Document:

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                                                                 EXHIBIT 10.13.1

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                                U.S. $120,000,000

                      LOAN PURCHASE AND SERVICING AGREEMENT

                                      Among

                               FIB HOLDINGS, INC.
                                  as the Seller

                            FIRST INTERNATIONAL BANK
                                 as the Servicer

                                  THE INVESTORS
                                  named herein

                      VARIABLE FUNDING CAPITAL CORPORATION
                                 as a Purchaser

                          FIRST UNION SECURITIES, INC.
                                as the Deal Agent

                            FIRST UNION NATIONAL BANK
                   as the Liquidity Agent and as the Registrar

                                  HSBC BANK USA
                 as the Collateral Custodian and Backup Servicer

                        and acknowledged and agreed to by

                            FIRST UNION NATIONAL BANK
                            as the Hedge Counterparty

                           Dated as of March 29, 2001

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                                TABLE OF CONTENTS
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                                                                                                           PAGE

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ARTICLE I  DEFINITIONS ......................................................................................1
         Section 1.1       Certain Defined Terms.............................................................1
         Section 1.2       Other Terms......................................................................28
         Section 1.3       Computation of Time Period.......................................................28
         Section 1.4       Interpretation...................................................................28

ARTICLE II  THE PURCHASE FACILITY...........................................................................29
         Section 2.1       Purchases of Asset Interests.....................................................29
         Section 2.2       The Initial Purchase and Incremental Purchases...................................30
         Section 2.3       Reduction of the Purchase Limit..................................................31
         Section 2.4       Determination of Yield...........................................................31
         Section 2.5       Percentage Evidenced by Asset Interest...........................................31
         Section 2.6       Dividing or Combining Asset Interests............................................32
         Section 2.7       Settlement Procedures............................................................32
         Section 2.8       The Structured Note..............................................................34
         Section 2.9       Substitution of Loans............................................................34
         Section 2.10      Collections and Allocations......................................................35
         Section 2.11      Payments, Computation, Etc.......................................................36
         Section 2.12      Optional Repurchase..............................................................36
         Section 2.13      Fees.............................................................................37
         Section 2.14      Increased Costs; Capital Adequacy; Illegality....................................37
         Section 2.15      Taxes............................................................................38
         Section 2.16      Assignment of the Purchase Agreement.............................................40
         Section 2.17      Put Option.......................................................................41
         Section 2.18      Appointment of Registrar and Duties..............................................42

ARTICLE III  CLOSING; CONDITIONS OF CLOSING AND PURCHASES...................................................43
         Section 3.1       Conditions to Closing and Initial Purchase.......................................43
         Section 3.2       Conditions Precedent to All Purchases and Remittances of
                           Collections......................................................................43

ARTICLE IV  REPRESENTATIONS AND WARRANTIES..................................................................44
         Section 4.1       Representations and Warranties of the Seller.....................................44
         Section 4.2       Representations and Warranties of Seller Relating to the
                           Agreement and the Loans..........................................................49
         Section 4.3       Representations and Warranties of the Seller Relating to the
                           Purchase Limit and Capital Limit.................................................50

ARTICLE V  GENERAL COVENANTS OF THE SELLER..................................................................50
         Section 5.1       General Covenants................................................................50
         Section 5.2       Covenants of Seller..............................................................51
         Section 5.3       Release of Lien..................................................................55
         Section 5.4       Hedge Agreement..................................................................55
         Section 5.5       Retransfer of Ineligible Loans...................................................56
         Section 5.6       Retransfer of Assets.............................................................57
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<TABLE>
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ARTICLE VI  ADMINISTRATION AND SERVICING OF LOANS...........................................................58
         Section 6.1       Appointment and Acceptance; Duties...............................................58
         Section 6.2       Duties and Responsibilities of the Servicer and the Collateral
                           Custodian........................................................................58
         Section 6.3       Authorization of the Servicer....................................................62
         Section 6.4       Collection of Payments...........................................................63
         Section 6.5       Servicer Advances................................................................64
         Section 6.6       Realization Upon Defaulted Loans.................................................65
         Section 6.7       Representations and Warranties of Backup Servicer and Collateral
                           Custodian........................................................................65
         Section 6.8       Maintenance of Insurance Policies................................................67
         Section 6.9       Representations and Warranties of Servicer.......................................67
         Section 6.10      Covenants of Servicer............................................................69
         Section 6.11      Covenants of Backup Servicer and Collateral Custodian............................69
         Section 6.12      Servicing Compensation...........................................................70
         Section 6.13      Custodial Compensation...........................................................70
         Section 6.14      Payment of Certain Expenses by Servicer..........................................70
         Section 6.15      Reports..........................................................................71
         Section 6.16      Annual Statement as to Compliance................................................71
         Section 6.17      Annual Independent Public Accountant's Servicing Reports.........................72
         Section 6.18      Adjustments......................................................................72
         Section 6.19      Merger or Consolidation of the Servicer..........................................72
         Section 6.20      Limitation on Liability of the Servicer and Others...............................73
         Section 6.21      Indemnification of the Seller, the Deal Agent, the Liquidity
                           Agent and the Secured Parties....................................................73
         Section 6.22      The Servicer and Backup Servicer Not to Resign...................................74
         Section 6.23      Access to Certain Documentation and Information Regarding
                           the Loans........................................................................75
         Section 6.24      Backup Servicer..................................................................75
         Section 6.25      Identification of Records........................................................77
         Section 6.26      Servicer Termination Events......................................................77
         Section 6.27      Appointment of Successor Servicer................................................78
         Section 6.28      Notification.....................................................................79
         Section 6.29      Protection of Right, Title and Interest in Assets................................79
         Section 6.30      Release of Loan Files............................................................80
         Section 6.31      FDIC Enforcement Actions.........................................................80

ARTICLE VII  EARLY AMORTIZATION EVENTS......................................................................80
         Section 7.1       Early Amortization Events........................................................80

ARTICLE VIII  INDEMNIFICATION...............................................................................83
         Section 8.1       Indemnities by the Seller........................................................83

ARTICLE IX  THE DEAL AGENT AND THE LIQUIDITY AGENT..........................................................85
         Section 9.1       Authorization and Action.........................................................85
         Section 9.2       Delegation of Duties.............................................................86
         Section 9.3       Exculpatory Provisions...........................................................86
         Section 9.4       Reliance.........................................................................87
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         Section 9.5       Non-Reliance on Deal Agent, Liquidity Agent and Others...........................87
         Section 9.6       Reimbursement and Indemnification................................................88
         Section 9.7       Deal Agent and Liquidity Agent in their Individual Capacities....................88
         Section 9.8       Successor Deal Agent or Liquidity Agent..........................................88

ARTICLE X  ASSIGNMENTS; PARTICIPATIONS......................................................................89
         Section 10.1      Assignments and Participations...................................................89

ARTICLE XI  MISCELLANEOUS ..................................................................................92
         Section 11.1      Amendments and Waivers...........................................................92
         Section 11.2      Notices, Etc.....................................................................93
         Section 11.3      [Reserved.]......................................................................93
         Section 11.4      No Waiver, Rights and Remedies...................................................93
         Section 11.5      Binding Effect...................................................................93
         Section 11.6      Term of this Agreement...........................................................93
         Section 11.7      GOVERNING LAW; CONSENT TO JURISDICTION;
                           WAIVER OF OBJECTION TO VENUE.....................................................94
         Section 11.8      WAIVER OF JURY TRIAL.............................................................94
         Section 11.9      Costs, Expenses and Taxes........................................................94
         Section 11.10     No Proceedings...................................................................95
         Section 11.11     Recourse Against Certain Parties.................................................95
         Section 11.12     Protection of Ownership Interest; Appointment of Deal
                           Agent as Attorney-in-Fact; Grant of Security Interest............................96
         Section 11.13     Confidentiality..................................................................97
         Section 11.14     Execution in Counterparts; Severability; Integration.............................97
         Section 11.15     Waiver of Setoff.................................................................98
         Section 11.16     Assignments......................................................................98
         Section 11.17     Revolving Loan Payments..........................................................98
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                                    EXHIBITS

EXHIBIT A      Form of Notice of Sale
EXHIBIT B      Form of Lock-Box Notice Agreement
EXHIBIT C      "Limited Purpose" Provisions
EXHIBIT D      Form of Assignment and Acceptance
EXHIBIT E      Form of Monthly Report
EXHIBIT F      Form of Servicer's Certificate
EXHIBIT G      Credit and Collection Policies
EXHIBIT H      Form of Purchase Certificate
EXHIBIT I      Form of Hedging Agreement (including Schedule and Confirmation)
EXHIBIT J      Form of Officer's Certificate as to Solvency
EXHIBIT K      Form of Officer's Closing Certificate
EXHIBIT L      Form of Power of Attorney
EXHIBIT M      Form of Structured Note

                          SCHEDULES

SCHEDULE I     Conditions Precedent
SCHEDULE II    Concentration and Mix Requirements
SCHEDULE III   Tradenames, Fictitious Names and "Doing Business As" Names
SCHEDULE IV    List of Loans
SCHEDULE V     Locations of Loan Documents
SCHEDULE VI    Lock-Box Banks and Lock-Box Accounts

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                     LOAN PURCHASE AND SERVICING AGREEMENT
                          Dated as of March 29, 2001

      THIS LOAN PURCHASE AND SERVICING AGREEMENT, (such agreement as amended,
modified, waived, supplemented or restated from time to time, the "Agreement")
is made as of March 29, 2001, among:

      (1)   FIB HOLDINGS, INC., a Delaware corporation, as the seller (in
such capacity, the "Seller");

      (2)   FIRST INTERNATIONAL BANK, a Connecticut bank and trust company
("FIB"), as the servicer (in such capacity, the "Servicer");

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

      (4)   VARIABLE FUNDING CAPITAL CORPORATION, a Delaware corporation
("VFCC");

      (5)   FIRST UNION SECURITIES, INC. ("FUSI"), as the deal agent (in such
capacity, the "Deal Agent");

      (6)   FIRST UNION NATIONAL BANK ("First Union"), as the liquidity agent
(in such capacity, the "Liquidity Agent");

      (7)   HSBC BANK USA ("HSBC"), as the collateral custodian (in such
capacity, the "Collateral Custodian") and as the backup servicer (in such
capacity, the "Backup Servicer"); and

      (8)   FIRST UNION NATIONAL BANK, not in its individual capacity but solely
as the registrar (in such capacity, the "Registrar").

      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.
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      (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).

      Addition Date:  With respect to any Additional Loans, the date on which
such Additional Loans become Pool Assets.

      Additional Loans: All Loans that become Pool Assets after the Closing Date
(or, if no Purchase is made on the Closing Date, then on the date of the initial
Purchase hereunder).

      Adjusted Eurodollar Rate: For any Fixed Period, an interest rate per annum
equal to the quotient expressed as a percentage and rounded upwards (if
necessary), to the nearest 1/100 of 1%, obtained by dividing (i) the LIBOR Rate,
for such Fixed Period by (ii) the decimal equivalent of 100% minus the
Eurodollar Reserve Percentage for such Fixed Period.

      Administration Agreement: That certain Amended and Restated Administration
Agreement, dated as of July 1, 1998, executed between VFCC and FUSI as the same
may be amended, supplemented, or otherwise modified from time to time.

      Adverse Claim: A lien, security interest, pledge, charge, encumbrance or
other right or claim of any Person.

      Affected Party: As defined in Section 2.14(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.

      Aggregate Outstanding Loan Balance: As of any date of determination, the
sum of the Outstanding Loan Balances of all Eligible Loans included as part of
the Asset Pool on such date; provided, however, that for purposes of determining
the Capital Limit, the Aggregate Outstanding Loan Balance shall not include the
Outstanding Loan Balances of Defaulted Loans and Charged-Off Loans.

      Aggregate Unpaids: At any time, an amount, equal to the sum of all Yield
(accrued and to accrue), Capital, Breakage Costs, Hedge Breakage, and all other
amounts owed hereunder or under any Hedging Agreement (including, without
limitation, payments in respect of the termination of any such Hedging
Agreement) or under any fee letter (including, without limitation, the Fee
Letter and the Backup Servicer and Collateral Custodian Fee Letter) delivered in
connection with the transactions contemplated by this Agreement (whether due or
accrued).

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      Agent's Account: A special account (account number 2000002391825) in the
name of the Deal Agent or, so long as VFCC is the sole Purchaser hereunder, in
the name of VFCC, at First Union.

      Agreement: As defined in the preamble.

      Alternative Rate: An interest rate per annum equal to the Adjusted
Eurodollar Rate; provided, however, that the Alternative Rate shall be the Base
Rate if a Eurodollar Disruption Event occurs.

      Amortization Period: The period beginning on the Termination Date and
ending on the Collection Date.

      Argentinean Loan: A Loan either (i) secured by collateral located in
Argentina or (ii) to an Obligor whose principal place of business is located in
Argentina.

      Asset: All right, title and interest (whether now owned or hereafter
arising or acquired, and wherever located) of the Seller in, to and under, but
none of the obligations under (whether now owned or hereafter acquired or
arising, and wherever located) all accessions, accounts, general intangibles,
instruments, inventory, electronic chattel paper, tangible chattel paper,
commingled goods, consumer goods, documents, money, letter of credit rights,
advices of credit, deposit accounts, certificates of deposit, investment
property, goods, proceeds, software, supporting obligations and other property
consisting of any and all of the following:

            (i) the Transferred Loans, and all monies due or to become due in
      payment of such Loans on and after the related Purchase Date, excluding
      any Retained Interest, if applicable;

            (ii) any Related Property securing the Transferred Loans including
      all proceeds from any sale or other disposition of such Related Property;

            (iii) the Loan Documents related to the Transferred Loans, all
      Records, all right, title and interest of the Seller in and to the
      documents, agreements, and instruments included in the Loan Documents or
      Records, including without limitation, rights of recovery of the Seller
      against the Originator;

            (iv) all Insurance Policies, guaranties, letters of credit or other
      agreements of whatever character from time to time supporting or securing
      payment of such Loan whether pursuant to such Loan or otherwise;

            (v) all security interests, liens, guaranties, warranties, letters
      of credit, mortgages or other encumbrances and property subject thereto
      from time to time purporting to secure or support payment of any Loan,
      together with all UCC financing statements or similar filings by an
      Obligor related thereto;

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<PAGE>   9
            (vi) the Lock-Box Account, all funds held in such account, and all
      certificates and instruments, if any, from time to time representing or
      evidencing the Lock-Box Account or such funds;

            (vii) the Collection Account, all funds held in such account, and
      all certificates and instruments, if any, from time to time representing
      or evidencing the Collection Account or such funds;

            (viii) all Collections and all other payments made or to be made in
      the future with respect to such Loans or by the Obligor thereunder and
      under any guarantee or similar form of credit enhancement with respect to
      such Loans, including but not limited to Export-Import Bank guarantees and
      the Ex-Im Policy;"

            (ix)  any Hedging Agreement and all payments from time to time
      due thereunder;

            (x) the Purchase Agreement and the assignment to the Deal Agent of
      all UCC financing statements filed by the Seller against the Originator
      under or in connection with the Purchase Agreement; and

            (xi)  all income and proceeds of the foregoing.

      Asset Interest:  At any time, an undivided variable percentage
ownership interest in all Assets.  Each Asset Interest shall be calculated in
accordance with Section 2.5.  The undivided percentage interest of an Asset
Interest shall equal

                   C+R
                   ---
                  AOLB

      where:

            C     =     equals the Capital in respect of such Asset Interest.

            R     =     equals the aggregate Reserves in respect of such
                        Asset Interest.

        AOLB      =     equals the Aggregate Outstanding Loan Balance.

        Asset Pool:  At any time, all then outstanding Assets.

      Assignment and Acceptance: An assignment and acceptance entered into by an
Investor and an Eligible Assignee, and accepted by the Deal Agent, in
substantially the form of Exhibit D hereto.

      Available Collections:  As defined in Section 2.7 hereof.

                                       4
<PAGE>   10
      Average Default Ratio: For any Determination Date, the arithmetic average
of the Default Ratios, expressed as percentages, for the three (3) Collection
Periods ended on such date, except that (i) in the case of the first
Determination Date following the Closing Date, the "Average Default Ratio" shall
be the Default Ratio for the Collection Period ended on such date, and (ii) in
the case of the second Determination Date following the Closing Date, the
"Average Default Ratio" shall be the arithmetic average of the Default Ratios
for the two (2) Collection Periods ended on such date.

      Average Net Loss Ratio: For any Determination Date, the arithmetic average
of the Net Loss Ratios, expressed as percentages, for the three (3) Collection
Periods ended on such date, except that (i) in the case of the first
Determination Date following the Closing Date, the "Average Net Loss Ratio"
shall be the Net Loss Ratio for the Collection Period ended on such date, and
(ii) in the case of the second Determination Date following the Closing Date,
the "Average Net Loss Ratio" shall be the arithmetic average of the Net Loss
Ratios for the two (2) Collection Periods ended on such date.

      Backup Servicer:  HSBC Bank USA, and its permitted successors and
assigns.

      Backup Servicer Fee:  As set forth in the Backup Servicer and
Collateral Custodian Fee Letter.

      Backup Servicer and Collateral Custodian Fee Letter: The Backup Servicer
and Collateral Custodian Fee Letter, dated as of the Closing Date, among FIB,
the Seller, the Backup Servicer, the Collateral Custodian, the Deal Agent and
First Union, setting forth among other things the Backup Servicer Fee and the
Collateral Custodian Fee, as such letter may be amended, modified, waived,
supplemented or restated from time to time.

      Bankruptcy Code:  The Federal Bankruptcy Code, as amended from time to
time (Title 11 of the United States Code).

      Base Rate: On any date, a fluctuating rate of interest per annum equal to
the higher of (a) the Prime Rate or (b) the Federal Funds Rate plus one-half of
one percent (0.5%).

      Benefit Plan: Any employee benefit plan as defined in Section 3(3) of
ERISA in respect of which the Seller or any ERISA Affiliate of the Seller is, or
at any time during the immediately preceding six years was, an "employer" as
defined in Section 3(5) of ERISA.

      Brazilian Loan:  A Loan either (i) secured by collateral located in
Brazil or (ii) to an Obligor whose principal place of business is located in
Brazil.

      Breakage Costs: Any amount or amounts as shall compensate a Purchaser for
any loss, cost or expense incurred by such Purchaser (as determined in such
Purchaser's sole discretion) as a result of a prepayment by the Seller of
Capital or Yield pursuant to the terms hereof.

      Business Day: Any day of the year other than a Saturday or a Sunday on
which (a) banks are not required or authorized to be closed in New York City,
Charlotte, North Carolina, and

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<PAGE>   11
Hartford, Connecticut, and (b) if the term "Business Day" is used in connection
with the Adjusted Eurodollar Rate, means the foregoing only if such day is also
a day of year on which dealings in United States dollar deposits are carried on
in the London interbank market.

      Capital: The sum of the amounts paid to the Seller for the initial
Purchase and in connection with each Incremental Purchase pursuant to Section
2.2, reduced from time to time by Collections and other payments received and
distributed to Purchasers on account of such Capital pursuant to Section 2.7;
provided, however, that such Capital shall not be reduced by any distribution of
any portion of Principal Collections if at any time such distribution is
rescinded or must be returned for any reason.

      Capital Limit: At any time the sum of (i) the Aggregate Outstanding Loan
Balance for all Eligible Loans that are Commercial Loans multiplied by the
Purchase Rate with respect to Commercial Loans, and (ii) the Aggregate
Outstanding Loan Balance for all Eligible Loans that are Ex-Im Loans or Ex-Im 2
Loans multiplied by the Purchase Rate with respect to the Ex-Im Loans or Ex-Im 2
Loans.

      Casual Loss: With respect to any item of Related Property, the loss,
theft, damage beyond repair or governmental condemnation or seizure of such item
of Related Property.

      Change in Control:  The date on which (i) any Person or "group" acquires
any "beneficial ownership" (as such terms are defined under Rule 13d-3 of, and
Regulation 13D under, the Securities Exchange Act of 1934, as amended), either
directly or indirectly, of membership interests or other equity interests or any
interest convertible into any such interest in the Originator having more than
fifty percent (50%) of the voting power for the election of directors of the
Originator, if any, under ordinary circumstances, or (ii) (except in connection
with any Securitization or in connection with the sale of Assets under the
Purchase Agreement) the Originator sells, transfers, conveys, assigns or
otherwise disposes of all or substantially all of the assets of the Originator;
provided, however, it shall not be a Change in Control for any one or more of
the following Persons, individually or collectively, to gain more than fifty
percent (50%) of such voting power:  Arnold Chase, Cheryl Chase, Rhoda L. Chase,
David T. Chase, Brett N. Silvers, Nancy W. Silvers, United Parcel Service, Inc.
and any family members, Affiliates, and heirs of any of the foregoing
(collectively, the "Permitted Owners"), and any trusts, partnerships or other
entities as to which the sole beneficiaries are any of the Permitted Owners.

      Charged-Off Loan: Any Loan (i) for which an Insolvency Event has occurred
with respect to the related Obligor, (ii) for which the related Obligor has
suffered any other change which materially and adversely affects its viability
as a going concern, or (iii) which is or otherwise should be written off as
uncollectible by the Servicer in accordance with the Credit and Collection
Policies.

      Clause (X) Failure:  As defined in Section 2.1(d).

      Clause (Y) Failure:  As defined in Section 2.1(d).

      Closing Date:  March 29, 2001.

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<PAGE>   12
      Code:  The Internal Revenue Code of 1986, as amended.

      Collateral Custodian:  HSBC Bank USA, and its permitted successors and
assigns.

      Collateral Custodian Fee:  As set forth in the Backup Servicer and
Collateral Custodian Fee Letter.

      Collection Account:  As defined in Section 2.10.

      Collection Date:  The date following the Termination Date on which the
Aggregate Unpaids have been reduced to zero and indefeasibly paid in full.

      Collection Period: Each calendar month, except in the case of the first
Collection Period, the period beginning on the Closing Date to and including the
last day of the calendar month in which the Closing Date occurs.

      Collections: With respect to any Transferred Loan, all cash collections or
other cash proceeds of such Loan received by the Servicer, Originator or Seller
from or on behalf of any Obligor in payment of any amounts owed in respect of
such Loan, including, without limitation, any Interest Collections, any
Principal Collections, Deemed Collections, Insurance Proceeds, interest earnings
in the Collection Account, all recoveries on Charged-Off Loans, and all payments
received pursuant to any Hedging Agreement or Hedge Transaction.

      Commercial Line of Credit: A revolving line of credit Loan to an
Obligor that is not an Ex-Im Loan or an Ex-Im 2 Loan.

      Commercial Loans:  All of the Commercial Lines of Credit and the
Commercial Term Loans.

      Commercial Term Loan:  A term loan to an Obligor that is not an Ex-Im
Loan or an Ex-Im 2 Loan.

      Commercial Paper Notes:  On any day, any short-term promissory notes
issued by VFCC with respect to financing its purchase of any Asset Interest
hereunder.

      Commitment: For each Investor, the commitment of such Investor to purchase
Asset Interests from the Seller in an amount not to exceed the amount set forth
opposite such Investor's name on the signature pages of this Agreement, as such
amount may be modified in accordance with the terms hereof.

      Commitment Fee:  As defined in Section 2.13(a) hereof.

      Commitment Termination Date: November 23, 2003 or such later date to which
the Commitment Termination Date may be extended (if extended) in the sole
discretion of VFCC and each Investor in accordance with the terms of Section
2.1(b); provided, however, the

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<PAGE>   13
Commitment Termination Date may also be reduced in accordance with the terms of
Sections 2.1 (c) and 2.1(d) hereof.

      Conversion: As defined in Section 2.1(c).

      Cost of Funds Adjustment: For each day during any Fixed Period, the
difference by which the CP Rate for such Fixed Period exceeds the Adjusted
Eurodollar Rate for such Fixed Period.

      CP Rate: For any day during any Fixed Period, the per annum rate
equivalent to the weighted average of the per annum rates paid or payable by
VFCC from time to time as interest on or otherwise (by means of interest rate
hedges or otherwise) in respect of the promissory notes issued by VFCC that are
allocated, in whole or in part, by the Deal Agent (on behalf of VFCC) to fund or
maintain the Asset Interest during such period, as determined by the Deal Agent
(on behalf of VFCC) and reported to the Seller and the Servicer, which rates
shall reflect and give effect to (i) the commissions of placement agents and
dealers in respect of such promissory notes, to the extent such commissions are
allocated, in whole or in part, to such promissory notes by the Deal Agent (on
behalf of VFCC), (ii) any incremental carrying costs associated with the
issuance of such promissory notes maturing on dates other than those dates on
which funds are received by VFCC, and (iii) other borrowings by VFCC, including,
without limitation, borrowings to fund small or odd dollar amounts that are not
easily accommodated in the commercial paper market; provided, however, that if
any component of such rate is a discount rate, in calculating the "CP Rate," the
Deal Agent shall for such component use the rate resulting from converting such
discount rate to an interest bearing equivalent rate per annum.

      Credit and Collection Policies: Those credit, collection, customer
relation and service policies of the Originator and the Servicer as of the date
hereof relating to the Loans and related Loan Documents, set forth in Exhibit G,
as the same may be amended or modified from time to time in accordance with
Section 6.10(e).

      Deal Agent:  FUSI, as Deal Agent hereunder, together with its
successors and assigns.

      Deemed Collections: On any day, an amount equal to the unpaid balance
(including any principal and accrued interest thereon) of any Loan included in
the Asset Pool if on such day (a) the Deal Agent, as agent for the Secured
Parties, does not have a valid perfected security interest in such Loan and any
Related Property, or (b) a Warranty Event has occurred with respect to such
Loan.

      Default Ratio: For any Collection Period, the percentage equivalent of a
fraction, the numerator which is the Outstanding Loan Balance of Defaulted Loans
at the end of such Collection Period, and the denominator of which is the
Aggregate Outstanding Loan Balance at the end of such Collection Period.

      Defaulted Loan: As of any day of determination, a Loan (i) as to which the
Obligor thereof has failed to make any payment, or part thereof, required to be
made thereunder for 60 days following the due date thereof, or (ii) that is a
Charged-Off Loan.

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<PAGE>   14
      Delinquent: On any day with respect to any Loan and any specified time
period any payment, or portion thereof, due with respect thereto, has not been
made by the Obligor of such loan for the specified time period from the due date
of such payment.

      Derivatives: Any exchange-traded or over-the-counter (i) forward, future,
option, swap, cap, collar, floor, foreign exchange contract, any combination
thereof, whether for physical delivery or cash settlement, relating to any
interest rate, interest rate index, currency, currency exchange rate, currency
exchange rate index, debt instrument, debt price, debt index, depository
instrument, depository price, depository index, equity instrument, equity price,
equity index, commodity, commodity price or commodity index, (ii) any similar
transaction, contract, instrument, undertaking or security, or (iii) any
transaction, contract, instrument, undertaking or security containing any of the
foregoing.

      Determination Date:  With respect to any Payment Date, the last day of
the immediately preceding Collection Period.

      Early Amortization Event:  As defined in Section 7.1.

      Eligible Assignee: 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
guaranteed by a Person whose short-term rating is at least A-1 from S&P and P-1
from Moody's and is satisfactory to VFCC and the Deal Agent.

      Eligible Loan: On any date of determination, each Loan (a) that is a
Transferred Loan and identified on the list of Loans delivered by the Seller to
the Collateral Custodian as part of a Notice of Sale, (b) that is a Commercial
Loan, an Ex-Im Loan or an Ex-Im 2 Loan and (c) that satisfies each of the
following requirements (unless otherwise agreed to in writing by the Deal Agent
in its sole discretion):

            (i) the Loan is evidenced by a promissory note which has been duly
      authorized and which, together with the related Loan Documents, is in full
      force and effect and constitutes the legal, valid and binding obligation
      of the Obligor of such Loan to pay the stated amount of the Loan and
      interest thereon, and the related Loan Documents are enforceable against
      such Obligor in accordance with their respective terms;

            (ii) the Loan was originated and maintained in accordance with the
      terms of the Credit and Collection Policies and arose in the ordinary
      course of the Originator's business from the loaning of money to the
      Obligor thereof;

            (iii) the Loan is not a Defaulted Loan or a Charged-Off Loan or a
      Loan any payment or portion thereof is more than 30 days Delinquent;

                                       9
<PAGE>   15
            (iv) the Obligor of such Loan is an Eligible Obligor and has
      executed all appropriate documentation including documentation relating to
      its collateral required by the Originator;

            (v) the promissory note which evidences the Loan is an "instrument"
      and is not a "general intangible," an "account," or "chattel paper" as
      such terms are defined and used in the UCC of all jurisdictions which
      govern the perfection of the security interest granted therein;

            (vi) all material consents, licenses, approvals or authorizations
      of, or registrations or declarations with, any Governmental Authority
      required to be obtained, effected or given in connection with the making
      of such Loan have been duly obtained, effected or given and are in full
      force and effect and the Loan was otherwise originated in accordance with
      all federal and state governmental consumer and other Requirements of Law;

            (vii) The Loan is denominated and payable only in United States
      dollars in the United States and the collateral securing such Loan is
      located only in the United States unless otherwise consented to in writing
      by the Deal Agent upon completion of any necessary credit approval,
      including receipt and review of due diligence conducted by FIB; provided,
      however, no written consent will be required from the Deal Agent with
      respect to Ex-Im Loans or Ex-Im 2 Loans in which the collateral securing
      such Loans is located in a foreign country approved under the Ex-Im
      Guarantee or Ex-Im Policy as long as the Deal Agent is given prior written
      notice of any such Loans that the Seller proposes to sell and assign Asset
      Interests in and provided the Deal Agent receives evidence satisfactory to
      it concerning the approval of the foreign country under the Ex-Im
      Guarantee or Ex-Im Policy prior to such Loan being included as part of the
      Asset Pool;

            (viii) [Reserved];

            (ix) the Loan, together with the Loan Documents related thereto,
      does not contravene in any material respect any laws, rules or regulations
      applicable thereto (including, without limitation, laws, rules and
      regulations relating to usury, truth in lending, fair credit billing, fair
      credit reporting, equal credit opportunity, fair debt collection practices
      and privacy) and with respect to which no party to the Loan Documents
      related thereto is in material violation of any such law, rule or
      regulation in any respect;

            (x)   the Loan, together with the related Loan Documents, is
      fully assignable;

            (xi) the Loan was documented and closed in accordance with the
      Originator's policies and procedures, including the relevant opinions and
      assignments, and only one current original promissory note with respect to
      such Loan, which promissory note has been delivered to the Collateral
      Custodian, duly endorsed for transfer under this Agreement;

                                       10
<PAGE>   16
            (xii) except for Permitted Liens, the Loan and all Related Property
      are free of any Liens; and all filings and other actions required to
      perfect the security interest of the Deal Agent as agent for the Secured
      Parties in the Assets related thereto have been made or taken;

            (xiii) the Required Loan Documents relating to such Loan are in the
      possession of the Collateral Custodian;

            (xiv) [Reserved];

            (xv) no right of recision, set off, counterclaim, defense or other
      material dispute has been asserted with respect to such Loan;

            (xvi) the Loan was made under the existing Loan Documents, which
      Loan Documents have not been modified in any respect or such Loan extended
      as a result of any adverse credit reason (including, without limitation,
      rescheduling of installment payments);

            (xvii) any Related Property with respect to such Loan is insured in
      accordance with the Credit and Collection Policies;

            (xviii) the Loan Documents with respect to such Loan are complete in
      accordance with the Credit and Collection Policies;

            (xix) the Obligor with respect to such Loan is an Eligible
      Obligor;

            (xx)  the Loan has an Eligible Risk Rating and was approved
      according to the Originator's Credit and Collection Policies;

            (xxi) if a Loan is a Commercial Line of Credit, (i) interest is due
      and payable monthly, (ii) the initial term of the Loan does not exceed 12
      months, with all outstanding principal and interest due at the end of 12
      months, and (iii) its respective Loan Documents provide that if it is not
      renewed it shall be amortized over a period not to exceed 36 additional
      months;

            (xxii) [Reserved]; and

            (xxiii) if a Loan is a Commercial Term Loan, (i) the first Scheduled
      Payment on such Loan is due within 45 days after its Purchase Date, (ii)
      its term does not exceed 25 years, and (iii) its Schedule of Payments has
      equal payments of principal and interest except for the final payment
      which may be less than the other payments.

      Eligible Obligor:  Any Obligor which satisfies each of the following
requirements at all times:

                                       11
<PAGE>   17
            (i)   the Obligor is not in the gaming, nuclear waste, bio-tech,
      oil and gas or real estate industries;

            (ii)  the Obligor is a legal operating entity, duly organized and
      validly existing under the laws of its jurisdiction of organization;

            (iii) the Obligor is not the subject of any Insolvency Event;

            (iv) the Obligor is not an Affiliate of any of the parties hereto;

            (v) the Obligor is not the Obligor of any Loan, any payment or
      portion thereof is more than 30 days Delinquent or any Charged-Off Loans;

            (vi)  the Obligor is not a Governmental Authority;

            (vii) the Obligor is in compliance with all material terms and
      conditions of its Loan Documents;

            (viii) the Obligor's principal office and any Related Property are
      located in (i) the United States or any other country or territory of the
      United States, or (ii) any country approved by the Deal Agent upon receipt
      and review of satisfactory legal due diligence, Rating Agency discussions
      and credit approval; and

            (ix) the Obligor has an Eligible Risk Rating and was approved
      according to the Originator's Credit and Collection Policies.

      Eligible Risk Rating: As of any date of determination, with respect to a
designated Loan or Obligor, a risk rating of "4.0" or better as determined or
should have been determined by the Servicer in accordance with the Credit and
Collection Policies or as designated by the Originator.

         Environmental Laws: Any and all foreign, federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of hazardous materials. Environmental
Laws include, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous
Material Transportation Act (49 U.S.C. Section 331 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act
(42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), the Safe Drinking Water Act (42 U.S.C. Section 300, et
seq.), the Environmental Protection Agency's regulations relating to underground
storage tanks (40 C.F.R. Parts 280 and 281), and the Occupational Safety and
Health Act (29 U.S.C. 651 et seq.), and the rules and regulations thereunder,
each as amended or supplemented from time to time.

                                       12
<PAGE>   18
      Equipment Buyer Program Loan:  A loan originated under FIB's equipment
buyer program.

      ERISA:  The U.S. Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.

      ERISA Affiliate: (a) Any corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as the Seller; (b) a trade or business (whether or not incorporated) under
common control (within the meaning of Section 414(c) of the Code) with the
Seller; or (c) a member of the same affiliated service group (within the meaning
of Section 414(m) of the Code) as the Seller, any corporation described in
clause (a) above or any trade or business described in clause (b) above.

      Eurodollar Disruption Event: The occurrence of any of the following: (a) a
determination by a Purchaser that it would be contrary to law or to the
directive of any central bank or other governmental authority (whether or not
having the force of law) to obtain United States dollars in the London interbank
market to make, fund or maintain any Purchase, (b) the failure of one or more of
the Reference Banks to furnish timely information for purposes of determining
the Adjusted Eurodollar Rate, (c) a determination by a Purchaser that the rate
at which deposits of United States dollars are being offered to such Purchaser
in the London interbank market does not accurately reflect the cost to such
Purchaser of making, funding or maintaining any Purchase or (d) the inability of
a Purchaser to obtain United States dollars in the London interbank market to
make, fund or maintain any Purchase.

      Eurodollar Reserve Percentage: For any day, that percentage (expressed as
a decimal) which is in effect from time to time under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor), as such
regulation may be amended from time to time or any successor regulation, as the
reserve requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency Liabilities as that term is defined in Regulation D (or against any
other category of liabilities that includes deposits by reference to which the
LIBOR Rate is determined), whether or not the Purchasers have any Eurocurrency
Liabilities subject to such reserve requirement at that time. All Capital whose
Yield is computed by reference to the Adjusted Eurodollar Rate shall be deemed
to constitute Eurocurrency Liabilities and as such shall be deemed subject to
reserve requirements without benefits of credits for proration, exceptions or
offsets that may be available from time to time to a Purchaser. The Adjusted
Eurodollar Rate shall be adjusted automatically on and as of the effective date
of any change in the Eurodollar Reserve Percentage.

      Ex-Im Guarantee. That guarantee no. 0079, dated as of October 3, 1995, in
favor of FIB, which guarantees the Ex-Im Loans and Ex-Im 2 Loans, as such
guarantee or successor guarantee may be replaced or renewed from time to time.

      Ex-Im Loan: A Loan to an Obligor that is a revolving line of credit, 90%
of the Outstanding Loan Balance of which is guaranteed through the Export-Import
Bank.

                                       13
<PAGE>   19
      Ex-Im 2 Loans: Loans to an Obligor that are either Inventory Buyer Program
Loans or Equipment Buyer Program Loans, a portion of the Outstanding Balance of
which is insured or guaranteed through the Export-Import Bank.

      Ex-Im Policy: Those certain policies in favor of FIB that insure the Ex-Im
2 Loans, as such policy or successor policy may be replaced or renewed from time
to time, so long as the Deal Agent, as agent for the Secured Parties, is (i)
named as loss payee or as an additional insured, on such policy and on such
renewal or replacement policy or (ii) otherwise satisfied that the Ex-Im Policy
inures to its benefit.

      Export-Import Bank: The Export-Import Bank of the United States.

      FDIC: Federal Deposit Insurance Corporation or any successor thereto.

      FDIC Action: The entering into with, or issuance by, the FDIC of a
memorandum of understanding or any similar or more severe enforcement action
that has a Material Adverse Effect with respect to the Originator or any
Affiliate thereof; provided, that, the determination of whether a memorandum of
understanding or any more severe enforcement action has a Material Adverse
Effect, or whether an enforcement action is more severe than a memorandum of
understanding, shall be made by the Deal Agent (in its reasonable discretion).

      Federal Funds Rate: For any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the federal
funds rates as quoted by First Union and confirmed in Federal Reserve Board
Statistical Release H.15(519) or any successor or substitute publication
selected by First Union (or, if such day is not a Business Day, for the
preceding Business Day), or, if, for any reason, such rate is not available on
any day, the rate determined, in the sole opinion of First Union, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 A.M. Charlotte, North Carolina time.

      Fee Letter: The Fee Letter, dated as of March 29, 2001, among the Seller,
the Servicer and the Deal Agent, as such letter may be amended, modified,
waived, supplemented or restated from time to time.

      FIB Existing Account:  Account No. 2005 maintained at FIB for the
purpose of receiving Collections.

      FNBNE Funding Corp. Loan Purchase and Servicing Agreement: That certain
Second Amended and Restated Loan Purchase and Servicing Agreement, dated as of
March 29, 2001, by and among FNBNE Funding Corp., as seller, First International
Bank, as servicer, the Investors named therein, Variable Funding Capital
Corporation, as a purchaser, First Union Securities, Inc., as deal agent, First
Union National Bank, as liquidity agent and as registrar, and HSBC Bank USA, as
collateral custodian and backup servicer, as such agreement may be amended,
modified, waived, supplemented or restated from time to time.

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

                                       14
<PAGE>   20
      Fixed Period: (a) With respect to the first Payment Date, the period from
and including the Closing Date to but excluding such first Payment Date and (b)
with respect to any subsequent Payment Date, the period from and including the
previous Payment Date to but excluding such subsequent Payment Date.

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

      Governmental Authority: Any nation or government, any state or other
political subdivision thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and any court or arbitrator having jurisdiction over such Person.

      H.15: Federal Reserve Statistical Release H.15.

      Hedge Breakage Costs: For any Hedge Transaction, any amount payable by the
Seller for the early termination of that Hedge Transaction or any portion
thereof.

      Hedge Counterparty: Any entity which (a) on the date of entering into any
Hedge Transaction (i) is an interest rate swap dealer that is either a Purchaser
or an Affiliate of a Purchaser, or has been approved in writing by the Deal
Agent (which approval shall not be unreasonably withheld), and (ii) has a
long-term unsecured debt rating of not less than "A" by S&P and not less than
"A-2" by Moody's ("Long-term Rating Requirement") and a short-term unsecured
debt rating of not less than "A-1" by S&P and not less than "P-1" by Moody's
("Short-term Rating Requirement"), and (b) in a Hedging Agreement (i) consents
to the assignment of the Seller's rights under the Hedging Agreement to the Deal
Agent pursuant to Section 5.4(a) and (ii) agrees that in the event that Moody's
or S&P reduces its long-term unsecured debt rating below the Long-term Rating
Requirement, it shall transfer its rights and obligations under each Hedging
Transaction to another entity that meets the requirements of clause (a) and (b)
hereof and has entered onto a Hedging Agreement with the Seller on or prior to
the date of such transfer.

      Hedge Notional Amount: For any Purchase, the aggregate notional amount in
effect on any day under all Hedge Transactions entered into pursuant to Section
5.4(a) for that Purchase.

      Hedge Transaction: Each interest rate swap transaction between the Seller
and a Hedge Counterparty which is entered into pursuant to Section 5.4(a) and is
governed by a Hedging Agreement.

      Hedging Agreement: Each agreement between the Seller and a Hedge
Counterparty which governs one or more Hedge Transactions entered into pursuant
to Section 5.4, which agreement shall consist of a "Master Agreement" in a form
published by the International Swaps and Derivatives Association, Inc., together
with a "Schedule" thereto substantially in the form of Exhibit I hereto or such
other form as the Deal Agent shall approve in writing, and each "Confirmation"
thereunder confirming the specific terms of each such Hedge Transaction.

                                       15
<PAGE>   21
         Increased Costs: Any amounts required to be paid by the Seller to an
Affected Party pursuant to Section 2.14.

         Incremental Purchase: Any Purchase that increases the aggregate
outstanding Capital hereunder.

         Indebtedness: With respect to any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current liabilities incurred in the
ordinary course of business and payable in accordance with customary trade
practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under capital leases, (c) all
obligations of such Person in respect of acceptances issued or created for the
account of such Person, (d) all liabilities secured by any Lien on any property
owned by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof, and (e) all indebtedness, obligations or
liabilities of that Person in respect of Derivatives.

         Indemnified Amounts: As defined in Section 8.1.

         Indemnified Party: As defined in Section 8.1.

         Indenture: The Indenture, dated as of March 1, 2001, between FIB
Funding Trust II and HSBC Bank USA, as indenture trustee.

         Industry: The industry of an Obligor as determined by reference to the
four digit standard industry classification codes.

         Insolvency Event: With respect to a specified Person, (a) the filing of
a decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable Insolvency Law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Insolvency Law now or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an involuntary case under any such
law, or the consent by such Person to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.

         Insolvency Laws: The Bankruptcy Code of the United States and all other
applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments, or similar
debtor relief laws from time to time in effect affecting the rights of creditors
generally.

                                       16
<PAGE>   22
         Insolvency Proceeding: Any case, action or proceeding before any court
or Governmental Authority relating to any Insolvency Event.

         Insurance Policy: With respect to any Loan included in the Asset Pool,
an insurance policy covering physical damage to or loss to any assets or Related
Property of the Obligor securing such Loan.

         Insurance Proceeds: Any amounts payable or any payments made, to the
Servicer under any Insurance Policy.

         Interest Collections: Any and all amounts received in respect of any
interest, fees or other similar charges on a Loan from or on behalf of any
Obligors that are deposited into the Collection Account, or received by the
Servicer, Originator, or Seller in respect of Loans, in the form of cash,
checks, wire transfers, electronic transfers or any other form of cash payment
(net of any payment owed by the Seller to, and including any receipts from, any
Hedge Counterparties).

         Inventory Buyer Program Loan: A loan originated under FIB's inventory
buyer program.

         Investment: With respect to any Person, any direct or indirect loan,
advance or investment by such Person in any other Person, whether by means of
share purchase, capital contribution, loan or otherwise, excluding the
acquisition of assets pursuant to the Purchase Agreement and excluding
commission, travel and similar advances to officers, employees and directors
made in the ordinary course of business.

         Issuer: VFCC and any other Investor whose principal business consists
of issuing commercial paper or other securities to fund its acquisition and
maintenance of receivables, accounts, instruments, chattel paper, general
intangibles and other similar Assets.

         Jurisdiction: Delaware and Connecticut.

         LIBOR Rate: For any day during any Fixed Period and any Asset Interest,
an interest rate per annum equal to: (a) to the extent that the relevant
Purchaser is VFCC and it has funded the acquisition of, or maintenance of its
investment in, the applicable Asset Interest through the issuance of Commercial
Paper Notes: (i) the posted rate for 30-day deposits in United States Dollars
appearing on Telerate page 3750 as of 11:00 a.m. (London time) on the Business
Day which is the second Business Day immediately preceding the first day of the
applicable Fixed Period; or (ii) if no such rate appears on Telerate page 3750
at such time and day, then the LIBOR Rate shall be determined by First Union at
its principal office in Charlotte, North Carolina as its rate (each such
determination, absent manifest error, to be conclusive and binding on all
parties hereto and their assignees) at which 30-day deposits in United States
Dollars are being, have been, or would be offered or quoted by First Union to
major banks in the applicable interbank market for Eurodollar deposits at or
about 11:00 a.m. (Charlotte, North Carolina time) on such day; and (b) in all
other cases: (i) the posted rate for 30-day deposits in United States Dollars
appearing on Telerate page 3750 as of 11:00 a.m. (London time) on the Business
Day

                                       17
<PAGE>   23
which is the second Business Day immediately preceding the first day of the
applicable Fixed Period; or (ii) if no such rate appears on Telerate page 3750
at such time and day, then the LIBOR Rate shall be determined by First Union at
its principal office in Charlotte, North Carolina as its rate (each such
determination, absent manifest error, to be conclusive and binding on all
parties hereto and their assignees) at which 30-day deposits in United States
Dollars are being, have been, or would be offered or quoted by First Union to
major banks in the applicable interbank market for Eurodollar deposits at or
about 11:00 a.m. (Charlotte, North Carolina time) on such day.

         Lien: With respect to any Asset, (a) any mortgage, lien, pledge, charge
security interest or encumbrance of any kind in respect of such Asset or (b) the
interest of a vendor or lessor under any conditional sale agreement, financing
lease or other title retention agreement relating to such Asset.

         Liquidation Expenses: With respect to any Defaulted Loan, the aggregate
amount of all out-of pocket expenses reasonably incurred by the Servicer
(including amounts paid to any subservicer) in connection with the repossession,
refurbishing and disposition of any related assets securing such Loan including
the attempted collection of any amount owing pursuant to such Loan.

         Liquidity Bank: Each liquidity bank that is a party to the Liquidity
Purchase Agreement.

         Liquidity Purchase Agreement: The Liquidity Purchase Agreement, dated
as of March 29, 2001, among VFCC, the Deal Agent, the Liquidity Agent, and First
Union, as an investor, and each other liquidity bank a party thereto, as such
agreement may be amended, modified, waived, supplemented or restated from time
to time.

         Loan: A secured commercial loan arising from the extension of credit to
an Obligor by the Originator or one of its subsidiaries in the ordinary course
of the Originator's business including, without limitation, all Commercial
Loans, all Ex-Im Loans, which loans are secured by accounts receivable,
inventory, machinery and equipment or real property or all Ex-Im 2 Loans that
are not secured; and such term further includes all monies due or owing and all
Interest Collections, Principal Collections and other amounts received from time
to time with respect to such loan receivable and all Proceeds.

         Loan Document: With respect to any Loan, (i) the related original
promissory note, (ii) any related loan agreement, (iii) any security agreement,
(iv) where real property serves as the primary Collateral for the Loan, the
mortgage, if any, related thereto, (v) any assignment of leases, and (vi) any
other documents, instruments, certificates or assignments (including amendments
or modifications thereof) executed by the Obligor thereof or by another Person
on the Obligor's behalf in respect of such Loan and related promissory note,
including, without limitation, general or limited guaranties, and any power of
attorney; provided, however, any "Loan Document" related solely and exclusively
to any Retained Interest shall be excluded from the foregoing definition.

                                       18
<PAGE>   24
         Lock-Box: A post office box to which Collections are remitted for
retrieval by a Lock-Box Bank and deposited by such Lock-Box Bank into a Lock-Box
Account.

         Lock-Box Account: An account, to be established within five (5)
Business Days of a request by the Deal Agent pursuant to Section 5.2(u), for the
purpose of receiving Collections at a bank or other financial institution which
has executed a Lock-Box Notice for the purpose of receiving Collections, but
specifically excluding the FIB Existing Account.

         Lock-Box Bank: Any of the banks or other financial institutions holding
one or more Lock-Box Accounts.

         Lock-Box Notice: A notice, in substantially the form of Exhibit B,
among the Seller, the Originator (if applicable) and a Lock-Box Bank.

         Material Adverse Effect: With respect to any memorandum of
understanding with the FDIC or any similar or more severe enforcement action
taken by the FDIC, means a material adverse effect on (a) the ability of the
Originator or any Affiliate to conduct its business in the manner that it
conducted business before the date of such memorandum of understanding or
enforcement action, (b) the capitalization of the Originator, provided, that, no
memorandum of understanding or enforcement action will be deemed to have a
material adverse effect on the Originator's capitalization if and for so long as
the Originator remains in compliance with any operational and/or capitalization
agreement or plan prepared in connection with such memorandum of understanding
or other enforcement action, (c) the validity, enforceability or collectibility
of the Agreement or any other Transaction Document, or the validity
enforceability or collectibility of the Assets generally or any material portion
of the Assets, (d) the rights and remedies of the Deal Agent and the Secured
Parties, (e) the ability of the Seller, the Servicer, the Backup Servicer, or
the Collateral Custodian to perform its respective obligations under the
Agreement or any Transaction Document, or (f) the status, existence, perfection,
priority or enforceability of the Secured Parties' interest in the Assets.

         Minimum Net Portfolio Yield: 2.0%.

         Monthly Report: As defined in Section 6.15(a).

         Moody's: Moody's Investors Service, Inc., and any successor thereto.

         Multiemployer Plan: A "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding five years contributed to by the Seller or any ERISA
Affiliate on behalf of its employees.

         Net Loss Ratio: For any Collection Period, the product of (a) the
percentage equivalent of a fraction, the numerator which is the Outstanding Loan
Balance of Charged-Off Loans during such Collection Period, and the denominator
of which is the Aggregate Outstanding Loan Balance at the end of such Collection
Period and (b) 12.

                                       19
<PAGE>   25
         Net Portfolio Yield: For any Fixed Period, the difference between the
Portfolio Yield for such Fixed Period and the Yield for such Fixed Period.

         Note Register: Defined in Section 2.18(c).

         Notice of Sale: A notice, substantially in the form of Exhibit A
hereto, delivered pursuant to Section 2.2.

         Obligor: With respect to any Loan, the Person or Persons obligated to
make payments pursuant to the respective Loan Documents, including any guarantor
thereof (but not including Export-Import Bank). For purposes of calculating any
of the concentration and mix criteria set forth on Schedule II, all Loans in the
Asset Pool or to be transferred to the Asset Pool, the Obligor of which is an
Affiliate of another Obligor, shall be aggregated with all Loans of such other
Obligor. For example, if Obligor A is an Affiliate of Obligor B, and the sum of
the Outstanding Loan Balances of all of Obligor A's Loans in the Asset Pool
constitutes 5% of the Aggregate Outstanding Loan Balance, and the sum of the
Outstanding Loan Balances of all of Obligor B's Loans in the Asset Pool
constitutes 5% of the Aggregate Outstanding Loan Balance, then the Obligor
concentration for Obligor A would be 10% and the Obligor concentration for
Obligor B would also be 10%.

         Officer's Certificate: A certificate signed by any officer of the
Seller or the Servicer, as the case may be, and delivered to the Deal Agent.

         Officer's Certificate as to Solvency: A certificate signed by any
officer of the Seller or FIB, as the case may be, and delivered to the Deal
Agent in the form of Exhibits J-1 and J-2 attached hereto.

         Officer's Closing Certificate: A certificate signed by any officer of
the Seller or FIB, as the case may be, and delivered to the Deal Agent in the
form of Exhibits K-1 and K-2.

         Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller or the Servicer and who shall be reasonably acceptable to the
Deal Agent.

         Originator: FIB.

         Originator Assets: Any Asset that was transferred to the Seller by the
Originator.

         Outstanding Loan Balance: With respect to any Loan, the then
outstanding principal balance thereof.

         Paying Agent: First International Bank as the Servicer and any
Successor Servicer.

         Payment Date: The twenty-first (21st) day of each calendar month or, if
such day is not a Business Day, the next succeeding Business Day, commencing on
April 21, 2001.

         Permitted Investments: Any one or more of the following types of
investments:

                                       20
<PAGE>   26
                  (a) marketable obligations of the United States, the full and
         timely payment of which are backed by the full faith and credit of the
         United States and which have a maturity of not more than 270 days from
         the date of acquisition;

                  (b) marketable obligations, the full and timely payment of
         which are directly and fully guaranteed by the full faith and credit of
         the United States and which have a maturity of not more than 270 days
         from the date of acquisition;

                  (c) bankers' acceptances and certificates of deposit and other
         interest-bearing obligations (in each case having a maturity of not
         more than 270 days from the date of acquisition) denominated in dollars
         and issued by any bank with capital, surplus and undivided profits
         aggregating at least $100,000,000, the short-term obligations of which
         are rated A-1 by S&P and P-1 by Moody's;

                  (d) repurchase obligations with a term of not more than ten
         days for underlying securities of the types described in clauses (a),
         (b) and (c) above entered into with any bank of the type described in
         clause (c) above;

                  (e) commercial paper rated at least A-1 by S&P and P-1 by
         Moody's; and,

                  (f) demand deposits, time deposits or certificates of deposit
         (having original maturities of no more than 365 days) of depository
         institutions or trust companies incorporated under the laws of the
         United States or any state thereof (or domestic branches of any foreign
         bank) and subject to supervision and examination by federal or state
         banking or depository institution authorities; provided, however that
         at the time such investment, or the commitment to make such investment,
         is entered into, the short-term debt rating of such depository
         institution or trust company shall be at least A-1 by S&P and P-1 by
         Moody's.

         Permitted Liens: Liens in favor of the Deal Agent as agent for the
Secured Parties created pursuant to this Agreement.

         Permitted Securitization Transaction: Any (a) financing transaction
undertaken by the Seller or an Affiliate of the Seller that is secured, directly
or indirectly, by the Assets or any portion thereof or any interest therein, and
(b) any securitization, including any sale, lease, whole loan sale, asset
securitization, secured loan or other transfer, to the extent approved in
writing by the Deal Agent in its sole discretion.

         Person: An individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, sole proprietorship, joint venture, government (or any agency or
political subdivision thereof) or other entity.

         Pool Assets: On any day any and all Assets in the Asset Pool.

                                       21
<PAGE>   27
         Portfolio Rate: On any day, with respect to any Collection Period, the
annualized percentage equivalent of a fraction, the numerator of which is equal
to all Interest Collections deposited in the Collection Account for such
Collection Period, and the denominator of which is equal to the Capital of the
last day of such Collection Period.

         Portfolio Yield: As of any date of determination, the excess, if any,
of (a) the Rolling Three Month Portfolio Rate on such day over (b) the Yield
Rate plus the Program Fee for such day.

         Power of Attorney: A power of attorney signed by any officer of the
Seller in the form of Exhibit L hereto.

         Prepaid Loan: Other than Commercial Lines of Credit which may be
prepaid but for which the commitment to make advances thereunder is still in
effect, any Loan that has terminated or been prepaid in full prior to its
scheduled maturity date (including because of a Casualty Loss), other than a
Defaulted Loan.

         Prime Rate: The rate announced by First Union from time to time as its
prime rate in the United States, such rate to change as and when such designated
rate changes. The Prime Rate is not intended to be the lowest rate of interest
charged by First Union in connection with extensions of credit to debtors.

         Principal Collections: Any and all amounts received in respect of any
principal due and payable under any Loan from or on behalf of Obligors that are
deposited into the Collection Account, or received by the Servicer, Originator,
or Seller in respect of Loans, in the form of cash, checks, wire transfers,
electronic transfers or any other form of cash payment.

         Proceeds: With respect to any Pool Asset, whatever is receivable or
received when such Pool Asset is sold, collected, liquidated, foreclosed,
exchanged, or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes all rights to payment with respect to any insurance
relating to such Pool Asset.

         Program Fee: As defined in the Section 2.13(b).

         Purchase: A purchase by a Purchaser of an undivided interest in the
Assets from the Seller pursuant to Article II, including a reinvestment under
Clause TENTH of Section 2.7.

         Purchase Agreement: The Purchase and Sale Agreement dated as of the
Closing Date between the Originator and the Seller, as amended, modified,
supplemented or restated from time to time.

         Purchase Date: The Closing Date (or, if a Purchase is not made on the
Closing Date, then the date of the initial Purchase after the Closing Date), and
as to any Incremental Purchase, any Business Day that is (i) at least one (1)
calendar week following the immediately preceding Purchase Date and (ii) five
(5) Business Days immediately following the receipt by the Deal

                                       22
<PAGE>   28
Agent of a written request by the Seller to sell an Asset Interest, such notice
to be in the form of Exhibit A hereto.

         Purchase Limit: At any time, $120,000,000, minus the amount of
"Capital" (as such term is defined in the FNBNE Funding Corp. Loan Purchase and
Servicing Agreement) outstanding to VFCC and the "Investors" (as such term is
defined in the FNBNE Funding Corp. Loan Purchase and Servicing Agreement) under
the FNBNE Funding Corp. Loan Purchase and Servicing Agreement on such date;
provided, that, on or after the Termination Date, the Purchase Limit shall mean
the aggregate outstanding Capital.

         Purchase Rate: (i) With respect to Commercial Loans, 85%, (ii) with
respect to Ex-Im Loans, 100% of the guaranteed portion of the Outstanding Loan
Balance of such Ex-Im Loans which is guaranteed through the Export-Import Bank
and (iii) with respect to Ex-Im 2 Loans, 100% of the guaranteed or insured
portion of the Outstanding Loan Balance of such Ex-Im 2 Loans that is guaranteed
or insured through the Export-Import Bank.

         Purchasers: Collectively, VFCC, First Union, and the Investors and any
other Person that agrees, pursuant to the pertinent Assignment and Acceptance,
to purchase an Asset Interest pursuant to this Agreement.

         Put Option: As defined in Section 2.17.

         Put Option Date Certificate: A certificate duly executed and delivered
by the Seller pursuant to Section 2.17(a)(iv).

         Put Option Purchase Date: As defined in Section 2.17.

         Qualified Institution: As defined in Section 6.4(d).

         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 the Issuer.

         Recoveries: With respect to a Defaulted Loan, proceeds from the sale of
the Related Property, proceeds of any related Insurance Policy and any other
recoveries with respect to such Defaulted Loan and the related Equipment and
related property, and other amounts representing late fees and penalties net of
Liquidation Expenses and amounts, if any, so received that are required to be
refunded to the Obligor on such Loan.

         Records: With respect to any Loans, all documents, books, records and
other information (including without limitation, computer programs, tapes,
disks, punch cards, data processing software and related property and rights)
maintained with respect to any Pool Asset and the related Obligors, other than
the Loan Documents; provided, however, any "Records" related solely and
exclusively to any Retained Interest shall be excluded from the foregoing
definition.

         Register: As defined in Section 10.1(c).

                                       23
<PAGE>   29
         Registrar: First Union, not in its individual capacity but solely as
Registrar, its successor or successors in interest and any Person which at any
time may be selected by the Seller upon the resignation of First Union to act as
Registrar.

         Related Property: With respect to a Loan, any property or other assets
of the Obligor thereunder pledged as collateral to the Originator to secure such
Loan.

         Replaced Loan: As defined in Section 2.9.

         Reporting Date: The date which is two Business Days prior to each
Payment Date.

         Required Investors: At a particular time, Investors with Commitments
equal to or in excess of 66 2/3 % of the Purchase Limit.

         Required Loan Documents: The documents described in clause (i), (ii),
(iii) and (iv) of the definition of Loan Document.

         Required Reports: Collectively, the Monthly Report, the Servicer's
Certificate and the financial statements of the Servicer required to be
delivered to the Deal Agent pursuant to Section 6.12(c) hereof.

         Requirements of Law: For any Person or property of such Person, shall
mean the certificate of incorporation or articles of association and by-laws or
other organizational or governing documents of such Person or property of such
Person, and any law, treaty, rule or regulation, or order or determination of an
arbitrator or Governmental Authority, in each case applicable to or binding upon
such Person or property of such Person, or to which such Person or property of
such Person, is subject, whether Federal, state or local (including, without
limitation, usury laws, the Federal Truth in Lending Act, and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System).

         Reserve Percentage: The percentage that is 100% minus the applicable
Purchase Rate.

         Reserves: As to any Asset Interest on any day, an amount equal to the
Reserve Percentage multiplied by the Capital of such Asset Interest as of the
close of business of the Collateral Custodian on such day.

         Responsible Officer: As to any Person, any officer of such Person with
direct responsibility for the administration of this Agreement and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.

         Retained Advances: Advances and loans made by the Originator to the
Obligor under any Revolving Loan and not sold to the Seller under the Purchase
Agreement including interest thereon and fees with respect thereto.

                                       24
<PAGE>   30
         Retained Interest: With respect to any Revolving Loan that does not
provide by its terms that any funding thereunder is in the Originator's sole and
absolute discretion, (i) all of the obligations, if any, to provide additional
funding, letters of credit, or other financing, products or services with
respect to such Revolving Loan, and (ii) any Retained Advances.

         Retransfer Amount: As defined in Section 5.6.

         Retransfer Date: As defined in Section 5.6.

         Revolving Loan: Any Transferred Loan that is not a Commercial Term Loan
or contains an unfunded commitment on the part of the Originator to advance
additional funds to the Obligor thereof.

         Revolving Period: The period commencing on the Closing Date and ending
on the day immediately preceding the Termination Date.

         Rolling Three-Month Portfolio Rate: For any day, the percentage
equivalent of a fraction the numerator of which is equal to the sum of the three
(3) most recent Portfolio Rates and the denominator of which is equal to three
(3).

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

         Scheduled Payment: With respect to a date on which a payment is due
under a Loan, the periodic payment (exclusive of any amounts in respect of
insurance or taxes and reflecting any adjustment for any partial prepayment) set
forth in the applicable Loan Documents as due from the Obligor.

         Secured Party: (i) Each Purchaser and (ii) each Hedge Counterparty that
is either a Purchaser or an Affiliate of a Purchaser if that Affiliate executes
a counterpart of this Agreement agreeing to be bound by the terms of this
Agreement applicable to a Secured Party.

         Securitization: A disposition of Loans in one or a series of structured
finance securitization transactions.

         Seller: Defined in the preamble to the Agreement.

         Servicer: FIB and its permitted successors and assigns.

         Servicer Advance: An advance of Scheduled Payments made by the Servicer
pursuant to Section 6.5.

         Servicer Assignee: As defined in Section 6.19.

         Servicer Termination Event: As defined in Section 6.23.

                                       25
<PAGE>   31
         Servicer's Certificate: As defined in Section 6.12(b).

         Servicing Duties: As defined in Section 6.1.

         Servicing Fee: As defined in Section 2.13(c).

         Servicing Fee Rate: As defined in the Fee Letter.

         Servicing Records: All documents, books, records and other information
(including, without limitation, computer programs, tapes, disks, data processing
software and related property rights) prepared and maintained by the Servicer
with respect to the Loans and the related Obligors.

         Solvent: As to any Person at any time, having a state of affairs such
that all of the following conditions are met: (a) the fair value of the property
owned by such Person is greater than the amount of such Person's liabilities
(including disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section 101(31) of the
Bankruptcy Code; (b) the present fair saleable value of the property owned by
such Person in an orderly liquidation of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts
as they become absolute and matured; (c) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in a business or a transaction, for
which such Person's property would constitute unreasonably small capital.

         Structured Note: Defined in Section 2.8.

         Structuring Fee: The structuring fee agreed to between the Seller and
the Deal Agent in the Fee Letter.

         Substitute Loan: As defined in Section 2.9.

         Successor Servicer: As defined in Section 6.27(a).

         Taxes: Any present or future taxes levies, imposts, duties, charges,
assessments or fees of any nature (including interest, penalties, and additions
thereto) that are imposed by any Government Authority.

         Termination Date: The earliest to occur of (a) the date of the
occurrence of an Early Amortization Event pursuant to Section 7.1, (b) the
Commitment Termination Date, (c) the termination of the Purchase Limit pursuant
to Section 2.3, and (d) the occurrence of an Insolvency Event with respect to
either FIB or the Seller.

         Termination Notice: As defined in Section 6.26.

                                       26
<PAGE>   32
         Transaction: As defined in Section 3.2.

         Transaction Documents: This Agreement, the Purchase Agreement, the
Liquidity Purchase Agreement, the Hedge Agreement, the Structured Note, the Fee
Letter, the Backup Servicer and Collateral Custodian Fee Letter, the Lockbox
Notices Agreement, any UCC financing statements filed pursuant to the terms of
this Agreement, and any additional document the execution of which is necessary
or incidental to carrying out the terms of the foregoing documents.

         Transferred Loans: Each Loan that is sold by the Originator to the
Seller under the Purchase Agreement.

         Trigger Event: Any of the Early Amortization Events described in
clauses (n), (o), (p) and (u) of Section 7.1, without regard to any applicable
cure period.

         UCC: The Uniform Commercial Code as from time to time in effect in the
specified jurisdiction.

         United States: The United States of America.

         Unmatured Early Amortization Event: Any event that, with the giving of
notice or lapse of time, or both, would become an Early Amortization Event.

         Unreimbursed Servicer Advances: At any time, the amount of all previous
Servicer Advances (or portions thereof) as to which the Servicer has not been
reimbursed as of such time pursuant to Section 2.7 and which the Servicer has
determined in its sole discretion will not be recoverable from Collections with
respect to the related Loan.

         Warranty Event: As to any Loan included as part of the Asset Pool, the
occurrence and continuance of a material breach of any representation or
warranty relating to such Loan and such breach is not cured within the relevant
cure period.

         Yield: For each Asset Interest for any Fixed Period, the sum of the
products (for each day during such Fixed Period) of:

                    YR x C x  1
                             ---
                              D

         where:

         C   =    the Capital of such Asset Interest,

         YR  =    the Yield Rate applicable on such day; and

                                       27
<PAGE>   33
         D   =    360 or, to the extent the Yield Rate is based on the Base
                  Rate, 365 or 366, as applicable.

provided, however, that (a) no provision of this Agreement shall require the
payment or permit the collection of Yield in excess of the maximum permitted by
Requirements of Law and (b) Yield shall not be considered paid by any
distribution if at any time such distribution is rescinded or must otherwise be
returned for any reason.

         Yield Rate: For any Fixed Period and for each Asset Interest purchased
by a Purchaser for each day during such Fixed Period: (a) to the extent the
Purchaser is VFCC and it has funded the applicable Asset Interest through the
issuance of commercial paper notes, a rate equal to the sum of the applicable
Adjusted Eurodollar Rate for such Fixed Period and the Cost of Funds Adjusted
(if any) for such Fixed Period; or (b) to the extent the relevant Purchaser did
not fund the applicable Asset Interest through the issuance of commercial paper,
a rate equal to the Alternative Rate for any Asset Interest that is not funded
by the issuance of commercial paper on the first day of the applicable Fixed
Period; provided, however, the Yield Rate shall be the Base Rate for any Fixed
Period for any Asset Interest as to which the related Purchaser has funded the
acquisition or maintenance thereof by a sale of a interest therein to any
Liquidity Bank under the Liquidity Agreement on any day other than the first day
of such Fixed Period.

         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 States of
New York and Connecticut, as applicable, and not specifically defined herein,
are used herein as defined in such Article 9.

         SECTION 1.3 COMPUTATION OF TIME PERIOD.

         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."

         SECTION 1.4 INTERPRETATION.

         In each Transaction Document, unless a contrary intention appears:

                  (i) the singular number includes the plural number and vice
         versa;

                  (ii) reference to any Person includes such Person's successors
         and assigns but, if applicable, only if such successors and assigns are
         permitted by the Transaction Documents;

                  (iii) reference to any gender includes each other gender;

                  (iv) reference to day or days without further qualification
         means calendar days;

                                       28
<PAGE>   34
                  (v) reference to any time means Charlotte, North Carolina
         time;

                  (vi) reference to any agreement (including any Transaction
         Document), document or instrument means such agreement, document or
         instrument as amended, supplemented or modified and in effect from time
         to time in accordance with the terms thereof and, if applicable, the
         terms of the other Transaction Documents, and reference to any
         promissory note that is an extension or renewal thereof or a substitute
         or replacement therefor; and

                  (vii) reference to any Requirements of Law means such
         Requirements of Law as amended, modified, codified, replaced or
         reenacted, in whole or in part, and in effect from time to time,
         including rules and regulations promulgated thereunder and reference to
         any section or other provision of any Requirements of Law means that
         provision of such Requirements of Law from time to time in effect and
         constituting the substantive amendment, modification, codification,
         replacement or reenactment of such section or other provision.

                                   ARTICLE II

                              THE PURCHASE FACILITY

         SECTION 2.1 PURCHASES OF ASSET INTERESTS.

         (a) On the terms and conditions hereinafter set forth, the Seller may
on any Purchase Date during the period from the date hereof to but not including
the Termination Date, at its option, sell and assign Asset Interests to the
Purchasers. The Deal Agent may act on behalf of and for the benefit of the
Purchasers in this regard. VFCC may, in its sole discretion, purchase, or if
VFCC shall decline to purchase, the Liquidity Agent shall purchase on behalf of
the Investors, Asset Interests from time to time during the period from the date
hereof to but not including the Termination Date. Under no circumstances shall
any Purchaser make the initial Purchase or any Incremental Purchase if, after
giving effect to such Purchase or Incremental Purchase, the aggregate Capital
outstanding hereunder would exceed the lesser of (i) the Purchase Limit or (ii)
the Capital Limit. Each Asset Interest purchased by any Purchaser hereunder is
subject to the interests of the Hedge Counterparties under Sections 2.7(a)(i)
and (x) of this Agreement.

         (b) The Seller may, within 60 days, but no later than 45 days, prior to
each one year anniversary of the Closing Date, by written notice to the Deal
Agent, make written request for VFCC and the Investors to extend the Commitment
Termination Date for an additional period of one year following the then
existing Commitment Termination Date. The Deal Agent will give prompt notice to
VFCC and each of the Investors of its receipt of such request for extension of
the Commitment Termination Date. VFCC and each Investor shall make a
determination, in their sole discretion and after a full credit review, not less
than 15 days prior to such anniversary date, as to whether or not it will agree
to extend the Commitment Termination Date; provided, however, that the failure
of VFCC or any Investor to make a timely response to the Seller's

                                       29
<PAGE>   35
request for extension of the Commitment Termination Date shall be deemed to
constitute a refusal by VFCC or the Investor, as the case may be, to extend the
Commitment Termination Date. The Commitment Termination Date shall only be
extended upon the consent of both (i) VFCC and (ii) 100% of the Investors.

         (c) Notwithstanding the foregoing Section 2.1(b), upon the proposed
conversion of FIB from a regulated bank to a commercial finance company (the
"Conversion"), which is otherwise subject to the provisions of this Agreement,
the Commitment Termination Date shall be the date that is the earlier of (i) the
date that is 364 days after the date of the Conversion, or (ii) the then
Commitment Termination Date, unless the Deal Agent and 100% of the Investors,
upon appropriate due diligence and credit approvals agree that the then
Commitment Termination Date should not be accelerated.

         (d) Notwithstanding the foregoing Sections 2.1(b) and (c), upon the
occurrence of any FDIC Action and (x) the failure of the Originator to be in
compliance with the requirements of such FDIC Action on the date that is 120
days after the effective date of the FDIC Action (a "Clause (X) Failure") or (y)
as to any portion of the FDIC Action that requires compliance after the end of
such 120 days, the failure of the Originator to be in compliance with the
requirements of such FDIC Action at or within 60 days after such compliance is
required by such FDIC Action (a "Clause (Y) Failure"), the Commitment
Termination Date shall be the date that is the earlier of (i) (a) with respect
to a Clause (X) Failure, the date that is 120 days after the FDIC Action, or (b)
with respect to a Clause (Y) Failure, the date that is 60 days after the date of
the Clause (Y) Failure, and (ii) the then Commitment Termination Date, unless
the Deal Agent and 100% of the Investors, upon appropriate due diligence and
credit approvals agree that the then Commitment Termination Date should not be
accelerated.

         SECTION 2.2 THE INITIAL PURCHASE AND INCREMENTAL PURCHASES.

         (a) Subject to the conditions described in Section 2.1, the initial
Purchase and each Incremental Purchase shall be made in accordance with the
procedures described in Section 2.2(b). After the Collection Date has occurred,
each of the Purchasers and the Deal Agent, in accordance with their respective
interests, shall assign and transfer to the Seller their respective remaining
interest in Asset Interests without any representation or warranty, express or
implied and without recourse of any kind.

         (b) The initial Purchase and each Incremental Purchase shall be made
pursuant to the terms of a Purchase Certificate in the form of Exhibit H hereto,
after receipt by the Deal Agent, on behalf of the Purchasers (with a copy to the
Collateral Custodian) of a duly completed Notice of Sale no later than 5:00 p.m.
(Charlotte, North Carolina time) at least two (2) business days prior to the
proposed Purchase Date. Each Notice of Sale shall (i) specify the desired amount
of such Purchase which amount must (a) in the case of the initial Purchase be in
a minimum amount of $5,000,000, and (b) in the case of any Incremental Purchase
be in an amount equal to $500,000 or an integral multiple of $10,000 in excess
thereof, (ii) specify the date of such Purchase, and (iii) include a
representation that all conditions precedent for a purchase described in Article
III hereof have been met. Each Notice of Sale shall be irrevocable.

                                       30
<PAGE>   36
         (c) Following receipt of such Notice of Sale, the Deal Agent will
consult with VFCC in order to assist VFCC in determining whether or not to make
the Purchase. If VFCC decides in its sole discretion that it is unwilling or
unable to make a proposed Purchase, the Investors will make such Purchase. On
the date of such Purchase, VFCC or each Investor shall, upon satisfaction of the
applicable conditions set forth in Article III, make available to the Seller in
same day funds, at such bank or other location reasonably designated by Seller
in its Notice of Sale given pursuant to this Section 2.2, an amount equal to the
lesser of (A) the amount requested by the Seller for such Asset Interest, (B) an
amount equal to the Capital Limit on such Purchase Date minus the aggregate
Capital of all other Asset Interests outstanding on such Purchase Date or (C)
the Purchase Limit.

         SECTION 2.3 REDUCTION OF THE PURCHASE LIMIT.

         The Seller may, upon at least five Business Days' notice to the Deal
Agent, terminate in whole or reduce in part the portion of the Purchase Limit
that exceeds the sum of the aggregate Capital and Yield accrued and to accrue
thereon, and the Commitments of the Investors shall be reduced proportionately;
provided, however, that each partial reduction of the Purchase Limit shall be in
an aggregate amount equal to $1,000,000 or an integral multiple of $100,000 in
excess thereof. Each notice of reduction or termination pursuant to this Section
2.3 shall be irrevocable.

         SECTION 2.4 DETERMINATION OF YIELD.

         The Deal Agent shall initially determine the Yield Rate and the Yield
(including unpaid Yield, if any, due and payable on a prior Payment Date) to be
paid by the Seller with respect to each Asset Interest on each Payment Date for
the related Fixed Period and shall advise the Servicer thereof on the third
Business Day prior to such Payment Date. Prior to the next succeeding Payment
Date, the Deal Agent shall redetermine the Yield Rate and Yield (including
unpaid Yield, if any, due and payable on a prior Payment Date) for the prior
Fixed Period and the difference, if any, between (i) the Yield Rate and Yield as
initially determined for such Fixed Period and (ii) the Yield Rate and Yield as
redetermined on the Payment Date for such Fixed Period. The amount owed in
respect of the Yield for the next succeeding Fixed Period, as initially
determined by the Deal Agent, shall be either increased or decreased, if
necessary and as appropriate, to reflect such difference in the Yield for the
most recently completed Fixed Period.

         SECTION 2.5 PERCENTAGE EVIDENCED BY ASSET INTEREST.

         The variable percentage represented by an Asset Interest shall be
initially computed on its date of purchase. Thereafter, until the Termination
Date, each Asset Interest shall be automatically recomputed (or deemed to be
recomputed) on each day prior to the Termination Date. The variable percentage
represented by an Asset Interest as computed (or deemed recomputed) as of the
close of business on the day immediately preceding the Termination Date shall
remain constant at all times after the Termination Date. The variable percentage
represented by the Asset Interest shall become zero when its Capital and Yield
has been paid in full.

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<PAGE>   37

         SECTION 2.6 DIVIDING OR COMBINING ASSET INTERESTS.

         The Deal Agent may, with the consent of a Purchaser, take any of the
following actions at the end of such Fixed Period with respect to any Asset
Interest: (i) divide the Asset Interest owned by such Purchaser into two or more
portions of Asset Interests having aggregate Capital equal to the Capital of
such divided Asset Interest, (ii) combine one portion of an Asset Interest of
such Purchaser with another portion of an Asset Interest of such Purchaser with
a Fixed Period ending on the same day, creating a new portion of an Asset
Interest having Capital equal to the Capital of the two portions of Asset
Interest combined or (iii) combine the Asset Interest of such Purchaser with the
Asset Interest to be purchased on such day by such Purchaser, creating a new
Asset Interest having Capital equal to the Capital of the two Asset Interests
combined; provided, that an Asset Interest of VFCC may not be combined with an
Asset Interest of the Investors.

         SECTION 2.7 SETTLEMENT PROCEDURES.

         (a) On each Payment Date, the Servicer shall pay to the following
Persons, from (i) the Collection Account, to the extent of available funds
including interest earnings on the Collection Account, (ii) a Servicer Advance
if made or required pursuant to Section 6.5, and (iii) amounts received in
respect of any Hedge Agreement during the applicable Collection Period (the sum
of such amounts described in clauses (i), (ii) and (iii) being the "Available
Collections") the following amounts in the following order of priority:

                           (A) FIRST, pro rata to each Hedge Counterparty, any
                  amounts, including any Hedge Breakage Costs, owing that Hedge
                  Counterparty under its respective Hedging Agreement in respect
                  of any Hedge Transaction(s) (other than payments in respect of
                  Termination of any Hedging Agreement), for the payment
                  thereof;

                           (B) SECOND, to the Servicer, but only out of proceeds
                  on the Ex-Im Policy or Ex-Im Guarantee that were paid with
                  respect to such Ex-Im Loans or Ex-Im 2 Loans, as applicable,
                  in an amount equal to any Unreimbursed Servicer Advances with
                  respect to such Ex-Im Loans or Ex-Im 2 Loans, as applicable,
                  for the payment thereof;

                           (C) THIRD, to the Servicer, but only out of Interest
                  Collections, in an amount equal to any Unreimbursed Servicer
                  Advances, for the payment thereof;

                           (D) FOURTH, to the Servicer, in an amount equal to
                  its accrued and unpaid Servicing Fees to the end of the
                  preceding Collection Period;

                           (E) FIFTH, to the extent not paid for by FIB, to the
                  Backup Servicer, in an amount equal to any accrued and unpaid
                  Backup Servicer Fee, for the payment thereof;

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<PAGE>   38
                           (F) SIXTH, to the extent not paid for by FIB, to the
                  Collateral Custodian, in an amount equal to any accrued and
                  unpaid Collateral Custodian Fee, for the payment thereof;

                           (G) SEVENTH, to the Deal Agent for the ratable
                  payment to each Purchaser, in an amount equal to any accrued
                  and unpaid Yield and Breakage Costs for such Payment Date;

                           (H) EIGHTH, to the Deal Agent for the ratable payment
                  to each Purchaser in an amount equal (I) to the extent not
                  paid by FIB, to any accrued and unpaid Commitment Fees and
                  (II) to any accrued and unpaid Program Fees;

                           (I) NINTH, to the Deal Agent, in the amount of unpaid
                  Increased Costs and/or Taxes, for payment to the Purchasers in
                  respect thereof;

                           (J) TENTH, to the extent that funds are available,
                  any remaining amounts may be reinvested in Eligible Loans;
                  provided, however, that if the aggregate Capital exceeds the
                  lesser of (i) the Capital Limit or (ii) the Purchase Limit, an
                  amount equal to such excess shall be paid to the Deal Agent to
                  pay down Capital outstanding;

                           (K) ELEVENTH, pro rata to each Hedge Counterparty,
                  any amounts owing that Hedge Counterparty under its respective
                  Hedging Agreement in respect of the termination of such
                  Hedging Agreement;

                           (L) TWELFTH, to the extent funds are available to
                  satisfy any unpaid Indemnified Amounts, amounts required to be
                  paid by the Seller pursuant to the indemnification provisions
                  of Section 8.1 and any other amounts due hereunder; and

                           (M) THIRTEENTH, (A) if such Payment Date occurs
                  during the Revolving Period, any remaining amount shall be
                  distributed to the Seller, and (B) if such Payment Date occurs
                  during the Amortization Period, to the Deal Agent in reduction
                  of the outstanding Capital to zero and the payment in full of
                  the Aggregate Unpaids.

         (b) On each Business Day during the Revolving Period, the Servicer may,
to the extent of any Principal Collections on deposit in the Collection Account
as of the last day of the related Collection Period, use such funds toward the
Purchase of Eligible Loans pursuant to item TENTH in subsection (a) above.

         (c) Notwithstanding anything to the contrary contained in this Section
2.7 or any other provision in this Agreement, if on any Business Day during the
Revolving Period the aggregate outstanding amount of Capital shall exceed the
lesser of (i) the Purchase Limit or (ii) the Capital Limit, then the Seller
shall remit to the Deal Agent, prior to any reinvestment of funds as set forth
in item TENTH of Section 2.7(a) and in any event no later than the close of

                                       33
<PAGE>   39
business of the Deal Agent on the next succeeding Business Day, a payment (to be
applied by the Deal Agent to outstanding Capital) in such amount as may be
necessary to reduce outstanding Capital to an amount less than or equal to the
lesser of (i) the Purchase Limit or (ii) the Capital Limit.

         (d) On each Business Day occurring during the Amortization Period, all
Principal Collections on deposit in the Collection Account as of such Business
Day shall be paid to the Deal Agent in reduction, to zero, of the outstanding
Capital and repayment in full of the Aggregate Unpaids.

         SECTION 2.8 THE STRUCTURED NOTE.

         The Seller shall deliver to the Deal Agent, on behalf of the
Purchasers, at the applicable address set forth on the signature pages of this
Agreement, a duly executed structured note, in the form of Exhibit M (the
"Structured Note"), dated as of the date of this Agreement, in a face amount
equal to the Purchase Limit, and otherwise duly completed. The Structured Note
is intended to be a "security" and shall evidence the amount owed by the Seller
to the Purchasers hereunder. The Deal Agent is hereby authorized to make a
notation on the schedule attached to the Structured Note (which may be computer
generated) or to otherwise record in its internal books and records or computer
system with respect to each Purchase under the Structured Note made by a
Purchaser: (i) the date and amount thereof, (ii) each decrease in the Capital
outstanding, and (iii) the outstanding Capital amount, and any such notation or
recordation shall constitute prima facie evidence of the accuracy of the
information so noted or recorded. The failure of the Deal Agent to make any such
notation or recordation on the schedule attached to the Structured Note or in
its internal books and records or computer system shall not limit or otherwise
affect the obligation of the Seller to repay the Aggregate Unpaids in accordance
with the terms set forth herein.

         SECTION 2.9 SUBSTITUTION OF LOANS.

         On any day prior to the occurrence of an Early Amortization Event, the
Seller may, and upon the request of the Deal Agent shall, subject to the
conditions set forth in this Section 2.9, replace any Loan subject to a Warranty
Event or in respect of which the Obligor thereunder has requested the rewriting
and/or restructuring of such Loan with one or more other Loans (each, a
"Substitute Loan"), provided that no such replacement shall occur unless each of
the following conditions is satisfied as of the date of such replacement and
substitution:

         (a) the Loan to be replaced (i) is a Defaulted Loan, (ii) has suffered
a credit rating downgrading below 3 in accordance with the Servicer's internal
credit scoring system, or (iii) has experienced a decline in its fair market
value at least twenty-five (25%) percent compared to its Purchase Price;

         (b) the Seller has previously recommended to the Deal Agent (with a
copy to the Collateral Custodian) in writing that the Loan to be replaced should
be replaced (each a "Replaced Loan");

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<PAGE>   40
         (c) each Substitute Loan is an Eligible Loan on the date of
substitution having an approximate Outstanding Loan Balance equal to that of the
Replaced Loan (with any difference paid in cash);

         (d) after giving effect to any such substitution, the aggregate of all
outstanding Capital does not exceed the lesser of the (i) Purchase Limit and
(ii) the Capital Limit;

         (e) the aggregate Outstanding Loan Balance of such Substitute Loans
shall be equal to or greater than the lesser of (i) the aggregate Outstanding
Loan Balance of the Replaced Loans and (ii) the amount necessary to prevent the
occurrence of a Trigger Event;

         (f) all representations and warranties of the Seller contained in
Sections 4.1 and 4.2 shall be true and correct as of the date of substitution of
any such Substitute Loan;

         (g) the substitution of any Substitute Loan does not cause an Early
Amortization Event to occur; and

         (h) the Seller shall deliver to the Deal Agent on the date of such
substitution a certificate of a Responsible Officer certifying that each of the
foregoing is true and correct as of such date.

         In connection with any such substitution, the Deal Agent as agent for
the Secured Parties shall, automatically and without further action, be deemed
to transfer to the Seller, free and clear of any Lien created pursuant to this
Agreement, all of the right, title and interest of the Deal Agent as agent for
the Secured Parties in, to and under such Replaced Loans, and the Deal Agent as
agent for the Secured Parties shall be deemed to represent and warrant that it
has the corporate authority and has taken all necessary corporate action to
accomplish such transfer, but without any other representation and warranty,
express or implied. The Deal Agent, as agent for the Purchasers, shall, at the
sole expense of the Servicer execute such documents and instruments of transfer
as may be prepared by the Servicer on behalf of the Seller and take other such
actions as shall reasonably be requested by the Seller to effect the transfer of
such Replaced Loan pursuant to this Section. Any right of the Deal Agent as
agent for the Secured Parties to substitute any Loan in the Asset Pool pursuant
to this Section 2.9 shall be in addition to, and without limitation of, any
other rights and remedies that the Deal Agent as agent for the Secured Parties
or any Secured Party may have to require the Seller or the Servicer, as
applicable, to substitute for, or accept retransfer of; any Loan pursuant to the
terms of this Agreement.

         SECTION 2.10 COLLECTIONS AND ALLOCATIONS.

         The Servicer shall promptly (but in no event later than one (1)
Business Day after the receipt or deposit thereof) identify any Collections
received by, the Seller or the Servicer or deposited into the FIB Existing
Account as being on account of Interest Collections or Principal Collections and
deposit all such Interest Collections or Principal Collections into the
Collection Account (the "Collection Account"). The Servicer shall make such
deposits or payments by wire transfer, in immediately available funds.

                                       35
<PAGE>   41
         SECTION 2.11 PAYMENTS, COMPUTATION, ETC.

         (a) Unless otherwise expressly provided herein, all amounts to be paid
or deposited by the Seller or the Servicer hereunder shall be paid or deposited
in accordance with the terms hereof no later than 11:00 A.M. (Charlotte, North
Carolina time) on the day when due in lawful money of the United States in
immediately available funds to the Agent's Account. The Seller shall, to the
extent permitted by law, pay to the Secured Parties interest on all amounts not
paid or deposited when due hereunder at 1% per annum above the Base Rate,
payable on demand; provided, however, that such interest rate shall not at any
time exceed the maximum rate permitted by Requirements of Law. Such interest
shall be retained by the Deal Agent except to the extent that such failure to
make a timely payment or deposit has continued beyond the date for distribution
by the Deal Agent of such overdue amount to the Secured Parties, in which case
such interest accruing after such date shall be for the account of, and
distributed by the Deal Agent to, the Secured Parties. All computations of
interest and all computations of Yield and other fees hereunder shall be made on
the basis of a year of 360 days (other than calculations with respect to the
Base Rate which shall be based on a year of 365 or 366 days, as applicable) for
the actual number of days (including the first but excluding the last day)
elapsed.

         (b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of Yield, interest or any fee payable hereunder, as the
case may be.

         (c) If any Purchase or Incremental Purchase requested by the Seller and
approved by a Purchaser and the Deal Agent pursuant to Section 2.2, is not, for
any reason whatsoever related to a default or nonperformance by the Seller, made
or effectuated, as the case may be, on the date specified therefor, the Seller
shall indemnify such Purchaser against any reasonable loss, cost or expense
incurred by such Purchaser, including, without limitation, any loss (including
loss of anticipated profits, net of anticipated profits in the reemployment of
such funds in the manner determined by such Purchaser), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Purchaser to fund or maintain such Purchase or Incremental Purchase, as
the case may be, during such Fixed Period.

         (d) Notwithstanding anything to the contrary contained herein or in any
other Transaction Document, all payments required to be made by the Seller
hereunder shall be made by the Seller through the Servicer acting as its Paying
Agent.

         SECTION 2.12 OPTIONAL REPURCHASE.

         At any time following the Termination Date when the Aggregate
Outstanding Loan Balance is less than ten percent of the Aggregate Outstanding
Loan Balance as of the Termination Date, the Servicer may notice the Deal Agent
in writing of its intent to purchase all remaining Assets in the Asset Pool,
provided that all Hedge Transactions have been terminated. On the Payment Date
next succeeding any such notice, the Servicer shall purchase all such Assets for
a price equal to the sum of the Aggregate Unpaids, including for illustrative
purposes but not in limitation, all Yield accrued and to accrue, as reasonably
determined by the Deal

                                       36
<PAGE>   42
Agent, and all accrued and unpaid Commitment Fees, Backup Servicer Fees,
Custodial Fees, Increased Costs, Taxes, Hedge Breakage Costs, Breakage Costs and
any other amounts payable by the Seller hereunder or under or with respect to
any Hedging Agreement, and the proceeds of such purchase will be deposited into
the Collection Account and paid in accordance with Section 2.9(b).

         SECTION 2.13 FEES.

         (a) FIB, in its individual capacity, shall pay to the Deal Agent from
its own funds on each Payment Date, monthly in arrears, a fee (the "Commitment
Fee"), as set forth in the Fee Letter.

         (b) The Seller shall pay to the Deal Agent, on each Payment Date,
monthly in arrears, a Program Fee (the "Program Fee"), as set forth in the Fee
Letter.

         (c) The Servicer shall be entitled to receive out of Interest
Collections a fee (the "Servicing Fee"), monthly in arrears in accordance with
Section 2.7(a), which fee shall be equal to the product of (i) the Servicing Fee
Rate and (ii) the Aggregate Outstanding Loan Balance as of the close of business
on the immediately preceding Determination Date.

         (d) The Backup Servicer shall be entitled to receive the Backup
Servicer Fee in accordance with Section 2.7(a).

         (e) The Collateral Custodian shall be entitled to receive the Custodial
Fee in accordance with Section 2.7(a).

         SECTION 2.14 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
guideline or request from any central bank or other governmental agency or
authority (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 an Asset Interest, 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 Yield), 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 an Asset
Interest 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 accompanied by a statement
setting forth the basis for such demand), the Seller shall pay directly to such
Affected Party such additional amount or

                                       37
<PAGE>   43
amounts as will compensate such Affected Party for such additional or increased
cost incurred or such reduction suffered.

         (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 law, guideline, rule, regulation,
directive or request from any central bank or other governmental authority or
agency (whether or not having the force of law), including, without limitation,
compliance by an Affected Party with any request or directive regarding capital
adequacy, has or would have the effect of reducing the rate of return on the
capital of any Affected Party 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
(which demand shall be accompanied by a statement setting forth the basis for
such demand), the Seller shall pay directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party for such
reduction.

         (c) If as a result of any event or circumstance similar to those
described in clauses (a) or (b) of this Section, and not in duplication of any
payments made under those clauses, 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 Seller 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 Seller a
certificate as to such additional or increased cost or reduction, which
certificate shall be conclusive absent demonstrable error.

         (e) If a Purchaser shall notify the Deal Agent that a Eurodollar
Disruption Event as described in clause (a) of the definition of "Eurodollar
Disruption Event" has occurred, the Deal Agent shall in turn so notify the
Seller, whereupon all Capital in respect of which Yield accrues at the Adjusted
Eurodollar Rate shall immediately be converted into Capital in respect of which
Yield accrues at the Base Rate.

         SECTION 2.15 TAXES.

         (a) All payments made by an Obligor in respect of a Loan and all
payments made by the Seller or the Servicer under this Agreement 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. If withholding
or deduction is required by law, the Obligor, Seller, or Servicer (as the case

                                       38
<PAGE>   44
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 or the Deal
Agent (as the case may be) 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 or the Deal
Agent, respectively, with respect to payments required to be made by the Seller
or Servicer under this Agreement, by a taxing jurisdiction in which such
Purchaser or Deal Agent is organized, conducts business or is paying taxes as of
the Closing Date (as the case may be). If a Purchaser or the Deal Agent pays any
Taxes in respect of which the Seller is obligated to pay Additional Amounts
under this Section 2.15(a), the Seller shall promptly reimburse such Purchaser
or Deal Agent the amount of such Additional Amounts.

         (b) The Seller will indemnify each Purchaser and the Deal Agent for the
full amount of Taxes in respect of which the Seller is required to pay
Additional Amounts (including, without limitation, any Taxes imposed by any
jurisdiction on such Additional Amounts) paid by such Purchaser or the Deal
Agent (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 the Deal Agent, as appropriate, making a demand for indemnity
payment shall provide the Seller, 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 the Deal Agent stating or
otherwise evidencing that such Purchaser or the 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 Seller of any
Taxes, the Seller will furnish to the 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 Requirements of Laws, deliver to the Seller
with a copy to the Deal Agent (i) within 15 days after the date hereof, or, if
later, the date on which such Purchaser becomes a Purchaser hereof two (or such
other number as may from time to time be prescribed by Requirements of Law) duly
completed copies of W-8BEN or W8ECI (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 Requirements of Law), as
appropriate, to permit the Seller 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 2.15(d), copies (in such numbers
as may from time to time be prescribed by Requirements of Law) of such
additional, amended or successor forms, certificates or statements as may be
required under Requirements of Law to permit the Seller to make payments
hereunder for the account of such Purchaser, without deduction or withholding of
United States federal income or similar Taxes.

                                       39
<PAGE>   45
         (e) For any period with respect to which a Purchaser or the Deal Agent
has failed to provide the Seller 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), the Deal
Agent or such Purchaser, as the case may be shall not be entitled to
indemnification under clauses (a) or (b) of this Section with respect to any
Taxes.

         (f) Within 30 days of the written request of the Seller therefor, the
Deal Agent and the Purchasers, as appropriate, shall execute and deliver to the
Seller such certificates forms or other documents which can be furnished
consistent with the facts and which are reasonably necessary to assist the
Seller in applying for refunds of Taxes remitted hereunder, provided, however,
that the Deal Agent and the Purchasers shall not be required to deliver such
certificates forms or other documents if in their respective sole discretion it
is determined that the deliverance of such certificate, form or other document
would have a material adverse effect on the Deal Agent or any Purchaser and
provided further, however, that the Seller shall reimburse the Deal Agent or any
such 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 Seller
shall pay to the Purchasers such additional amount or amounts (without
duplication) 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
Seller hereunder, the agreements and obligations of the Seller contained in this
Section shall survive the termination of this Agreement.

         SECTION 2.16 ASSIGNMENT OF THE PURCHASE AGREEMENT.

         The Seller hereby assigns to the Deal Agent, for the ratable benefit of
the Secured Parties hereunder, all of the Seller's right and title to and
interest in, but none of its obligations under, the Purchase Agreement and any
UCC financing statements filed under or in connection therewith. The Seller
confirms that following an Early Amortization Event the Deal Agent shall have
the sole right to enforce the Seller's rights and remedies under the Purchase
Agreement and any UCC financing statements filed under or in connection
therewith for the benefit of the Secured Parties. The Seller further confirms
and agrees that such assignment to the Deal Agent shall terminate upon the
Collection Date; provided, however, that the rights of the Deal Agent and the
Secured Parties pursuant to such assignment with respect to rights and remedies
in connection with any indemnities and any breach of any representation,
warranty or covenants made by the Originator pursuant to the Purchase Agreement,
which rights and remedies survive the termination of the Purchase Agreement,
shall be continuing and shall survive any termination of such assignment.

                                       40
<PAGE>   46
         SECTION 2.17 PUT OPTION.

         (a) The Seller hereby grants to the Deal Agent, on behalf of the
Purchasers, the option (the "Put Option") to require the Seller to prepay all or
a portion of the aggregate Capital in connection with the sale and assignment to
the Seller by the Deal Agent, on behalf of the Purchasers, of the Assets,
subject to the following terms and conditions:

                  (i) The Deal Agent, on behalf of the Purchasers, shall have
given the Seller at least fifteen (15) days prior written notice of its
intention to exercise its Put Option. Such notice shall specify the portion of
the aggregate Capital for which the Put Option is being exercised and shall set
for the closing a date (the "Put Option Purchase Date"), which is not less than
fifteen (15) nor more than ninety (90) days after the date such notice is sent.
The Deal Agent, on behalf of the Purchasers, may rescind such notice, without
liability of any kind, at any time prior to the Put Option Purchase Date by
giving at least five (5) days prior written notice thereof to the Seller;

                  (ii) Any Put Option shall be exercised solely in connection
with a Permitted Securitization Transaction;

                  (iii) No portion of the proceeds used by the Seller to prepay
Capital on a Put Option Purchase Date shall be realized from the Seller's sale
or assignment of Assets back to the Originator on such date;

                  (iv) Unless a Put Option Purchase Date is a Payment Date (in
which case the relevant calculations with respect to such Put Option shall be
reflected on the applicable Monthly Report), the Seller shall deliver to the
Deal Agent a Put Option Purchase Date Certificate, together with evidence to the
reasonable satisfaction of the Deal Agent (which evidence may consist solely of
the Put Option Purchase Date Certificate) that the Seller shall have sufficient
funds on the related Put Option Purchase Date to effect the contemplated Put
Option in accordance with this Agreement. In effecting a Put Option, the Seller
may use the proceeds of sales of the Assets (which sales must be made in
arm's-length transactions to Persons other than the Originator);

                  (v) After giving effect to the prepayment of Capital pursuant
to the exercise of the Put Option and the assignment to the Seller of the Assets
on any Put Option Purchase Date, (x) the remaining aggregate Capital shall be
less than or equal to the lesser of the Capital Limit and the Purchase Limit,
(y) the representations and warranties contained in Section 4.1 and Section 4.2
hereof shall continue to be correct in all material respects, except to the
extent relating to an earlier date, and (z) neither an Early Amortization Event
nor an event that, with the giving of notice of the lapse of time, or both,
would become an Early Amortization Event, shall have resulted;

                  (vi) On the related Put Option Purchase Date, the Deal Agent
shall have received, for the benefit of the Purchasers and the Hedge
Counterparties, as applicable, in immediately available funds, an amount equal
to the sum of (i) the portion of the aggregate Capital to be prepaid plus (ii)
an amount equal to all unpaid Yield to the extent reasonably

                                       41
<PAGE>   47
determined by the Deal Agent to be attributable to that portion of the aggregate
Capital to be paid in connection with the Put Option plus (iii) an aggregate
amount equal to the sum of all other amounts due and owing to the Deal Agent,
the Purchasers and the Hedge Counterparties, as applicable, under this Agreement
and the other Transaction Documents, to the extent accrued to such date and to
accrue thereafter (including, without limitation, Breakage Costs and Hedge
Breakage Costs);

                  (vii) On or prior to each Put Option Purchase Date, the Seller
shall have delivered to the Deal Agent, on behalf of the Purchasers, a list
designating the Assets to be sold and assigned pursuant to such Put Option.

         (b) In connection with any Put Option that does not constitute a
prepayment in full of the outstanding aggregate Capital, then, following receipt
by the Deal Agent of the amounts referred to in clause (v) above, there shall be
sold and assigned to the Seller all of the right, title and interest of the Deal
Agent in, to and under the portion of the Assets so retransferred and such
portion of the Assets so retransferred shall be released from the Lien of this
Agreement (subject to the requirements of clause (iv) above).

         (c) The Seller hereby agrees to pay the reasonable legal fees and
expenses of the Deal Agent, the Purchasers and the Hedge Counterparties in
connection with any Put Option (including, but not limited to, expenses incurred
in connection with the release of the Lien of the Deal Agent, the Purchasers,
the Hedge Counterparties and any other party having such an interest in the
Assets in connection with such Put Option).

         (d) In connection with any Put Option, on the related Put Option
Purchase Date, the Deal Agent, on behalf of the Purchasers and the Hedge
Counterparties, shall, at the expense of the Seller (i) execute such instruments
of release with respect to the portion of the Assets to be retransferred to the
Seller, in recordable form if necessary, in favor of the Seller as the Seller
may reasonably request, (ii) deliver any portion of the Assets to be
retransferred to the Seller in its possession to the Seller and (iii) otherwise
take such actions , and cause or permit the Collateral Custodian to take such
actions, as are necessary and appropriate to release the Lien of the Deal Agent
on the portion of the Assets to be retransferred to the Seller and release and
deliver to the Seller such portion of the Assets to be retransferred to the
Seller.

         (e) Notwithstanding any other provision of this Section 2.17, the
closing of the Put Option may only occur if the Seller obtains the Capital for
which the Put Option is being exercised by transferring the applicable Assets in
a Permitted Securitization Transaction.

         SECTION 2.18 APPOINTMENT OF REGISTRAR AND DUTIES.

         (a) First Union is hereby appointed to act as Registrar under this
Agreement and hereby accepts such appointment and agrees to perform the duties
and obligations with respect thereto set forth in the Agreement.

                                       42
<PAGE>   48
         (b) As long as the Structured Note remains outstanding, the Seller
shall maintain a Registrar therefor. As set forth in Section 2.18(a) above,
First Union shall initially act as Registrar and shall perform such duties as
are set forth in this Agreement.

         (c) The Seller shall cause to be kept a register (the "Note Register")
which contains an accurate and complete list of those Persons who from time to
time shall be holders of the Structured Note. The Note Register shall be
maintained by the Registrar, and so long as First Union is the Registrar the
Registrar may not be removed by the Seller. Upon the Resignation of any
Registrar, the Seller shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Registrar. So long as First Union
is the Registrar, the Note Register shall be kept at One First Union Center,
Mail Code: NC0610, Charlotte, North Carolina 28288.

         (d) Upon the resignation of First Union as Registrar, the Seller will
give the Deal Agent Prompt written notice of the appointment of a successor
Registrar and of the location, and any change in the location, of the Note
Register, and the Deal Agent shall have the right to inspect the Note Register
at all reasonable times and to obtain copies thereof, and the Deal Agent shall
have the right to rely upon a certificate executed on behalf of the Registrar by
a Responsible Officer thereof as to the names and addresses of the holder(s) of
the Structured Note and the principal amounts and the amounts and number of such
Structured Note(s).

                                   ARTICLE III

                  CLOSING; CONDITIONS OF CLOSING AND PURCHASES

         SECTION 3.1 CONDITIONS TO CLOSING AND INITIAL PURCHASE.

         The initial Purchase hereunder is subject to the conditions precedent
listed in Schedule I, each of which shall have been satisfied or waived, in the
Deal Agent's and the Purchasers' sole discretion, on or before the Closing Date
(unless otherwise indicated), in form and substance satisfactory to the Deal
Agent and the Purchasers.

         SECTION 3.2 CONDITIONS PRECEDENT TO ALL PURCHASES AND REMITTANCES OF
                     COLLECTIONS.

         Each Purchase (including the Initial Purchase) from the Seller by a
Purchaser, the right of the Servicer to remit Collections to the Seller pursuant
to Section 2.7(b) and each Incremental Purchase (each, a "Transaction") shall be
subject to the further conditions precedent that (a) with respect to any
Purchase (including the Initial Purchase) or Incremental Purchase, the Servicer
shall have delivered to the Deal Agent, at least one (1) Business Day prior to
the initial Purchase and at least five (5) Business Days prior to the date of
any Incremental Purchase in form and substance satisfactory to the Deal Agent,
(i) a Purchase Notice (Exhibit A), (ii) a Purchase Certificate (Exhibit H), and
(iii) a Sale Assignment (Exhibit A to the Purchase Agreement) including Schedule
I thereto and such additional information as may be reasonably requested by

                                       43
<PAGE>   49
the Deal Agent; (b) on the date of such Transaction the following statements
shall be true and the Seller shall be deemed to have certified that:

                  (i) The representations and warranties contained in Sections
         4.1 and 4.2 are true and correct, on and as of such day, before and
         after giving effect to such Purchase or Incremental Purchase and to the
         application of proceeds, as though made on and as of such date;

                  (ii) No event has occurred and is continuing, or would result
         from such Transaction, that constitutes an Early Amortization Event or
         Unmatured Early Amortization Event;

                  (iii) On and as of such day, after giving effect to such
         Transaction, the outstanding Capital does not exceed the lesser of (x)
         the Purchase Limit, or (y) the Capital Limit;

                  (iv) On and as of such day, the Seller and the Servicer are in
         compliance with each of their respective covenants set forth in the
         Transaction Documents;

                  (v) 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, remittance of Collections or Incremental Purchase by the
         Purchaser in accordance with the provisions hereof;

                  (vi) No Servicer Termination Event shall have occurred;

         (c) The Commitment Termination Date shall not have occurred;

         (d) There shall have been no material adverse change in the condition
(financial or otherwise), business, operations, results of operations, or
properties of the Originator or the Seller since the preceding Purchase; and

         (e) The Originator and Seller shall have taken such other action,
including delivery of approvals, consents, opinions, documents, and instruments
to the Purchasers and the Deal Agent as each may reasonably request.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER.

         The Seller represents and warrants as follows:

                                       44
<PAGE>   50
         (a) Organization and Good Standing. The Seller is a corporation
organized, validly existing, and in good standing under the laws of the
jurisdiction of its formation, and has full corporate power, authority and legal
right to own or loan its properties and conduct its business as such properties
are presently owned or loaned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement and the
Purchase Agreement.

         (b) Due Qualification. The Seller is duly qualified to do business and
is in good standing as a corporation, and has obtained or will obtain all
necessary licenses and approvals, in each jurisdiction in which the nature of
its business requires it to be so qualified.

         (c) Due Authorization. The execution and delivery of this Agreement and
the Purchase Agreement and the consummation of the transactions provided for
herein and therein have been duly authorized by the Seller by all necessary
corporate action on the part of the Seller.

         (d) No Conflict. The execution and delivery of this Agreement and the
Purchase Agreement, the performance by the Seller of the transactions
contemplated hereby and thereby and the fulfillment of the terms hereof and
thereof will not conflict with or result in any breach of any of the material
terms and provisions of, and will not constitute (with or without notice or
lapse of time or both) a default under, any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which the Seller is a party or
by which it or any of its property is bound.

         (e) No Violation. The execution and delivery of this Agreement and the
Purchase Agreement, the performance of the transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof will not conflict
with or violate, in any material respect, any Requirements of Law applicable to
the Seller.

         (f) No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of the Seller, threatened against the Seller, before
any Governmental Authority (i) asserting the invalidity of this Agreement or the
Purchase Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or the Purchase Agreement or (iii)
seeking any determination or ruling that could reasonably be expected to be
adversely determined, and if adversely determined, would materially and
adversely affect the performance by the Seller of its obligations under this
Agreement or the Purchase Agreement.

         (g) All Consents Required. All approvals, authorizations, consents,
licenses, orders or other actions of any Person or of any Governmental Authority
required in connection with the execution and delivery by the Seller of this
Agreement and the Purchase Agreement, the performance by the Seller of the
transactions contemplated by this Agreement and the Purchase Agreement, and the
fulfillment of the terms hereof and thereof by the Seller, have been obtained,
unless the failure to obtain such shall not materially and adversely affect the
Seller's performance of its obligations under this Agreement or under the
Purchase Agreement.

                                       45
<PAGE>   51
         (h) Bulk Sales. The execution, delivery and performance of this
Agreement do not require compliance with any "bulk sales" law by Seller.

         (i) Solvency. The transactions under this Agreement and Purchase
Agreement do not and will not render the Seller not Solvent.

         (j) Selection Procedures; Credit and Collection Policies. No procedures
believed by the Seller to be materially adverse to the interests of VFCC or the
Purchasers were utilized by the Seller in identifying and/or selecting the Loans
that are in the Asset Pool. In addition, each Loan shall comply in all respects
with the Credit and Collection Policies.

         (k) Taxes. The Seller has filed or caused to be filed all Tax returns
which, to its knowledge, are required to be filed. The Seller has paid or made
adequate provisions for the payment of all Taxes and all assessments made
against it or any of its property (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 Seller), and no Tax lien has
been filed and, to the Seller's knowledge, no claim is being asserted, with
respect to any such Tax, fee or other charge.

         (l) Agreements Enforceable. This Agreement and the Purchase Agreement
constitute the legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with their respective terms, except as such
enforceability may be limited by Insolvency Laws and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).

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

         (n) No Liens. Each Asset, together with the Loan Documents related
thereto, shall, at all times, be owned by the Seller free and clear of any
Adverse Claim except as provided herein, and upon each Purchase, Incremental
Purchase or remittance of Collections, the relevant Secured Party shall acquire
(subject to recordation where necessary) a valid and perfected first priority
undivided ownership interest in each Asset then existing or thereafter arising
and Collections with respect thereto, free and clear of any Adverse Claim except
as provided hereunder. No effective financing statement or other instrument
similar in effect covering any Asset or Collections shall at any time be on file
in any recording office except such as may be filed in favor of the Deal Agent
relating to this Agreement.

         (o) Reports Accurate. No Monthly Report (if prepared by the Seller, or
to the extent that information contained therein is supplied by the Seller),
information, exhibit, schedule, financial statement, document, book, record or
report furnished or to be furnished by the Seller to the Deal Agent or a
Purchaser in connection with this Agreement 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 Deal Agent or such Purchaser, as the case may be, at such time)
as of the date so furnished.

                                       46
<PAGE>   52
         (p) Location of Offices. The principal place of business and chief
executive office of the Seller and the office where the Seller keeps all the
Records is located at the address of the Seller referred to in Section 11.2
hereof (or at such other locations as to which the notice and other requirements
specified in Section 5.2(1) shall have been satisfied).

         (q) Tradenames. Except as described in Schedule III, the Seller has no
trade names, fictitious names, assumed names or "doing business as" names or
other names under which it has done or is doing business.

         (r) Purchase Agreement. The Purchase Agreement is the only agreement
pursuant to which the Seller purchases Assets.

         (s) Value Given. The Seller shall have given reasonably equivalent
value to the Originator in consideration for the transfer to the Seller of the
Assets under the Purchase Agreement, no such transfer shall have been made for
or on account of an antecedent debt owed by the Originator to the Seller, and no
such transfer is or may be voidable or subject to avoidance under any section of
the Bankruptcy Code; no event or circumstance has occurred that would constitute
an Early Amortization Event.

         (t) Special Purpose Entity. The Certificate of Incorporation of the
Seller includes substantially the provisions set forth on Exhibit C hereto, and
the Originator has confirmed in writing to the Seller that, so long as the
Seller is not "insolvent" within the meaning of the Bankruptcy Code, the
Originator will not cause the Seller to file a voluntary petition under the
Bankruptcy Code or any other Insolvency Laws. Each of the Seller and the
Originator is aware that in light of the circumstances described in the
preceding sentence and other relevant facts, the filing of a voluntary petition
under the Bankruptcy Code for the purpose of making the assets of the Seller
available to satisfy claims of the creditors of the Originator would not result
in making such assets available to satisfy such creditors under the Bankruptcy
Code.

         (u) Accounting. The Seller accounts for the transfers to it from the
Originator of interests in Assets and Collections under the Purchase Agreement
as sales of such Asset Interests in its books, records and financial statements,
in each case consistent with GAAP and with the requirements set forth herein,
although such Asset Interests will continue to be reflected on the Originator's
consolidated balance sheet for financial reporting purposes.

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

         (w) Security Interest. The Seller has granted a security interest (as
defined in the UCC) to the Deal Agent, as agent for the Secured Parties, in the
Assets and Collections, which is enforceable in accordance with Requirements of
Law upon execution and delivery of this Agreement. Upon the making of each
Purchase, the Deal Agent, as agent for the Secured

                                       47
<PAGE>   53
Parties, shall have acquired a first priority perfected security interest in
Assets and Collections as may be perfected under the UCC by filing a financing
statement or the delivery of possession (except for any Permitted Liens). All
filings (including, without limitation, such UCC filings) as are necessary in
any Jurisdiction to perfect the interest of the Deal Agent as agent for the
Secured Parties, in the Assets and Collections have been (or prior to the
applicable Purchase will be) made.

         (x) Investments. The Seller does not own or hold directly or
indirectly, any capital stock or equity security of, or any equity interest in,
any Person, except for holding the certificates of FIB Funding Trust II issued
in connection with the note issued by FIB Funding Trust II pursuant to the
Indenture.

         (y) Business. Since its formation, the Seller has conducted no business
other than the sale of Assets from the Originator under the Purchase Agreement,
the sale of Assets under this Agreement and such other activities as are
incidental to the foregoing, except for holding the certificates of FIB Funding
Trust II issued in connection with the note issued by FIB Funding Trust II
pursuant to the Indenture.

         (z) Investment Company Act.

                  (i) The Seller represents and warrants that the Seller has
         never been, is not now, and will not in the future be operated in such
         a manner as to cause the Seller to be an "investment company," as such
         term is defined in Section 3 of the Investment Company Act of 1940, as
         amended (the "1940 Act");

                  (ii) The Seller represents and warrants that the business and
         other activities of the Seller, including but not limited to, the sale
         of the Asset Interests to the Purchasers the application and use of the
         proceeds thereof by the Seller and the consummation and conduct of the
         transactions contemplated by the Transaction Documents to which the
         Seller is a party (a) do now and will in the future comply in all
         respects with the provisions of Rule 3a-7 promulgated under the 1940
         Act; and (b) do not now and will not in the future result in a
         violation by the Seller, the Servicer or any other person or entity of
         the 1940 Act or the rules and regulations promulgated thereunder.

         (aa) Lock-Boxes. The names and addresses of all the Lock-Box Banks,
together, with the account numbers of the Lock-Box Accounts of the Seller at
such Lock-Box Banks and the names, addresses and account numbers of all accounts
to which Collections of the Assets outstanding before the initial Purchase
hereunder have been sent, are specified in Schedule VI (which shall be deemed to
be amended in respect of terminating or adding any Lock-Box Account or Lock-Box
Bank upon satisfaction of the notice and other requirements specified in respect
thereof).

         (bb) FIB Existing Account. All Collections in the FIB Existing Account
are free and clear of any Adverse Claim. As long as any Collections are held
therein, no effective financing statement or other instruments similar in effect
shall at any time be on file in any recording office

                                       48
<PAGE>   54
with respect to the FIB Existing Account except such as may be filed in favor of
the Deal Agent relating to this Agreement.

         (cc) Loans Secured by Real Property. Less than fifty (50%) percent of
the Aggregate Outstanding Loan Balance consists of Loans principally secured by
real property.

         (dd) Accuracy of Representations and Warranties. Each representation or
warranty by the Seller contained herein or in any certificate or other document
furnished by the Seller pursuant hereto or in connection herewith is true and
correct in all material respects.

         The representations and warranties set forth in this Section shall
survive the transfer of the Assets to the Deal Agent as agent for the Secured
Parties. Upon discovery by the Seller, the Servicer, any Secured Party, the
Liquidity Agent or the 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 AND WARRANTIES OF SELLER RELATING TO THE
                     AGREEMENT AND THE LOANS.

         The Seller hereby represents and warrants to the Deal Agent, each
Secured Party, the Liquidity Agent and each Investor that, as of the Closing
Date and as of each Purchase Date:

         (a) Binding Obligation, Valid Transfer and Security Interest.

                  (i) This Agreement and the Purchase Agreement each constitute
         legal, valid and binding obligations of the Seller, enforceable against
         the Seller in accordance with its respective terms, except as such
         enforceability may be limited by Insolvency Laws and except as such
         enforceability may be limited by general principles of equity (whether
         considered in a suit at law or in equity).

                  (ii) This Agreement constitutes either (A) a valid transfer to
         the Deal Agent as agent for the Secured Parties of all right, title and
         interest of the Seller in, to and under all Assets in the Asset Pool to
         the extent of the Asset Interest, and such transfer will be free and
         clear of any Lien of any Person claiming through or under the Seller or
         its Affiliates, except for Permitted Liens, or (B) a grant of a
         security interest in all Assets in the Asset Pool to the Deal Agent as
         agent for the Secured Parties. In connection with the foregoing clause
         (B), upon the filing of the financing statements described in Section
         6.9(c) the Deal Agent as agent for the Secured Parties shall have a
         first priority perfected security interest in such Assets in the Asset
         Pool as may be perfected under the UCC by filing a financing statement
         or the delivery of possession, subject only to Permitted Liens. Neither
         the Seller nor any Person claiming through or under the Seller shall
         have any claim to or interest in the Collection Account, except, if
         this Agreement is deemed to grant a security interest in such property,
         for the interest of the Seller in such property as a debtor for
         purposes of the UCC.

                                       49
<PAGE>   55
         (b) Eligibility of Loans. As of the later of the Closing Date or the
initial Purchase Date, (i) Schedule IV to this Agreement and the information
contained in the Notice of Sale and Purchase Certificate delivered pursuant to
Section 2.2 is an accurate and complete listing in all material respects of all
the Loans that are in the Asset Pool as of such date and the information
contained therein with respect to the identity of such Loans and the amounts
owing thereunder is true and correct in all material respects as of such date,
(ii) each such Loan is an Eligible Loan, (iii) each such Loan and the Related
Property is free and clear of any Lien of any Person (other than Permitted
Liens) and in compliance with all Requirements of Law applicable to the Seller
and/or the Originator and (iv) with respect to each such Loan, all consents,
licenses, approvals or authorizations of or registrations or declarations with
any Governmental Authority required to be obtained, effected or given by the
Seller in connection with the transfer of an interest in such Loan and the
Related Property to the Deal Agent, as agent for the Secured Parties, have been
duly obtained, effected or given and are in full force and effect. On each
Purchase Date, the Seller shall be deemed to represent and warrant that (i)
Additional Loan referenced on the related Seller Notice delivered pursuant to
Section 2.2 is an Eligible Loan, (ii) each such Loan and the related Property is
free and clear of any Lien of any Person (other than Permitted Liens) and in
compliance with all Requirements of Law applicable to Seller and/or the
Originator, (iii) with respect to each such Loan, all consents, licenses,
approvals, authorizations, registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the Seller in connection
with the addition of such Loan and the Related Property to the Asset Pool have
been duly obtained, effected or given and are in full force and effect and (iv)
the representations and warranties set forth in Section 4.2(a) are true and
correct with respect to each Loan transferred on such day as if made on such
day.

         (c) Notice of Breach. The representations and warranties set forth in
this Section 4.2 shall survive the transfer of an interest in the respective
Assets to the Deal Agent as agent for the Secured Parties. Upon discovery by the
Seller, the Servicer, any Secured Party, the Deal Agent, the Liquidity Agent of
any Investor 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 4.3 REPRESENTATIONS AND WARRANTIES OF THE SELLER RELATING TO
                     THE PURCHASE LIMIT AND CAPITAL LIMIT.

         The Seller is hereby deemed to represent and warrant that on each day
prior to the Termination Date, the amount of Capital outstanding on such day
shall not exceed the lesser of (x) the Purchase Limit or (y) the Capital Limit.

                                    ARTICLE V

                         GENERAL COVENANTS OF THE SELLER

         SECTION 5.1 GENERAL COVENANTS.

         Until the date on which all Aggregate Unpaids have been indefeasibly
paid in full, the Seller hereby covenants that it will comply in all material
respects with all Requirements of Law,

                                       50
<PAGE>   56
rules, regulations and orders and preserve and maintain its corporate existence,
rights, franchises, qualifications and privileges the loss of which rights,
franchises, qualifications and privileges would have a material adverse effect
on the Seller.

         SECTION 5.2 COVENANTS OF SELLER.

         The Seller hereby covenants that:

         (a) Security Interests. Except as contemplated in this Agreement, the
Seller will not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any Loan or Related
Property that is in the Asset Pool, whether now existing or hereafter
transferred hereunder, or any interest therein, and the Seller will not sell,
pledge, assign or suffer to exist any Lien on its interest, if any, hereunder.
The Seller will promptly notify the Deal Agent of the existence of any Lien on
any Loan or Related Property that is in the Asset Pool and the Seller shall
defend the right, title and interest of the Deal Agent as agent for the Secured
Parties in, to and under any Loan and the Related Property that is in the Asset
Pool, against all claims of third parties, provided, however, that nothing in
this Section 5.2(a) shall prevent or be deemed to prohibit the Seller from
suffering to exist Permitted Liens upon any Loan or any Related Property that is
in the Asset Pool.

         (b) Delivery of Collections. The Seller agrees to pay to the Servicer
promptly (but in no event later than one (1) Business Day after receipt) all
Collections (including any Deemed Collections) received by Seller in respect of
the Loans that are in the Asset Pool.

         (c) Compliance with the Law. The Seller hereby agrees to comply in all
respects with all Requirements of Law applicable to the Seller, the Loans that
are in the Asset Pool and the Related Property, if the failure to do so would
have a material adverse effect on the Seller, the Loans that are in the Asset
Pool or the Related Property.

         (d) Activities of Seller. The Seller shall not engage in any business
or activity of any kind, or enter into any transaction or indenture, mortgage,
instrument, agreement, contract, lease or other undertaking, which is not
authorized by or related to the transactions contemplated by the Transaction
Documents, except for holding the certificates of FIB Funding Trust II issued in
connection with the note issued by FIB Funding Trust II pursuant to the
Indenture.

         (e) Indebtedness. The Seller shall not create, incur, assume or suffer
to exist any Indebtedness or other liability whatsoever, except (i) obligations
incurred under this Agreement or the Purchase Agreement and instruments related
thereto, or under any Hedging Agreement required by Section 5.4(a), or (ii)
liabilities incident to the maintenance of its corporate existence in good
standing.

         (f) Guarantees. The Seller shall not become or remain liable, directly
or indirectly, in connection with any Indebtedness or other liability of any
other Person, whether by guarantee, endorsement (other than endorsements of
negotiable instruments for deposit or collection in the ordinary course of
business), agreement to purchase or repurchase, agreement to supply or advance
funds, or otherwise.

                                       51
<PAGE>   57
         (g) Investments. The Seller shall not make or suffer to exist any loans
or advances to, or extend any credit to, or make any investments (by way of
transfer of property, contributions to capital, purchase of stock or securities
or evidences of indebtedness, acquisition of the business or assets, or
otherwise) in, any Person except for purchases of Loans and other Assets
pursuant to the Purchase Agreement, or for investments in Permitted Investments
in accordance with the terms of this Agreement, except for holding the
certificates of FIB Funding Trust II issued in connection with the note issued
by FIB Funding Trust II pursuant to the Indenture.

         (h) Merger Sales. The Seller shall not enter into any transaction of
merger or consolidation, or liquidate or dissolve itself (or suffer any
liquidation or dissolution), or acquire or be acquired by any Person, or convey,
sell, lease or otherwise dispose of all or substantially all of its property or
business, except as provided for in this Agreement.

         (i) Distributions. The Seller may, provided it is in compliance with
any applicable State laws and no Early Amortization Event has occurred or will
occur as a result thereof, declare or pay, directly or indirectly, any dividend
or make any other distribution (whether in cash or other property) with respect
to the profits, assets or capital of the Seller or any Person's interest
therein, or purchase, redeem or otherwise acquire for value any of its capital
stock now or hereafter outstanding.

         (j) Agreements. Except for holding the certificates of FIB Funding
Trust II issued in connection with the note issued by FIB Funding Trust II
pursuant to the Indenture, the Seller shall not become a party to, or permit any
of its properties to be bound by, any indenture, mortgage, instrument, contract,
agreement, lease or other undertaking, except this Agreement, the Purchase
Agreement and any Hedging Agreement or amend or modify the provisions of its
operating agreement, without the consent of the Deal Agent, or issue any power
of attorney except to the Deal Agent or the Servicer.

         (k) Separate Corporate Existence. The Seller shall:

                  (i) Maintain its own deposit account or accounts, separate
         from those of any Affiliate, with commercial banking institutions. The
         funds of the Seller will not be diverted to any other Person or for
         other than corporate uses of the Seller.

                  (ii) Ensure that, to the extent that it shares the same
         officers or other employees as any of its stockholders or Affiliates,
         the salaries of and the expenses related to providing benefits to such
         officers and other employees shall be fairly allocated among such
         entities, and each such entity shall bear its fair share of the salary
         and benefit costs associated with all such common officers and
         employees.

                  (iii) Ensure that, to the extent that it jointly contracts
         with any of its stockholders or Affiliates to do business with vendors
         or service providers or to share overhead expenses, the costs incurred
         in so doing shall be allocated fairly among such entities, and each
         such entity shall bear its fair share of such costs. To the extent that
         the Seller contracts or does business with vendors or service providers
         when the goods and

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<PAGE>   58
         services provided are partially for the benefit of any other Person,
         the costs incurred in so doing shall be fairly allocated to or among
         such entities for whose benefit the goods and services are provided,
         and each such entity shall bear its fair share of such costs. All
         material transactions between Seller and any of its Affiliates shall be
         only on an arm's length basis.

                  (iv) Maintain a principal executive and administrative office
         through which its business is conducted separate from those of its
         Affiliates. To the extent that Seller and any of its stockholders or
         Affiliates have offices in the same location, there shall be a fair and
         appropriate allocation of overhead costs among them, and each such
         entity shall bear its fair share of such expenses.

                  (v) Conduct its affairs strictly in accordance with its
         Certificate of Incorporation and observe all necessary, appropriate and
         customary corporate formalities, including, but not limited to, holding
         all regular and special stockholders, and directors' meetings
         appropriate to authorize all corporate action, keeping separate and
         accurate minutes of its meetings, passing all resolutions or consents
         necessary to authorize actions taken or to be taken, and maintaining
         accurate and separate books, records and accounts, including, but not
         limited to, payroll and intercompany transaction accounts.

                  (vi) Take or refrain from taking, as applicable, each of the
         activities specified in the "non-consolidation" opinion of Bingham Dana
         LLP delivered on the Closing Date, upon which the conclusions expressed
         therein are based.

         (l) Location of Seller Records Instruments. The Seller (x) shall not
move the location of its principal executive office, without 30 days' prior
written notice to the Deal Agent and (y) shall not move, or consent to the
Servicer or Collateral Custodian moving, the Loan Documents without 30 days'
prior written notice to the Deal Agent and (z) will promptly take all actions
required of each relevant jurisdiction in order to continue the first priority
perfected security interest of the Deal Agent as agent for the Secured Parties
(except for Permitted Liens) in all Assets in the Asset Pool, including delivery
of an opinion of counsel acceptable to the Deal Agent.

         (m) ERISA Matters. The Seller will not (a) engage or permit any ERISA
Affiliate to engage in any prohibited transaction for which an exemption is not
available or has not previously been obtained from the United States Department
of Labor; (b) permit to exist any accumulated funding deficiency, as defined in
Section 302(a) of ERISA and Section 412(a) of the Code, or funding deficiency
with respect to any Benefit Plan other than a Multiemployer Plan; (c) fail to
make any payments to a Multiemployer Plan that the Seller or any ERISA Affiliate
may be required to make under the agreement relating to such Multiemployer Plan
or any law pertaining thereto; (d) terminate any Benefit Plan so as to result in
any liability; or (e) permit to exist any occurrence of any reportable event
described in Title IV of ERISA.

         (n) Originator Assets. With respect to each Asset acquired by the
Seller, the Seller will (i) acquire such Asset pursuant to and in accordance
with the terms of the Purchase Agreement, (ii) take all action necessary to
perfect, protect and more fully evidence the Seller's

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<PAGE>   59
ownership of such Asset, including, without limitation, (A) filing and
maintaining, effective financing statements (Form UCC-l) against the Originator
in all necessary or appropriate filing offices, and filing continuation
statements, amendments or assignments with respect thereto in such filing
offices and (B) executing or causing to be executed such other instruments or
notices as may be necessary or appropriate, (iii) perform in accordance with
those terms of the Assets requiring performance thereof by the Seller, and (vi)
take all additional action that the Deal Agent may reasonably request to
perfect, protect and more fully evidence the respective interests of the parties
to this Agreement in the Assets and interest therein represented by the Asset
Interests.

         (o) Transactions with Affiliates. The Seller will not enter into, or be
a party to, any transaction with any of its Affiliates, except (i) the
transactions permitted or contemplated by this Agreement, the Purchase Agreement
and any Hedging Agreements, (ii) other transactions (including, without
limitation, the lease of office space or computer equipment or software by the
Seller to or from an Affiliate) (A) in the ordinary course of business, (B)
pursuant to the reasonable requirements of the Seller's business, (C) upon fair
and reasonable terms that are no less favorable to the Seller than could be
obtained in a comparable arm's-length transaction with a Person not an Affiliate
of the Seller, and (D) not inconsistent with the factual assumptions set forth
in the "non-consolidation" legal opinion letter issued by Bingham Dana LLP and
delivered to the Deal Agent as a condition to the initial Purchase, as such
assumptions may be modified in any subsequent opinion letters delivered to the
Deal Agent pursuant to Section 3.2 or otherwise, and (iii) holding the
certificates of FIB Funding Trust II issued in connection with the note issued
by FIB Funding Trust II pursuant to the Indenture. It is understood that any
compensation arrangement for officers shall be permitted under clause (ii)(A)
through (C) above if such arrangement has been expressly approved by the board
of directors of the Seller.

         (p) Change in the Purchase Agreement. The Seller will not amend,
modify, waive or terminate any terms or conditions of the Purchase Agreement,
without the consent of Deal Agent.

         (q) Amendment to Certificate of Incorporation. The Seller will not
amend, modify or otherwise make any change to its Certificate of Incorporation
which would delete or otherwise nullify or circumvent the provisions set forth
on Exhibit C hereto.

         (r) Credit and Collection Policies. The Seller shall take all actions
necessary to comply with the terms of the Credit and Collection Policies, and
the Seller shall not cause or permit any changes to be made to the Credit and
Collection Policies in any manner that would materially and adversely affect the
collectibility of the Loans that are in the Asset Pool without the prior written
consent of the Deal Agent.

         (s) Accounting of Purchases. Other than for federal, state and local
income tax purposes, the Seller will account for and treat (whether in financial
statements or otherwise) the transactions contemplated hereby as financings of
such Asset Interests. The Seller will treat the transactions contemplated by the
Purchase Agreement as the sale or absolute assignment of the Originator Assets
by the Originator to the Seller, as the case may be, although the Asset
Interests

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<PAGE>   60
transferred from the Originator to the Seller will continue to be retained on
the Originator's balance sheet for financial reporting purposes.

         (t) Ex-Im Policy. If any Ex-Im 2 Loans are outstanding, (i) on or
before the expiration of the then existing Ex-Im Policy, the Seller will deliver
to the Deal Agent a copy of a renewal or replacement Ex-Im Policy showing the
Seller as an insured and the Deal Agent as loss payee, and the Seller will
notify the Deal Agent on or before such expiration date of any Obligor under an
Ex-Im 2 Loan that has been excluded from policy coverage upon such renewal or
replacement; (ii) the Seller will comply with all warranties, covenants and
agreements of the "Insured" under the Ex-Im Policy; (iii) the Seller will
cooperate with the Servicer and take all actions reasonably required by the
Servicer to collect amounts due under the Ex-Im Policy.

         (u) FIB Existing Account/Establishment of Lock-Box Account. As long as
any Collections are held therein, the Seller will not grant, create, incur or
suffer to exist any Adverse Claim with respect to the Collections in the FIB
Existing Account. The Seller will promptly notify the Deal Agent of the
existence of any Adverse Claim with respect to any Collections in the FIB
Existing Account and the Seller shall defend the right, title and interest of
the Deal Agent as agent for the Secured Parties in such Collections against all
claims of third parties. Upon the request of the Deal Agent, the Seller shall
cause a Lock-Box Account to be established within five (5) Business Days and
shall promptly transfer all Collections in the FIB Existing Account into such
Lock-Box Account.

         SECTION 5.3 RELEASE OF LIEN.

         At the same time as (i) any Loan in the Asset Pool expires by its terms
and all amounts in respect thereof have been paid by the related Obligor and
deposited in the Collection Account or (ii) any Loan becomes a Prepaid Loan and
all amounts in respect thereof have been paid by the related Obligor and
deposited in the Collection Account, the Deal Agent as agent for the Purchasers
will, to the extent requested by the Servicer, release its interest in such Loan
and Loan Documents.

         SECTION 5.4 HEDGE AGREEMENT.

         (a) Within ten (10) Business Days of the Closing Date and on or prior
to each Purchase Date for any Purchase thereafter, the Seller shall enter into
one or more Hedge Transactions for that Purchase, provided that each such Hedge
Transaction shall:

                  (i) be entered into with a Hedge Counterparty and governed by
         a Hedging Agreement;

                  (ii) have monthly payment periods the first of which commences
         on the Purchase Date of that Purchase and the last of which ends on the
         last Scheduled Payment due to occur under the Loans to which that
         Purchase relates;

                  (iii) have an amortizing notional amount such that the Hedge
         Notional Amount in effect during any monthly payment period shall be
         equal to at least seventy-five

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<PAGE>   61
         percent (75%) but not more than one hundred percent (100%) of the
         aggregate Capital outstanding of Commercial Loans hereunder; provided,
         however, that the above percentage shall increase to one hundred
         percent (100%) for any period during which the difference between the
         Portfolio Yield and the Adjusted Eurodollar Rate is less than 2%; and

                  (iv) provide for two series of monthly payments to be netted
         against each other, one such series being payments to be made by the
         Seller to a Hedge Counterparty (solely on a net basis) by reference to
         a fixed interest rate, and the other such series being payments to be
         made by the Hedge Counterparty to the Deal Agent (solely on a net
         basis) by reference to the money market yield of the rate set forth in
         Federal Reserve Statistical Release H.15 (519) under the caption
         "Commercial Paper-Nonfinancial" for a 30-day maturity as in effect on
         the first day of each monthly payment period, the net amount of which
         shall be paid into the Collection Account (if payable by the Hedge
         Counterparty) or from the Collection Account to the extent funds are
         available under Section 2.7 or 2.9 of this Agreement (if payable by the
         Seller).

         (b) As additional security hereunder, Seller hereby assigns to the Deal
Agent, as agent for the Secured Parties, all right, title and interest of Seller
in each Hedging Agreement, each Hedge Transaction, and all present and future
amounts payable by a Hedge Counterparty to Seller under or in connection with
the respective Hedging Agreement and Hedge Transaction(s) with that Hedge
Counterparty ("Hedge Collateral"), and grants a security interest to the Deal
Agent, as agent for the Secured Parties, in the Hedge Collateral. Seller
acknowledges that, as a result of that assignment, Seller may not, without the
prior written consent of the Deal Agent, exercise any rights under any Hedging
Agreement or Hedge Transaction, except for Seller's right under any Hedging
Agreement to enter into Hedge Transactions in order to meet the Seller's
obligations under Section 5.4(a) hereof. Nothing herein shall have the effect of
releasing the Seller from any of its obligations under any Hedging Agreement or
any Hedge Transaction, nor be construed as requiring the consent of the Deal
Agent or any Secured Party for the performance by Seller of any such
obligations.

         SECTION 5.5 RETRANSFER OF INELIGIBLE LOANS.

         In the event of a breach of any representation or warranty set forth in
Section 4.2 with respect to a Loan in the Asset Pool (each such Loan, an
"Ineligible Loan") which breach results in a Trigger Event, or would result in a
Trigger Event at the next Determination Date or other date of determination, no
later than thirty (30) days after the earlier of (i) knowledge by the Seller of
such Loan becoming an Ineligible Loan and causing a Trigger Event or prospective
Trigger Event, and (ii) receipt by the Seller from the Deal Agent or Servicer of
written notice thereof, the Seller shall either (a) accept the retransfer of
each such Ineligible Loan, and the Deal Agent as agent for the Purchasers shall
convey to the Seller, without recourse, representation or warranty, all of its
right, title and interest in such Ineligible Loan; or (b) subject to the
satisfaction of the conditions in Section 2.9, substitute for such Ineligible
Loan a Substitute Loan; provided, however, that no such retransfer shall be
required to be made with respect to such Ineligible Loan (and such Loan shall
cease to be an Ineligible Loan) if, on or before the expiration of such 30-day
period, the representations and warranties in Section 4.2 with respect

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<PAGE>   62
to such Loan shall be made true and correct in all material respects with
respect to such Loan as if such Loan had been transferred to the Purchasers on
such day. Notwithstanding anything contained in this Section 5.5 to the
contrary, in the event of breach of any representation and warranty set forth in
Section 4.2, with respect to any interest in each Loan and the Related Property
having been conveyed to the Purchasers free and clear of any Lien of any Person
claiming through or under the Seller and its Affiliates (other than Permitted
Liens) and in compliance in all material respects, with all Requirements of Law
applicable to the Seller, immediately upon the earlier to occur of the discovery
of such breach by the Seller or receipt by the Seller of written notice of such
breach given by the Deal Agent, the Seller shall repurchase and the Deal Agent
on behalf of the Secured Parties shall convey, free and clear of any Lien
created pursuant to this Agreement, all of its right, title and interest in such
Ineligible Loan, and the Deal Agent shall, in connection with such conveyance
and without further action, be deemed to represent and warrant on behalf of the
Secured Parties that it has the corporate authority and has taken all necessary
corporate action to accomplish such conveyance, but without any other
representation or warranty, express or implied. In any of the foregoing
instances, the Seller shall accept the retransfer of each such Ineligible Loan,
and the Aggregate Outstanding Loan Balance shall be reduced by the Outstanding
Loan Balance of each such Ineligible Loan and, if applicable, increased by the
Outstanding Loan Balance of each such Substitute Loan. On and after the date of
retransfer, the Ineligible Loan so retransferred shall not be included in the
Asset Pool and, as applicable, the Substitute Loan shall be included in the
Asset Pool. In consideration of such retransfer without substitution of a
Substitute Loan, the Seller shall, on the date of retransfer of such Ineligible
Loan, make a deposit to the Collection Account (for allocation pursuant to
Section 2.7) in immediately available funds in an amount equal to the
Outstanding Loan Balance of such Ineligible Loan (to the extent that the Deemed
Collections with respect to such Ineligible Loan have not already been deposited
in the Collection Account), plus interest thereon from the last day of the
immediately preceding Fixed Period to and including the date of repurchase at a
rate per annum equal to the weighted average of the Yield Rates. Upon each
retransfer to the Seller of such Ineligible Loan, the Deal Agent, as agent for
the Purchasers, shall automatically and without further action be deemed to
transfer, assign and set-over to the Seller without recourse, representation or
warranty, all the right, title and interest of the Deal Agent, as agent for the
Purchasers, in, to and under such Ineligible Loan and all monies due or to
become due with respect thereto, and all proceeds of such Ineligible Loan and
Recoveries and Insurance Proceeds relating thereto and all rights to Related
Property and other security for any such Ineligible Loan, and all proceeds and
products of the foregoing. The Deal Agent, as agent for the Purchasers, shall,
at the sole expense of the Servicer execute such documents and instruments of
transfer as may be prepared by the Servicer on behalf of the Seller and take
other such actions as shall reasonably be requested by the Seller to effect the
transfer of such Ineligible Loan pursuant to this subsection.

         SECTION 5.6 RETRANSFER OF ASSETS.

         In the event of a breach of any representation or warranty set forth in
Section 4.2 hereof which breach could reasonably be expected to have a material
adverse effect on the rights of the Secured Parties or the Deal Agent, as agent
of the Secured Parties, or on the ability of the Seller to perform its
obligations hereunder, by notice then given in writing to the Seller, the Deal
Agent may direct the Seller to accept the retransfer of all of the Assets, in
which case the Seller shall be

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<PAGE>   63
obligated to accept retransfer of such Assets on a Payment Date specified by the
Seller which date shall be at least thirty (30) days after the date of such
notice (such date, the "Retransfer Date") and to terminate all Hedge
Transactions prior to the Retransfer Date; provided, however, that no such
retransfer shall be required to be made if, on or before expiration of such
applicable period, the representations and warranties contained in Section 4.2
shall then be true and correct in all material respects. The Seller shall
deposit on the Retransfer Date an amount equal to the deposit amount provided
below for such Assets in the Collection Account for distribution to the Secured
Parties in accordance with Section 2.7. The deposit amount (the "Retransfer
Amount") for such retransfer will be equal to (A) the Aggregate Unpaids minus
(B) the amount, if any, available in the Collection Account on such Payment
Date. On the Retransfer Date, provided that the full Retransfer Amount has been
deposited into the Collection Account, the Assets shall be transferred to the
Seller; and the Deal Agent as agent for the Secured Parties shall, at the sole
expense of the Servicer, execute and deliver such instruments of transfer, in
each case without recourse, representation or warranty, as shall be prepared and
reasonably requested by the Servicer on behalf of the Seller to vest in the
Seller, or its designee or assignee, all right, title and interest of the Deal
Agent as agent for the Secured Parties in, to and under the Assets. If the Deal
Agent gives a notice directing the Seller to accept such a retransfer as
provided above, the obligation of Seller to accept a retransfer pursuant to this
Section 5.6 shall constitute the sole remedy respecting a breach of the
representations and warranties contained in Section 4.2 available to the Secured
Parties and the Deal Agent on behalf of the Secured Parties.

                                   ARTICLE VI

                      ADMINISTRATION AND SERVICING OF LOANS

         SECTION 6.1 APPOINTMENT AND ACCEPTANCE; DUTIES.

         The Seller hereby appoints FIB as Servicer pursuant to this Agreement.
FIB accepts such appointment and agrees to act as the Servicer pursuant to this
Agreement to service the Transferred Loans and to serve in such capacity until
the termination of its responsibilities pursuant to Section 6.26. HSBC is hereby
appointed as Backup Servicer and Collateral Custodian pursuant to this
Agreement. HSBC accepts the appointment and agrees to act as the Backup Servicer
and Collateral Custodian pursuant to this Agreement.

         SECTION 6.2 DUTIES AND RESPONSIBILITIES OF THE SERVICER AND THE
                     COLLATERAL CUSTODIAN.

         (a) The Servicer shall conduct the servicing, administration and
collection of the Transferred Loans and shall take, or cause to be taken, all
such actions as may be necessary or advisable to service, administer and collect
Transferred Loans from time to time on behalf of the Purchasers. The Servicer
will perform its servicing duties with reasonable care, using that degree of
skill and attention that a prudent person engaging in such activities would
exercise, but in any event shall not act with less care than the Servicer
exercises with respect to all comparable loans that it services for itself or
others. Neither the Secured Parties, the Deal Agent nor the

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<PAGE>   64
Collateral Custodian shall have any obligation or liability with respect to any
Transferred Loans, nor shall any of them be obligated to perform any of the
obligations of the Servicer hereunder.

         (b) The duties of the Servicer, as the Purchasers' agent, shall
include, without limitation:

                  (i) preparing and submitting of claims to, and post-billing
         liaison with, Obligors on Transferred Loans;

                  (ii) maintaining all necessary Servicing Records with respect
         to the Transferred Loans and providing such reports to the Liquidity
         Agent and the Deal Agent in respect of the servicing of the Transferred
         Loans (including information relating to its performance under this
         Agreement) as may be required hereunder or as the Liquidity Agent or
         the Deal Agent may reasonably request;

                  (iii) maintaining and implementing administrative and
         operating procedures (including, without limitation, an ability to
         recreate Servicing Records evidencing the Transferred Loans in the
         event of the destruction of the originals thereof) and keeping and
         maintaining all documents, books, records and other information
         reasonably necessary or advisable for the collection of the Transferred
         Loans (including, without limitation, records adequate to permit the
         identification of each new Transferred Loan and all Collections of and
         adjustments to each existing Transferred Loan);

                  (iv) promptly delivering to the Deal Agent, from time to time,
         such information and Servicing Records relating to the Transferred
         Loans (including information relating to its performance under this
         Agreement) as the Deal Agent may from time to time reasonably request;

                  (v) identifying each Transferred Loan clearly and
         unambiguously in its Servicing Records to reflect that such Transferred
         Loan is owned by the Purchasers;

                  (vi) complying in all material respects with the Credit and
         Collection Policies in regard to each Transferred Loan;

                  (vii) complying in all material respects with all Requirements
         of Law, rules, regulations and orders with respect to it, its business
         and properties and all Transferred Loans and Collections with respect
         thereto;

                  (viii) preserving and maintaining its existence, rights,
         franchises and privileges as a bank organized under the laws of the
         State of Connecticut and qualifying to and remaining authorized to
         perform obligations as Servicer (including enforcement of collection of
         Transferred Loans on behalf of the Secured Parties) in each
         jurisdiction where the failure to preserve and maintain such existence,
         rights, franchises, privileges and qualification would materially
         adversely affect (A) the rights or interests of the Secured Parties in
         the Transferred Loans, (B) the collectibility of any Transferred Loan,
         or (C) the ability of the Servicer to perform its obligations
         hereunder;

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<PAGE>   65
                  (ix) immediately, but not later than three (3) Business Days
         after such occurrence, notifying the Liquidity Agent and the Deal Agent
         of the occurrence of an Early Amortization Event (including, without
         limitation, a material adverse change in the financial condition of the
         Originator);

                  (x) notifying the Liquidity Agent and the Deal Agent of any
         material action, suit, proceeding, dispute, offset deduction, defense
         or counterclaim that is or may be (1) asserted by an Obligor with
         respect to any Transferred Loan; or (2) reasonably expected to have a
         material adverse effect on the Loans as a whole or on the ability of
         the Servicer or the Originator to perform its obligations under the
         Transaction Documents or on the Servicer or the Seller or any of their
         respective property; and

                  (xi) notifying the Deal Agent of any change in the Credit and
         Collections Policies.

         (c) Disposition Upon Defaulted Loan. Upon any Loan in the Asset Pool
becoming a Defaulted Loan, the Servicer will use commercially reasonable efforts
in accordance with the Credit and Collection Policies to dispose of any Related
Property. Without limiting the generality of the foregoing, to the extent
provided by law, the Servicer may dispose of any such Related Property by
purchasing such Related Property or by selling such Related Property to any of
its Affiliates for a purchase price equal to the fair market value thereof, any
such sale to be evidenced by a certificate of a Responsible Officer of the
Servicer delivered to the Deal Agent setting forth the Loan, the Related
Property, the sale price of the Related Property and certifying that such sale
price is the fair market value of such Related Property.

         (d) Further Assurances. The Deal Agent will, at the sole expense of the
Servicer, furnish the Servicer 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.

         (e) Custodial Duties. The Collateral Custodian shall take and retain
custody of the Required Loan Documents delivered by the Seller in accordance
with the terms and conditions of this Agreement, all for the benefit of the
Purchasers and subject to the Lien thereon in favor of the Deal Agent as agent
for the Secured Parties. Within five Business Days of its receipt of any
Required Loan Document, the Collateral Custodian shall review the related
Required Loan Documents to verify that such Required Loan Documents have been
executed and have no missing or mutilated pages and to confirm that such Loan is
referenced on the related list of Loans delivered in connection with the related
Purchase Certificate. In order to facilitate the foregoing review by the
Collateral Custodian, in connection with each delivery of Required Loan
Documents hereunder to the Collateral Custodian, the Servicer shall provide to
the Collateral Custodian an electronic file (in EXCEL or a comparable format)
that contains the related list of Required Loan Documents or which otherwise
contains the Loan number and the name of the Obligor with respect to each
related Loan. If, at the conclusion of such review, the Collateral Custodian
shall determine that such Required Loan Documents are not executed or in proper
form on its face, or that the respective Loan is not referenced on such list of
Required Loan Documents, the Collateral Custodian shall promptly notify the
Seller and the Deal Agent of such

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<PAGE>   66
determination by providing a written report to such Persons setting forth, with
particularity, the lack of execution of such Required Loan Documents, that such
Required Loan Documents have missing or mutilated pages, or the fact that such
Loan was not referenced on the related list. In addition, unless instructed
otherwise in writing by the Seller or the Deal Agent within 10 days of the
Collateral Custodian's delivery of such report, the Collateral Custodian shall
return any Required Loan Documents not referenced on such list of Loans to the
Seller. Other than the foregoing, the Collateral Custodian shall not have any
responsibility for reviewing any Required Loan Documents.

         In taking and retaining custody of the Required Loan Documents, the
Collateral Custodian shall be deemed to be acting as the agent of the Deal Agent
as agent for the Purchasers and Secured Parties, provided, however, that the
Collateral Custodian makes no representations as to the existence, perfection or
priority of any Lien on the Required Loan Documents or the instruments therein,
and provided, further, that the Collateral Custodian's duties as agent shall be
limited to those expressly contemplated herein. All Required Loan Documents
shall be kept in fireproof vaults or cabinets at the locations specified on
Schedule V attached hereto, or at such other office as shall be specified to the
Deal Agent by the Collateral Custodian in a written notice delivered at least 45
days prior to such change. All Required Loan Documents shall be placed together
in a separate file cabinet with an appropriate identifying label and maintained
in such a manner so as to permit retrieval and access. All Required Loan
Documents shall be clearly segregated from any other documents or instruments
maintained by the Collateral Custodian. The Collateral Custodian shall clearly
indicate that such Required Loan Documents are the sole property of the
Purchasers and that the Seller has granted an interest therein to the Deal Agent
on behalf of the Secured Parties. In performing its duties, the Collateral
Custodian shall use the same degree of care and attention as it employs with
respect to similar contracts which it holds as Collateral Custodian.

         (f) Concerning the Collateral Custodian.

                  (i) The Collateral Custodian may conclusively rely on and
         shall be fully protected in acting upon any certificate, instrument,
         opinion, notice, letter, telegram or other document delivered to it and
         which in good faith it reasonably believes to be genuine and which has
         been signed by the proper party or parties. The Collateral Custodian
         may rely conclusively on and shall be fully protected by in acting upon
         (A) the written instructions of any designated officer of the Deal
         Agent (and shall provide a copy thereof to the Seller) or (B) the
         verbal instructions of the Deal Agent, which the Collateral Custodian
         shall promptly confirm in writing (and shall provide a copy thereof to
         the Seller).

                  (ii) The Collateral Custodian may consult counsel satisfactory
         to it and the written advice or opinion of such counsel shall be full
         and complete authorization and protection in respect of any action
         taken, suffered or omitted by it hereunder in good faith and in
         accordance with the advice or opinion of such counsel.

                  (iii) The Collateral Custodian shall not be liable for any
         error of judgment, or for any act done or step taken or omitted by it,
         in good faith, or for any mistakes of fact or

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<PAGE>   67
         law, or for anything which it may do or refrain from doing in
         connection herewith except in the case of its willful misconduct or
         grossly negligent performance or omission.

                  (iv) The Collateral Custodian makes no warranty or
         representation and shall have no responsibility (except as expressly
         set forth in this Agreement) as to the content, enforceability,
         completeness, validity, sufficiency, value, genuineness, ownership or
         transferability of the Loans, and will not be required to and will not
         make any representations as to the validity or value (except as
         expressly set forth in this Agreement) of any of the Loans. The
         Collateral Custodian shall not be obligated to take any legal action
         hereunder which might in its judgment involve any expense or liability
         unless it has been furnished with an indemnity reasonably satisfactory
         to it.

                  (v) The Collateral Custodian shall have no duties or
         responsibilities except such duties and responsibilities as are
         specifically set forth in this Agreement and no covenants or
         obligations shall be implied in this Agreement against the Collateral
         Custodian.

                  (vi) Except for overhead and general administrative expenses,
         the Collateral Custodian shall not be required to expend or risk its
         own funds in the performance of its duties hereunder.

                  (vii) It is expressly agreed and acknowledged that the
         Collateral Custodian is not guaranteeing performance of or assuming any
         liability for the obligations of the other parties hereto or any
         parties to the Loans.

         SECTION 6.3 AUTHORIZATION OF THE SERVICER.

         (a) Each of the Originator, the Seller and the Deal Agent on behalf of
the Secured Parties and each Hedge Counterparty hereby authorizes the Servicer
(including any successor thereto) to take any and all reasonable steps in its
name and on its behalf necessary or desirable and not inconsistent with the sale
of the Transferred Loans to the Purchasers, in the determination of the
Servicer, to collect all amounts due under any and all Transferred Loans,
including, without limitation, endorsing any of their names on checks and other
instruments representing Collections, executing and delivering any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Transferred
Loans and, after the delinquency of any Transferred Loan and to the extent
permitted under and in compliance with Requirements of Law and regulations, to
commence proceedings with respect to enforcing payment thereof, to the same
extent as the Originator could have done if it had continued to own such Loan.
The Originator, the Seller and the Deal Agent on behalf of the Secured Parties
and each Hedge Counterparty shall furnish the Servicer (and any successors
thereto) with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder, and shall cooperate with the Servicer to the fullest extent in
order to ensure the collectibility of the Transferred Loans. In no event shall
the Servicer be entitled to make any Secured Party, any Hedge Counterparty, the
Collateral Custodian or the Deal Agent a party to any litigation without such
party's express prior written consent, or to make the Seller a party to

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any litigation (other than any routine foreclosure or similar collection
procedure) without the Deal Agent's consent.

         (b) After an Early Amortization Event has occurred and is continuing,
at the Agent's direction the Servicer shall take such action as the Deal Agent
may deem necessary or advisable to enforce collection of the Transferred Loans;
provided, however, that the Deal Agent may, at any time that an Early
Amortization Event has occurred and is continuing, notify any Obligor with
respect to any Transferred Loans of the assignment of such Transferred Loans, to
the Deal Agent and direct that payments of all amounts due or to become due to
any other party thereunder be made directly to the Deal Agent or any servicer,
collection agent or lockbox or other account designated by the Deal Agent and,
upon such notification and at the expense of the Seller, the Deal Agent may
enforce collection of any such Transferred Loans and adjust, settle or
compromise the amount or payment thereof.

         SECTION 6.4 COLLECTION OF PAYMENTS.

         (a) Collection Efforts, Modification of Loans. The Servicer will make
reasonable efforts to collect all payments called for under the terms and
provisions of the Loans included in the Asset Pool as and when the same become
due, and will follow those collection procedures which it follows with respect
to all comparable Loans that it services for itself or others; provided,
however, that so long as FIB or the Servicer Assignee is the Servicer the
Servicer shall collect all payments in accordance with the Credit and Collection
Policies. The Servicer may not waive, modify or otherwise vary any provision of
a Loan that is included in the Asset Pool other than as permitted in the Credit
and Collection Policies or as permitted by the Deal Agent. The Servicer may in
its discretion waive any late payment charge or any other fees that may be
collected in the ordinary course of servicing any Loan included in the Asset
Pool.

         (b) Prepaid Loan. The Servicer may not permit a Loan in the Asset Pool
to become a Prepaid Loan (which shall not include a Loan that becomes a Prepaid
Loan due to a Casualty Loss), unless (x) the Servicer provides an Additional
Loan or (y) such prepayment will not result in the Collection Account receiving
an amount (the "Prepayment Amount") less than the sum of (A) the Outstanding
Loan Balance on the date of such prepayment, (B) any outstanding Servicer
Advances thereon, (C) all Hedge Breakage Costs owing to the relevant Hedge
Counterparty for any termination of one or more Hedge Transactions, in whole or
in part, as required by the terms of any Hedging Agreement as the result of any
such Loan becoming a Prepaid Loan, and (D) any accrued and unpaid Yield thereon
and all Breakage Costs arising as a result of such prepayment. After an Early
Amortization Event has occurred, the Servicer may not permit a Loan in the Asset
Pool to become a Prepaid Loan (which shall not include a Loan that becomes a
Prepaid Loan due to a Casualty Loss), unless the Servicer collects an amount
equal to the sum of (A) the Outstanding Loan Balance on the date of such
prepayment, (B) any outstanding Servicer Advances thereon, (C) all Hedge
Breakage Costs owing to the relevant Hedge Counterparty for any termination of
one or more Hedge Transactions, in whole or in part, as required by the terms of
any Hedging Agreement as the result of any such Loan becoming a Prepaid Loan,
and (D) any accrued and unpaid Yield thereon and all Breakage Costs arising as a
result of such prepayment.

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         (c) Acceleration. The Servicer shall accelerate the maturity of all or
any Scheduled Payments under any Loan included in the Asset Pool under which a
default under the terms thereof has occurred and is continuing (after the lapse
of any applicable grace period) promptly after such Loan becomes a Defaulted
Loan; provided, however, that so long as FIB or the Servicer Assignee is the
Servicer the Servicer shall collect all Defaulted Loans in accordance with the
Credit and Collections Policies.

         (d) Taxes and other Amounts. To the extent provided for in any Loan
included in the Asset Pool, the Servicer will use its best efforts to collect
all payments with respect to amounts due for taxes, assessments and insurance
premiums relating to such Loans or the Related Property and remit such amounts
to the appropriate Governmental Authority or insurer on or prior to the date
such payments are due.

         (e) Payments to FIB Existing Account and Lock-Box Account. On or before
each applicable Purchase Date, the Servicer shall have instructed all Obligors
to make all payments in respect of the Loans in the Asset Pool to the FIB
Existing Account; provided, however, notwithstanding the foregoing, upon the
establishment of a Lock-Box Account pursuant to Section 5.2 hereof, the Servicer
shall promptly instruct all Obligors to make all payments in respect of the
Loans in the Asset Pool to a Lock-Box or directly to a Lock-Box Account.

         (f) Establishment of the Collection Account. The Servicer shall cause
to be established, on or before the Closing Date, and maintained in the name of
the Deal Agent, with a "Qualified Institution" (as hereinafter defined) the
Collection Account. A "Qualified Institution" shall be a depository institution
or trust company that at all times shall be organized under the laws of the
United States or any one of the States thereof or the District of Columbia (or
any domestic branch of a foreign bank), (i) (A) which has either (1) a long-term
unsecured debt rating of A- or better by S&P and A3 or better by Moody's or (2)
a short-term unsecured debt rating or certificate of deposit rating of A-l or
better by S&P or P-l or better by Moody's, (B) the parent corporation of which
has either (1) a long-term unsecured debt rating of A- or better by S&P and A3
or better by Moody's or (2) a short-term unsecured debt rating or certificate of
deposit rating of A-l or better by S&P and P-1 or better by Moody's or (C) is
otherwise acceptable to the Deal Agent and (ii) whose deposits are insured by
the Federal Deposit Insurance Corporation.

         SECTION 6.5 SERVICER ADVANCES.

         For each Collection Period, if the Servicer determines that any
Scheduled Payment (or portion thereof) which was due and payable pursuant to a
Loan in the Asset Pool during such Collection Period was not received prior to
the end of such Collection Period, the Servicer may make an advance in an amount
up to the amount of such delinquent Scheduled Payment (or portion thereof); in
addition, if on any day there are not sufficient funds on deposit in the
Collection Account to pay accrued Yield on any Asset Interest the Fixed Period
of which ends on such day, the Servicer shall make an advance in the amount
necessary to pay such Yield (in either case, any such advance, a "Servicer
Advance"). Notwithstanding the preceding sentence, (i) the Servicer shall be
required to make a Servicer Advance with respect to any Loan if, and only if,
the Servicer determines (such determination to be conclusive and binding) in
good faith

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that such Servicer Advance will ultimately be recoverable from future
collections on, or the liquidation of, the Asset Pool and payments by one or
more Hedge Counterparties under one or more Hedging Agreements, (ii) the
Servicer's obligation to make a Servicer Advance for any Loan shall cease on the
day such Loan becomes a Defaulted Loan or a Charged-Off Loan and (iii) any
successor Servicer, including the Backup Servicer, will not be obligated to make
any Servicer Advances. The Servicer will deposit any Servicer Advances into the
Collection Account on or prior to 11:00 a.m. (Charlotte, North Carolina time) on
the related Payment Date, in immediately available funds.

         SECTION 6.6 REALIZATION UPON DEFAULTED LOANS.

         The Servicer will use reasonable efforts to repossess or otherwise
comparably convert the ownership of any Related Property with respect to a
Defaulted Loan and will act as sales and processing agent for Related Property
which it repossesses. The Servicer will follow such other practices and
procedures as it deems necessary or advisable and as are customary and usual in
its servicing of loans and other actions by the Servicer in order to realize
upon such Related Property, which practices and procedures may include
reasonable efforts to enforce all obligations of Obligors and repossessing and
selling such Related Property at public or private sale in circumstances other
than those described in the preceding sentence, provided, however, that so long
as FIB or the Servicer Assignee is Servicer the Servicer shall follow the
practices and procedures with respect to the servicing of loans and the
realization upon any Related Property as are set forth in the Credit and
Collection Policies. Without limiting the generality of the foregoing, the
Servicer may sell any such Related Property with respect to the Servicer or its
Affiliates for a purchase price equal to the then fair market value thereof, any
such sale to be evidenced by a certificate of a Responsible Officer of the
Servicer delivered to the Deal Agent setting forth the Loan, the Related
Property, the sale price of the Related Property and certifying that such sale
price is the fair market value of such Related Property. In any case in which
any such Related Property has suffered damage, the Servicer will not expend
funds in connection with any repair or toward the repossession of such Related
Property unless it reasonably determines that such repair and/or repossession
will increase the Recoveries by an amount greater than the amount of such
expenses. The Servicer will remit to the Collection Account the Recoveries
received in connection with the sale or disposition of Related Property with
respect to a Defaulted Loan.

         SECTION 6.7 REPRESENTATIONS AND WARRANTIES OF BACKUP SERVICER AND
                     COLLATERAL CUSTODIAN.

         Each of the Backup Servicer and the Collateral Custodian represents and
warrants to the Deal Agent, as agent for the Secured Parties, and the Secured
Parties that, as of the Closing Date and on each Purchase Date, insofar as any
of the following affects the Backup Servicer's or the Collateral Custodian's, as
the case may be, ability to perform its obligations pursuant to this Agreement
in any material respect:

         (a) Organization and Good Standing. HSBC is a New York banking
corporation duly organized, validly existing and in good standing under the laws
of the State of New York with all

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<PAGE>   71
requisite corporate power and authority to own its properties and to conduct its
business as presently conducted and to enter into and perform its obligations
pursuant to this Agreement.

         (b) Power and Authority. Each of the Backup Servicer and the Collateral
Custodian has the corporate power and authority to execute and deliver this
Agreement and to carry out its terms. Each of the Backup Servicer and the
Collateral Custodian has duly authorized the execution, delivery and performance
of this Agreement by all requisite corporate action.

         (c) No Violation. The consummation of the transactions contemplated by,
and the fulfillment of the terms of, this Agreement by the Backup Servicer and
the Collateral Custodian will not (i) conflict with, result in any breach of any
of the terms or provisions of, or constitute a default under, the charter or
bylaws of the Backup Servicer or the Collateral Custodian, or any term of any
material agreement, indenture, mortgage, deed of trust or other instrument to
which the Backup Servicer or the Collateral Custodian is a party or by which it
or any of its property is bound, (ii) result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, or (iii) violate any
law, regulation, order, writ, judgment, injunction, decree, determination or
award of any Governmental Authority applicable to HSBC or any of its properties
that might (in the reasonable judgment of the Backup Servicer or the Collateral
Custodian, as the case may be) materially and adversely affect the performance
by the Backup Servicer or the Collateral Custodian of its obligations under, or
the validity or enforceability of, this Agreement.

         (d) No Consent. No consent, approval, authorization, order,
registration, filing, qualification, license or permit (collectively, the
"Consents") of or with any State of New York governmental authority or agency
regulating the banking and trust powers of the Backup Servicer or the Collateral
Custodian or any of its respective properties is required to be obtained by or
with respect to the Backup Servicer or the Collateral Custodian in order for the
Backup Servicer or the Collateral Custodian, as the case may be, to enter into
this Agreement or perform its obligations hereunder (except with respect to
performance only, such Consents as the Backup Servicer or the Collateral
Custodian, as the case may be, may need to obtain prior to the commencement of
its performance of its duties hereunder in the certain jurisdictions outside of
New York, provided that in lieu of obtaining for itself the requisite Consents,
the Backup Servicer or the Collateral Custodian, as the case may be, may and
shall be permitted to delegate the performance of its duties to parties having
the requisite Consents in such jurisdictions; provided, however, in the case of
such delegation of performance the Backup Servicer or the Collateral Custodian,
as the case may be, shall not be relieved of their responsibility under this
Agreement with respect to such duties).

         (e) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of HSBC, enforceable against the Backup Servicer and the
Collateral Custodian in accordance with its terms, except as such enforceability
may be limited by (i) applicable Insolvency Laws and (ii) general principles of
equity (whether considered in a suit at law or in equity).

         (f) No Proceeding. There are no proceedings or investigations pending
or, to the best of its knowledge, threatened, against the Backup Servicer or the
Collateral Custodian, before any

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<PAGE>   72
Governmental Authority (i) asserting the invalidity of this Agreement, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this Agreement or (iii) seeking any determination or ruling that might (in the
reasonable judgment of the Backup Servicer or the Collateral Custodian, as the
case may be) materially and adversely affect the performance by the Backup
Servicer or the Collateral Custodian of its obligations under, or the validity
or enforceability of, this Agreement.

         SECTION 6.8 MAINTENANCE OF INSURANCE POLICIES.

         The Servicer will require that each Obligor with respect to a Loan
included in the Asset Pool maintains an Insurance Policy with respect to each
Loan and the Related Property, in accordance with the Credit and Collection
Policies. In connection with its activities as Servicer, the Servicer agrees to
present, or to require the Obligor to present, on behalf of the Deal Agent as
agent for the Secured Parties, claims to the insurer under each Insurance Policy
and any such liability policy, and to settle, adjust and compromise such claims,
in each case, consistent with the terms of each related Loan.

         SECTION 6.9 REPRESENTATIONS AND WARRANTIES OF SERVICER.

         The Servicer represents and warrants to the Deal Agent, as agent for
the Secured Parties, each Secured Party, the Liquidity Agent and each Investor
that, as of the Closing Date and on each Purchase Date:

         (a) Organization and Good Standing. The Servicer is a bank organized
under the laws of the State of Connecticut duly organized and validly existing
with all requisite corporate power and authority to own its properties and to
conduct its business as presently conducted and to enter into and perform its
obligations pursuant to this Agreement.

         (b) Due Qualification. The Servicer is qualified to do business, is in
good standing, and has obtained all licenses and approvals as required under the
laws of all jurisdictions in which the ownership or lease of its property and or
the conduct of its business (other than the performance of its obligations
hereunder) requires such qualification, standing, license or approval, except to
the extent that the failure to so qualify, maintain such standing or be so
licensed or approved would not have a material adverse effect on the interests
of the Seller or of the Purchasers. The Servicer is qualified to do business, is
in good standing, and has obtained all licenses and approvals as required under
the laws of all states in which the performance of its obligations pursuant to
this Agreement requires such qualification, standing, license or approval and
where the failure to qualify or obtain such license or approval would have
material adverse effect on its ability to perform hereunder.

         (c) Power and Authority. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms. The
Servicer has duly authorized the execution, delivery and performance of this
Agreement by all requisite corporate action. The execution, delivery and
performance of this Agreement does not contravene the Servicer's Certificate of
Incorporation or by-laws.

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         (d) No Violation. The consummation of the transactions contemplated by,
and the fulfillment of the terms of, this Agreement by the Servicer (with or
without notice or lapse of time) will not (i) conflict with, result in any
breach of any of the terms or provisions of, or constitute a default under, the
certificate of incorporation or by-laws of the Servicer, or any term of any
agreement, indenture, mortgage, deed of trust of other instrument to which the
Servicer is a party or by which it or any of its property is bound, (ii) result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, or (iii) violate any law, regulation, order, writ, judgment,
injunctions, decree, determination or award of any Governmental Authority
applicable to the Servicer or any of its properties.

         (e) No Consent. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
Governmental Authority having jurisdiction over the Servicer or any of its
properties is required to be obtained by or with respect to the Servicer in
order for the Servicer to enter into this Agreement or perform its obligations
hereunder.

         (f) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Servicer, enforceable against the Servicer in
accordance with its terms, except as such enforceability may be limited by (i)
applicable Insolvency Laws and (ii) general principles of equity (whether
considered in a suit at law or in equity).

         (g) No Proceeding. There are no proceedings or investigations pending
or threatened against the Servicer, before any Governmental Authority (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or (iii)
seeking any determination or ruling that might (in the reasonable judgment of
the Servicer) materially and adversely affect the performance by the Servicer of
its obligations under, or the validity or enforceability of, this Agreement.

         (h) Reports Accurate. No Servicer Certificate, information, exhibit,
financial statement, document, book, Servicer Record or report furnished or to
be furnished by the Servicer to the Deal Agent or a Secured Party in connection
with this Agreement 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 Deal Agent
or such Secured Party, as the case may be, at such time) as of the date so
furnished.

         (i) Investment Company Act.

                  (i) The Servicer represents and warrants that the Servicer has
         never been, is not now, and will not in the future be operated in such
         a manner as to cause the Servicer to be an "investment company," as
         such term is defined in Section 3 of the 1940 Act; and

                  (ii) The Servicer represents and warrants that the business
         and other activities of the Servicer, including but not limited to, the
         consummation and conduct of the transactions contemplated by the
         Transaction Documents to which the Servicer is a party do not now and
         will not in the future result in a violation by the Servicer, the
         Borrower,

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         or any other person or entity of the 1940 Act or the rules and
         regulations promulgated thereunder.

         SECTION 6.10 COVENANTS OF SERVICER.

         The Servicer hereby covenants that:

         (a) Compliance with Law. The Servicer will comply with all laws and
regulations of any Governmental Authority applicable to the Servicer or the
Loans included in the Asset Pool and Related Property and Loan Documents or any
part thereof.

         (b) Obligations with Respect to Loans; Modifications. The Servicer will
duly fulfill and comply with all obligations on the part of the Seller to be
fulfilled or complied with under or in connection with each Loan included in the
Asset Pool and will do nothing to impair the rights of the Deal Agent as agent
for the Secured Parties or of the Secured Parties in, to and under the Assets.
The Servicer will perform its obligations under the Loans included in the Asset
Pool and will not change or modify such Loans other than as permitted in the
Credit and Collection Policies or as approved by the Deal Agent.

         (c) Preservation of Security Interest. The Servicer will execute and
file such financing and continuation statements and any other documents which
may be required by any law or regulation of any Governmental Authority to
preserve and protect fully the interest of the Deal Agent as agent for the
Secured Parties in, to and under the Assets.

         (d) No Bankruptcy Petition. Prior to the date that is one year and one
day after the payment in full of all amounts owing in respect of all outstanding
commercial paper issued by VFCC, the Servicer will not institute against the
Seller or VFCC, or join any other Person in instituting against the Seller or
VFCC, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceedings under the laws of the United States or
any state of the United States. This Section 6.10(d) will survive the
termination of this Agreement.

         (e) Amendments to Credit and Collection Policies. The Servicer, without
the prior written consent of the Deal Agent, will not agree or consent to or
otherwise permit to occur any amendment, modification, change, supplement, or
recision of the Credit and Collection Policies in whole or in part or in any
manner that could have a material adverse effect upon the Loans or the interests
of the Deal Agent or the Secured Parties.

         (f) Backup Servicer and Collateral Custodian Fee Letter. The Servicer
will not amend, modify, waive or terminate any terms or provisions of the Backup
Servicer and Collateral Custodian Fee Letter without the prior written consent
of the Deal Agent.

         SECTION 6.11 COVENANTS OF BACKUP SERVICER AND COLLATERAL CUSTODIAN.

         Each of the Backup Servicer and the Collateral Custodian hereby
covenants that:

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         (a) Loan Files. The Collateral Custodian will not dispose of any
documents constituting the Loan Files in any manner which is inconsistent with
the performance of its obligations as the Collateral Custodian pursuant to this
Agreement and will not dispose of any Loan Files except as contemplated by this
Agreement.

         (b) Compliance with Law. Each of the Backup Servicer and the Collateral
Custodian will comply with all applicable laws and regulations of any State of
New York governmental authority or agency regulating the banking and trust
powers of the Backup Servicer and the Collateral Custodian.

         (c) No Bankruptcy Petition. Prior to the date that is one year and one
day after the payment in full of all amounts owing in respect of all outstanding
commercial paper issued by VFCC, neither the Backup Servicer nor the Collateral
Custodian will institute against the Seller or VFCC, or join any other Person in
instituting against the Seller or VFCC, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States. This
Section 6.11(c) will survive the termination of this Agreement.

         (d) Location of Loan Files. The Loan Files shall remain at all times in
the possession of the Collateral Custodian at the address set forth herein
unless notice of a different address is given in accordance with the terms
hereof.

         (e) No Changes in Backup Servicer and Collateral Custodian Fee. The
Backup Servicer and Collateral Custodian will not make any changes to the fees
set forth in the Backup Servicer and Collateral Custodian Fee Letter without the
prior written approval of the Deal Agent.

         SECTION 6.12 SERVICING COMPENSATION.

         As compensation for its servicing activities hereunder and
reimbursement for its expenses, the Servicer shall be entitled to receive a
servicing fee (the "Servicing Fee") in respect of each Collection Period (or
portion thereof) equal to one-twelfth of the product of (A) the Servicing Fee
Rate and (B) the Aggregate Outstanding Loan Balance as on the most recent
Determination Date, such Servicing Fee to be payable monthly in arrears on each
Payment Date to the extent of funds available therefor pursuant to the
provisions of Section 2.7.

         SECTION 6.13 CUSTODIAL COMPENSATION.

         As compensation for its custodial activities hereunder and
reimbursement for its expenses, the Collateral Custodian shall be entitled to
receive a custodial fee (the "Custodial Fee") as provided in the Backup Servicer
and Collateral Custodian Fee Letter.

         SECTION 6.14 PAYMENT OF CERTAIN EXPENSES BY SERVICER.

         The Servicer will be required to pay all expenses incurred by it in
connection with its activities under this Agreement, including fees and
disbursements of legal counsel and

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independent accountants, Taxes imposed on the Servicer, expenses incurred in
connection with payments and reports pursuant to this Agreement, and all other
fees and expenses not expressly stated under this Agreement for the account of
the Seller, but excluding Liquidation Expenses. The Servicer will be required to
pay all reasonable fees and expenses owing to any bank or trust company in
connection with the maintenance of the FIB Existing Account, the Collection
Account and the Lock-Box Account. The Servicer shall be required to pay such
expenses for its own account and shall not be entitled to any payment therefor
other than the Servicing Fee.

         SECTION 6.15 REPORTS.

         (a) Monthly Report. With respect to each Determination Date and the
related Collection Period the Servicer will provide to the Seller and the Deal
Agent and the Backup Servicer, on the related Reporting Date, a monthly
statement (a "Monthly Report"), signed by a Responsible Officer of the Servicer
and substantially in the form of Exhibit E.

         (b) Servicer's Certificate. Together with each Monthly Report, the
Servicer shall submit to the Seller, the Deal Agent and the Backup Servicer a
certificate (a "Servicer's Certificate"), signed by a Responsible Officer of the
Servicer and substantially in the form of Exhibit F.

         (c) Financial Statements. The Servicer will submit to the Deal Agent,
within 45 days of the end of each of the Servicer's fiscal quarters, commencing
March 31, 1999 unaudited consolidated financial statements of the Servicer (or,
so long as FIB or the Servicer Assignee is the Servicer, First International
Bancorp, Inc.) (including an analysis of delinquencies and losses for each
fiscal quarter) as of the end of each such fiscal quarter. The Servicer shall
submit to the Deal Agent, within 90 days of the end of the Servicer's fiscal
year, commencing December 31, 2000, annual consolidated audited financial
statements of the Servicer (or, so long as the Originator is the Servicer, First
International Bancorp, Inc.) as of the end of such fiscal year.

         SECTION 6.16 ANNUAL STATEMENT AS TO COMPLIANCE.

         The Servicer will provide to the Deal Agent, on or prior to March 31 of
each year, commencing March 31, 2001, an annual report signed by a Responsible
Officer of the Servicer certifying that (a) a review of the activities of the
Servicer, and the Servicer's performance pursuant to this Agreement, for the
period ending on the last day of the preceding fiscal year has been made under
such Person's supervision and (b) the Servicer has performed or has caused to be
performed in all material respects all of its obligations under this Agreement
throughout such year and no Servicer Termination Event has occurred and is
continuing (or if a Servicer Termination Event has so occurred and is
continuing, specifying each such event, the nature and status thereof and the
steps necessary to remedy such event, and, if a Servicer Termination Event
occurred during such year and no notice thereof has been given to the Deal
Agent, specifying such Servicer Termination Event and the steps taken to remedy
such event).

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         SECTION 6.17 ANNUAL INDEPENDENT PUBLIC ACCOUNTANT'S SERVICING REPORTS.

         The Servicer will cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer) to
furnish to the Deal Agent, on or prior to March 31 of each year, commencing
March 31, 2001, (i) a report relating to the previous fiscal year to the effect
that (A) such firm has reviewed certain documents and records relating to the
servicing of the Loans included in the Asset Pool, and (B) based on such
examination, such firm is of the opinion that the Monthly Reports for such year
were prepared in compliance with this Agreement, except for such exceptions as
it believes to be immaterial and such other exceptions as will be set forth in
such firm's report and (ii) a report covering the preceding fiscal year to the
effect that such accountants have applied certain agreed-upon procedures to
certain documents and records relating to the servicing of Loans under this
Agreement, compared the information contained in the Servicer's Certificates
delivered during the period covered by such report with such documents and
records and that no matters came to the attention of such accountants that
caused them to believe that such servicing was not conducted in compliance with
this Article VI of this Agreement, except for such exceptions as such
accountants shall believe to be immaterial and such other exceptions as shall be
set forth in such statement.

         SECTION 6.18 ADJUSTMENTS.

         If (i) the Servicer makes a deposit into the Collection Account in
respect of a Collection of a Loan included in the Asset Pool and such Collection
was received by the Servicer in the form of a check which is not honored for any
reason or (ii) the Servicer makes a mistake with respect to the amount of any
Collection and deposits an amount that is less than or more than the actual
amount of such Collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect such dishonored
check or mistake. Any Scheduled Payment in respect of which a dishonored check
is received shall be deemed not to have been paid.

         SECTION 6.19 MERGER OR CONSOLIDATION OF THE SERVICER.

         The Servicer shall not consolidate with or merge into any other Person
or convey or transfer its properties and assets substantially as an entirety to
any Person, unless the Servicer is the surviving entity and unless:

                  (i) the Servicer has delivered to the Deal Agent and the
         Backup Servicer an Officer's Certificate and an Opinion of Counsel each
         stating that any consolidation, merger, conveyance or transfer and such
         supplemental agreement comply with this Section 6.19 and that all
         conditions precedent herein provided for relating to such transaction
         have been complied with and, in the case of the Opinion of Counsel,
         that such supplemental agreement is legal, valid and binding with
         respect to the Servicer and such other matters as the Deal Agent may
         reasonably request;

                  (ii) the Servicer shall have delivered notice of such
         consolidation, merger, conveyance or transfer to the Deal Agent; and

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                  (iii) after giving effect thereto, no Early Amortization Event
         or event which with notice or lapse of time would constitute an Early
         Amortization Event shall have occurred.

         Notwithstanding anything to the contrary contained herein, so long as
the Servicer and the Originator are the same Person, the Servicer is permitted
as part of a Conversion to assign its rights hereunder to, and the Servicer's
obligations hereunder can be assumed by, another wholly-owned subsidiary of
First International Bancorp, Inc. (the "Servicer Assignee") (in which case all
of the provisions of this Agreement shall, to the same extent as they apply to
the Servicer hereunder, apply to the Servicer Assignee rather than to the
Servicer) on the condition that (a) the Servicer Assignee acquires substantially
all of the Servicer's assets relating to its commercial lending business, (b)
the Servicer Assignee assumes substantially all of the Servicer's liabilities
relating to its commercial lending business, but expressly excluding the
Servicer's deposits, (c) Deal Agent receives such documents evidencing (a) and
(b) above as Deal Agent shall reasonably request, and (d) the Servicer Assignee
executes and deliver to Deal Agent such amendments to this Agreement and such
opinions of counsel as Deal Agent may deem necessary including, but not limited
to opinions to evidence that the Servicer Assignee has assumed all of the
Servicer's rights and obligations, and is bound by all of the Servicer's
agreements, set forth herein. Upon such conversion, the Commitment Termination
Date may be accelerated pursuant to the provisions of Section 2.1(c).

         SECTION 6.20 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.

         Except as provided herein, neither the Servicer nor any of the
directors or officers or employees or agents of the Servicer shall be under any
liability to the Deal Agent, the Secured Parties or any other Person for any
action taken or for refraining from the taking of any action pursuant to this
Agreement whether arising from express or implied duties under this Agreement;
provided, however, that this provision shall not protect the Servicer or any
such Person against any liability which would otherwise be imposed by reason of
its willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of its willful misconduct hereunder.

         SECTION 6.21 INDEMNIFICATION OF THE SELLER, THE DEAL AGENT, THE
                      LIQUIDITY AGENT AND THE SECURED PARTIES.

         The Servicer shall indemnify and hold harmless the Seller, the Deal
Agent, the Liquidity Agent and each Secured Party and their respective officers,
directors, employees and agents (collectively, the "Indemnified Persons") from
and against any loss, liability, expense, damage or injury suffered or sustained
by any Indemnified Person by reason of any acts, omissions or alleged acts or
omissions of the Servicer, including, but not limited to any judgment, award,
settlement, reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim, but excluding allocations of overhead expenses of any such Indemnified
Party or other non-monetary damages of any such Indemnified Party.
Notwithstanding the foregoing, the Servicer shall not indemnify an Indemnified
Person if such loss, liability, expense, damage or injury results or arises (i)
as a result of fraud, gross negligence or willful misconduct by any Indemnified
Person; and (ii) under any federal, state or local income or franchise taxes or
any other Tax imposed on or measured by

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income (or any interest or penalties with respect thereto or arising from a
failure to comply therewith) required to be paid by the Seller, the Deal Agent,
the Liquidity Agent or the Secured Parties in connection herewith to any taxing
authority. The provisions of this indemnity shall run directly to and be
enforceable by an injured party subject to the limitations hereof. If the
Servicer has made any indemnity payment pursuant to this Section 6.21 and such
payment fully indemnified the recipient thereof and the recipient thereafter
collects any payments from others in respect of such Indemnified Amounts, the
recipient shall repay to the Servicer an amount equal to the amount it has
collected from others in respect of such indemnified amounts.

         If for any reason the indemnification provided above in this Section
6.21 is unavailable to the Indemnified Person or is insufficient to hold an
Indemnified Person harmless, then Servicer shall contribute to the amount paid
or payable by such Indemnified Person as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnified Person on the one hand and Servicer on the
other hand but also the relative fault of such Indemnified Person as well as any
other relevant equitable considerations.

         The parties hereto agree that the provisions of this Section 6.21 shall
not be interpreted to provide recourse to the Seller against loss by reason of
the bankruptcy or insolvency (or other credit condition) of, or default by,
related Obligor on, any Loan.

         Any indemnification pursuant to this Section shall not be payable from
the Assets.

         Any indemnification pursuant to this Section shall not be in
duplication of any other indemnification for the same loss under Section 8.1.

         The obligations of the Servicer under this Section 6.21 shall survive
the resignation or removal of the Deal Agent and the Liquidity Agent, and the
termination of this Agreement.

         SECTION 6.22 THE SERVICER AND BACKUP SERVICER NOT TO RESIGN.

         Neither the Servicer nor the Backup Servicer shall resign from the
obligations and duties hereby imposed on it except upon such Person's
determination that (i) the performance of its duties hereunder is or becomes
impermissible under Requirements of Law and (ii) there is no reasonable action
which such Person could take to make the performance of its duties hereunder
permissible under Requirements of Law. Any such determination permitting the
resignation of the Servicer or Backup Servicer shall be evidenced as to clause
(i) above by an Opinion of Counsel to such effect delivered to the Deal Agent.
No such resignation shall become effective until a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance with
Section 6.27, or a successor Backup Servicer shall have assumed the
responsibilities and obligations of the Backup Servicer, respectively.

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         SECTION 6.23 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
                      REGARDING THE LOANS.

         The Servicer shall provide to the Deal Agent access to the Loan
Documents and all other documentation regarding the Loans included in the Asset
Pool and the Related Property in such cases where the Deal Agent is required in
connection with the enforcement of the rights or interests of the Secured
Parties, or by applicable statutes or regulations, to review such documentation,
such access being afforded without charge but only (i) upon two Business Days
prior written request, (ii) during normal business hours and (iii) subject to
the Servicer's normal security and confidentiality procedures. Prior to the
Closing Date and periodically thereafter at the discretion of the Deal Agent,
the Deal Agent may review the Servicer's collection and administration of the
Loans in order to assess compliance by the Servicer with the Servicer's written
policies and procedures, as well as with this Agreement and may conduct an audit
of the Loans, Loan Documents and Records in conjunction with such a review. Such
review shall be reasonable in scope and shall be completed in a reasonable
period of time. The Seller shall bear the cost of up to four of such audits per
calendar year in an amount not to exceed $5,000 per audit.

         SECTION 6.24 BACKUP SERVICER.

         (a) On or before the date on which the initial Purchase occurs, until
the receipt by the Servicer of a Termination Notice, the Backup Servicer shall
perform, on behalf of the Deal Agent and the Secured Parties, the following
duties and obligations:

                  (i) On or before the Closing Date, the Backup Servicer shall
         accept from the Servicer delivery of the information required to be set
         forth in the Monthly Reports in hard copy and on computer tape;
         provided, however, the computer tape is in an MS-DOS, PC readable ASCII
         format or format to be agreed upon by the Backup Servicer and the
         Servicer on or prior to closing.

                  (ii) Not later than 12:00 noon New York time two Business Days
         prior to each Reporting Date, the Backup Servicer shall accept delivery
         of tape from the Servicer, which shall include but not be limited to
         the following information: the name, number and name of the related
         Obligor for each Loan, the collection status, the contract status, the
         principal balance and the Aggregate Outstanding Loan Balance (the
         "Tape").

         The Servicer shall provide the Tape on each Reporting Date as described
above.

         (b) On or before the date on which the initial Purchase occurs, and
until the receipt by the Servicer of a Termination Notice, the Backup Servicer
shall perform, on behalf of the Secured Parties and the Deal Agent, the
following duties and obligations:

                  (i) Prior to the related Payment Date, the Backup Servicer
         shall review the Monthly Report to ensure that it is complete on its
         face and that the following items in such Monthly Report have been
         accurately calculated, if applicable, and reported: (A) the Aggregate
         Outstanding Loan Balance, (B) the Backup Servicing Fee, (C) the Loans
         that

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<PAGE>   81
         are 30-60 days past due, (D) the Loans that are 61-90 days past due,
         (E) the Loans that are 90+ days past due, (F) the Loans that are
         Defaulted Loans, (G) the Average Default Rate, and (H) the Average Net
         Loss Ratio. The Backup Servicer shall notify the Deal Agent and the
         Servicer of any disagreements with the Monthly Report based on such
         review not later than the Business Day preceding such Payment Date to
         such Persons.

                  (ii) If the Servicer disagrees with the report provided under
         paragraph (i) above by the Backup Servicer or if the Servicer or any
         subservicer has not reconciled such discrepancy, the Backup Servicer
         agrees to confer with the Servicer to resolve such disagreement on or
         prior to the next succeeding Determination Date and shall settle such
         discrepancy with the Servicer if possible, and notify the Deal Agent of
         the resolution thereof. The Servicer hereby agrees to cooperate at its
         own expense, with the Backup Servicer in reconciling any discrepancies
         herein. If within 20 days after the delivery of the report provided
         under paragraph (i) above by the Backup Servicer, such discrepancy is
         not resolved, the Backup Servicer shall promptly notify the Deal Agent
         of the continued existence of such discrepancy. Following receipt of
         such notice by the Deal Agent, the Servicer shall deliver to the Deal
         Agent, the Secured Parties, and the Backup Servicer no later than the
         related Payment Date a certificate describing the nature and amount of
         such discrepancies and the actions the Servicer proposes to take with
         respect thereto.

         With respect to the foregoing, the Backup Servicer, in the performance
of its duties and obligations hereunder, is entitled to rely conclusively, and
shall be fully protected in so relying, on the contents of each Tape, including,
but not limited to, the completeness and accuracy thereof, provided by the
Servicer.

         (c) After the receipt of an effective Termination Notice by the
Servicer in accordance with this Agreement, all authority, power, rights and
responsibilities of the Servicer, under this Agreement, whether with respect to
the Loans or otherwise shall pass to and be vested in the Backup Servicer,
subject to and in accordance with the provisions of Section 6.27, as long as the
Backup Servicer is not prohibited by an applicable provision of law from
fulfilling the same, as evidenced by an Opinion of Counsel.

         (d) Any Person (i) into which the Backup Servicer may be merged or
consolidated, (ii) which may result from any merger or consolidation to which
the Backup Servicer shall be a party, or (iii) which may succeed to the
properties and assets of the Backup Servicer substantially as a whole, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Backup Servicer hereunder, shall be the
successor to the Backup Servicer under this Agreement without further act on the
part of any of the parties to this Agreement.

         (e) As compensation for its back-up servicing obligations hereunder,
the Backup Servicer shall be entitled to receive the Backup Servicing Fee in
respect of each Monthly Period (or portion thereof) until the first to occur of
the date on which the Backup Servicer becomes a Successor Servicer, resigns or
is removed as Backup Servicer or termination of this Agreement.

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         (f) The Backup Servicer and the Collateral Custodian may be removed
without cause by the Deal Agent by notice then given in writing to the Servicer,
the Seller, the Backup Servicer and the Collateral Custodian. In the event of
any such removal, each of the Backup Servicer and the Collateral Custodian may
be replaced by (i) the Servicer, acting with the consent of the Deal Agent or
(ii) if no such replacement is appointed within thirty (30) days following such
removal or resignation, by the Deal Agent.

         (g) The Backup Servicer undertakes to perform only such duties and
obligations as are specifically set forth in this Agreement, it being expressly
understood by all parties hereto that there are no implied duties or obligations
of the Backup Servicer hereunder. Without limiting the generality of the
foregoing, the Backup Servicer, except as expressly set forth herein, shall have
no obligation to supervise, verify, monitor or administer the performance of the
Servicer. The Backup Servicer may act through its agents, attorneys and
custodians in performing any of its duties and obligations under this Agreement,
it being understood by the parties hereto that the Backup Servicer will be
responsible for any misconduct or negligence on the part of such agents,
attorneys or custodians acting on the routine and ordinary day-to-day operations
for and on behalf of the Backup Servicer. Neither the Backup Servicer nor any of
its officers, directors, employees or agents shall be liable, directly or
indirectly, for any damages or expenses arising out of the services performed
under this Agreement other than damages or expenses which result from the gross
negligence or willful misconduct of it or them or the failure to perform
materially in accordance with this Agreement.

         (h) The Backup Servicer shall not be liable for any obligation of the
Servicer contained in this Agreement or for any errors of the Servicer contained
in any computer tape, certificate or other data or document delivered to the
Backup Servicer hereunder or on which the Backup Servicer must rely in order to
perform its obligations hereunder, and the Seller, Secured Parties, Deal Agent,
Liquidity Agent, Collateral Custodian and Backup Servicer, shall look only to
the Servicer to perform such obligations. The Backup Servicer and the Collateral
Custodian shall have no responsibility and shall not be in default hereunder or
incur any liability for any failure, error, malfunction or any delay in carrying
out any of their respective duties under this Agreement if such failure or delay
results from the Backup Servicer acting in accordance with information prepared
or supplied by a Person other than the Backup Servicer or the failure of any
such other Person to prepare or provide such information.

         SECTION 6.25 IDENTIFICATION OF RECORDS.

         The Servicer shall clearly and unambiguously identify each Loan that is
in the Asset Pool and the Related Property in its computer or other records to
reflect that the Asset Interests in such Loans and Related Property have been
transferred to and are owned by the Purchasers and that the Deal Agent has the
interest therein granted by the Seller pursuant to this Agreement.

         SECTION 6.26 SERVICER TERMINATION EVENTS.

         (a) If any one of the following events (a "Servicer Termination Event")
shall occur and be continuing on any day:

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                  (i) any failure by the Servicer to make any payment, transfer
         or deposit on or before the date occurring two (2) Business Days after
         the date such payment, transfer or deposit is required to be made, or
         any failure by the Servicer to give instructions or notice to the Deal
         Agent as required by this Agreement or to deliver any Required Reports
         hereunder and such failure continues unremedied more than two (2)
         Business Days after notice thereof to the Servicer.

                  (ii) any failure on the part of the Servicer duly to observe
         or perform in any material respect any other covenants or agreements of
         the Servicer set forth in this Agreement or any other Transaction
         Document which continues unremedied for a period of 30 days after the
         first to occur of (i) the date on which written notice of such failure
         requiring the same to be remedied shall have been given to the Servicer
         by the Deal Agent and (ii) the date on which the Servicer becomes aware
         thereof;

                  (iii) any representation, warranty or certification made by
         the Servicer in this Agreement or in any certificate delivered pursuant
         to this Agreement shall prove to have been incorrect when made, and
         which continues to be unremedied for a period of 30 days after the
         first to occur of (i) the date on which written notice of such
         incorrectness requiring the same to be remedied shall have been given
         to the Servicer by the Deal Agent and (ii) the date on which the
         Servicer becomes aware thereof;

                  (iv) the Servicer shall fail in any material respect to
         service the Loans in accordance with the Credit and Collection
         Policies;

                  (v) an Insolvency Event shall occur with respect to the
         Servicer; or

                  (vi) (x) the Servicer ceases to be a wholly-owned subsidiary
         of First International Bancorp., Inc., or (y) the Servicer's principal
         place of business and chief executive office ceases to be located in
         the United States, without the prior written consent of the Deal Agent,
         VFCC and the Required Investors.

Notwithstanding anything herein to the contrary, so long as any such Servicer
Termination Events shall not have been remedied at the expiration of any
applicable cure period, the Deal Agent, by written notice to the Servicer (a
"Termination Notice"), may, subject to the provisions of Section 6.27, terminate
all of the rights and obligations of the Servicer as Servicer under this
Agreement. The Seller shall pay all reasonable set-up and conversion costs
associated with the transfer of servicing rights to the Successor Servicer.

         SECTION 6.27 APPOINTMENT OF SUCCESSOR SERVICER.

         (a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 6.26, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Deal Agent in writing or, if no such date
is specified in such Termination Notice or otherwise specified by the Deal
Agent, until a date mutually agreed upon by the Servicer and the Deal Agent. The
Deal Agent may at the time described in the immediately preceding sentence in
its sole discretion,

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appoint the Backup Servicer as the Servicer hereunder, and the Backup Servicer
shall on such date assume all obligations of the Servicer hereunder, and all
authority and power of the Servicer under this Agreement shall pass to and be
vested in the Backup Servicer (the Backup Servicer or such other successor, the
"Successor Servicer"); provided, however, that the Successor Servicer shall not
be responsible or liable for any past actions or omissions of the outgoing
Servicer. In the event that a Successor Servicer has not been appointed and has
not accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Deal Agent shall petition a court of competent Jurisdiction to
appoint any established financial institution having a net worth of not less
than U.S. $25,000,000 and whose regular business includes the servicing of Loans
as the Successor Servicer hereunder.

         (b) Upon its appointment, the Backup Servicer (subject to 6.27(a)) or
the Successor Servicer, as applicable, shall be the successor in all respects to
the Servicer with respect to servicing functions under this Agreement and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof, and all references in
this Agreement to the Servicer shall be deemed to refer to the Backup Servicer
or the Successor Servicer, as applicable.

         (c) All authority and power granted to the Servicer under this
Agreement shall automatically cease and terminate upon termination of this
Agreement and shall pass to and be vested in the Seller and, without limitation,
the Seller is hereby authorized and empowered to execute and deliver, on behalf
of the Servicer, as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights. The
Servicer agrees to cooperate with the Seller in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing with respect to
the Loans included in the Asset Pool.

         (d) Upon the Backup Servicer receiving notice that it is required to
serve as Servicer hereunder pursuant to the foregoing provisions of this Section
6.27, the Backup Servicer will promptly begin the transition to its role as
Servicer.

         SECTION 6.28 NOTIFICATION.

         Upon the Servicer becoming aware of the occurrence of any Servicer
Termination Event, the Servicer shall promptly give written notice thereof to
the Deal Agent.

         SECTION 6.29 PROTECTION OF RIGHT, TITLE AND INTEREST IN ASSETS.

         The Servicer shall cause this Agreement, all amendments hereto and/or
all financing statements and continuation statements and any other necessary
documents covering the right, title and interest of the Deal Agent as agent for
the Secured Parties and of the Secured Parties to the Assets to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, all in such manner and in such places as may be required by law fully
to preserve and protect the right, title and interest of the Deal Agent as agent
for the Secured Parties hereunder to all property comprising the Asset Pool. The
Servicer shall deliver to the Deal Agent file-stamped copies of, or filing
receipts for, any document recorded, registered or filed as

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provided above, as soon as available following such recording, registration or
filing. The Seller shall cooperate fully with the Servicer in connection with
the obligations set forth above and will execute any and all documents
reasonably required to fulfill the intent of this Section.

         SECTION 6.30 RELEASE OF LOAN FILES.

         The Seller may, with the prior written consent of the Deal Agent (such
consent not to be unreasonably withheld), require that the Collateral Custodian
release each Loan File (a) delivered to the Collateral Custodian in error, (b)
for which a Substitute Loan has been substituted in accordance with Section 2.9,
(c) as to which the lien on the Related Property has been so released pursuant
to Section 5.3, (d) which has been retransferred to the Seller pursuant to
Section 5.5 or 5.6, or (e) which is required to be redelivered to the Seller in
connection with the termination of this Agreement, in each case by submitting to
the Collateral Custodian and the Deal Agent a written request (signed by both
the Seller and the Deal Agent) specifying the Loans to be so released and
reciting that the conditions to such release have been met (and specifying the
Section or Sections of this Agreement being relied upon for such release). The
Collateral Custodian shall upon its receipt of each such request for release
executed by the Seller and the Deal Agent promptly, but in any event within 5
Business Days, release the Loan Files so requested to the Seller.

         SECTION 6.31 FDIC ENFORCEMENT ACTIONS.

         Each of the Originator and the Seller hereby covenants that it will
provide copies to the Deal Agent of all written communications with the FDIC
regarding any enforcement actions (including any FDIC Action) within five (5)
days of such action; provided, that the Originator and the Seller will not
provide copies to the Deal Agent of any written communication with the FDIC
which the Originator or Seller, as applicable, is not permitted to deliver to
the Deal Agent under Requirements of Law.

                                   ARTICLE VII

                            EARLY AMORTIZATION EVENTS

         SECTION 7.1 EARLY AMORTIZATION EVENTS.

         If any of the following events (each, an "Early Amortization Event")
shall occur and be continuing:

         (a) the Seller or the Servicer shall default in the payment of any
amount required to be made under the terms of this Agreement and such failure
continues unremedied for a period of three (3) Business Days after written
notice thereof shall have been given by the Deal Agent or the Collateral
Custodian to the Seller or Servicer; or

         (b) the amount of outstanding Capital shall exceed the Capital Limit
for more than three (3) Business Days; or

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         (c) (i) the Seller or the Originator shall fail to perform or observe
in any material respect any other covenant or other agreement of the Seller or
the Originator set forth in this Agreement, or (ii) the Originator shall fail to
perform or observe in any material respect any term covenant or agreement of
such Originator set forth in the Purchase Agreement, in each case when such
failure continues unremedied for more than thirty (30) days after the earlier of
(x) the date written notice thereof shall have been given by the Deal Agent or
the Collateral Custodian to such Person or (y) the date of actual knowledge
thereof by the Seller; or

         (d) any representation or warranty made or deemed made hereunder shall
prove to be incorrect in any material respect as of the time when the same shall
have been made, and such incorrect representation or warranty shall not have
been eliminated or otherwise cured within a period of thirty (30) days after
written notice thereof shall have been given by the Deal Agent or the Collateral
Custodian to the Seller; or

         (e) an Insolvency Event shall occur with respect to the Seller or the
Originator; or

         (f) a Servicer Termination Event occurs; or

         (g) any Change in Control of the Seller or Originator occurs; or

         (h) the Seller or the Originator defaults in making any payment
required to be made under any material agreement for borrowed money to which
either is a party and such default gives the relevant lender a right to
accelerate the Seller's or Originator's obligations thereunder and is not cured
within the relevant cure period; or

         (i) the Deal Agent, as agent for the Secured Parties, shall fail for
any reason to have a valid and perfected first priority security interest in any
of the Assets; or

         (j) (i) a final judgment for the payment of money in excess of
$5,000,000 shall have been rendered against the Originator or $1,000,000 against
the Seller by a court of competent jurisdiction and, if such judgment relates to
the Originator, the Originator shall not have either: (1) discharged or provided
for the discharge of such judgment in accordance with its terms, or (2)
perfected a timely appeal of such judgment and caused the execution thereof to
be stayed (by supersedes or otherwise during the pendency of such appeal or (ii)
the Seller, shall have made payments of amounts in excess of $100,000 in
settlement of any litigation; or

         (k) the Seller or Originator agrees or consents to, or otherwise
permits to occur, any amendment, modification, change, supplement or recision of
or to the Credit and Collection Policies in whole or in part that could have a
material adverse effect upon the Loans or interest of any Purchaser, without the
prior consent of the Deal Agent or the Purchaser; or

         (l) any failure to comply with Section 5.4 and such failure continues
for a period of fifteen (15) days; or

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         (m) on any Determination Date, the Net Portfolio Yield does not equal
or exceed the Minimum Net Portfolio Yield and such failure continues for a
period of fifteen (15) consecutive days; or

         (n) as of any Determination Date, the Average Default Ratio is greater
than 4.0%; or

         (o) as of any Determination Date, the Average Net Loss Ratio is greater
than one and one-half percent (1.5%); or

         (p) [Reserved];

         (q) the Originator ceases to be a wholly-owned subsidiary of First
International Bancorp., Inc.; or

         (r) the Seller ceases to be a "bankruptcy-remote entity" under
customary criteria; or

         (s) the Seller shall become an "investment company" within the meaning
of the 1940 Act; or

         (t) the noncompliance at any time of the composition of the Asset Pool
with the concentration and mix requirements set forth on Schedule II hereof and
such noncompliance is not cured within five (5) Business Days; or

         (u) the business and other activities of the Seller or the Servicer (if
the Originator is the Servicer), including but not limited to, the Purchases
made by the Purchasers, the application and use of the proceeds thereof by the
Seller and the consummation and conduct of the transactions contemplated by the
Transaction Documents to which the Seller or Servicer is a party do not now and
will not in the future result in a violation by the Servicer, the Seller, or any
other person or entity of the 1940 Act or the rules and regulations promulgated
thereunder; or

         (v) for the Determination Date on June 30, 2000, the Default Ratio is
greater than 3.5%; or

         (w) an Early Amortization Event under and as defined in the FNBNE
Funding Corp. Loan Purchase and Servicing Agreement shall occur;

then, and in any such event, the Deal Agent shall, at the request, or may with
the consent, of the Required Investors, by notice to the Seller declare the
Termination Date to have occurred, without demand, protest or future notice of
any kind, all of which are hereby expressly waived by the Seller, and all
Aggregate Unpaids and all other amounts owing by the Seller under this Agreement
shall be accelerated and become immediately due and payable, provided, that in
the event that the Termination Event described in subsection (f) herein has
occurred, the Termination Date shall automatically occur, without demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Seller.

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                                  ARTICLE VIII

                                 INDEMNIFICATION

         SECTION 8.1 INDEMNITIES BY THE SELLER.

         Without limiting any other rights which the Deal Agent, the Liquidity
Agent, any Secured Parties, the Registrar or their assignees, or any of their
respective Affiliates may have hereunder or under any Requirements of Law, the
Seller hereby agrees to indemnify the Deal Agent, the Secured Parties, the
Registrar or their assignees and each of their respective Affiliates and
officers, directors, employees and agents thereof (collectively, the
"Indemnified Parties") 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 such Indemnified
Party or other non-monetary damages of any such Indemnified Party any of them
arising out of or as a result of this Agreement, excluding, however, Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of any Indemnified Party. Without limiting the foregoing, the Seller
shall indemnify the Indemnified Parties for Indemnified Amounts relating to or
resulting from:

                  (i) any Loan treated as or represented by the Seller to be an
         Eligible Loan which is not at the applicable time an Eligible Loan;

                  (ii) reliance on any representation or warranty made or deemed
         made by the Seller, the Servicer (or one of its Affiliates) or any of
         their respective officers under or in connection with this Agreement,
         which shall have been false or incorrect in any material respect when
         made or deemed made or delivered;

                  (iii) the failure by the Seller or the Servicer (or one of its
         Affiliates) to comply with any term, provision or covenant contained in
         this Agreement or any agreement executed in connection with this
         Agreement, or with any Requirements of Law, rule or regulation with
         respect to any Loan comprising a portion of the Assets Pool, the
         Related Property, or the nonconformity of any Loan, the Related
         Property with any such Requirements of Law, rule or regulation or any
         failure by the Originator, the Seller or any Affiliate thereof to
         perform its respective duties under the Loans included as a part of the
         Assets;

                  (iv) the failure to vest and maintain vested in the relevant
         Purchaser or to transfer to such Purchaser, an undivided ownership
         interest in the Assets, together with all Collections, free and clear
         of any Adverse Claim whether existing at the time of any Purchase or at
         any time thereafter;

                  (v) the failure to file, or any delay in filing, financing
         statements or other similar instruments or documents under the UCC of
         any applicable jurisdiction or other

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         Requirements of Law with respect to any Asset whether at the time of
         any Purchase or at any subsequent time and as required by the
         Transaction Documents;

                  (vi) any dispute, claim, offset or defense (other than the
         discharge in bankruptcy of the Obligor) of the Obligor to the payment
         of any Loan included in the Asset Pool which is, or is purported to be,
         an Eligible Loan (including, without limitation, a defense based on the
         Loan not being a legal, valid and binding obligation of such Obligor
         enforceable against it in accordance with its terms);

                  (vii) any failure of the Seller or the Servicer (if the
         Originator or one of its Affiliates) to perform its duties or
         obligations in accordance with the provisions of this Agreement or any
         failure by the Originator, the Seller or any Affiliate thereof to
         perform its respective duties under the Loans;

                  (viii) any products liability claim or personal injury or
         property damage suit or other similar or related claim or action of
         whatever sort arising out of or in connection with merchandise or
         services which are the subject of any Loan included in the Asset Pool
         or the Related Property included in the Asset Pool;

                  (ix) any claim, suit or action of any kind or nature arising
         out of or connection with Environmental Laws, including vicarious
         liability;

                  (x) the failure by Seller to pay when due any Taxes for which
         the Seller is liable, including without limitation, sales, excise or
         personal property taxes payable in connection with the Assets Pool;

                  (xi) any repayment by the Deal Agent, the Liquidity Agent or a
         Secured Party of any amount previously distributed in reduction of
         Capital or payment of Yield or any other amount due hereunder or under
         any Hedging Agreement, in each case which amount the Deal Agent, the
         Liquidity Agent or a Secured Party believes in good faith is required
         to be repaid;

                  (xii) any investigation, litigation or proceeding related to
         this Agreement or the use of proceeds of Purchases or in respect of any
         Loan included in the Asset Pool or the Related Property included in the
         Asset Pool;

                  (xiii) any failure by the Seller to give reasonably equivalent
         value to the Originator in consideration for the transfer by the
         Originator to the Seller of any Loan or the Related Property or any
         attempt by any Person to void or otherwise avoid any such transfer
         under any statutory provision or common law or equitable action,
         including, without limitation, any provision of the Bankruptcy Code;

                  (xiv) the failure of the Seller, the Originator or any of
         their respective agents or representatives to remit to the Servicer or
         the Deal Agent, Collections on the Pool Assets remitted to the Seller
         or any such agent or representative; or

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                  (xv) the failure to maintain, as of the close of business on
         each Business Day prior to the Termination Date, an amount of Capital
         outstanding which is less than or equal to the lesser of (x) the
         Purchase Limit on such Business Day, or (y) the Capital Limit on such
         Business Day.

Any amounts subject to the indemnification provisions of this Section 8.1 shall
be paid by the Seller solely pursuant to the provisions of Sections 2.7 and 2.9
hereof as the case may be to the Deal Agent within two Business Days following
the Deal Agent's demand therefor.

         Any indemnification pursuant to this Section 8.1 shall not be in
duplication of any other indemnification for the same loss under Section 6.21.

                                   ARTICLE IX

                     THE DEAL AGENT AND THE LIQUIDITY AGENT

         SECTION 9.1 AUTHORIZATION AND ACTION.

         (a) Each Secured Party hereby designates and appoints the Deal Agent as
Deal Agent hereunder, and authorizes the Deal Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Deal
Agent by the terms of this Agreement together with such powers as are reasonably
incidental thereto. The Deal Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the Deal
Agent shall be read into this Agreement or otherwise exist for the Deal Agent.
In performing its functions and duties hereunder, the Deal Agent shall act
solely as agent for the Secured Parties 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. The Deal Agent shall not be
required to take any action which exposes the Deal Agent to personal liability
or which is contrary to this Agreement or Requirements of Law. The appointment
and authority of the Deal Agent hereunder shall terminate at the indefeasible
payment in full of the Aggregate Unpaids.

         (b) Each Investor hereby designates and appoints First Union as
Liquidity Agent hereunder, and authorizes the Liquidity Agent to take such
actions as agent on its behalf and to exercise such powers as are delegated to
the Liquidity Agent by the terms of this Agreement together with such powers as
are reasonably incidental thereto. The Liquidity Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Investor, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Liquidity Agent shall be read into this Agreement or otherwise exist for the
Liquidity Agent. In performing its functions and duties hereunder, the Liquidity
Agent shall act solely as agent for the Investors 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. The Liquidity Agent shall
not be required to take any action which exposes the Liquidity Agent to personal
liability or which is contrary to this Agreement or

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Requirements of Law. The appointment and authority of the Liquidity Agent
hereunder shall terminate at the indefeasible payment in full of the Aggregate
Unpaids.

         SECTION 9.2 DELEGATION OF DUTIES.

         (a) The Deal Agent may execute any of its 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 Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

         (b) The Liquidity Agent may execute any of its 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 Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.

         SECTION 9.3 EXCULPATORY PROVISIONS.

         (a) Neither the Deal Agent nor any of its 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 Deal Agent, the breach of its obligations expressly set forth in
this Agreement), or (ii) responsible in any manner to any of the Secured Parties
for any recitals, statements, representations or warranties made by the Seller
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 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 Seller to perform its
obligations hereunder, or for the satisfaction of any condition specified in
Article III. The Deal Agent shall not be under any obligation to any Secured
Party 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 Seller. The Deal Agent shall
not be deemed to have knowledge of any Early Amortization Event unless the Deal
Agent has received notice from the Seller or a Secured Party.

         (b) Neither the Liquidity Agent nor any of its 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 Agent, the breach of its obligations expressly set
forth in this Agreement), or (ii) responsible in any manner to the Deal Agent or
any of the Secured Parties for any recitals, statements, representations or
warranties made by the Seller 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
Seller to perform its obligations hereunder, or for the satisfaction of any
condition specified in Article III. The Liquidity Agent shall not be under any
obligation to the Deal Agent or any Secured Party to

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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 Seller. The Liquidity Agent
shall not be deemed to have knowledge of any Early Amortization Event unless the
Liquidity Agent has received notice from the Seller, the Deal Agent or a Secured
Party.

         SECTION 9.4 RELIANCE.

         (a) The Deal Agent 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 Seller), independent accountants and other
experts selected by the Deal Agent. The Deal Agent 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 VFCC or the Required Investors or all of the
Secured Parties, as applicable, as it deems appropriate or it shall first be
indemnified to its satisfaction by the Secured Parties; provided, that, unless
and until the Deal Agent shall have received such advice, the Deal Agent may
take or refrain from taking any action, as the Deal Agent shall deem advisable
and in the best interests of the Secured Parties. The Deal Agent shall in all
cases be fully protected in acting, or in refraining from acting, in accordance
with a request of VFCC or the Required Investors or all of the Secured Parties,
as applicable, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Secured Parties.

         (b) The Liquidity Agent 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 Seller), independent accountants
and other experts selected by the Liquidity Agent. The Liquidity Agent 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 Investors as it deems
appropriate or it shall first be indemnified to its satisfaction by the
Investors, provided that unless and until the Liquidity Agent shall have
received such advice, the Liquidity Agent may take or refrain from taking any
action, as the Liquidity Agent shall deem advisable and in the best interests of
the Investors. The Liquidity Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of the
Required Investors and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Investors.

         SECTION 9.5 NON-RELIANCE ON DEAL AGENT, LIQUIDITY AGENT AND OTHERS.

         Each Secured Party expressly acknowledges that neither the Deal Agent,
the Liquidity Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by the Deal Agent or the Liquidity Agent
hereafter taken, including, without limitation, any review of the affairs of the
Seller, shall be deemed to constitute any representation or warranty by the Deal
Agent or the

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Liquidity Agent. Each Secured Party represents and warrants to the Deal Agent
and to the Liquidity Agent that it has and will, independently and without
reliance upon the Deal Agent. the Liquidity Agent or any other Secured Party 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 Seller and
made its own decision to enter into this Agreement.

         SECTION 9.6 REIMBURSEMENT AND INDEMNIFICATION.

         The Investors agree to reimburse and indemnify VFCC, the Deal Agent.
the Liquidity Agent and each of their respective officers, directors, employees,
representatives and agents ratably according to their pro rata shares, to the
extent not paid or reimbursed by the Seller (i) for any amounts for which VFCC,
the Liquidity Agent, acting in its capacity as Liquidity Agent, or the Deal
Agent, acting in its capacity as Deal Agent, is entitled to reimbursement by the
Seller hereunder and (ii) for any other expenses incurred by VFCC, the Liquidity
Agent, acting in its capacity as Liquidity Agent, or the Deal Agent, in its
capacity as Deal Agent and acting on behalf of the Secured Parties, in
connection with the administration and enforcement of this Agreement.

         SECTION 9.7 DEAL AGENT AND LIQUIDITY AGENT IN THEIR INDIVIDUAL
                     CAPACITIES.

         The Deal Agent, the Liquidity Agent and each of their respective
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Seller or any Affiliate of the Seller as though the
Deal Agent or the Liquidity Agent, as the case may be, were not the Deal Agent
or the Liquidity Agent, as the case may be, hereunder. With respect to the
making of Purchases pursuant to this Agreement, the Deal Agent, the Liquidity
Agent 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 Agent or the Liquidity Agent, as the case may be, and the
terms "Investor," "Purchaser," "Investors" and "Purchasers" shall include the
Deal Agent or the Liquidity Agent, as the case may be, in its individual
capacity.

         SECTION 9.8 SUCCESSOR DEAL AGENT OR LIQUIDITY AGENT.

         (a) The Deal Agent may, upon 5 days' notice to the Seller and the
Secured Parties, and the Deal Agent will, upon the direction of all of the
Secured Parties (other than the Deal Agent, in its individual capacity) resign
as Deal Agent. If the Deal Agent shall resign, then the Required Investors
during such 5-day period shall appoint from among the Secured Parties a
successor agent. If for any reason no successor Deal Agent is appointed by the
Required Investors during such 5-day period, then effective upon the expiration
of such 5-day period, the Secured Parties shall perform all of the duties of the
Deal Agent hereunder and the Seller shall make all payments in respect of the
Aggregate Unpaids or under any fee letter delivered by the Originator to the
Deal Agent and the Secured Parties directly to the applicable Purchaser and for
all purposes shall deal directly with the Secured Parties. After any retiring
Deal Agent's resignation hereunder as Deal Agent, the provisions of Article VIII
and Article IX shall inure to

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its benefit as to any actions taken or omitted to be taken by it while it was
Deal Agent under this Agreement.

         (b) The Liquidity Agent may, upon 5 days' notice to the Seller, the
Deal Agent and the Investors, and the Liquidity Agent will, upon the direction
of all of the Investors (other than the Liquidity Agent, in its individual
capacity) resign as Liquidity Agent. If the Liquidity Agent shall resign, then
the Required Investors during such 5-day period shall appoint from among the
Investors a successor Liquidity Agent. If for any reason no successor Liquidity
Agent is appointed by the Required Investors during such 5-day period, then
effective upon the expiration of such 5-day period, the Investors shall perform
all of the duties of the Liquidity Agent hereunder and all payments in respect
of the outstanding Capital. After any retiring Liquidity Agent's resignation
hereunder as Liquidity Agent, the provisions of Article VIII and Article IX
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Liquidity Agent under this Agreement.

                                    ARTICLE X

                           ASSIGNMENTS; PARTICIPATIONS

         SECTION 10.1 ASSIGNMENTS AND PARTICIPATIONS.

         (a) Each Investor may upon at least 30 days' notice to VFCC, the Deal
Agent and the Liquidity Agent, and prior to the Termination Date with the
consent of the Seller (which consent shall not be unreasonably withheld), assign
to one or more banks or other entities 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 Investor's rights and obligations under this Agreement, (ii) the
amount of the Commitment of the assigning Investor 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) $10,000,000 or an integral multiple of $1,000,000 in excess of that amount
and (B) the full amount of the assigning Investor'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 Deal Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,000 or such lesser amount as shall be
approved by the Deal Agent, (v) the parties to each such assignment shall have
agreed to reimburse the Deal Agent, the Liquidity Agent and VFCC for all
reasonable fees, costs and expenses (including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for each of the Deal
Agent, the Liquidity Agent and VFCC) incurred by the Deal Agent the Liquidity
Agent and VFCC, respectively, in connection with such assignment and (vi) there
shall be no increased costs, expenses or taxes incurred by the Deal Agent, the
Liquidity Agent or VFCC upon such assignment or participation; and provided,
further, that upon the effective date of such assignment the provisions of
Section 3.03(f) of the Administration Agreement shall be satisfied. Upon such
execution, delivery and acceptance by the Deal Agent and the Liquidity Agent and
the recording by the 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 Deal Agent

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and the 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 an Investor hereunder and (ii)
the Investor 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 (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Investor's rights and obligations under
this Agreement, such Investor shall cease to be a party hereto).

         (b) By executing and delivering an Assignment and Acceptance, the
Investor 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 Investor 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 Investor makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of VFCC or the performance or observance by VFCC 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 Deal Agent or the
Liquidity Agent, such assigning Investor or any other Investor 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 Investor and such assignee confirm that such
assignee is an Eligible Assignee; (vi) such assignee appoints and authorizes
each of the Deal Agent and the 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; and (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 an Investor.

         (c) The 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 Investors and the
Commitment of, and principal amount of, each Asset Interest owned by each
investor from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and VFCC, the
Seller and the Investors may treat each Person whose name is recorded in the
Register as an Investor hereunder for all purposes of this Agreement. The
Register shall be available for inspection by VFCC, the Liquidity Agent or any
Investor at any reasonable time and from time to time upon reasonable prior
notice.

         (d) Subject to the provisions of Section 10.1(a), upon its receipt of
an Assignment and Acceptance executed by an assigning Investor and an assignee,
the Deal Agent and the Liquidity Agent shall each, if such Assignment and
Acceptance has been completed and is in

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substantially the form of Exhibit D hereto, accept such Assignment and
Acceptance, and the Deal Agent shall then (i) record the information contained
therein in the Register and (ii) give prompt notice thereof to VFCC.

         (e) Each Investor may sell participations to one or more banks or other
entities 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 Asset Interest owned by it); provided, however, that (i) such Investor's
obligations under this Agreement (including, without limitation, its Commitment
hereunder) shall remain unchanged, (ii) such Investor shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Deal Agent and the other Investors shall continue to deal solely
and directly with such Investor in connection with such Investor's rights and
obligations under this Agreement; and provided, further, that the Deal Agent
shall have confirmed that upon the effective date of such participation the
provisions of Section 3.03(f) of the Administration Agreement shall be
satisfied. Notwithstanding anything herein to the contrary, each participant
shall have the rights of an Investor (including any right to receive payment)
under Sections 2.14 and 2.15; provided, however, that no participant shall be
entitled to receive payment under either such Section in excess of the amount
that would have been payable under such Section by the Seller to the Investor
granting its participation had such participation not been granted, and no
Investor granting a participation shall be entitled to receive payment under
either such Section in an amount which exceeds the sum of (i) the amount to
which such Investor is entitled under such Section with respect to any portion
of any Asset Interest owned by such Investor 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
10.1, the participant's rights as set forth in the agreement between such
participant and the applicable Investor to agree to or to restrict such
Investor'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 Investor may have under or in respect of this Agreement shall
be limited to the right to consent to any of the matters set forth in Section
11.1 of this Agreement.

         (f) Each Investor may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.1, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Seller or VFCC furnished to such
Investor by or on behalf of the Seller or VFCC, but such Investor shall require
such assignee or participant or proposed assignee or participant to keep all
such information confidential.

         (g) In the event (i) an Investor ceases to qualify as an Eligible
Assignee, or (ii) an Investor makes demand for compensation pursuant to Section
2.15 or Section 2.16, VFCC may. and, upon the direction of the Seller and prior
to the occurrence of the Termination Date, shall, in any such case,
notwithstanding any provision to the contrary herein, replace such Investor with
an Eligible Assignee by giving three Business Days' prior written notice to such
Investor. In the event of the replacement of an Investor, such Investor agrees
(i) to assign all of its rights and obligations hereunder to an Eligible
Assignee selected by VFCC upon payment to such Investor of the amount of such
Investor's Asset Interests together with any accrued and unpaid Yield

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thereon, all accrued and unpaid commitment fees owing to such Investor and all
other amounts owing to such Investor 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 VFCC or the Deal Agent. In the
event that any Investor ceases to qualify as an Eligible Assignee, such affected
Investor agrees (1) to give the Deal Agent, the Seller and VFCC prompt written
notice thereof and (2) subject to the following proviso, to reimburse the Deal
Agent, the Liquidity Agent, the Seller, VFCC 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 Deal Agent, the Liquidity
Agent, the Seller and VFCC and such assignee) incurred by the Deal Agent, the
Liquidity Agent, the Seller, VFCC and such assignee. respectively, in connection
with any assignment made pursuant to this Section 10.1(g) by such affected
Investor; provided, however, that such affected Investor's liability for such
costs, fees and expenses shall be limited to the amount of any up-front fees
paid to such affected Investor at the time that it became a party to this
Agreement.

         (h) Nothing herein shall prohibit any Investor from pledging or
assigning as collateral any of its rights under this Agreement to any Federal
Reserve Bank in accordance with Requirements of Law and any such pledge or
collateral assignment may be made without compliance with Section 10.1(a) or
Section 10.1(b).

         (i) In the event any Investor causes increased costs, expenses or taxes
to be incurred by the Deal Agent, Liquidity Agreement or VFCC in connection with
the assignment or participation of such Investor's rights and obligations under
this Agreement to an Eligible Assignee then such Investor agrees that it will
make reasonable efforts to assign such increased costs, expenses or taxes to
such Eligible Assignee in accordance with the provisions of this Agreement.

                                   ARTICLE XI

                                  MISCELLANEOUS

         SECTION 11.1 AMENDMENTS AND WAIVERS.

         (a) Except as provided in this Section 11.1, no amendment, waiver or
other modification of any provision of this Agreement shall be effective without
the written agreement of the Seller, the Deal Agent, VFCC and the Required
Investors; provided, however, that any amendment of this Agreement which is
solely for the purpose of adding a Purchaser or increasing the Commitment of all
Purchasers may be effected with the written consent of the Deal Agent. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

         (b) No amendment, waiver or other modification affecting the rights or
obligations of any Hedge Counterparty shall be effective against such Hedge
Counterparty without the written agreement of such Hedge Counterparty.

                                       92
<PAGE>   98
         (c) No amendment, waiver or other modification adversely affecting the
rights or obligations of the Backup Servicer or Collateral Custodian shall be
effective against such Backup Servicer or Collateral Custodian without their
written agreement.

         SECTION 11.2 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 specified in such party's Assignment and Acceptance 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 mail, first class postage prepaid, (b)
notice by telex, when telexed against receipt of answer back, 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 11.3 [RESERVED.]

         SECTION 11.4 NO WAIVER, RIGHTS AND REMEDIES.

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

         SECTION 11.5 BINDING EFFECT.

         This Agreement shall be binding upon and inure to the benefit of the
Seller, the Deal Agent, the Liquidity Agent, the Secured Parties and their
respective successors and permitted assigns and, in addition, the provisions of
Sections 2.7 and 2.9 applicable to the Hedge Counterparty shall inure to the
benefit of each Hedge Counterparty, whether or not that Hedge Counterparty is a
Secured Party.

         SECTION 11.6 TERM OF THIS AGREEMENT.

         This Agreement, including, without limitation, the Seller's obligation
to observe its covenants set forth in Article V, and the Servicer's obligation
to observe its covenants set forth in Article VI, shall remain in full force and
effect until the Collection Date; provided, however, that the rights and
remedies with respect to any breach of any representation and warranty made or
deemed made by the Seller pursuant to Articles III and IV and the
indemnification and payment provisions of Article VIII and Article IX and the
provisions of Section 11.10 and Section 11.11 shall be continuing and shall
survive any termination of this Agreement.

                                       93
<PAGE>   99
         SECTION 11.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
                      OBJECTION TO VENUE.

         THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. EACH OF THE SECURED PARTIES, THE SELLER, THE
LIQUIDITY AGENT AND THE DEAL AGENT HEREBY AGREES TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF
THE PARTIES HERETO AND EACH SECURED PARTY 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 11.8 WAIVER OF JURY TRIAL.

         TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, EACH OF THE SECURED
PARTIES, THE SELLER AND THE DEAL AGENT 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 11.9 COSTS, EXPENSES AND TAXES.

         (a) In addition to (but without duplication of) the rights of
indemnification granted to the Deal Agent, the Liquidity Agent, the Secured
Parties and its or their Affiliates and officers, directors, employees and
agents thereof under Article VIII hereof, the Seller agrees to pay on demand all
reasonable costs and expenses of the Deal Agent, the Liquidity Agent, and the
Secured Parties incurred in connection with the preparation, execution,
delivery, administration (including periodic auditing), amendment or
modification of, or any waiver or consent issued in connection with, this
Agreement and the other documents to be delivered hereunder or in connection
herewith, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Deal Agent, the Liquidity Agent, and the Secured
Parties with respect thereto and with respect to advising the Deal Agent, the
Liquidity Agent, and the Secured Parties as to their respective rights and
remedies under this Agreement and the other documents to be delivered hereunder
or in connection herewith (excluding any Hedge Agreement) and all costs and
expenses, if any (including reasonable counsel fees and expenses), incurred by
the Deal Agent, the Liquidity Agent, or the Secured Parties in connection with
the enforcement of this Agreement and the other documents to be delivered
hereunder or in connection herewith (including any Hedge Agreement); provided,
that the fees above other than legal fees may not

                                       94
<PAGE>   100
exceed $5,000 per occurrence and per service provider without FIB's consent
which shall not unreasonably be withheld.

         (b) The Seller shall pay on demand any and all stamp, sales, excise and
other taxes (excluding taxes based on income) and fees payable or determined to
be payable in connection with the execution, delivery, filing and recording of
this Agreement, the other documents to be delivered hereunder or any 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 Capital hereunder.

         (c) The Seller shall pay on demand all other costs, expenses and taxes
(excluding income taxes) ("Other Costs"), including, without limitation, all
reasonable costs and expenses incurred by the Deal Agent in connection with
periodic audits of the Seller's or the Servicer's books and records and the cost
of rating VFCC's commercial paper by independent financial rating agencies,
which are incurred as a result of the execution of this Agreement.

         SECTION 11.10 NO PROCEEDINGS.

         Each of the Seller, the Deal Agent, the Liquidity Agent and the Secured
Parties hereby agrees that it will not institute against, or join any other
Person in instituting against VFCC any Insolvency Proceeding so long as any
commercial paper issued by VFCC shall be outstanding and 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 11.11 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 Secured 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 manager or administrator of such
Secured Party or any incorporator, affiliate, stockholder, officer, employee or
director of such Secured Party or of any such manager or 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 and understood that the
agreements of such Secured 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 Secured Party, and that no personal liability whatsoever shall attach to or
be incurred by any manager or administrator of such Secured Party or any
incorporator, stockholder, affiliate, officer, employee or director of such
Secured Party or of any such manager or administrator, as such, or any other of
them, under or by reason of any of the obligations. covenants or agreements of
such Secured Party contained in this Agreement or in any other such instruments,
documents or agreements, or which are implied therefrom, and that any and all
personal liability of every such manager or administrator of such Secured Party
and each incorporator, stockholder, affiliate, officer, employee or director of
such Secured Party or of any such administrator, or any of them, for breaches by
such Secured Party of any such obligations, covenants or agreements, which
liability may arise either at common law or at equity, by statute

                                       95
<PAGE>   101
or constitution, or otherwise, is hereby expressly waived as a condition of and
in consideration for the execution of this Agreement.

         (b) Notwithstanding anything in this Agreement or any other Transaction
Document to the contrary, VFCC shall have no obligation to pay any amount
required to be paid by it hereunder or thereunder in excess of any amount
available to VFCC after paying or making provision for the payment of its
Commercial Paper Notes. All payment obligations of VFCC hereunder are contingent
upon the availability of funds in excess of the amounts necessary to pay
Commercial Paper Notes; and each of the Seller, the Servicer, the Backup
Servicer, the Deal Agent, the Liquidity Agent and the Secured Parties agrees
that they shall not have a claim under Section 101(5) of the Bankruptcy Code if
and to the extent that any such payment obligation exceeds the amount available
to VFCC to pay such amounts after paying or making provision for the payment of
its Commercial Paper Notes.

         (c) The provisions of this Section 11.11 shall survive the termination
of this Agreement.

         SECTION 11.12 PROTECTION OF OWNERSHIP INTEREST; APPOINTMENT OF DEAL
                       AGENT AS ATTORNEY-IN-FACT; GRANT OF SECURITY INTEREST.

         (a) The Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may reasonably be necessary or desirable, or that the Deal Agent
may reasonably request, to perfect, protect or more fully evidence the Asset
Interests and the undivided ownership interest in the Assets in the Asset Pool
represented by such Asset Interests, or to enable the Deal Agent or the Secured
Parties to exercise and enforce their rights and remedies hereunder.

         (b) If the Seller or the Servicer fails to perform any of its
obligations hereunder after five Business Days' notice from the Deal Agent, the
Deal Agent or any Secured Party may (but shall not be required to) perform, or
cause performance of, such obligation; and the Deal Agent's or such Secured
Party's reasonable costs and expenses incurred in connection therewith shall be
payable by the Seller (if the Servicer that fails to so perform is the Seller or
an Affiliate thereof) as provided in Article VIII, as applicable. The Seller
irrevocably authorizes the Deal Agent and appoints the Deal Agent as its
attorney-in-fact to act on behalf of the Seller (i) to execute on behalf of the
Seller as debtor and to file financing statements necessary or desirable in the
Deal Agent's sole discretion to perfect and to maintain the perfection and
priority of the interest of the Secured Parties in the Asset Pool and (ii) to
file a carbon, photographic or other reproduction of this Agreement or any
financing statement with respect to the Asset Pool as a financing statement in
such offices as the Deal Agent in its sole discretion deems necessary or
desirable to perfect and to maintain the perfection and priority of the
interests of the Secured Parties in the Asset Pool. This appointment is coupled
with an interest and is irrevocable.

         (c) The parties hereto intend that the conveyance of Asset Interests by
the Seller to the Purchasers shall be treated as sales for all purposes. If,
despite such intention, a determination is made that such transactions shall not
be treated as sales, then the parties hereto intend that this Agreement
constitutes a security agreement and the transactions effected hereby

                                       96
<PAGE>   102
constitute secured loans by the Purchasers to the Seller under Requirements of
Law. For such purpose, the Seller hereby transfers, conveys, assigns and grants
to the Deal Agent, for the benefit of the Secured Parties, a lien and continuing
security interest in all Assets, all Collections, all Hedging Agreements and the
proceeds of the foregoing to secure all of the obligations of the Seller arising
in connection with this Agreement and the other Transaction Documents, whether
now or hereafter existing due or to become due, direct or indirect, or absolute
or contingent, including, without limitation the Aggregate Unpaids. Upon the
occurrence of an Early Amortization Event, the Deal Agent and Secured Parties
shall have, with respect to the Assets granted pursuant to the preceding
sentence, and in addition to all other rights and remedies available to the Deal
Agent and Secured Parties under this Agreement or other Requirements of Law, all
rights and remedies of a secured party upon default under the UCC.

         SECTION 11.13 CONFIDENTIALITY

         (a) Each of the Deal Agent, the Secured Parties, the Liquidity Agent
and the Seller 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 and employees may (i) disclose such information
to its external accountants and attorneys and as required by Requirements of Law
or order of any judicial or administrative proceeding, (ii) disclose the
existence of this Agreement, but not the financial terms thereof and (iii)
disclose the Agreement and such information in any suit, action. proceeding or
investigation (whether in law or in equity or pursuant to arbitration) involving
and of the Transaction Documents or any Hedging Agreement for the purpose of
defending itself, reducing itself, reducing its liability, or protecting or
exercising any of its claims, rights, remedies, or interests under or in
connection with any of the Transaction Documents or any Hedging Agreement.

         (b) Anything herein to the contrary notwithstanding, the Seller hereby
consents to the disclosure of any nonpublic information with respect to it (i)
to the Deal Agent, the Liquidity Agent, or the Secured Parties by each other,
(ii) by the Liquidity Agent, the Deal Agent or the Secured Parties to any
prospective or actual Eligible Assignee or participant of any of them or (iii)
by the Deal Agent, the Liquidity Agent or the Secured Parties to any Rating
Agency, commercial paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement to a Secured Party and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing, provided
each such Person is informed of the confidential nature of such information and
agree to be bound hereby. In addition, the Secured Parties, the Liquidity Agent
and the Deal Agent 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 11.14 EXECUTION IN COUNTERPARTS; SEVERABILITY; INTEGRATION.

         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

                                       97
<PAGE>   103
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 delivered by the
Originator to the Deal Agent and the Purchasers.

         SECTION 11.15 WAIVER OF SETOFF.

         Each of the parties thereto (other than VFCC) hereby waives any right
of setoff it may have or to which it may be entitled under this Agreement from
time to time against VFCC or its assets.

         SECTION 11.16 ASSIGNMENTS.

         VFCC may at any time assign, or grant a security interest in or sell a
participation interest in, any Asset Interest (or portion thereof) to any
Person. The parties to any such assignment, grant or sale of participation
interest, shall execute and deliver to the Deal Agent, for its acceptance and
recording in its books and records, such agreement or document as may be
satisfactory to such parties and the Deal Agent. The Seller shall not assign or
delegate, or grant any interest in, or permit any Adverse Claim to exist upon,
any of the Seller's rights, obligations or duties under this Agreement without
the prior written consent of the Deal Agent.

         SECTION 11.17  REVOLVING LOAN PAYMENTS.

         With respect to each Revolving Loan included as part of the Asset Pool,
as of any date of determination, (a) the outstanding principal amount of the
Retained Advances (if any) and (b) the Outstanding Loan Balance of such
Revolving Loan funded by the Purchaser under and in accordance with Section 2.1
hereof shall share all Collections from the Obligor on such Revolving Loan and
any and all Recoveries with respect to any Related Property in an amount equal
to the percentage equivalent of the following fraction: (a) the numerator of
which is equal to, as applicable, (i) the outstanding principal amount of the
Retained Advances (if any) as to such Revolving Loan, or (ii) the Outstanding
Loan Balance of such Revolving Loan, and (b) the denominator of which is the sum
of (i) the outstanding principal amount of the Retained Advances (if any) as to
such Revolving Loan, and (ii) the Outstanding Loan Balance of such Revolving
Loan.

         Notwithstanding the foregoing or anything to the contrary contained
herein or any Transaction Document, any payments made by any Hedge Counterparty,
at any time, pursuant to the terms of the Hedge Agreements shall be solely for
the benefit of the Deal Agent and the Secured Parties, and shall not be subject
to the pro rata sharing provisions of this Section 11.17; in furtherance of the
foregoing clause (b) of this paragraph, the Originator hereby releases any

                                       98
<PAGE>   104
right, title, or interest it may have in or to any payment made or to be made at
any time by any Hedge Counterparty pursuant to the terms of any Hedge Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       99
<PAGE>   105
         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.

SELLER:                                       FIB HOLDINGS, INC.

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

                                              FIB Holdings, Inc.
                                              C/o First International Bank
                                              280 Trumbull Street
                                              Hartford, CT 06103
                                              Attention:  Capital Markets
                                              Facsimile:  (860) 241-4726
                                              Telephone:  (860) 241-2595

SERVICER:                                     FIRST INTERNATIONAL BANK

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

                                              First International Bank
                                              280 Trumbull Street
                                              Hartford, CT 06103
                                              Attention:  Capital Markets
                                              Facsimile:  (860) 241-4726
                                              Telephone:  (860) 241-2595

                  [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
<PAGE>   106
VFCC:                       VARIABLE FUNDING CAPITAL CORPORATION

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

                            By:         /s/Douglas R. Wilson, Sr.
                                     ----------------------------
                            Name:       Douglas R. Wilson, Sr.
                                     -------------------------
                            Title:      Vice President
                                     -----------------

                            Variable Funding Capital Corporation
                            c/o First Union Securities, Inc.
                            One First Union Center, Mail Code: NC0610
                            Charlotte, North Carolina  28288
                            Attention:  Conduit Administration
                            Facsimile: (704) 383-6036
                            Telephone: (704) 383-9343

With a copy to:             Lord Securities Corp.
                            2 Wall Street, 19th Floor
                            New York, New York 10005
                            Attention: Vice President
                            Facsimile: (212) 346-9012
                            Confirmation No.: (212) 346-9008

                  [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
<PAGE>   107
REQUIRED INVESTORS:           FIRST UNION NATIONAL BANK

                              By:   /s/Bill A. Shirley
                                 -----------------------------------------
                              Name:   Bill A. Shirley
                                   ---------------------------------------
                              Title:     Senior Vice President
                                    --------------------------------------

                              Commitment:  $120,000,000; but in no event
                              shall such Commitment exceed the Purchase Limit.

                              First Union National Bank
                              One First Union Center, Mail Code: NC0610
                              Charlotte, North Carolina  28288
                              Attention: Capital Markets Credit Administration
                              Facsimile: (704) 374-3254
                              Telephone: (704) 374-4001

DEAL AGENT:                   FIRST UNION SECURITIES, INC.

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

                              First Union Securities, Inc.
                              One First Union Center, Mail Code: NC0610
                              Charlotte, North Carolina  28288
                              Attention: Conduit Administration
                              Facsimile: (704) 383-6036
                              Telephone: (704) 383-9343

                  [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
<PAGE>   108
HEDGE COUNTERPARTY:          FIRST UNION NATIONAL BANK

                             By:   /s/Bill A. Shirley
                                -----------------------------------------
                             Name:   Bill A. Shirley
                                  ---------------------------------------
                             Title:     Senior Vice President
                                   --------------------------------------

                             First Union National Bank
                             One First Union Center, Mail Code: NC0610
                             Charlotte, North Carolina  28288
                             Attention: Capital Markets Credit Administration
                             Facsimile: (704) 374-3254
                             Telephone: (704) 374-4001

LIQUIDITY AGENT AND
REGISTRAR:                   FIRST UNION NATIONAL BANK

                             By:   /s/Bill A. Shirley
                                -----------------------------------------
                             Name:   Bill A. Shirley
                                  ---------------------------------------
                             Title:     Senior Vice President
                                   --------------------------------------

                             First Union National Bank
                             One First Union Center, Mail Code: NC0610
                             Charlotte, North Carolina  28288
                             Attention: Capital Markets Credit Administration
                             Facsimile: (704) 374-3254
                             Telephone: (704) 374-4001

                  [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
<PAGE>   109
COLLATERAL CUSTODIAN                HSBC BANK USA

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

                                    HSBC Bank USA
                                    140 Broadway
                                    Corporate Trust Department, 12th Floor
                                    New York, New York 10005
                                    Attention: Susan Barstock
                                    Facsimile: (212) 658-6425

BACKUP SERVICER                     HSBC BANK USA

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

                                    HSBC Bank USA
                                    140 Broadway
                                    Corporate Trust Department, 12th Floor
                                    New York, New York 10005
                                    Attention:  Susan Barstock
                                    Facsimile:  (212) 658-6425<PAGE>   1
                                                                 Exhibit 10.20.2

                          SALE AND SERVICING AGREEMENT
                            Dated as of March 1, 2001

                                     Between

                              FIB FUNDING TRUST II
                                     (Trust)

                                       and

                            FIRST INTERNATIONAL BANK
                              (Seller and Servicer)

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

<TABLE>
<CAPTION>
Section                                                                      Page
-------                                                                      ----
<S>                                                                         <C>
                                    ARTICLE I

                                   DEFINITIONS

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

                                   ARTICLE II

                      SALE AND CONVEYANCE OF THE TRUST FUND

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

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

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

                                   ARTICLE IV

                  ADMINISTRATION AND SERVICING OF SBA LOANS

Section 4.01  Duties of the Servicer....................................     20
Section 4.02  Liquidation of SBA Loans..................................     23
</TABLE>

                                      (i)
<PAGE>   3
<TABLE>
<S>                                                                         <C>
Section 4.03  Establishment of Principal and Interest Accounts;
              Deposits in Principal and Interest Accounts...............     24
Section 4.04  Permitted Withdrawals From the Principal and Interest
              Account...................................................     26
Section 4.05  [Intentionally Omitted]...................................     27
Section 4.06  Transfer of Accounts......................................     27
Section 4.07  Maintenance of Hazard Insurance...........................     27
Section 4.08  [Intentionally Omitted]...................................     28
Section 4.09  Fidelity Bond.............................................     28
Section 4.10  Title, Management and Disposition of Foreclosed Property..     28
Section 4.11  [Intentionally Omitted]...................................     29
Section 4.12  Collection of Certain SBA Loan Payments...................     29
Section 4.13  Access to Certain Documentation and Information Regarding
              the SBA Loans.............................................     29

                                    ARTICLE V

                           PAYMENTS TO THE NOTEHOLDERS

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

                                   ARTICLE VI

                           GENERAL SERVICING PROCEDURE

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

                                      (ii)
<PAGE>   4
<TABLE>
<S>                                                                         <C>
Section 6.07  Reports to the Indenture Trustee; Principal and Interest
              Account Statements........................................     41
Section 6.08. Required Holdback Amount..................................     42

                                   ARTICLE VII

                       REPORTS TO BE PROVIDED BY SERVICER

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

                                  ARTICLE VIII

                                  THE SERVICER

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

                                   ARTICLE IX

                              SERVICER TERMINATION

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

                                    ARTICLE X

                                   TERMINATION

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

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

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

                                     (iii)
<PAGE>   5
<TABLE>
<S>                                                                         <C>
Section 11.08 No Partnership............................................     56
Section 11.09 Counterparts..............................................     56
Section 11.10 Successors and Assigns....................................     56
Section 11.11 Headings..................................................     56
Section 11.12 Notification to Administrative Agent......................     56
Section 11.13 Inconsistencies...........................................     56
Section 11.14 Limitation of Liability...................................     56
Section 11.15 No Petition...............................................     57
</TABLE>

                                      (iv)
<PAGE>   6
APPENDIX A             Definitions and Usage

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

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

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

                              PRELIMINARY STATEMENT

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

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

                                   DEFINITIONS

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

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

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

                                       2
<PAGE>   9
                                   ARTICLE II

                   SALE AND CONVEYANCE OF THE TRUST FUND

            Section 2.01 Sale and Conveyance of Trust Fund.

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

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

            Section 2.02 Possession of Business Files.

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

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

            Section 2.03 Books and Records.

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

                                       3
<PAGE>   10
the Trust; (B) the records of the Trust will reflect that it owns the
Unguaranteed Interests of each SBA Loan; (C) the Seller will respond to any
third-party inquiry that the Unguaranteed Interest of each SBA Loan have been
sold to the Trust; and (D) the Seller will be responsible for maintaining and
will maintain, a complete set of books and records for each SBA Loan which shall
be clearly marked to reflect the ownership of the Unguaranteed Interest of each
SBA Loan by the Trust for the benefit of the SBA, the Noteholders, the
Certificateholders and the Hedge Counterparties, as their interests may appear.

            Section 2.04 Delivery of SBA Loan Documents.

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

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

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

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

                                       4
<PAGE>   11
secured by Mortgaged Properties located in the same county), or (ii) a copy of
such Assignment of Mortgage certified as a true copy by a Responsible Officer of
the Seller where the original has been transmitted for recording (provided,
however, that where the original Assignment of Mortgage is not being delivered
to the Indenture Trustee, such Responsible Officer may complete one or more
blanket certificates attaching copies of one or more Assignments of Mortgage
relating to the Mortgages originated by the Seller);

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

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

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

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

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

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

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

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

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

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

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

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

                                       6
<PAGE>   13
review the "Acknowledgment of Receipt" delivered by the FTA and on or prior to
the applicable Transfer Date, the Indenture Trustee shall deliver to the Company
and the Servicer a certification in the form attached hereto as Exhibit F
relating to such "Acknowledgment of Receipt". Within 360 days after each
Transfer Date (or, with respect to any Qualified Substitute SBA Loan, within 360
days after the assignment thereof), the Indenture Trustee shall deliver to the
Servicer, the Seller, the SBA, and any Noteholder who requests a copy from the
Indenture Trustee a final certification in the form attached hereto as Exhibit
F-1 evidencing the completeness of the Indenture Trustee's Document Files with
respect to the SBA Loans being transferred on such Transfer Date.

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

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

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

                                       7
<PAGE>   14
Servicer shall comply with the SBA Rules and Regulations in connection with such
action, including the giving of any necessary notice. Upon receipt of such
certification, the Indenture Trustee, shall deliver to the Servicer the
requested documentation and the Indenture Trustee shall execute, without
recourse, and deliver such instruments of transfer necessary to release all or
the requested part of the Mortgaged Property or other Collateral from the lien
of the related SBA Loan.

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

            Section 2.06  [Reserved].

            Section 2.07  [Reserved].

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

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

            Section 2.09  Transfer and Conveyance of the SBA Loans.

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

                                       8
<PAGE>   15
the Unguaranteed Interest in each such SBA Loan prior to the related Transfer
Date. The transfer by the Seller of the Unguaranteed Interest in each of the SBA
Loans set forth on the SBA Loan Schedule to the Trust shall be absolute and
shall be intended by all parties hereto to be treated as a contribution by the
Seller.

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

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

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

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

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

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

                  (v) the Termination Date shall not have occurred;

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

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

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

            Section 2.10  Optional Purchase or Substitution of SBA Loans.

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

            Section 2.11  Securitizations.

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

                                       10
<PAGE>   17
                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

            Section 3.01 Representations of the Seller.

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

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

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

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

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

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

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

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

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

            (i) The Seller is Well Capitalized;

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

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

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

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

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

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

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

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

            Section 3.02  Individual SBA Loans.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            Section 3.03  Purchase and Substitution of Defective SBA Loans.

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

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

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

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

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

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

                                       19
<PAGE>   26
                                   ARTICLE IV

                    ADMINISTRATION AND SERVICING OF SBA LOANS

            Section 4.01  Duties of the Servicer.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            Section 4.02  Liquidation of SBA Loans.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            Section 4.04  Permitted Withdrawals From the Principal and Interest
                          Account.

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

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

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

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

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

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

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

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

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

            Section 4.05  [Intentionally Omitted]

            Section 4.06  Transfer of Accounts.

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

            Section 4.07  Maintenance of Hazard Insurance.

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

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

            Section 4.08  [Intentionally Omitted].

            Section 4.09  Fidelity Bond.

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

            Section 4.10  Title, Management and Disposition of Foreclosed
                          Property.

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

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

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

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

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

            Section 4.11  [Intentionally Omitted].

            Section 4.12  Collection of Certain SBA Loan Payments.

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

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

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

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

                                       30
<PAGE>   37
                                    ARTICLE V

                           PAYMENTS TO THE NOTEHOLDERS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and also, in no particular order of priority:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            Section 5.04  Funding Account

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

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

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

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

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

            Section 5.05  [Intentionally Omitted]

            Section 5.06  Investment of Accounts.

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

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

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

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

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

            Section 5.07  Distributions.

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

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

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

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

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

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

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

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

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

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

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

            Section 5.08  [Intentionally Omitted].

            Section 5.09  Statements.

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

            (i) Available Funds for the related Remittance Date;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            Section 5.10  Reports of Foreclosure and Abandonment of Mortgaged
                          Property

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

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<PAGE>   45
                                   ARTICLE VI

                           GENERAL SERVICING PROCEDURE

            Section 6.01  [Intentionally Omitted].

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

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

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

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

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

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

            Section 6.03  Servicing Compensation.

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

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

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

            Section 6.05  Annual Independent Public Accountants' Servicing
                          Report.

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

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

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

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

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

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<PAGE>   48
            Section 6.08      Required Holdback Amount.

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

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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.

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<PAGE>   50
                                  ARTICLE VIII

                                  THE SERVICER

            Section 8.01  Indemnification; Third Party Claims.

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

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

            Section 8.02  Merger or Consolidation of the Servicer.

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

                                       44
<PAGE>   51
qualification to do business as a foreign entity, in each jurisdiction necessary
to protect the validity and enforceability of this Agreement or any of the SBA
Loans and to perform its duties under this Agreement.

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

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

            Section 8.03  Limitation on Liability of the Servicer and Others.

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

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<PAGE>   52
            Section 8.04  Servicer Not to Resign.

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

                                       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 consent
may be withheld in its sole discretion) immediately terminate all the rights and
obligations of the Servicer under this Agreement and in and to the SBA Loans and
the proceeds thereof, as Servicer. Upon such receipt by the Servicer of a
written notice from the Majority Noteholders (accompanied with the consent of
the SBA) stating that they or it intend to terminate the Servicer as a result of
such Servicer Termination Event, all authority and power of the Servicer under
this Agreement, whether with respect to the SBA Loans or otherwise, shall,
subject to Section 9.02 and the Multi-Party Agreement, pass to and be vested in
the Indenture Trustee and the Indenture Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including, but not limited to, the transfer and
endorsement or assignment of the SBA Loans and related documents. The Servicer
agrees to cooperate with the Indenture Trustee in effecting the termination of
the Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Indenture Trustee for administration by it of
all amounts which shall at the time be credited by the Servicer to each
Principal and Interest Account or thereafter received with respect to the SBA
Loans. The Indenture Trustee shall provide written notice to the SBA of any
Servicer Termination Event of which a Responsible Officer of the Indenture
Trustee has knowledge and any actual termination of the Servicer hereunder.

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

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

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

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

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

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

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

            Section 9.03  Waiver of Defaults.

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

            Section 9.04  Control by Majority Noteholders.

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

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

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

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

                                       51
<PAGE>   58
                                    ARTICLE X

                                   TERMINATION

            Section 10.01  Termination.

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

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

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

            Section 10.02  Accounting Upon Termination of Servicer

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

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

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

                                       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.

            Section 11.15  No Petition

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

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

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

                                 FIRST INTERNATIONAL BANK
                                    as Seller and Servicer

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

                                 FIB FUNDING TRUST II

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

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

                                       58
<PAGE>   65
                                 Accepted and Agreed to:

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

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

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

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

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

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

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

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

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

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

                                    My Commission expires   12/31/05

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