accrued unpaid Servicing Fees
and Premium Protection Fees allocable to the SBA Loans and for unreimbursed
Servicing Advances to the extent deposited in the Principal and Interest Account
(and not netted from Monthly Payments received). The Servicer's right to
reimbursement for unpaid Servicing Fees and Premium Protection Fees and, except
as provided in the following, Servicing Advances shall be limited to

                                       25
<PAGE>   32
Liquidation Proceeds, Released Mortgaged Property Proceeds, Insurance Proceeds
and such other amounts as may be collected by the Servicer from the Obligor or
otherwise relating to the SBA Loan in respect of which such unreimbursed amounts
are owed. The Servicer's right to reimbursement for Servicing Advances in excess
of such amounts shall be limited to any late collections of interest received on
the SBA Loans generally, including Liquidation Proceeds, Released Mortgaged
Property Proceeds, Insurance Proceeds and any other amounts; provided, however,
that the Servicer's right to such reimbursement pursuant hereto shall be
subordinate to the rights of the Noteholders;

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

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

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

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

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

                  So long as no default or Servicer Termination Event shall have
occurred and be continuing, and consistent with any requirements of the Code,
the Principal and Interest Accounts shall either be maintained with an Eligible
Deposit Account as an interest-bearing account meeting the requirements set
forth in Section 4.03(a), or the funds held therein may be invested by the
Servicer (to the extent practicable) in Permitted Instruments, as directed in
writing by the Servicer. In either case, funds in the Principal and Interest
Account must be available for withdrawal without penalty, and any Permitted
Instruments must mature not later than the Business Day immediately preceding
the Determination Date next following the date of such investment (except that
if such Permitted Instrument is an obligation of the institution that maintains
such account, then such Permitted Instrument shall mature not later than such
Determination Date) and shall not be sold or disposed of prior to its maturity.
All Permitted Instruments must be held by or registered in the name of "First
International Bank, as Servicer, in trust for the registered holders of FIB
Funding Trust Notes." All interest or other earnings from funds on deposit in
the Principal and Interest Account (or any Permitted Instruments thereof) shall
be the exclusive property of the Servicer, and may be withdrawn from the
Principal and Interest Account pursuant to clause (d) above. The amount of any
losses incurred in connection with the investment of funds in the Principal and
Interest Account in Permitted Instruments shall be deposited in the Principal
and Interest Account by the Servicer from its own funds immediately as realized
without reimbursement therefor.

                                       26
<PAGE>   33
                  Section 4.05      [Intentionally Omitted]

                  Section 4.06      Transfer of Accounts.

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

                  Section 4.07      Maintenance of Hazard Insurance.

                  The Servicer shall comply with the SBA Rules and Regulations
concerning the issuance and maintenance of fire and hazard insurance with
extended coverage customary in the area where the Mortgaged Property is located.
If at origination of an SBA Loan, to the best of the Servicer's knowledge after
reasonable investigation, the related Mortgaged Property is in an area
identified in the Federal Register by the Flood Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available)
consistent with the SBA Rules and Regulations, the Servicer will require the
related Obligor to purchase a flood insurance policy with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the full insurable value of the Mortgaged Property, or (ii) the maximum
amount of insurance available under the National Flood Insurance Act of 1968, as
amended. The Servicer shall also maintain, to the extent such insurance is
available, and required by the SBA Rules and Regulations and the Credit and
Collection Policy, on Foreclosed Property constituting real property, fire and
hazard insurance in the amounts described above and liability insurance. The
Unguaranteed Percentage of any amounts collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
Mortgaged Property, or to be released to the Obligor in accordance with the SBA
Rules and Regulations) shall be deposited in the Principal and Interest Account,
subject to withdrawal pursuant to Section 4.04. It is understood and agreed that
no earthquake or other additional insurance need be required by the Servicer of
any Obligor or maintained on Foreclosed Property, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. All policies required hereunder shall be
endorsed with standard mortgagee clauses with losses payable to the Servicer or
its affiliates.

                  Section 4.08      [Intentionally Omitted].

                  Section 4.09      Fidelity Bond.

                  The Servicer shall maintain with a responsible company, and at
its own expense, a blanket fidelity bond and an errors and omissions insurance
policy, in a minimum amount equal to $1,500,000, and a maximum deductible of
$100,000, if commercially available, with coverage on all employees acting in
any capacity requiring such persons to handle funds, money, documents or papers
relating to the SBA Loans ("Servicer Employees"). The fidelity bond shall insure
the Indenture Trustee and the Owner Trustee, their respective officers and
employees against losses resulting from forgery, theft, embezzlement or fraud by
such Servicer Employees.

                                       27
<PAGE>   34
The errors and omissions policy shall insure against losses resulting from the
errors, omissions and negligent acts of such Servicer employees. No provision of
this Section 4.09 requiring such fidelity bond and errors and omissions
insurance shall relieve the Servicer from its duties as set forth in this
Agreement. Upon the request of the Indenture Trustee, the Owner Trustee, the SBA
or any Noteholder, Certificateholder or Hedge Counterparty, the Servicer shall
cause to be delivered to the Indenture Trustee, Owner Trustee, the SBA or such
Noteholder or such Certificateholder a certified true copy of such fidelity bond
and insurance policy. The current issuer of such fidelity bond and insurance
policy is The Hartford Underwriters Insurance Company.

                  Section 4.10      Title, Management and Disposition
                                    of Foreclosed Property.

                  In the event that title to a Mortgaged Property or other
Collateral is acquired in foreclosure or by deed in lieu of foreclosure or by
other legal process (a "Foreclosed Property"), the deed or certificate of sale,
or the repossessed Collateral shall be taken in the name of the Trust for the
benefit of the Noteholders, the Certificateholders, the SBA and the Hedge
Counterparties, as their interests may appear under the Multi-Party Agreement
dated the date of this Agreement (or such other name as the SBA may direct).

                  Unless the servicing of a Foreclosed Property or item of
Repossessed Collateral relating to an SBA Loan is assumed by the SBA pursuant to
the SBA Rules and Regulations, the Servicer, subject to Sections 4.01 and 4.02
hereof, shall manage, conserve, protect and operate each Foreclosed Property or
other Repossessed Collateral for the SBA, the Noteholders, the
Certificateholders and any Hedge Counterparty solely for the purpose of its
prudent and prompt disposition and sale. The Servicer shall, either itself or
through an agent selected by the Servicer, manage, conserve, protect and operate
the Foreclosed Property or other Repossessed Collateral in the same manner that
it manages, conserves, protects and operates other foreclosed or repossessed
property for its own account, and in the same manner that similar property in
the same locality as the Foreclosed Property or other Repossessed Collateral is
managed. The Servicer shall attempt to sell the same (and may temporarily rent
the same) on such terms and conditions as the Servicer deems to be in the best
interest of the SBA, the Noteholders, the Certificateholders and any Hedge
Counterparty.

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

                  The disposition of Foreclosed Property or other Repossessed
Collateral shall be carried out by the Servicer at such price, and upon such
terms and conditions, as the Servicer, with SBA concurrence (if required by the
SBA Rules and Regulations), deems to be in the best interest of the SBA, the
Noteholders, the Certificateholders and any Hedge Counterparty. The Unguaranteed
Percentage of the proceeds of sale of the Foreclosed Property or other
Repossessed Collateral shall promptly, but in no event later than two Business
Days after receipt, be deposited

                                       28
<PAGE>   35
in the Principal and Interest Account as received from time to time and, as soon
as practicable thereafter, the expenses of such sale shall be paid. The Servicer
shall, subject to Section 4.04, reimburse itself for any related unreimbursed
Servicing Advances and unpaid Servicing Fees, and the Servicer shall deposit in
the Principal and Interest Account the net cash proceeds of such sale to be
distributed to the Noteholders in accordance with Section 5.07 hereof.

                  Section 4.11      [Intentionally Omitted].

                  Section 4.12      Collection of Certain SBA
                                    Loan Payments.

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

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

                  The Servicer shall provide to the Owner Trustee, the Indenture
Trustee, the SBA, the FDIC, the OCC, the Federal Reserve, the Office of Thrift
Supervision and the supervisory agents and examiners of the foregoing, access to
the documentation regarding the SBA Loans required by applicable local, state
and federal regulations, such access being afforded without charge but only upon
reasonable request and during normal business hours at the offices of the
Servicer designated by it.

                                       29
<PAGE>   36
                                    ARTICLE V

                           PAYMENTS TO THE NOTEHOLDERS

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

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

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

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

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

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

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

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

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

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

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

                                       30
<PAGE>   37
                           (iv) by the Indenture Trustee, to clear and terminate
                  the Note Distribution Account upon the termination of this
                  Agreement in accordance with the terms of Section 10.01
                  hereof;

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

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

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

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

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

and also, in no particular order of priority:

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

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

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

                                       31
<PAGE>   38
                  Section 5.03      Establishment of Expense Account;
                                    Deposits in Expense Account; Permitted
                                    Withdrawals from Expense Account

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

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

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

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

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

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

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

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

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

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

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<PAGE>   39
and (b)(iii) above, have been made, and, if all such payments have been made,
from the amounts remaining in the Expense Accounts, the Indenture Trustee shall
remit to the Servicer as additional servicing compensation any amounts remaining
in the Expense Account.

                  Section 5.04      Funding Account

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

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

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

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

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

                  Section 5.05      [Intentionally Omitted]

                  Section 5.06      Investment of Accounts.

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

                  (b) If any amounts are needed for disbursement from any
Account held by the Indenture Trustee and sufficient uninvested funds are not
available to make such disbursement, the Indenture Trustee shall cause to be
sold or otherwise converted to cash a sufficient amount of

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

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

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

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

                  Section 5.07      Distributions.

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

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

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

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

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

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

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<PAGE>   41
                   (v) fifth, to any Hedge Counterparty under any Hedging
Agreement or Hedge Transaction, all amounts due, if any, as Hedge Breakage
Costs;

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

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

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

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

                  Section 5.08      [Intentionally Omitted].

                  Section 5.09      Statements.

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

                  (i) Available Funds for the related Remittance Date;

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

                  (iii) The number and Principal Balances of all SBA Loans which
were the subject of Principal Prepayments during the Due Period and the number
and Principal Balances

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       36
<PAGE>   43
                  (xvii) The following information for such Determination Date
(a) the Portfolio Yield, (b) the Default Ratio and the Average Default Ratio,
(c) Net Loss Ratio and the Average Net Loss Ratio, (d) the Portfolio Net Loss
Ratio and the Average Portfolio Net Loss Ratio;

                  (xviii) The aggregate Principal Balance of all Eligible Loans
and all Ineligible Loans;

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

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

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

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

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

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

                                       37
<PAGE>   44
                  Section 5.10      Reports of Foreclosure and Abandonment
                                    of Mortgaged Property

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

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<PAGE>   45
                                   ARTICLE VI

                           GENERAL SERVICING PROCEDURE

                  Section 6.01  [Intentionally Omitted].

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

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

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

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

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

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

                  Section 6.03      Servicing Compensation.

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

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

         The Servicer will deliver to the Indenture Trustee, the SBA and the
Administrative Agent on or before March 31 of each year beginning March 31,
2001, an Officer's Certificate stating that (i) the Servicer has fully complied
with the provisions of Articles IV, V, VI and VII, (ii) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officer's supervision, and (iii)
to the best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof and
the action being taken by the Servicer to cure such default.

                  Section 6.05      Annual Independent Public Accountants'
                                    Servicing Report.

                  On or before March 31 of each year beginning March 31, 2001,
the Servicer, at its expense, shall cause one of the "big five" accounting firms
to furnish a letter or letters to the Indenture Trustee and the Administrative
Agent to the effect that such firm has with respect to the Servicer's overall
servicing operations examined such operations in accordance with the
requirements of the Uniform Single Audit Program for Mortgage Bankers, and
stating such firm's conclusions relating thereto.

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

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

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

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

                                       41
<PAGE>   48
                  Section 6.08.     Premium Protection Fee and Servicing Fee.

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

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<PAGE>   49
                                   ARTICLE VII

                       REPORTS TO BE PROVIDED BY SERVICER

                  Section 7.01      Financial Statements.

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

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

                                       43
<PAGE>   50
                                  ARTICLE VIII

                                  THE SERVICER

                  Section 8.01      Indemnification; Third Party Claims.

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

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

                                       44
<PAGE>   51
                  Section 8.02      Merger or Consolidation of the Servicer.

                  The Servicer will keep in full effect its existence, rights
and franchises as a corporation, bank or association and if required by
applicable law will obtain and preserve its qualification to do business as a
foreign entity, in each jurisdiction necessary to protect the validity and
enforceability of this Agreement or any of the SBA Loans and to perform its
duties under this Agreement.

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

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

                  Section 8.03.     Limitation on Liability of the Servicer and
                                    Others.

                  The Servicer and any director, officer, employee or agent of
the Servicer may rely on any document of any kind which it in good faith
reasonably believes to be genuine and to have been adopted or signed by the
proper authorities or persons respecting any matters arising hereunder. Subject
to the terms of Section 8.01 herein, the Servicer shall have no obligation to

                                       45
<PAGE>   52
appear with respect to, prosecute or defend any legal action which is not
incidental to the Servicer's duty to service the SBA Loans in accordance with
this Agreement.

                  Section 8.04.  Servicer Not to Resign.

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

                                       46
<PAGE>   53
                                   ARTICLE IX

                              SERVICER TERMINATION

                  Section 9.01      Servicer Termination Events.

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

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

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

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

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

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

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

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

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

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

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

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

                  On and after the time of the Servicer's termination, or the
Servicer's receipt of notice if required by Section 9.01, or at any time if the
Indenture Trustee receives the resignation of the Servicer evidenced by an
Opinion of Counsel pursuant to Section 8.04 or the Servicer is removed as
Servicer pursuant to this Article IX, the Indenture Trustee shall be the
successor in all respects to the Servicer in its capacity as Servicer under this
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof; provided, however,
that the Indenture Trustee shall not be liable for any actions of any Servicer
prior to it, and that the Indenture Trustee shall not be obligated to make
advances or payments pursuant to Sections 4.03, 4.10 or 5.03 but only to the
extent the Indenture Trustee determines reasonably and in good faith that such
advances would not be recoverable, such determination to be evidenced with
respect to each such advance by a certification of a Responsible Officer of the
Indenture Trustee. As compensation therefor, the Indenture Trustee shall be
entitled to all funds relating to the SBA Loans which the Servicer would have
been entitled to receive from the Principal and Interest Account pursuant to
Section 4.04 if the Servicer had continued to act as Servicer hereunder,
together with other servicing compensation in the form of assumption fees, late
payment charges or otherwise as provided in Sections 5.01 and 5.03 and shall be
shall be entitled to the Servicing Fee and the Premium Protection Fee.

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

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

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

                  Section 9.03.     Waiver of Defaults.

                  The SBA may, or the Majority Noteholders may, on behalf of all
the Noteholders, Certificateholders and any Hedge Counterparty and subject to
the consent of the SBA, which consent may not be unreasonably withheld, waive
any events permitting removal of the Servicer pursuant to this Article IX;
provided, however, that the Majority Noteholders or the SBA may not waive a
default in making a required distribution on a Note without the consent of the
holder of such Note. Upon any waiver of a past default, such default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been remedied for every purpose of this

                                       50
<PAGE>   57
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto except to the extent expressly so waived.

                  Section 9.04.     Control by Majority Noteholders.

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

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

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

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

                                       51
<PAGE>   58
                                    ARTICLE X

                                   TERMINATION

                  Section 10.01.    Termination.

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

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

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

                  Section 10.02.    Accounting Upon Termination of
                                    Servicer

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

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

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

                                       52
<PAGE>   59
                  (c) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee and to the Administrative Agent a full
accounting of all funds, including a statement showing the Monthly Payments
collected by it and a statement of monies held in trust by it for the payments
or charges with respect to the SBA Loans; and

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

                                       53
<PAGE>   60
                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  Section 11.01     Acts of Noteholders.

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

                  Section 11.02     Amendment.

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

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

                  Section 11.03.    Recordation of Agreement.

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

                                       54
<PAGE>   61
and beneficially affects the interests of the Noteholders or is necessary for
the administration or servicing of the SBA Loans.

                  Section 11.04.    Duration of Agreement.

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

                  SECTION 11.05.    GOVERNING LAW.

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

                  Section 11.06.    Notices.

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

                  Section 11.07.    Severability of Provisions.

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

                                       55
<PAGE>   62
                  Section 11.08.    No Partnership.

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

                  Section 11.09.    Counterparts.

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

                  Section 11.10.    Successors and Assigns.

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

                  Section 11.11.    Headings.

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

                  Section 11.12.    Notification to Administrative Agent.

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

                  Section 11.13  Inconsistencies.

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

                  Section 11.14.  Limitation of Liability.

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

                                       56
<PAGE>   63
purposes of this Agreement and each other Basic Document, the Owner Trustee and
the Trust Company shall be entitled to the benefits of the Trust Agreement.

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

                             FIRST INTERNATIONAL BANK
                                 as Seller and Servicer

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

                             FIB FUNDING TRUST,

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

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

                                       58
<PAGE>   65
                             Accepted and Agreed to:

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

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

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

                  On the 3rd day of November 1999 before me, a Notary Public in
and for said State, personally appeared Edward L. Truitt, Jr. known to me to be
an officer of First Union Trust Company, National Association, the trust company
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said banking corporation, and acknowledged to me that
such banking corporation executed the within instrument.

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

                                   /s/Rita Marie Ritrovato Lawless
                                   --------------------------------------------
                                        Notary Public

                                   My Commission expires November 21, 1999

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

                  On the 29th day of October 1999 before me, a Notary Public in
and for the State of Connecticut, personally appeared Theodore J. Horan known to
me to be the Senior Vice President of First International Bank, one of the
corporations that executed the within instrument and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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

                                  /s/Maureen D. Coppola
                                   --------------------------------------------
                                  Notary Public

                                  My Commission expires December 31, 2003<PAGE>   1
                                                                       Ex. 10.20

                                                                  Execution Copy
================================================================================

                             NOTE PURCHASE AGREEMENT

                           Dated as of October 1, 1999

                                      Among

                                FIB FUNDING TRUST

                                    as Issuer

                            FIRST INTERNATIONAL BANK

                                   as Servicer

                            the LIQUIDITY PURCHASERS

                                  named herein

                      VARIABLE FUNDING CAPITAL CORPORATION

                                as a CP Purchaser

                          FIRST UNION SECURITIES, INC.,

                 as VFCC Deal Agent and as Administrative Agent

                            FIRST UNION NATIONAL BANK

                             as VFCC Liquidity Agent

================================================================================
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                               Page
<S>           <C>                                                              <C>
                                   ARTICLE I.

                                   DEFINITIONS

Section 1.1   Certain Defined Terms..........................................    1
Section 1.2   Other Terms....................................................    7
Section 1.3   Computation of Time Periods....................................    7

                                   ARTICLE II

                              THE PURCHASE FACILITY

Section 2.1   Sale and Delivery of the Note..................................    7
Section 2.2   The Purchases..................................................    9
Section 2.3   Reduction of the Purchase Limit................................    9
Section 2.4   Increased Costs; Capital Adequacy; Illegality..................   10
Section 2.5   Taxes..........................................................   11

                                   ARTICLE III

                             CONDITIONS OF PURCHASES

Section 3.1   Conditions Precedent to Initial Purchase.......................   13
Section 3.2   Conditions Precedent to Each Purchase..........................   13

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

Section 4.1   Representations and Warranties of the Issuer and the Servicer..   15
Section 4.2   Representations, Warranties and Agreements of the Purchasers...   18

                                    ARTICLE V

                                GENERAL COVENANTS

Section 5.1   General Covenants of the Issuer................................   19
Section 5.2   General Covenants of the Servicer..............................   19
</TABLE>

                                      -i-
<PAGE>   3
<TABLE>
<S>           <C>                                                              <C>
                                   ARTICLE VI

                                 INDEMNIFICATION

Section 6.1   Indemnities by the Issuer......................................   20
Section 6.2   Indemnities by the Servicer....................................   20

                                   ARTICLE VII

       THE ADMINISTRATIVE AGENT, THE DEAL AGENTS AND THE LIQUIDITY AGENTS

Section 7.1   Authorization and Action.......................................   21
Section 7.2   Delegation of Duties...........................................   22
Section 7.3   Exculpatory Provisions.........................................   22
Section 7.4   Reliance.......................................................   23
Section 7.5   Non-Reliance on Deal Agents, Administrative Agents,
              Liquidity Agents and Other Purchasers..........................   24
Section 7.6   Reimbursement and Indemnification..............................   24
Section 7.7   Deal Agents, Administrative Agent and Liquidity Agents
              in their Individual Capacities.................................   25
Section 7.8   Successor Deal Agents, Administrative Agent or Liquidity Agents   25

                                  ARTICLE VIII

                           ASSIGNMENTS; PARTICIPATIONS

Section 8.1   Assignments and Participations.................................   26

                                   ARTICLE IX

                                  MISCELLANEOUS

Section 9.1   Amendments and Waivers.........................................   32
Section 9.2   Notices, Etc...................................................   33
Section 9.3   Ratable Payments...............................................   33
Section 9.4   No Waiver; Remedies............................................   33
Section 9.5   Binding Effect.................................................   33
Section 9.6   Term of this Agreement.........................................   34
Section 9.7   Governing Law..................................................   34
Section 9.8   Waiver of Jury Trial...........................................   34
Section 9.9   Costs and Expenses.............................................   34
Section 9.10  No Proceedings.................................................   35
Section 9.11  Recourse Against Certain Parties...............................   35
Section 9.12  Confidentiality................................................   36
Section 9.13  Counterparts...................................................   37
Section 9.14  Limitation of Liability........................................   37
Section 9.15  Inconsistencies................................................   37
</TABLE>

                                      -ii-
<PAGE>   4
LIST OF SCHEDULES AND EXHIBITS

<TABLE>
<S>          <C>
SCHEDULES
---------

SCHEDULE I   Conditions Precedent to Initial Purchase

EXHIBITS
--------

EXHIBIT A    Form of Compliance Certificate and Funding Notice
EXHIBIT B    Form of Related Group Addition Notice
EXHIBIT C    Form of Assignment and Acceptance
EXHIBIT D    Form of CP Assignment and Acceptance
</TABLE>

                                     -iii-
<PAGE>   5
         NOTE PURCHASE AGREEMENT (the "Agreement"), dated as of October 1, 1999,
by and among:

                  (1)      FIB FUNDING TRUST (the "Issuer");

                  (2)      FIRST INTERNATIONAL BANK, as Servicer (the
                           "Servicer");

                  (3)      the financial institutions listed on the signature
                           pages of this Agreement under the heading "Liquidity
                           Purchasers" and their respective successors and
                           permitted assigns (the "Liquidity Purchasers");

                  (4)      VARIABLE FUNDING CAPITAL CORPORATION, a Delaware
                           corporation (together with its successors and
                           permitted assigns, "VFCC"), as purchaser (a "CP
                           Purchaser");

                  (5)      FIRST UNION SECURITIES, INC., ("FUSI"), as agent for
                           VFCC (a "Deal Agent" and the "VFCC Deal Agent"), and
                           as administrative agent (the "Administrative Agent");
                           and

                  (6)      FIRST UNION NATIONAL BANK, a national banking
                           association ("First Union"), as liquidity agent for
                           the VFCC Deal Agent (a "Liquidity Agent" and the
                           "VFCC Liquidity Agent")

         IT IS AGREED as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.1 Certain Defined Terms.

                  (a) Certain capitalized terms used throughout this Agreement
are defined above or in this Section 1.1. In addition, capitalized terms used
but not defined herein have the meanings given to such terms in Appendix A to
the Sale and Servicing Agreement (the "Sale and Servicing Agreement"), dated as
of October 1, 1999, by and among the Issuer, the Servicer and the Indenture
Trustee.

                  (b) As used in this Agreement and its exhibits, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined).

Act: The Securities Act of 1933, as amended.
<PAGE>   6
Advance: Any and all advances made by a Purchaser pursuant to Section 2.2 of
this Agreement.

Affected Party:  As defined in Section 2.4(a).

Affiliate: With respect to a Person means any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" or "controlled" have meanings correlative
to the foregoing.

Basic Documents: This Agreement, the Indenture, the Sale and Servicing
Agreement, the Multi-Party Agreement, the Trust Agreement and each other
document entered into in connection with the foregoing, as the same may be
amended, supplemented, restated, replaced or otherwise modified from time to
time.

Borrowing Base: means, for any date of determination, the sum of (i) the product
of (A) 100% minus the Minimum Subordination Percentage and (B) the aggregate
Principal Balance of all Eligible Loans plus (ii) all amounts on deposit in the
Principal and Interest Account representing collections of principal on the
Unguaranteed Interests in the SBA Loans.

Closing Date: December 13, 1999.

Collection Date: The date following the Termination Date on which the principal
amount of the Note has been reduced to zero, the Purchasers have received all
amounts of interest due in respect of the Note and other amounts due to the
Purchasers in connection with this Agreement and the Indenture and each party to
this Agreement has received all amounts due to it in connection with this
Agreement.

Commercial Paper: On any day, any commercial paper note issued by a CP Purchaser
for the purpose of financing or maintaining its investment in the Note.

Commitment: For each Liquidity Purchaser, the commitment of such Liquidity
Purchaser to fund Advances in an amount not to exceed the amount set forth
opposite such Liquidity Purchaser's name on the signature pages of this
Agreement, as such amount may be modified in accordance with the terms hereof.

Commitment Termination Date: December 12, 2002 or such other date to which the
Commitment Termination Date may be modified in accordance with the terms of
Section 2.1(c) or (e).

Compliance Certificate: As defined in Section 3.2(c).

Concentration and Mix Criteria: On any day, each of the concentration
limitations set forth below, which concentrations shall be measured on the basis
of a percentage of the Outstanding Amount:

                                      -2-
<PAGE>   7
                  (a) the sum of the Principal Balances of the Obligors of
Eligible Loans located in any one state is limited to 35% (or 40% for
Connecticut);

                  (b) the sum of the Principal Balances of Eligible Loans from a
particular industry (as defined by the four digit SIC) is limited to 25%;

                  (c) the largest Principal Balance for an individual Eligible
Loan is limited to (i) $1,000,000 during the first six months following the
Closing Date and during the first six months following any Securitization and
(ii) thereafter, the greater of $1,000,000 and 2.0%;

                  (d) the aggregate Principal Balance of the five largest
Eligible Loans is limited to (i) $5,000,000 during the first six months
following the Closing Date and during the first six months following any
Securitization and (ii) thereafter, the greater of $5,000,000 or 7.5%; and

                  (e) the aggregate Principal Balance of all Eligible Loans risk
rated "3W" is limited to 20%.

CP Purchaser: Variable Funding Capital Corporation, and any other Person
approved by the SBA that has the option to fund Advances pursuant to this
Agreement or a properly completed Related Group Addition Notice in the form of
Exhibit B hereto or a properly completed CP Assignment and Acceptance in the
form of Exhibit D hereto.

Deal Agent: With respect to VFCC, the VFCC Deal Agent. With respect to any other
CP Purchaser, the Person acting as agent for such CP Purchaser pursuant to a
properly completed Related Group Addition Notice in the form of Exhibit B
hereto.

Eligible Assignee: (a) A Person whose short-term rating is at least "A-1" from
S&P and "P-1" from Moody's, or whose obligations under this Agreement are
unconditionally guaranteed by a Person whose short-term rating is at least "A-1"
from S&P and "P-1" from Moody's, or (b) such other Person satisfactory to the CP
Purchasers, the Deal Agents and each of the Rating Agencies rating the
Commercial Paper and approved, in writing, by the Issuer and the SBA; provided,
however, that no such approval by the Issuer shall be required in the event any
Liquidity Purchaser is required by any Rating Agency rating the CP Purchasers'
commercial paper notes or by any regulatory agency to make an assignment.

Eligible Loan: An SBA Loan that satisfies the requirements set forth in Section
3.02 of the Sale and Servicing Agreement.

Facility: The agreements and obligations of the parties hereto, as evidenced by
the terms and provisions of this Agreement.

Facility Termination Date: December 12, 2002 or such other date to which the
Facility Termination Date may be modified in accordance with the terms of
Section 2.1(d) or (e).

                                      -3-
<PAGE>   8
Fee Letter: The letter agreement, dated as of October 1, 1999, between the
Issuer and the VFCC Deal Agent, as amended from time to time, and any other
similar agreement entered into from time to time between the Issuer and a CP
Purchaser or its Deal Agent.

First Union: First Union National Bank, in its individual capacity, and its
successors or assigns.

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

Funding Account: As defined in the Sale and Servicing Agreement.

Funding Notice: As defined in Section 2.1(b).

GAAP: Generally accepted accounting principles as in effect from time to time in
the United States.

Increased Costs: Any amounts required to be paid by the Issuer to an Affected
Party pursuant to Section 2.4.

Indemnified Amounts: As defined in Section 6.1.

Indemnified Party: As defined in Section 6.1.

Indenture Trustee: HSBC Bank USA, or its successor in interest, or any successor
trustee appointed as provided in the Indenture.

Ineligible Loan: An SBA Loan that breaches a representation or warranty
contained in Section 3.02 of the Sale and Servicing Agreement.

Initial Purchase Date: The date on which the initial Purchaser initially
purchases the Note from the Issuer.

Liquidity Agent: With respect to VFCC, the VFCC Liquidity Agent. With respect to
any other CP Purchaser, the Person acting as agent for its related Liquidity
Purchasers pursuant to a properly completed Related Group Addition Notice in the
form of Exhibit B hereto.

Liquidity Purchaser: First Union, and each other liquidity bank that agrees to
fund Advances pursuant to a properly completed Related Group Addition Notice in
the form of Exhibit B hereto or a properly completed Assignment and Acceptance
in the form of Exhibit C hereto.

Loss Rate: As defined in the Multi-Party Agreement.

Minimum Subordination Percentage: Means, for any date of determination, the
greater of (i) 7.0% and (ii) twice the Seller's then applicable Loss Rate.

                                      -4-
<PAGE>   9
Moody's: Moody's Investors Service, Inc., and any successor thereto.

Note: The Note issued by the Issuer to the Administrative Agent, on behalf of
the Purchasers, hereunder pursuant to the terms of this Agreement and the
Indenture.

Outstanding Amount: The aggregate principal amount of the Note outstanding on
the date of determination.

Person: An individual, partnership, corporation (including a business trust),
joint stock company, limited liability company, limited partnership, limited
liability partnership, trust, association, joint venture, any governmental
authority or any other entity of any nature.

Principal Balance: The meaning set forth in Appendix A to the Sale and Servicing
Agreement.

Purchase: The initial purchase by a Purchaser of the Note from the Issuer and
the payment of any additional Advance by a Purchaser.

Purchase Date: Any day on which a Purchaser makes a Purchase.

Purchase Limit: (i) $60,000,000; or (ii) such other amount as may be agreed to
in writing among the Issuer, the Liquidity Agents and the Deal Agents (with the
prior written consent of the SBA); provided, however, that at all times, on or
after the Termination Date, the "Purchase Limit" shall mean the then outstanding
principal amount of the Note and, provided, further, that the "Purchase Limit"
may be reduced in accordance with the provisions of Section 2.3. No CP Purchaser
shall be obligated to fund any Advance.

Purchasers: Collectively, the CP Purchasers and the Liquidity Purchasers and any
other Person that may agree from time, pursuant to the pertinent Assignment and
Acceptance, to fund an Advance hereunder and their successors and assigns.
ratable: With respect to each Related Group shall mean the fraction, expressed
as a percentage, the numerator of which is the Commitment applicable to all
Liquidity Purchasers in such Related Group and the denominator of which is the
aggregate Commitment applicable to all Liquidity Purchasers in all Related
Groups.

Rating Agency: Each of S&P, Moody's and any other rating agency that has been
requested to issue a rating with respect to the commercial paper notes issued by
a CP Purchaser.

Register: As defined in Section 8.1(c).

Related: VFCC, the VFCC Deal Agent, the VFCC Liquidity Agent and First Union are
deemed to be "related" as one group, and for any other CP Purchaser, such CP
Purchaser and its Deal Agent, Liquidity Agent and Liquidity Purchasers shall be
deemed to be "related" as another group.

                                      -5-
<PAGE>   10
Related Group: For each CP Purchaser, (i) such CP Purchaser and its related Deal
Agent, Liquidity Agent and Liquidity Purchasers and (ii) any other CP Purchaser
having the same related Deal Agent, Liquidity Agent and Liquidity Purchasers.

Required Purchasers: At a particular time, all (or 100%) of the Liquidity
Purchasers.

Required Rating: A rating of at least "A" by S&P and "A2" by Moody's (pertaining
to a party's long-term unsecured debt obligations), and at least "A-1" by S&P
and "P-1" by Moody's (pertaining to a party's short-term unsecured debt
obligations).

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

Securitization: A transaction pursuant to which the Unguaranteed Interests in
the SBA Loans are transferred by the Issuer to another trust or special purpose
entity and securities backed by or representing a beneficial ownership interest
in such Unguaranteed Interests are sold to third-party investors.

Seller: First International Bank, a Connecticut bank and trust company, and its
permitted successors and assigns.

Servicer Indemnified Amounts: As defined in Section 6.2.

Servicer Indemnified Party: As defined in Section 6.2.

S&P: Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto.

Subordination Percentage: Means a fraction, expressed as a percentage,
calculated as 1.0 minus a fraction, the numerator of which is the Outstanding
Amount less all amounts on deposit in the Principal and Interest Account
representing payments of principal on the Unguaranteed Interests in the SBA
Loans and all amounts on deposit in the Spread Account, and the denominator of
which is the aggregate Principal Balance of all Eligible Loans.

Taxes: Any present or future taxes, levies, imposts, duties, charges,
assessments or fees of any nature (including interest, penalties, and additions
thereto other than those arising out of an Affected Party's negligence) that are
imposed by any government or other taxing authority.

Termination Date: The earliest of (a) the Business Day designated as the
Termination Date by the Trust upon at least 2 Business Days' prior written
notice to each Deal Agent, (b) the second Business Day preceding the Facility
Termination Date, (c) the second Business Day preceding the Commitment
Termination Date or (d) the occurrence of an Event of Default.

UCC: The Uniform Commercial Code as in effect in the applicable jurisdiction.

                                      -6-
<PAGE>   11
United States: The United States of America.

VFCC Agent's Account: For amounts payable to VFCC or any VFCC-related entity, a
special account (account number 22341) in the name of the VFCC Deal Agent, or in
the name of VFCC, as the case may be, maintained at Bankers Trust Company, or
such other account as the VFCC Deal Agent may advise the Issuer.

         Section 1.2 Other Terms.

         All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC in the State of
New York, as applicable, and not specifically defined herein, are used herein as
defined in such Article 9.

         Section 1.3 Computation of Time Periods.

         Unless otherwise stated in this Agreement, in the computation of a
period of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."

                                   ARTICLE II

                              THE PURCHASE FACILITY

         Section 2.1 Sale and Delivery of the Note.

                  (a) On the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Issuer agrees to
deliver to the Administrative Agent, on or before the Initial Purchase Date, the
Note, which Note shall be duly executed by the Issuer, duly authenticated by the
Indenture Trustee and registered in the name of the Administrative Agent or its
nominee.

                  (b) On the terms and conditions hereinafter set forth, the
Issuer may request the Purchasers to increase the principal outstanding on the
Note (each such request, a "Funding Notice"), each such Funding Notice to be on
the terms and conditions set forth herein and in the Indenture and substantially
in the form of Exhibit A hereto. On each day prior to the Termination Date and
subject to the satisfaction of the terms and conditions hereinafter set forth
(including, without limitation, Section 2.2(b)), each CP Purchaser may, in its
sole discretion, make a Purchase, or if any CP Purchaser shall decline to
Purchase, the related Liquidity Purchaser shall make a Purchase, of its ratable
share of the amount requested under a Funding Notice from time to time during
the period from the date hereof to but not including the Termination Date.
Notwithstanding anything to the contrary herein contained, no Liquidity
Purchaser shall have any obligation to make any Purchase if, after giving effect
to such Purchase, the aggregate amount of outstanding Purchases made by such
Liquidity Purchaser would exceed the lesser of (X) such Liquidity Purchaser's
ratable share of the lesser of (i) the Purchase Limit or

                                      -7-
<PAGE>   12
(ii) the Borrowing Base or (Y) such Liquidity Purchaser's Commitment. Prior to
executing a Related Group Addition Notice, each CP Purchaser and each Liquidity
Purchaser that is part of a new Related Group shall purchase from the CP
Purchasers and Liquidity Purchasers of each existing Related Group, its ratable
share of all outstanding CP Advances and Liquidity Advances, respectively.

                  (c) The Issuer may, within 60 days, but no later than 45 days,
prior to the then Commitment Termination Date, by written notice to each Deal
Agent, with a copy to the Indenture Trustee and the SBA, request the CP
Purchasers and the Liquidity Purchasers to extend the Commitment Termination
Date for an additional period of up to 364 days from the date on which the
renewal is approved. Each of the CP Purchasers and each Liquidity Purchaser
shall make a determination, in its sole discretion and after a full credit
review, within 15 days of the Commitment Termination Date, as to whether or not
it will agree to extend the Commitment Termination Date; provided, however, that
the failure of the CP Purchasers or any Liquidity Purchaser to make a timely
response to the Issuer's request for extension of the Commitment Termination
Date shall be deemed to constitute a refusal by the CP Purchasers or the
Liquidity Purchaser, as the case may be, to extend the Commitment Termination
Date. The Commitment Termination Date shall only be extended upon the consent of
(i) the CP Purchasers, (ii) 100% of the Liquidity Purchasers and (iii) the SBA.
Any such renewal shall become effective only upon written confirmation to the
Issuer by each Deal Agent on behalf of its related CP Purchaser and Liquidity
Purchaser of its agreement to so renew and upon receipt by each Deal Agent of
any fees required to be paid in connection with such renewal and any such
renewal shall be binding upon the related CP Purchaser and Liquidity Purchaser.

                  (d) The Issuer may, within 60 days, but no later than 45 days,
prior to the then Facility Termination Date, by written notice to each Deal
Agent, with a copy to the Indenture Trustee and the SBA, request the CP
Purchasers and the Liquidity Purchasers to extend the Facility Termination Date.
Each of the CP Purchasers and each Liquidity Purchaser shall make a
determination, in its sole discretion and after a full credit review, within 15
days of the Facility Termination Date, as to whether or not it will agree to
extend the Facility Termination Date; provided, however, that the failure of the
CP Purchasers or any Liquidity Purchaser to make a timely response to the
Issuer's request for extension of the Facility Termination Date shall be deemed
to constitute a refusal by the CP Purchasers or the Liquidity Purchaser, as the
case may be, to extend the Facility Termination Date. The Facility Termination
Date shall only be extended upon the consent of (i) the CP Purchasers, (ii) 100%
of the Liquidity Purchasers and (iii) the SBA. Any such renewal shall become
effective only upon written confirmation to the issuer by each Deal Agent on
behalf of its related CP Purchaser and Liquidity Purchaser of its agreement to
so renew and upon receipt by each Deal Agent of any fees required to be paid in
connection with such renewal and any such renewal shall be binding upon the
related CP Purchaser and Liquidity Purchaser.

                  (e) Notwithstanding the foregoing Sections 2.1(c) and (d),
upon any conversion of the Servicer from a regulated bank to a commercial
finance company (the "Conversion"), which is otherwise subject to the provisions
of the Sale and Servicing Agreement, the Commitment Termination Date and the
Facility Termination Date shall be the date that is the earlier of (i) the

                                      -8-
<PAGE>   13
date that is 364 days after the date of the Conversion, or (ii) the then
Commitment Termination Date, unless the CP Purchases, 100% of the Liquidity
Purchasers and the SBA, upon appropriate due diligence and credit approvals
agree that the then Commitment Termination Date and Facility Termination Date
should not be accelerated.

         Section 2.2 The Purchases.

                  (a) Subject to the conditions described in Section 2.1, the
initial Purchase shall be made in accordance with the procedures described in
Section 2.2(b). After the date of the initial Purchase, until the occurrence of
the Termination Date, the CP Purchasers and the Liquidity Purchasers shall make
subsequent Purchases in accordance with the provisions of the Indenture, but
subject to the provisions of Section 2.1 (b) and Section 2.2 hereof.

                  (b) Each Purchase shall be made at least two Business Days
after receipt by the Purchaser of a written Funding Notice substantially in the
form of Exhibit A hereto delivered by the Issuer to each Deal Agent. Each
Funding Notice must be received by the Deal Agents no later than 3:00 p.m. on a
Business Day. If any Funding Notice is received by a Deal Agent after 3:00 p.m.
on a Business Day or on a day that is not a Business Day, such Funding Notice
shall be deemed to be received by such Deal Agent at 9:00 a.m. on the next
following Business Day. Each such notice shall specify the amount by which the
principal of the Note is to increase on such Purchase Date. The Issuer shall
deliver no more than one such notice to each Deal Agent in any calendar month,
and each amount specified in any such notice must be in an aggregate amount for
all Purchasers at least equal to (i) $5,000,000 in the case of the initial
Purchase and (ii) $500,000 in the case of any subsequent Purchase, and integral
multiples of $1,000 in excess thereof provided, however, that such Advance shall
not (x) exceed the product of (A) 100% minus the Minimum Subordination
Percentage and (B) the aggregate Principal Balance of the Eligible Loans being
transferred to the Issuer in connection with such Advance and (y) cause the
Outstanding Amount of the Notes to exceed the lesser of (i) the Borrowing Base
or (ii) the Purchase Limit. Following receipt of such notice, each Deal Agent
shall determine whether or not its related CP Purchaser shall make the Purchase.
If a CP Purchaser declines to make the Purchase, such Purchase will be made by
the related Liquidity Purchaser. On the date of such Purchase, each CP Purchaser
or each Liquidity Purchaser shall, upon satisfaction of the applicable
conditions set forth in Article III, make available to the Issuer, in same day
funds, in the Funding Account, an amount equal to such CP Purchaser's or such
Liquidity Purchaser's ratable share of the Purchase.

         Section 2.3 Reduction of the Purchase Limit.

         The Issuer may, upon at least 30 days' written notice to the Deal
Agents, with a copy to the Indenture Trustee and the SBA, terminate in whole or
reduce in part the unused Purchase Limit; provided, however, that each partial
reduction of the Purchase Limit shall be in amounts equal to $1,000,000 or an
integral multiple thereof. Each notice of reduction or termination pursuant to
this Section 2.3 shall be irrevocable.

                                      -9-
<PAGE>   14
         Section 2.4 Increased Costs; Capital Adequacy; Illegality.

                  (a) If either (i) the introduction of or any change
(including, without limitation, any change by way of imposition or increase of
reserve requirements) in or in the interpretation of any law or regulation or
(ii) the compliance by a Purchaser or any Affiliate thereof (each of which, an
"Affected Party") with any new guideline or request from any central bank or
other governmental agency or authority having authority over the Affected Party
(whether or not having the force of law), (A) shall subject an Affected Party to
any Tax (except for Taxes on the overall net income of such Affected Party),
duty or other charge with respect to a Purchase, or any right to make Purchases
hereunder, or on any payment made hereunder or (B) shall impose, modify or deem
applicable any reserve requirement (including, without limitation, any reserve
requirement imposed by the Board of Governors of the Federal Reserve System, but
excluding any reserve requirement, if any, included in the determination of the
interest rate on the Notes), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Affected Party or (C) shall impose any other condition affecting a Purchase or a
Purchaser's rights hereunder, the result of which is to increase the cost to any
Affected Party or to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement, then within ten days after demand by such
Affected Party (which demand shall be reasonable and accompanied by a statement
setting forth in reasonable detail the basis and calculations supporting such
demand), the Issuer shall pay directly to such Affected Party such additional
amount or amounts as will compensate such Affected Party for such additional or
increased cost incurred or such reduction suffered. The Issuer shall also have
the right to give a notice of termination and terminate the Agreement; provided,
however, the Issuer shall immediately pay to the CP Purchasers an amount equal
to the sum of all amounts due under the Note on such date, together with all of
the CP Purchasers' fees and costs occasioned by such early termination. The
Issuer shall remain liable for any and all amounts due under this Section 2.4(a)
which accrued prior to the effective date of such termination.

                  (b) If either (i) the introduction of or any change in or in
the interpretation of any law, guideline, rule, regulation, directive or request
or (ii) compliance by any Affected Party with any new law, guideline, rule,
regulation, directive or request from any central bank or other governmental
authority or agency having authority over the Affected Party (whether or not
having the force of law), regarding capital adequacy, has or will have the
effect of reducing the rate of return on the capital of any Affected Party
(including, without limitation, any capital requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding any capital requirement,
if any, included in the determination of the interest rate on the Note) as a
consequence of its obligations hereunder or arising in connection herewith to a
level below that which any such Affected Party could have achieved but for such
introduction, change or compliance (taking into consideration the policies of
such Affected Party with respect to capital adequacy) by an amount deemed by
such Affected Party to be material, then from time to time, within ten days
after demand by such Affected Party after the Affected Party has accrued,
expensed or realized such reduced rate of return (which demand shall be
accompanied by a statement setting forth the basis for such demand), the Issuer
shall pay directly to such Affected Party such additional amount or amounts as
will compensate such Affected Party for such reduction.

                                      -10-
<PAGE>   15
                  (c) If as a result of any event or circumstance similar to
those described in clauses (a) or (b) of this section, any Affected Party is
required to compensate a bank or other financial institution providing liquidity
support, credit enhancement or other similar support to such Affected Party in
connection with this Agreement or the funding or maintenance of Purchases
hereunder, then within ten days after demand by such Affected Party, the Issuer
shall pay to such Affected Party such additional amount or amounts as may be
necessary to reimburse such Affected Party for any amounts paid by it.

                  (d) In determining any amount provided for in this section,
the Affected Party may use any reasonable averaging and attribution methods. Any
Affected Party making a claim under this section shall submit to the Issuer a
certificate as to such additional or increased cost or reduction, which
certificate shall be conclusive absent demonstrable error.

         Section 2.5 Taxes.

                  (a) All payments made by the Issuer or the Servicer under this
Agreement or the other Basic Documents will be made free and clear of and
without deduction or withholding for or on account of any Taxes, unless such
withholding or deduction is required by law. In such event, the Issuer or
Servicer, (as the case may be) shall pay to the appropriate taxing authority any
such Taxes required to be deducted or withheld and the amount payable to each
Purchaser will be increased (such increase, the "Additional Amount") such that
every net payment made under this Agreement after deduction or withholding for
or on account of any Taxes (including, without limitation, any Taxes on such
increase) is not less than the amount that would have been paid had no such
deduction or withholding been deducted or withheld. The foregoing obligation to
pay Additional Amounts, however, will not apply with respect to net income or
franchise taxes imposed on a Purchaser with respect to payments required to be
made by the Issuer or Servicer under this Agreement, by a taxing jurisdiction in
which such Purchaser is organized or conducts business (as the case may be). If
a Purchaser pays any Taxes in respect of which the Issuer is obligated to pay
Additional Amounts under this Section 2.5(a), to the extent such Purchaser has
not been reimbursed previously the Issuer shall promptly reimburse such
Purchaser in full. If the Issuer or Servicer pays any Additional Amount that
ultimately is determined not to be properly payable as an Additional Amount
under this Section 2.5(a), the applicable Purchaser shall reimburse the Issuer
or Servicer, as the case may be, for such amount upon receipt of evidence
satisfactory to such Purchaser that such amount was not properly payable.

         At the time any Tax in respect of which the Issuer or the Servicer has
paid an Additional Amount becomes due, then unless the Issuer would have been
responsible for the payment of such Tax under Section 2.4(a)(ii)(A), each
Purchaser shall rebate to the Issuer or the Servicer, as the case may be, the
amount of such Tax owed by such Purchaser which was paid as an Additional
Amount.

                  (b) To the extent not otherwise paid pursuant to Section 2.4,
the Issuer will indemnify each Purchaser and the each Deal Agent for the full
amount of Taxes in respect of which the Issuer is required to pay Additional
Amounts (including, without limitation, any Taxes imposed by any jurisdiction on
such Additional Amounts) paid by such Purchaser or Deal Agent

                                      -11-
<PAGE>   16
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto; provided, however, that
such Purchaser or Deal Agent, as appropriate, making a demand for indemnity
payment shall provide the Issuer, at its address set forth under its name on the
signature pages hereof, with a certificate from the relevant taxing authority or
from a responsible officer of such Purchaser or Deal Agent stating or otherwise
evidencing that such Purchaser or Deal Agent has made payment of such Taxes and
will provide a copy of or extract from documentation, if available, furnished by
such taxing authority evidencing assertion or payment of such Taxes. This
indemnification shall be made within ten days from the date the Purchaser or the
Deal Agent (as the case may be) makes written demand therefor.

                  (c) Within 30 days after the date of any payment by the Issuer
of any Taxes, the Issuer will furnish to the appropriate Deal Agent, at its
address set forth under its name on the signature pages hereof, appropriate
evidence of payment thereof.

                  (d) If a Purchaser is not created or organized under the laws
of the United States or a political subdivision thereof, such Purchaser shall,
to the extent that it may then do so under applicable laws and regulations,
deliver to the Issuer with a copy to each Deal Agent (i) within 15 days after
the date hereof, or, if later, the date on which such Purchaser becomes a
Purchaser hereunder two (or such other number as may from time to time be
prescribed by applicable laws or regulations) duly completed copies of IRS Form
4224 or Form 1001 (or any successor forms or other certificates or statements
which may be required from time to time by the relevant United States taxing
authorities or applicable laws or regulations), as appropriate, to permit the
Issuer to make payments hereunder for the account of such Purchaser, as the case
may be, without deduction or withholding of United States federal income or
similar Taxes and (ii) upon the obsolescence of or after the occurrence of any
event requiring a change in, any form or certificate previously delivered
pursuant to this Section 2.5(d), copies (in such numbers as may from time to
time be prescribed by applicable laws or regulations) of such additional,
amended or successor forms, certificates or statements as may be required under
applicable laws or regulations to permit the Issuer to make payments hereunder
for the account of such Purchaser, without deduction or withholding of United
States federal income or similar Taxes.

                  (e) For any period with respect to which a Purchaser or a Deal
Agent has failed to provide the Issuer with the appropriate form, certificate or
statement described in clause (d) of this section (other than if such failure is
due to a change in law occurring after the date of this Agreement), such Deal
Agent or such Purchaser, as the case may be, shall not be entitled to the
protections of clauses (a) or (b) of this Section or Section 2.4 with respect to
any Taxes or Additional Amounts.

                  (f) The Issuer shall be entitled to receive solely from the
applicable Governmental Authority, any refunds payable by such Governmental
Authority in respect of Taxes paid by the Issuer. Within 30 days of the written
request of the Issuer therefor, the Deal Agent and the Purchaser, as
appropriate, shall execute and deliver to the Issuer such certificates, forms or
other documents which can be furnished consistent with the facts and which are
reasonably necessary to assist the Issuer in applying for refunds of Taxes
remitted hereunder; provided, however, that the Deal Agent and the Purchaser
shall not be required to deliver such

                                      -12-
<PAGE>   17
certificates, forms or other documents if they reasonably determine that the
delivery of such certificate, form or other document would have a material
adverse affect on the Deal Agent or Purchaser; and, provided, further, that the
Issuer shall reimburse the Deal Agent or Purchaser for any reasonable expenses
incurred in the delivery of such certificate, form or other document.

                  (g) If, in connection with an agreement or other document
providing liquidity support, credit enhancement or other similar support to the
Purchasers in connection with this Agreement or the funding or maintenance of
Purchases hereunder, the Purchasers are required to compensate a bank or other
financial institution in respect of Taxes under circumstances similar to those
described in this section then within ten days after demand by the Purchasers,
the Issuer shall pay to the Purchasers such additional amount or amounts as may
be necessary to reimburse the Purchasers for any amounts paid by them.

                  (h) Without prejudice to the survival of any other agreement
of the Issuer hereunder, the agreements and obligations of the Issuer contained
in this section shall survive the termination of this Agreement.

                                   ARTICLE III

                             CONDITIONS OF PURCHASES

         Section 3.1 Conditions Precedent to Initial Purchase.

         The initial Purchase hereunder is subject to the satisfaction, on or
before the date of such purchase, as determined by the Deal Agents, of each
condition precedent listed in Schedule I.

         Section 3.2 Conditions Precedent to Each Purchase.

         Each Purchase (including the initial Purchase) from the Issuer shall be
subject to the further conditions precedent: (a) the Deal Agents shall have
received a Funding Notice no later than 3:00 p.m. on the second Business Day
immediately prior to the date of such Purchase, (b) on the date of such Purchase
the following statements shall be true and the Issuer by accepting the amount of
such Purchase shall be deemed to have certified that:

                  (i) The representations and warranties contained in Section
         4.1 are true and correct on and as of such day as though made on and as
         of such date,

                  (ii) No event has occurred and is continuing, or would result
         from such Purchase which constitutes an Event of Default, or a material
         event which with notice or the passage of time or both would constitute
         an Event of Default,

                  (iii) On and as of such day, after giving effect to such
         Purchase, the principal amount of the Note does not exceed the lesser
         of (x) the Purchase Limit, or (y) the Borrowing Base,

                                      -13-
<PAGE>   18
                  (iv) On and as of such day, without giving effect to such
         Purchase, the Subordination Percentage is equal to or greater than the
         Minimum Subordination Percentage,

                  (v) On and as of such day, each of the Issuer, the Seller and
         the Servicer has performed in all material respects all of the
         agreements contained in this Agreement, the Indenture, the Sale and
         Servicing Agreement and the other Basic Documents to be performed by
         such Person at or prior to such day,

                  (vi) On and as of such date, the Seller is "well capitalized"
         as defined in 12 CFR Part 325,

                  (vii) The Servicer shall have received from the Indenture
         Trustee a receipt in the form of Exhibit F to the Sale and Servicing
         Agreement acknowledging that the Indenture Trustee has received the
         documents required to be delivered to it pursuant to Section 2.04 of
         the Sale and Servicing Agreement,

                  (viii) On and as of such date, after giving effect to such
         Purchase, the Concentration and Mix Criteria shall be satisfied in all
         respects,

                  (ix) The proceeds of such Purchase will be used to fund SBA
         Loans, and

                  (x) No law or regulation shall prohibit, and no order,
         judgment or decree of any federal, state or local court or governmental
         body, agency or instrumentality shall prohibit or enjoin, the making of
         such Purchase by the Purchaser in accordance with the provisions
         hereof; and

no later than 3:00 p.m. on the second Business Day preceding the date of each
such Purchase the Deal Agents shall have received a certificate, substantially
in the form of Exhibit A hereto, of the President, a Senior Vice President, a
Vice President, the Controller, the Treasurer or any Assistant Treasurer of the
Servicer and of the Issuer (i) setting forth all information required under
Section 2.2(b) hereof, and (ii) certifying that each of the conditions set forth
in (i) through (v) of Section 3.2(b) has been satisfied in full on or before
such day and, with respect to all determinations of each element of each
calculation necessary to satisfy the conditions in Section 3.2(b)(iii), that
such calculations and determinations shall be based upon amounts and percentages
as of the date thereof (such certificate being referred to herein as a
"Compliance Certificate") and dated as of the date of such request; and, (d) the
Deal Agents shall have received, for their own account and for the accounts of
the Purchasers, all fees and expenses required by the Agreement to be paid on or
before the date of such Purchase.

                                      -14-
<PAGE>   19
                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         Section 4.1 Representations and Warranties of the Issuer and the
                     Servicer.

         Each of the Issuer and the Servicer represents and warrants as to
itself as follows:

                  (a) Organization. It is duly organized and validly existing in
good standing under the laws of the state of its organization, is duly qualified
and in good standing as a foreign entity and authorized to do business in all
other jurisdictions wherein the nature of its business or property makes such
qualification materially necessary, and has full power and authority to own its
properties and to conduct its business as presently conducted.

                  (b) Licenses and Approvals. It has obtained all necessary
licenses and approvals in all states in which the ownership or lease of property
or the conduct of its business requires such licenses and approvals except where
the failure to have such licenses and approvals does not have a material adverse
affect on its financial condition or on its ability to perform its obligations
under the Basic Documents.

                  (c) Authority. It has full power and authority to execute and
deliver, and perform each of its obligations under, each of the Basic Documents
to which it is a party, including the Issuer's use of the proceeds of Purchases,
and it has duly authorized the execution, delivery and performance of each of
the foregoing and, in the case of the Issuer, the sale of the Note to the
Purchasers by all necessary action.

                  (d) Enforceability. Each of the Basic Documents to which it is
a party constitutes its legal, valid and binding obligations, enforceable
against it in accordance with their respective terms, except as limited by
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium and
other similar laws and equitable principles affecting creditors' rights and
remedies.

                  (e) No Conflicts. The consummation of the transactions
contemplated by and the fulfillment of the terms of the Basic Documents to which
it is a party will not conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice, lapse of time or both)
a default under its articles of organization or operating agreement or any
material indenture, agreement, mortgage, deed of trust or other material
instrument to which it is a party or by which it is bound, or result in the
creation or imposition of any Lien (other than as contemplated by this Agreement
or the Indenture) upon any of its properties pursuant to the terms of such
indenture, agreement, mortgage, deed of trust or other such instrument, other
than the Basic Documents, or violate any law, rule, regulation or any order
applicable to it of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over it or any of its properties.

                                      -15-
<PAGE>   20
                  (f) Legal Proceedings. There are no proceedings or
investigations to which it is a party pending, or, to its best knowledge,
threatened, before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality (a) asserting the invalidity of the
Basic Documents, (b) seeking to prevent the consummation of any of the
transactions contemplated by the Basic Documents, (c) seeking any determination
or ruling that would materially and adversely affect the performance by it of
its obligations under, or the validity or enforceability of, the Basic Documents
or (d) which would have a material adverse effect on its ability to perform its
obligations under the Basic Documents.

                  (g) Consents and Approvals. All approvals, authorizations,
consents, orders or other actions of any Person, corporation or other
organization, or of any court, governmental agency or body or official, required
in connection with the execution, delivery and performance of the Basic
Documents, have been received or taken, as the case may be.

                  (h) Information. No information, exhibit, financial statement,
document, book, record or report furnished or to be furnished by it to a Deal
Agent or a Purchaser, (i) is or will be inaccurate in any material respect as of
the date it is or shall be dated or (except as otherwise disclosed to the
recipient thereof at the time of delivery or thereafter) as of the date so
furnished, and (ii) no such document contains or will contain any material
misstatement of fact or omits or shall omit to state a material fact necessary
to make the statements contained therein not misleading in light of the
statements made therein and in other information furnished to a Deal Agent,
Administrative Agent, Liquidity Agent or Purchaser.

                  (i) Bulk Sales. The execution, delivery and performance of
this Agreement do not require compliance with any "bulk sales" law by Issuer.

                  (j) Solvency. The Issuer is solvent and the transactions under
this Agreement, the Basic Documents do not and will not impair such solvent
state of the Issuer.

                  (k) Selection Procedures. No procedures believed by the Issuer
to be materially adverse to the interests of the Purchasers were utilized by the
Issuer in identifying and/or selecting the SBA Loans.

                  (l) Taxes. The Issuer has filed or caused to be filed all Tax
returns which, to its knowledge, are required to be filed. The Issuer has paid
all Taxes and all assessments made against it or any of its property which have
become due (other than any amount of Tax the validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in accordance with generally accepted accounting principles have
been provided on the books of the Issuer), and no Tax lien has been filed
against it or the Issuer's property and, to the Issuer's knowledge, no claim is
being asserted, with respect to any such Tax, fee or other charge.

                  (m) Exchange Act Compliance. No proceeds of any Purchase will
be used by the Issuer to acquire any security in any transaction which is
subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended.

                                      -16-
<PAGE>   21
                  (n) SBA Compliance. The Servicer is party to a current Small
Business Administration Loan Guaranty Agreement (Deferred Participation) (SBA
Form 750), which agreement is in full force and effect, and the Servicer has not
been notified of the SBA's revocation of the Servicer's Preferred Lender or
Certified Lender status where such status then exists to originate SBA Loans
pursuant to the Small Business Administration Section 7(a) Guaranteed Program.

                  (o) Value Given. The Issuer shall have given reasonably
equivalent value in consideration for the transfer to the Issuer of the
Unguaranteed Interests in the SBA Loans under the Sale and Servicing Agreement,
no such transfer shall have been made for or on account of an antecedent debt,
and no such transfer is or may be voidable or subject to avoidance under any
section of the Bankruptcy Code or similar law.

                  (p) Accounting. The Issuer accounts for the transfers to it of
the Unguaranteed Interests in the SBA Loans under the Sale and Servicing
Agreement, as sales of such Unguaranteed Interests consistent with GAAP and with
the requirements set forth herein.

                  (q) Separate Entity. The Issuer is operated as an entity with
assets and liabilities distinct from those of the Servicer and any Affiliates
thereof (other than the Issuer), and the Issuer hereby acknowledges that the
Deal Agents and the Purchasers are entering into the transactions contemplated
by this Agreement in reliance upon the Issuer's identity as a separate legal
entity from the Servicer and from each such other Affiliate of the Servicer.

                  (r) Security Interest. The Issuer has granted a security
interest (as defined in the UCC) to the Indenture Trustee in the Unguaranteed
Interests in the SBA Loans and the other assets being pledged under the
Indenture, which is enforceable as a first priority security interest in
accordance with applicable law upon execution and delivery of the Indenture, the
Issuer acquiring an interest in such assets and the Issuer delivering the SBA
Notes to the FTA. All filings (including, without limitation, such UCC filings)
as are necessary in any jurisdiction to perfect the interest of the Indenture
Trustee in the Unguaranteed Interests in the SBA Loans and the other assets
being pledged under the Indenture have been (or prior to the applicable Purchase
will be) made.

                  (s) Investments. The Issuer does not own or hold directly or
indirectly, any capital stock or equity security of, or any equity interest in,
any Person.

                  (t) Investment Company Act. The Issuer is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

                  (u) Offer and Sale. Neither the Issuer nor the Servicer nor
any person acting on behalf of either of them has offered to sell the Note by
any form of general solicitation or general advertising. Neither the Issuer nor
the Servicer has offered or sold the Note or other similar security in any
manner that would render the issuance and sale of the Note a violation of

                                      -17-
<PAGE>   22
the Act, or require registration pursuant thereto, nor has it authorized nor
will it authorize any person to act in such manner.

                  (v) Representations and Warranties. The representations and
warranties made by the Issuer, the Seller or the Servicer in the Indenture, this
Agreement and the Sale and Servicing Agreement and made in any officer's
certificate of the Issuer, the Seller or the Servicer delivered pursuant to the
Indenture, this Agreement and the Sale and Servicing Agreement will be true and
correct in all material respects at the time made and on and as of the
applicable Purchase Date (except as otherwise disclosed to the recipient
thereof).

                  (w) Ownership Interest. Immediately prior to the transfer of
the Unguaranteed Interests in the SBA Loans to the Issuer, the Seller held good
and indefeasible title to, and was the sole owner of, such Unguaranteed
Interests subject to no liens, charges, mortgages, encumbrances or rights of
others; and immediately upon the transfer and assignment contemplated by the
Sale and Servicing Agreement, the Issuer will hold good and indefeasible title
to, and will be the sole owner of, such Unguaranteed Interests subject to no
liens, charges, mortgages, encumbrances or rights of others except as
contemplated by the Basic Documents.

                  (x) Eligibility. Each SBA Loan on the applicable Transfer Date
is an Eligible Loan.

         The representations and warranties set forth in this section shall
survive the initial Purchase of the Note and any future Purchases. Upon
discovery by the Issuer, the Servicer, any Purchaser, any Liquidity Agent or any
Deal Agent of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the
others.

         Section 4.2 Representations, Warranties and Agreements of the
                     Purchasers.

         Each Purchaser hereby represents and warrants to, and agrees with, the
Issuer that:

                  (a) The Purchaser understands that the Note purchased by it
has not been registered under the Act or the securities laws of any State and,
if the Note is not then registered under applicable federal and State securities
law (which registration the Issuer is not obligated to effect), it will not
offer to sell, transfer or otherwise dispose of the Note or any portion thereof
except in a transaction which is exempt from such registration.

                  (b) The Purchaser is acquiring the Note for its own account,
and not as a nominee for any other person, and the Purchaser is not acquiring
the Note with a view to or for sale or transfer in connection with any
distribution of the Note under the Act, but subject, nevertheless, to any
requirement of law that the disposition of its property shall at all times be
within its control.

                  (c) The Purchaser will not dispose of the Note or any portion
thereof purchased by it in violation of any applicable securities laws.

                                      -18-
<PAGE>   23
                  (d) The Purchaser is an "accredited investor" as defined in
Regulation D under the Act, that is experienced in making investments such as
the Advances and is able to evaluate the merits and risks involved in financing
SBA Loans.

                  (e) The Purchaser is not, and is not purchasing for, or on
behalf of, a "benefit plan investor" as such term is defined in 29 C.F.R.
Section 2510.3-101, unless the transfer to, or holding of the Notes by, such
Person will either: (i) not result in any prohibited transaction under Title I
of the Employee Retirement Income Security Act of 1974, as amended, or excise
taxes under Section 4975 of the Internal Revenue Code of 1986, as amended, or
(ii) result in a prohibited transaction, but any such transaction will be
eligible for exemptive relief under Prohibited Transaction Class Exemption 91-38
(regarding investments by bank collective trust funds), Prohibited Transaction
Class Exemption 90-1 (relating to investments by insurance company separate
accounts), Prohibited Transaction Class Exemption 95-60 (relating to investments
by insurance company general accounts), Prohibited Transaction Class Exemption
84-14 (relating to investments by qualified professional asset managers) or
Prohibited Transaction Class Exemption 96-23 (relating to investments by
in-house asset managers).

                  (f) Neither the Purchaser nor any person acting on its behalf
has offered to sell the Note by any form of general solicitation or general
advertising. The Purchaser has not offered the Note in any manner that would
render the issuance and sale of the Note a violation of the Securities Act, or
require registration pursuant thereto, nor has it authorized nor will it
authorize any person to act in such manner.

                                    ARTICLE V

                                GENERAL COVENANTS

         Section 5.1 General Covenants of the Issuer.

                  (a) The Issuer hereby agrees to notify the Deal Agents, as
soon as possible, and in any event within five (5) days after notice to the
Issuer, of (a) the occurrence of any Event of Default, (b) any fact, condition
or event which, with the giving of notice or the passage of time or both, could
become an Event of Default, (c) the failure of the Issuer to observe any of its
material undertakings under the Basic Documents, or (d) any change in the status
or condition of the Issuer or the SBA Loans in the aggregate that would
reasonably be expected to adversely affect the Issuer's ability to perform its
obligations under the Basic Documents.

                  (b) The Issuer agrees not to sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Act) that would be integrated with the sale of the Note in a manner that
would require the registration under the Act of the sale to the Purchasers of
the Note.

         Section 5.2 General Covenants of the Servicer.

                                      -19-
<PAGE>   24
                  (a) The Servicer hereby agrees to notify the Deal Agents, as
soon as possible, and in any event within five (5) days after notice to the
Servicer, of (a) the occurrence of any Event of Default, (b) any fact, condition
or event which, with the giving of notice or the passage of time or both, could
become an Event of Default, (c) the failure of the Servicer to observe any of
its material undertakings under the Basic Documents, (d) the commencement of any
lawsuit, proceeding or investigation that, if determined adversely against the
Servicer, could reasonably be expected to have a material adverse effect on the
Note Purchaser, the Servicer's ability to perform its obligations under the
Basic Documents or in the financial condition, results of operations or business
or property of the Servicer and its affiliates, or (e) any change in the status
or condition of the Servicer or the SBA Loans in the aggregate that would
reasonably be expected to adversely affect the Servicer's ability to perform its
obligations under the Basic Documents.

                  (b) The Servicer agrees not to sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Act) that would be integrated with the sale of the Note in a manner that
would require the registration under the Act of the sale to the Purchasers of
the Note.

                                   ARTICLE VI

                                 INDEMNIFICATION

         Section 6.1 Indemnities by the Issuer.

         Without limiting any other rights which the Deal Agents, the
Administrative Agent, the Liquidity Agents, the Purchasers or any of their
respective Affiliates may have, hereunder or under applicable law, the Issuer
hereby agrees to indemnify each of the Deal Agents, the Administrative Agent,
the Liquidity Agents, the Purchasers and each of their respective Affiliates,
together with their respective successors and permitted assigns (each of the
foregoing Persons being individually called an "Indemnified Party") from and
against any and all damages, losses, claims, liabilities and related costs and
expenses, including reasonable attorneys' fees and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of, or resulting from the breach
by the Issuer of any representation, warranty, covenant or obligation of the
Issuer of, this Agreement, any Basic Document or the Note, excluding, however,
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of any related Indemnified Party or any Affiliate
thereof.

         Any amounts subject to the indemnification provisions of this Section
6.1 shall be paid by the Issuer to the Indemnified Party within ten (10)
Business Days following the Indemnified Party's demand therefor, setting forth
in reasonable detail the basis therefor.

         Section 6.2 Indemnities by the Servicer.

                                      -20-
<PAGE>   25
         Without limiting any other rights which the Deal Agents, the
Administrative Agent, the Liquidity Agents, the Purchasers or any of their
respective Affiliates may have hereunder or under applicable law (but subject to
such limitations as may be included in the Basic Documents concerning the
Servicer's obligations to repurchase Unguaranteed Interests in SBA Loans), the
Servicer hereby agrees to indemnify each of the Deal Agents, the Administrative
Agent, the Liquidity Agents, the Purchasers and each of their respective
Affiliates, together with their respective successors and permitted assigns
(each of the foregoing Persons being individually called a "Servicer Indemnified
Party") from and against any and all damages, losses, claims, liabilities and
related costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively referred to as "Servicer
Indemnified Amounts") awarded against or incurred by any of them arising out of,
or resulting from the breach by the Servicer of any representation, warranty,
covenant or obligation of the Servicer of, this Agreement, any Basic Document or
the Note, excluding, however (i) Servicer Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of any related
Servicer Indemnified Party or any Affiliate thereof and (ii) losses resulting
from the credit risk of the Obligors of the SBA Loans.

         Any amounts subject to the indemnification provisions of this Section
6.2 shall be paid by the Servicer to the Indemnified Party within ten (10)
Business Days following the Indemnified Party's demand therefor, setting forth
in reasonable detail the basis therefor.

                                   ARTICLE VII

       THE ADMINISTRATIVE AGENT, THE DEAL AGENTS AND THE LIQUIDITY AGENTS

         Section 7.1 Authorization and Action.

                  (a) Each Purchaser hereby designates and appoints its related
Deal Agent as a Deal Agent hereunder, and authorizes its related Deal Agent to
take such actions as agent on its behalf and to exercise such powers as are
delegated to the Deal Agents by the terms of this Agreement together with such
powers as are reasonably incidental thereto. Each Purchaser also hereby
designates and appoints the Administrative Agent as the Administrative Agent
hereunder, and authorizes the Administrative Agent to take such actions as agent
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of this Agreement together with such powers as are reasonably
incidental thereto. Each Purchaser, each Deal Agent and the Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Purchaser or any other Deal
Agent, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of a Deal Agent or the Administrative
Agent shall be read into this Agreement or otherwise exist for each Deal Agent
or the Administrative Agent. In performing its functions and duties hereunder,
the Deal Agents and Administrative Agent shall act solely as agent for the
Purchasers and do not assume nor shall be deemed to have assumed any obligation
or relationship of trust or agency with or for the Issuer or any of its
successors or assigns. The Deal

                                      -21-
<PAGE>   26
Agents and Administrative Agent shall not be required to take any action which
exposes the Deal Agents and Administrative Agent to personal liability or which
is contrary to this Agreement or applicable law. The appointment and authority
of the Deal Agents and Administrative Agent hereunder shall terminate at the
indefeasible payment in full of all amounts due under the Note or under any Fee
Letter.

                  (b) Each Liquidity Purchaser hereby designates and appoints
its related Liquidity Agent as its Liquidity Agent hereunder, and authorizes
such Liquidity Agent to take such actions as agent on its behalf and to exercise
such powers as are delegated to such Liquidity Agent by the terms of this
Agreement together with such powers as are reasonably incidental thereto. Such
Liquidity Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Liquidity
Purchaser, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of such Liquidity Agent shall be read
into this Agreement or otherwise exist for such Liquidity Agent. In performing
its functions and duties hereunder, such Liquidity Agent shall act solely as
agent for its related Liquidity Purchaser and does not assume nor shall be
deemed to have assumed any obligation or relationship of trust or agency with or
for the Seller or any of its successors or assigns. Such Liquidity Agent shall
not be required to take any action which exposes such Liquidity Agent to
personal liability or which is contrary to this Agreement or applicable law. The
appointment and authority of such Liquidity Agents hereunder shall terminate at
the indefeasible payment in full of all amounts due under the Note or under any
Fee Letter.

         Section 7.2 Delegation of Duties.

                  (a) The Deal Agents and Administrative Agent may execute any
of their duties under this Agreement by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Deal Agents and Administrative Agent shall not be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
them with reasonable care.

                  (b) The Liquidity Agents may execute any of their duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Liquidity Agents shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by them with reasonable care.

                  (c) At least four Business Days prior to each Remittance Date,
each Deal Agent shall provide the Issuer with written notice of the amount of
interest and other fees that will be owing to such Deal Agent's Related Group on
such Remittance Date. Each Deal Agent shall, upon request of the Issuer,
cooperate with the Issuer in explaining how such interest amount was calculated.

         Section 7.3 Exculpatory Provisions.

                                      -22-
<PAGE>   27
                  (a) The Deal Agents and Administrative Agent, and any of their
directors, officers, agents or employees, shall not be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement (except for its, their or such Person's own gross negligence or
willful misconduct or, in the case of the Deal Agents and Administrative Agent,
the breach of their obligations expressly set forth in this Agreement) or (ii)
responsible in any manner to any of the Purchasers for any recitals, statements,
representations or warranties made by the Issuer contained in this Agreement or
in any certificate, report, statement or other document referred to or provided
for in, or received under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other document furnished in connection herewith, or for
any failure of the Issuer to perform its obligations hereunder, or for the
satisfaction of any condition specified in Article III. The Deal Agents and
Administrative Agent shall not be under any obligation to any Purchaser to
ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of the Issuer. The Deal Agents and
Administrative Agent shall not be deemed to have knowledge of any Event of
Default unless the Deal Agents and Administrative Agent have received notice
from the Issuer or a Purchaser.

                  (b) Neither of the Liquidity Agents nor any of their
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement (except for its, their or such Person's own gross negligence or
willful misconduct or, in the case of the Liquidity Agents, the breach of their
obligations expressly set forth in this Agreement) or (ii) responsible in any
manner to the Deal Agents or any of the Purchasers for any recitals, statements,
representations or warranties made by the Issuer contained in this Agreement or
in any certificate, report, statement or other document referred to or provided
for in, or received under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other document furnished in connection herewith, or for
any failure of the Issuer to perform its obligations hereunder, or for the
satisfaction of any condition specified in Article III. The Liquidity Agents
shall not be under any obligation to the Deal Agents or any Purchaser to
ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of the Issuer. The Liquidity Agents
shall not be deemed to have knowledge of any Event of Default unless the
Liquidity Agents have received notice from the Issuer, the Deal Agents or a
Purchaser.

         Section 7.4 Reliance.

                  (a) The Deal Agents and Administrative Agent shall in all
cases be entitled to rely, and shall be fully protected in relying, upon any
document or conversation believed by them to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Issuer), independent accountants and other experts selected by the Deal Agents
and Administrative Agent. The Deal Agents and Administrative Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other document

                                      -23-
<PAGE>   28
furnished in connection herewith unless they shall first receive such advice or
concurrence of the Purchasers or the Required Purchasers, as applicable, as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Purchasers, provided, that unless and until the Deal Agents and Administrative
Agent shall have received such advice, the Deal Agents and Administrative Agent
may take or refrain from taking any action, as the Deal Agents and
Administrative Agent shall deem advisable and in the best interests of the
Purchasers. The Deal Agents and Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, in accordance with a request
of the Purchasers or the Required Purchasers, as applicable, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Purchasers.

                  (b) The Liquidity Agents shall in all cases be entitled to
rely, and shall be fully protected in relying, upon any document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Issuer), independent accountants
and other experts selected by the Liquidity Agents. The Liquidity Agents shall
in all cases be fully justified in failing or refusing to take any action under
this Agreement or any other document furnished in connection herewith unless it
shall first receive such advice or concurrence of Required Purchasers as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Purchasers, provided, that unless and until the Liquidity Agents shall have
received such advice, the Liquidity Agents may take or refrain from taking any
action, as the Liquidity Agents shall deem advisable and in the best interests
of the Purchasers. The Liquidity Agents shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of the
Required Purchasers and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Purchasers.

         Section 7.5 Non-Reliance on Deal Agents, Administrative Agents,
                     Liquidity Agents and Other Purchasers.

         Each Purchaser expressly acknowledges that none of the Deal Agents, the
Administrative Agent, the Liquidity Agents, nor any of their officers,
directors, employees, agents, attorneys-in-fact or affiliates, has made any
representations or warranties to it and that no act by the Deal Agents and
Administrative Agent hereafter taken, including, without limitation, any review
of the affairs of the Issuer, shall be deemed to constitute any representation
or warranty by the Deal Agents or the Liquidity Agents. Each Purchaser
represents and warrants to the Deal Agents, the Administrative Agent, and to the
Liquidity Agents that it has and will, independently and without reliance upon
the Deal Agents, the Liquidity Agent or any other Purchaser and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of the Issuer and made its
own decision to enter into this Agreement.

         Section 7.6 Reimbursement and Indemnification.

         The Liquidity Purchasers agree to reimburse and indemnify their related
CP Purchaser, their related Deal Agent, their related Liquidity Agent, the
Administrative Agent, and each of

                                      -24-
<PAGE>   29
their respective officers, directors, employees, representatives and agents
ratably according to their pro rata shares, to the extent not paid or reimbursed
by the Issuer or the Servicer (i) for any amounts for which their related CP
Purchaser, their related Liquidity Agent, acting in its capacity as Liquidity
Agent, or their related Deal Agent, acting in its capacity as Deal Agent, the
Administrative Agent, acting in its capacity as Administrative Agent, is
entitled to reimbursement by the Issuer or the Servicer hereunder and (ii) for
any other expenses incurred by their related CP Purchaser, their related
Liquidity Agent, acting in its capacity as Liquidity Agent, their related Deal
Agent, acting in its capacity as Deal Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement.

         Section 7.7 Deal Agents, Administrative Agent and Liquidity Agents in
                     their Individual Capacities.

         The Deal Agents, the Administrative Agent, the Liquidity Agents and
each of their respective Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Servicer or any Affiliate of
the Servicer as though the Deal Agents, the Administrative Agent or the
Liquidity Agents, as the case may be, were not the Deal Agents, the
Administrative Agent or the Liquidity Agents, as the case may be, hereunder.
With respect to the acquisition of the Note pursuant to this Agreement, the Deal
Agents, the Administrative Agent, the Liquidity Agents and each of their
respective Affiliates shall have the same rights and powers under this Agreement
as any Purchaser and may exercise the same as though it were not the Deal
Agents, the Administrative Agent, or the Liquidity Agents, as the case may be,
and the terms "Liquidity Purchaser," "Purchaser," "Liquidity Purchasers" and
"Purchasers" shall include the Deal Agents or the Liquidity Agents, as the case
may be, in their individual capacity.

         Section 7.8 Successor Deal Agents, Administrative Agent or Liquidity
                     Agents.

                  (a) Each Deal Agent may, upon 5 days' notice to the Issuer,
the SBA and the related Purchasers, and each Deal Agent will, upon the direction
of all its related Purchasers (other than such Deal Agent, in its individual
capacity) resign as a Deal Agent. The Administrative Agent may, upon 5 days'
notice to the Issuer, the SBA and the Purchasers, and the Administrative Agent
will, upon the direction of all the Required Purchasers, resign as
Administrative Agent. If such Deal Agent or Administrative Agent shall resign,
then the Purchasers related to such Deal Agent (with respect to a resigning Deal
Agent) or the Required Purchasers (with respect to the resigning Administrative
Agent) during such 5-day period shall appoint from among the applicable
Purchasers a successor agent. If for any reason no successor Deal Agent is
appointed during such 5-day period, then effective upon the expiration of such
five-day period, the Purchasers related to such Deal Agent shall perform all of
the duties of its related Deal Agent hereunder and the Issuer shall make all
payments in respect of the Note or under any Fee Letter directly to the
applicable Purchaser(s) and for all purposes shall deal directly with such
Purchasers. No resignation of the Administrative Agent shall be effective until
its successor shall have been appointed and accepted such appointment. After the
retiring Deal Agent's or Administrative Agent's resignation hereunder as Deal
Agent or Administrative Agent, the provisions of this Agreement shall inure to
its benefit and be binding upon it as to any actions

                                      -25-
<PAGE>   30
taken or omitted to be taken by it while it was Deal Agent or Administrative
Agent under this Agreement.

                  (b) Each Liquidity Agent may, upon 5 days' notice to the
Issuer, the SBA, the Deal Agents and the related Liquidity Purchasers, and each
Liquidity Agent will, upon the direction of all its related Liquidity Purchasers
(other than such Liquidity Agent, in its individual capacity) resign as
Liquidity Agent. If such Liquidity Agent shall resign, then its related
Purchasers during such 5-day period shall appoint from among the related
Liquidity Purchasers a successor Liquidity Agent. If for any reason no successor
Liquidity Agent is appointed by the applicable Purchasers during such 5-day
period, then effective upon the expiration of such 5-day period, the related
Liquidity Purchasers shall perform all of the duties of its related Liquidity
Agent hereunder and all payments in respect of the Note and any amount due at
any time hereunder or under any Fee Letter directly to the applicable Liquidity
Purchaser and for all purposes shall deal directly with the Liquidity
Purchasers. After any retiring Liquidity Agent's resignation hereunder as
Liquidity Agent, the provisions of this Agreement shall inure to its benefit and
be binding upon it as to any actions taken or omitted to be taken by it while it
was Liquidity Agent under this Agreement.

                                  ARTICLE VIII

                           ASSIGNMENTS; PARTICIPATIONS

         Section 8.1 Assignments and Participations.

                  (a) Each Liquidity Purchaser may upon at least 30 days notice
to its related CP Purchasers, the related Deal Agent, the related Liquidity
Agent, the Issuer, the Servicer, the SBA and S&P and Moody's, assign to one or
more banks or other entities satisfactory to the SBA and the Administrative
Agent all or a portion of its rights and obligations under this Agreement;
provided, however, that (i) each such assignment shall be of a constant, and not
a varying percentage of all of the assigning Liquidity Purchaser's rights and
obligations under this Agreement, (ii) the amount of the Commitment of the
assigning Liquidity Purchaser being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than the lesser of (A) $15,000,000 or an
integral multiple of $1,000,000 in excess of that amount and (B) the full amount
of the assigning Liquidity Purchaser's Commitment, (iii) each such assignment
shall be to an Eligible Assignee, (iv) the parties to each such assignment shall
execute and deliver to the related Deal Agent, for their acceptance and
recording in the Register, an Assignment and Acceptance in the form of Exhibit C
hereto, together with a processing and recordation fee of $3,500 or such lesser
amount as shall be approved by the related Deal Agent, (v) such assignment shall
not require the Issuer to register as an "investment company" under the
Investment Company Act and (vi) the parties to each such assignment shall have
agreed to reimburse the related Deal Agent, Liquidity Agent and CP Purchasers
for all fees, costs and expenses (including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel for the related Deal Agent, Liquidity
Agent and CP Purchasers) incurred by the related Deal Agent, Liquidity Agent and
CP Purchasers, respectively, in connection with such assignment, and,

                                      -26-
<PAGE>   31
provided, further, that upon the effective date of such assignment all of the
related CP Purchasers' internal control conditions shall be satisfied. Except
with respect to assignments to First Union or any of its banking Affiliates
which do not result in increased costs to Issuer or the Servicer, no such
assignment shall become effective unless the Issuer shall have consented in
writing thereto, which consent will not be unreasonably withheld. Upon such
execution, delivery and acceptance by the related Deal Agent and Liquidity Agent
and the recording by the related Deal Agent, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be the
date of acceptance thereof by the related Deal Agent and Liquidity Agent, unless
a later date is specified therein, (i) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Liquidity Purchaser hereunder and (ii) the Liquidity Purchaser
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement except with
respect to actions theretofore taken (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Liquidity
Purchaser's rights and obligations under this Agreement, such Liquidity
Purchaser shall cease to be a party hereto).

                  (b) By executing and delivering an Assignment and Acceptance,
the Liquidity Purchaser assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Liquidity
Purchaser makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such assigning Liquidity
Purchaser makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the related CP Purchasers or the
performance or observance by the related CP Purchasers of any of its obligations
under this Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of such financial statements and other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the related Deal Agent or Liquidity
Agent, such assigning Liquidity Purchaser or any other Liquidity Purchaser and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assigning Liquidity Purchaser and such assignee
confirm that such assignee is an Eligible Assignee; (vi) such assignee appoints
and authorizes each of the related Deal Agent and Liquidity Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to such agent by the terms hereof, together with such powers as
are reasonably incidental thereto; (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Liquidity Purchaser
and (viii) such assignee makes each of the representations and warranties
contained in Section 4.2.

                                      -27-
<PAGE>   32
                  (c) Each Deal Agent shall maintain at its address referred to
herein a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the related
Liquidity Purchasers and the Commitment of, and the interest in the Note owned
by each related investor from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the CP Purchasers, the Issuer, the Servicer and the Liquidity
Purchasers may treat each Person whose name is recorded in the Register as a
Liquidity Purchaser hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the CP Purchasers, the Liquidity Agents,
the Issuer, the Servicer or any Liquidity Purchaser at any reasonable time and
from time to time upon reasonable prior notice.

                  (d) Subject to the provisions of Section 8.1(a), upon its
receipt of an Assignment and Acceptance executed by an assigning Liquidity
Purchaser and an assignee, the related Deal Agent and Liquidity Agent shall
each, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, accept such Assignment and
Acceptance, and the related Deal Agent shall then (i) record the information
contained therein in the Register and (ii) give prompt notice thereof to the
related CP Purchasers.

                  (e) With the prior consent of the SBA and the Administrative
Agent, each Liquidity Purchaser may sell participations to banks or other
entities which qualify as "institutional" accredited investors within the
meaning of Rule 501(a)(1)-(3) or (7) under the Act in or to all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitment and each interest in the Note owned by it);
provided, however, that (i) such Liquidity Purchaser's obligations under this
Agreement (including, without limitation, its Commitment hereunder) shall remain
unchanged, (ii) such Liquidity Purchaser shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such
participation shall not require the Issuer to register as an "investment
company" under the Investment Company Act and (iv) the Deal Agents and the other
Liquidity Purchasers shall continue to deal solely and directly with such
Liquidity Purchaser in connection with such Liquidity Purchaser's rights and
obligations under this Agreement. Notwithstanding anything herein to the
contrary, each participant shall have the rights of a Liquidity Purchaser
(including any right to receive payment) under Sections 2.4 and 2.5; provided,
however, that no participant shall be entitled to receive payment under such
Sections in excess of the amount that would have been payable under such
Sections by the Issuer to the Liquidity Purchaser granting its participation had
such participation not been granted, and no Liquidity Purchaser granting a
participation shall be entitled to receive payment under such Sections in an
amount which exceeds the sum of (i) the amount to which such Liquidity Purchaser
is entitled under such Sections with respect to any portion of any interest in
the Note owned by such Liquidity Purchaser which is not subject to any
participation, plus (ii) the aggregate amount to which its participants are
entitled under such Sections with respect to the amounts of their respective
participations. With respect to any participation described in this Section 8.1,
the participant's rights as set forth in the agreement between such participant
and the applicable Liquidity Purchaser to agree to or to restrict such Liquidity
Purchaser's ability to agree to any modification, waiver or release of any of
the terms of this Agreement or to exercise or refrain from exercising any powers
or rights which such Liquidity Purchaser may have under or

                                      -28-
<PAGE>   33
in respect of this Agreement shall be limited to the right to consent to any of
the matters set forth in Section 9.1 of this Agreement.

                  (f) Each Liquidity Purchaser may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 8.1, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Issuer or the CP Purchasers
furnished to such Liquidity Purchaser by or on behalf of the Issuer or the CP
Purchasers; provided that such assignee or participant or proposed assignee or
participant executes an agreement for the benefit of the Issuer, in form and
substance satisfactory to the Issuer, agreeing to maintain the confidentiality
of such information.

                  (g) In the event (i) a Liquidity Purchaser ceases to qualify
as an Eligible Assignee or (ii) a Liquidity Purchaser makes demand for
compensation pursuant to Sections 2.4 or 2.5, the related CP Purchasers may,
and, upon the direction of the Issuer and prior to the occurrence of an Event of
Default, shall, in any such case, notwithstanding any provision to the contrary
herein, replace such Liquidity Purchaser with an Eligible Assignee approved by
the Issuer (which approval shall not be unreasonably withheld) and the SBA by
giving three Business Days' prior written notice to such Liquidity Purchaser. In
the event of the replacement of a Liquidity Purchaser, such Liquidity Purchaser
agrees (i) to assign all of its rights and obligations hereunder to an Eligible
Assignee selected by the related CP Purchasers and approved by the Issuer (which
approval shall not be unreasonably withheld) upon payment to such Liquidity
Purchaser of all amounts due such Liquidity Purchaser under the Note, together
with any accrued and unpaid interest thereon, all accrued and unpaid fees owing
to such Liquidity Purchaser and all other amounts owing to such Liquidity
Purchaser hereunder and (ii) to execute and deliver an Assignment and Acceptance
and such other documents evidencing such assignment as shall be necessary or
reasonably requested by the related CP Purchasers, the Issuer or the related
Deal Agent. In the event that any Liquidity Purchaser ceases to qualify as an
Eligible Assignee, such affected Liquidity Purchaser agrees (1) to give the
related Deal Agent, the Issuer and the related CP Purchasers prompt written
notice thereof and (2) subject to the following proviso, to reimburse the
related Deal Agent, the related Liquidity Agent, the Issuer, the Servicer, the
related CP Purchasers and the relevant assignee for all fees, costs and expenses
(including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel for each of the related Deal Agent, the related Liquidity Agent, the
Issuer, the Servicer and the related CP Purchasers and such assignee) incurred
by the related Deal Agent, the related Liquidity Agent, the Issuer, the
Servicer, the related CP Purchasers and such assignee, respectively, in
connection with any assignment made pursuant to this Section 8.1(g) by such
affected Liquidity Purchaser; provided, however, that such affected Liquidity
Purchaser's liability for such costs, fees and expenses shall be limited to the
amount of any up-front fees paid to such affected Liquidity Purchaser at the
time that it became a party to this Agreement pursuant to the related Fee
Letter.

                  (h) Nothing herein shall prohibit any Liquidity Purchaser from
pledging or assigning as collateral any of its rights under this Agreement to
any Federal Reserve Bank in accordance with applicable law and any such pledge
or collateral assignment may be made without compliance with Section 8.1(a) or
Section 8.1(b).

                                      -29-
<PAGE>   34
                  (i) With the prior consent of the SBA and the Administrative
Agent, each CP Purchaser may upon at least 30 days notice to its related Deal
Agent, the related Liquidity Agent, the Issuer, the SBA and the Servicer, assign
to one or more entities that issues commercial paper for which the VFCC Deal
Agent acts as Deal Agent all or a portion of its rights and obligations under
this Agreement; provided, however, that (i) each such assignment shall be of a
constant, and not a varying percentage of all of the assigning CP Purchaser's
rights and obligations under this Agreement, (ii) the parties to each such
assignment shall execute and deliver to the related Deal Agent, for their
acceptance and recording in the Register, a CP Assignment and Acceptance in the
form of Exhibit D hereto, together with a processing and recordation fee of
$3,500 or such lesser amount as shall be approved by the related Deal Agent and
(iii) the parties to each such assignment shall have agreed to reimburse the
related Deal Agent, Liquidity Agent and CP Purchasers for all fees, costs and
expenses (including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the related Deal Agent, Liquidity Agent and CP
Purchasers) incurred by the related Deal Agent, Liquidity Agent and CP
Purchasers, respectively, in connection with such assignment, and, provided,
further, that upon the effective date of such assignment all of the related CP
Purchasers' internal control conditions shall be satisfied. No such assignment
shall require the consent of the Issuer. Upon such execution, delivery and
acceptance by the related Deal Agent and Liquidity Agent and the recording by
the related Deal Agent, from and after the effective date specified in each CP
Assignment and Acceptance, which effective date shall be the date of acceptance
thereof by the related Deal Agent and Liquidity Agent, unless a later date is
specified therein, (i) the assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such CP Assignment and Acceptance, have the rights and obligations
of a CP Purchaser hereunder and (ii) the CP Purchaser assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such CP Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement except with respect to
actions theretofore taken (and, in the case of a CP Assignment and Acceptance
covering all or the remaining portion of an assigning CP Purchaser's rights and
obligations under this Agreement, such CP Purchaser shall cease to be a party
hereto).

                  (j) By executing and delivering a CP Assignment and
Acceptance, the CP Purchaser assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such CP Assignment and Acceptance, such assigning
CP Purchaser makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such assigning CP
Purchaser makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the related Liquidity Purchasers or the
performance or observance by the related Liquidity Purchasers of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of such financial statements and other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the related Deal Agent or
Liquidity Agent, such

                                      -30-
<PAGE>   35
assigning CP Purchaser or any other CP Purchaser and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes each of the related Deal Agent and Liquidity
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to such agent by the terms hereof,
together with such powers as are reasonably incidental thereto; (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a CP Purchaser and (vii) such assignee makes each of the representations
and warranties contained in Section 4.2.

                  (k) Each Deal Agent shall maintain at its address referred to
herein a copy of each CP Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the related
CP Purchasers and the interest in the Note owned by each related investor from
time to time (the "CP Register"). The entries in the CP Register shall be
conclusive and binding for all purposes, absent manifest error, and the CP
Purchasers, the Issuer, the Servicer and the Liquidity Purchasers may treat each
Person whose name is recorded in the CP Register as a CP Purchaser hereunder for
all purposes of this Agreement. The CP Register shall be available for
inspection by the CP Purchasers, the Liquidity Agents, the Issuer, the Servicer
or any Liquidity Purchaser at any reasonable time and from time to time upon
reasonable prior notice.

                  (l) Subject to the provisions of Section 8.1(i), upon its
receipt of a CP Assignment and Acceptance executed by an assigning CP Purchaser
and an assignee, the related Deal Agent and Liquidity Agent shall each, if such
CP Assignment and Acceptance has been completed and is in substantially the form
of Exhibit D hereto, accept such a CP Assignment and Acceptance, and the related
Deal Agent shall then (i) record the information contained therein in the CP
Register and (ii) give prompt notice thereof to the related Liquidity
Purchasers.

                  (m) Each CP Purchaser may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 8.1, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Issuer or the Liquidity Purchasers
furnished to such CP Purchaser by or on behalf of the Issuer or the Liquidity
Purchasers; provided that such assignee or participant or proposed assignee or
participant executes an agreement for the benefit of the Issuer, in form and
substance satisfactory to the Issuer, agreeing to maintain the confidentiality
of such information.

                  (n) At any time and from time to time, without the consent of
the Issuer, the Servicer or any other party hereto, a CP Purchaser or a
Liquidity Purchaser may assign all or any portion of its interests in Advances
hereunder to its related Liquidity Purchasers or CP Purchasers, respectively.
The CP Purchaser or Liquidity Purchaser making such assignment shall provide
written notice to the Issuer of any such assignment. Upon any such assignment
from a CP Purchaser to its related Liquidity Purchasers, the portion of the
interest in the Advance so assigned shall be deemed for all purposes (including
but not limited to determining the Program Fee) to be a Liquidity Advance. Upon
any such assignment from a Liquidity Purchaser to its

                                      -31-
<PAGE>   36
related CP Purchasers, the portion of the interest in the Advance so assigned
shall be deemed for all purposes (including but not limited to determining the
Program Fee) to be a CP Advance.

                  (o) Notwithstanding anything contained herein to the contrary,
except for exercising the Put Option, no Purchaser may sell, transfer, assign,
pledge, participate or otherwise convey any interest in its interest in any
Advances or its rights or obligations under this Agreement without the prior
written consent of the SBA, which may be withheld in its sole discretion.

                                   ARTICLE IX

                                  MISCELLANEOUS

         Section 9.1 Amendments and Waivers.

         (a) Except as provided in Section 9.1(b), no amendment or modification
of any provision of this Agreement shall be effective without the written
agreement of the Issuer, the Servicer, the SBA, the Deal Agents and the Required
Purchasers. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. The Servicer shall
provide the Indenture Trustee and the Owner Trustee with a copy of any
amendment, modification or waiver of the Agreement.

                  (b) No amendment, waiver or other modification of this
Agreement shall:

                           (i) without the consent of the Issuer, the SBA and
         each affected Purchaser, (A) extend the Commitment Termination Date,
         (B) reduce the rate or extend the time of payment of interest on the
         Note, (C) reduce any fee payable to the Deal Agents for the benefit of
         the Purchasers, (D) except pursuant to Article VIII hereof, change the
         amount of a Liquidity Purchaser's pro rata share or an a Liquidity
         Purchaser's Commitment, (E) amend, modify or waive any provision of the
         definition of Required Purchasers or this Section 9.1(b), (F) consent
         to or permit the assignment or transfer by the Issuer of any of its
         rights and obligations under this Agreement or (G) amend or modify any
         defined term (or any defined term used directly or indirectly in such
         defined term) used in clauses (A) through (E) above in a manner which
         would circumvent the intention of the restrictions set forth in such
         clauses; or

                           (ii) without the written consent of the Issuer, the
         SBA and the Deal Agents, amend, modify or waive any provision of this
         Agreement if the effect thereof is to affect the rights or duties of
         such Deal Agent.

                  (c) Notwithstanding the foregoing provisions of this Section
9.1, without the consent of the Liquidity Purchasers the Deal Agents may, with
the consent of the Issuer, which consent will not be unreasonably withheld, and
the consent of the SBA enter into a Related Group Addition Notice in the form of
Exhibit B solely to add additional Persons as Purchasers hereunder.

                                      -32-
<PAGE>   37
         Section 9.2 Notices, Etc.

         All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including telex communication and
communication by facsimile copy) and mailed, telexed, transmitted or delivered,
as to each party hereto, at its address set forth under its name on the
signature pages hereof or as otherwise set forth in the Basic Documents or at
such other address as shall be designated by such party in a written notice to
the other parties hereto. All such notices and communications shall be
effective, upon receipt, or in the case of (a) notice by mail, five days after
being deposited in the United States mails, first class postage prepaid, (b)
notice by telex, when telexed against receipt of answerback, or (c) notice by
facsimile copy, when verbal communication of receipt is obtained, except that
notices and communications pursuant to Article II shall not be effective until
received with respect to any notice sent by mail or telex.

         Section 9.3 Ratable Payments.

         If any Purchaser, whether by setoff or otherwise, has payment made to
it with respect to any portion of the Note owing to such Purchaser in a greater
proportion than that received by any other Purchaser, such Purchaser agrees,
promptly upon demand, to purchase for cash without recourse or warranty a
portion of the Note held by the other Purchasers so that after such purchase
each Purchaser will hold its ratable proportion of the Note; provided that if
all or any portion of such excess amount is thereafter recovered from such
Purchaser, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.

         Section 9.4 No Waiver; Remedies.

         No failure on the part of any party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

         Section 9.5 Binding Effect.

         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

                                      -33-
<PAGE>   38
         Section 9.6 Term of this Agreement.

         This Agreement, including, without limitation, the Issuer's and the
Servicer's obligations to observe their covenants set forth in Article V, shall
remain in full force and effect until the Collection Date; provided, however,
that the obligations of the Issuer under Section 2.4, the indemnification and
payment provisions of Article VI and the provisions of Section 9.10 and Section
9.11 and the agreements of the parties contained in Sections 9.7, 9.8, 9.9 and
9.12 shall be continuing and shall survive any termination of this Agreement.

         SECTION 9.7 GOVERNING LAW.

         THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF
THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS,
AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE
AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

         SECTION 9.8 WAIVER OF JURY TRIAL.

         TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.

         Section 9.9 Costs and Expenses.

                  (a) The Issuer shall pay all fees and expenses as provided for
in each Fee Letter on the day each such fee or expense is stated to be due in
such Fee Letter.

                  (b) The Issuer or Servicer shall pay all reasonable costs and
expenses (including reasonable fees and disbursements of one counsel retained by
and acting on the collective behalf of the Deal Agents, the Administrative
Agent, the Liquidity Agents and the Purchasers) subsequent to the Closing Date
in connection with the preparation, execution and delivery of any waiver,
amendment or consent relating to this Agreement or any of the Basic Documents.

                                      -34-
<PAGE>   39
                  (c) The Issuer and the Servicer shall pay the costs and
expenses of the Deal Agents, the Administrative Agent, the Liquidity Agents, and
the Purchasers, including, without limitation, the costs and expenses of
consulting with one or more persons such as appraisers, accountants and
attorneys, concerning or related to the nature, scope or value of any right or
remedy of the Deal Agents, the Administrative Agent, the Liquidity Agents and
the Purchasers hereunder or under any of the other Basic Documents, including
any review of factual matters in connection therewith, which expenses shall
include all reasonable fees and disbursements of one set of each of such types
of Persons, retained by and acting on the collective behalf of the Deal Agents,
the Administrative Agent, the Liquidity Agents and the Purchasers. The Issuer or
Servicer shall pay all costs and expenses of the Deal Agents, the Administrative
Agent, the Liquidity Agents and the Purchasers in connection with prosecuting or
defending any claim in any way arising out of, related to, connected with, or
enforcing any provision of, this Agreement or any of the other Basic Documents
relating to, arising out of or in connection with any breach or alleged breach
by the Issuer or the Servicer of its representations, warranties, obligators or
covenants hereunder or under any other Basic Document, which expenses shall
include the reasonable fees and disbursements of one counsel and one set of
experts and other consultants retained by and acting on the collective behalf of
the Deal Agents, the Administrative Agent, the Liquidity Agents and the
Purchasers.

         Section 9.10 No Proceedings.

         Each of the Issuer, the Deal Agents, the Administrative Agent, the CP
Purchasers, the Liquidity Agent and the Servicer hereby agrees that it will not
institute against, or join any other Person in instituting against any CP
Purchaser any bankruptcy, insolvency, winding up, dissolution, receivership,
conservatorship or other similar proceeding or action so long as any commercial
paper issued by the CP Purchasers shall be outstanding or there shall not have
elapsed one year and one day since the last day on which any such commercial
paper shall have been outstanding.

         Section 9.11 Recourse Against Certain Parties.

                  (a) No recourse under or with respect to any obligation,
covenant or agreement (including, without limitation, the payment of any fees or
any other obligations) of any party as contained in this Agreement or any other
agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against any administrator of such party or any
incorporator, affiliate, stockholder, officer, employee, manager or director of
such party or of any such administrator, as such, by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and understood that the agreements of such
party contained in this Agreement and all of the other agreements, instruments
and documents entered into by it pursuant hereto or in connection herewith are,
in each case, solely the corporate obligations of such party, and that no
personal liability whatsoever shall attach to or be incurred by any
administrator of such party or any incorporator, stockholder, affiliate,
officer, employee, manager or director of such party or of any such
administrator, as such, or any other of them, under or by reason of any of the
obligations, covenants or agreements of such party contained in this Agreement
or in any other such

                                      -35-
<PAGE>   40
instruments, documents or agreements, or which are implied therefrom, and that
any and all personal liability of every such administrator of such party and
each incorporator, stockholder, affiliate, officer, employee, manager or
director of such party or of any such administrator, as such, or any of them,
for breaches by such party of any such obligations, covenants or agreements,
which liability may arise either at common law or at equity, by statute or
constitution, or otherwise, is hereby expressly waived as a condition of and in
consideration for the execution of this Agreement. The provisions of this
Section 9.11 shall survive the termination of this Agreement.

                  (b) Notwithstanding anything contained in this Agreement, no
CP Purchaser shall have any obligation to pay any amount required to be paid by
it hereunder to any Liquidity Agent, the Administrative Agent or any Deal Agent,
in excess of any amount available to such CP Purchaser after paying or making
provision for the payment of its Commercial Paper. All payment obligations of a
CP Purchaser hereunder are contingent upon the availability of funds in excess
of the amounts necessary to pay Commercial Paper; and each of the Liquidity
Agent, the Administrative Agent, each Deal Agent and each Liquidity Purchaser
agrees that they shall not have a claim under Section 101(5) of the United State
Bankruptcy Code if and to the extent that any such payment obligation exceeds
the amount available to a CP Purchaser to pay such amounts after paying or
making provision for the payment of its Commercial Paper.

         Section 9.12 Confidentiality.

                  (a) Each of the Deal Purchaser Agents, the Administration
Agent, the Purchasers, the Liquidity Agents, the Servicer and the Issuer shall
maintain and shall cause each of its employees and officers to maintain the
confidentiality of the Agreement and the other confidential proprietary
information with respect to the other parties hereto and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
each such party and its officers, members and employees may (i) disclose such
information to its external accountants, attorneys, and the agents of such
Persons ("Excepted Persons"), and as required by an applicable law or order of
any judicial or administrative proceeding, (ii) disclose the Agreement and such
information in any suit, action, proceeding or investigation (whether in Law or
in equity or pursuant to arbitration) involving this Agreement for the purpose
of defending itself, reducing its liability, or protecting or exercising any of
its claims, rights, remedies or interests under or in connection with this
Agreement, (iii) disclose the existence of the Agreement, but not the financial
terms thereof and (iv) disclose the amount of each Liquidity Purchaser's
Commitment, the conditions precedent to each Purchase set forth in Section 2.2
and the provisions concerning prepayment of the Note and the removal of
Unguaranteed Interests in the SBA Loans from the lien of the Indenture.

                  (b) Anything herein to the contrary notwithstanding, the
Issuer and the Servicer hereby consent to the disclosure of any nonpublic
information with respect to it (i) to the Deal Agents, the Liquidity Agents or
the Purchasers by each other, or (ii) by the Co-Purchaser Agents, the Liquidity
Agents or a Purchaser to any Rating Agency, Commercial Paper dealer or provider
of a surety, guaranty or credit or liquidity enhancement to a Purchaser and to
any officers, directors, employees, outside accountants and attorneys of any of
the foregoing,

                                      -36-
<PAGE>   41
provided that such disclosure will not cause the offering of the Notes to be
required to be registered under the Act and each such Person is informed of the
confidential nature of such information. In addition, the Purchasers, the
Liquidity Agents and the Deal Agents may disclose any such nonpublic information
pursuant to any law, rule, regulation, direction, request or order of any
judicial, administrative or regulatory authority or proceedings.

         Section 9.13 Counterparts.

         This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. This
Agreement contains the final and complete integration of all prior expressions
by the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings
other than any Fee Letter.

         Section 9.14 Limitation of Liability.

         Notwithstanding any other provision herein or elsewhere, in no event
shall First Union Trust Company, National Association (the "Trust Company") or
the Owner Trustee have any liability in respect of the representations,
warranties, or obligations of the Issuer hereunder or under any other Basic
Document, as to all of which recourse shall be had solely to the assets of the
Issuer, and for all purposes of this Agreement and each other Basic Document,
the Owner Trustee and the Trust Company shall be entitled to the benefits of the
Trust Agreement.

         Section 9.15 Inconsistencies.

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

                             [Signatures to Follow]

                                      -37-
<PAGE>   42
         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

THE ISSUER:                            FIB FUNDING TRUST

                                       By:  FIRST INTERNATIONAL BANK

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

THE SERVICER:                          FIRST INTERNATIONAL BANK

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

                                      -38-
<PAGE>   43
THE LIQUIDITY PURCHASERS:              FIRST UNION NATIONAL BANK, a national
                                       banking corporation

                                       Commitment:

                                       By:    /s/C. Brand Hosford
                                              ----------------------------------
                                       Name:  C. Brand Hosford
                                              ----------------------------------
                                       Title: Vice President
                                              ----------------------------------

                                       First Union National Bank
                                       One First Union Center, TW9
                                       Charlotte, North Carolina 28288
                                       Attention:  Bill A. Shirley
                                       Facsimile Number: (704) 374-3254
                                       Telephone Number: (704) 383-6913

THE CP PURCHASERS:                     VARIABLE FUNDING CAPITAL CORPORATION,
                                       a Delaware corporation

                                       By:    First Union Securities, Inc., as
                                              attorney-in-fact

                                              By:    /s/Paul S. Zajac
                                                     ---------------------------
                                              Name:  Paul S. Zajac
                                                     ---------------------------
                                              Title: Vice President
                                                     ---------------------------

                                       Variable Funding Capital Corporation
                                       c/o First Union Securities, Inc.
                                       One First Union Center, TW9
                                       Attention:  Conduit Administration
                                       Facsimile Number: (704) 374-2520
                                       Telephone Number: (704) 383-6036

                                       39
<PAGE>   44
THE DEAL AGENTS                        FIRST UNION SECURITIES, INC.
("VFCC  Deal Agent") and THE
ADMINISTRATIVE AGENT:

                                       By:    /s/James L. Sigman
                                              ----------------------------------
                                       Name:  James L. Sigman
                                              ----------------------------------
                                       Title: Director
                                              ----------------------------------

                                       First Union Securities, Inc.
                                       One First Union Center, TW9
                                       Charlotte, North Carolina 28288
                                       Attention:  Conduit Administration
                                       Facsimile Number: (704) 374-2520
                                       Telephone Number: (704) 383-6036

THE LIQUIDITY AGENTS                   FIRST UNION NATIONAL BANK,
("First Union"):                       a national banking association

                                       By:    /s/C. Brand Hosford
                                              ----------------------------------
                                       Name:  C. Brand Hosford
                                              ----------------------------------
                                       Title: Vice President
                                              ----------------------------------

                                       First Union National Bank
                                       One First Union Center, TW9
                                       Charlotte, North Carolina 28288
                                       Attention: Bill A. Shirley
                                       Facsimile Number: (704) 374-3254
                                       Telephone Number: (704) 383-6913

                                       40

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