Exhibit 4.3

                     SUBSEQUENT CONTRACT TRANSFER AGREEMENT

                                     between

                           DVI RECEIVABLES CORP. XVI,
                                   as Company

                                       and

                          DVI RECEIVABLES XVI, L.L.C.,
                                    as Issuer

                          Dated as of November 1, 2001

ALL RIGHTS IN AND TO THIS AGREEMENT ON THE PART OF DVI  RECEIVABLES  XVI, L.L.C.
HAVE BEEN ASSIGNED AND ARE SUBJECT TO A SECURITY  INTEREST IN FAVOR OF U.S. BANK
TRUST NATIONAL ASSOCIATION, AS TRUSTEE, UNDER THE INDENTURE DATED AS OF NOVEMBER
1, 2001 FOR THE BENEFIT OF THE PERSONS REFERRED TO THEREIN.



<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

                                    ARTICLE I
                                   DEFINITIONS

Section 1.01   Definitions ...................................................1

                                   ARTICLE II
                 PROCEDURES FOR PURCHASES OF ELIGIBLE CONTRACTS

Section 2.01   Transfer ......................................................2
Section 2.02   Substitute Contracts ..........................................2
Section 2.03   Intent of Parties; Security Interest ..........................3
Section 2.04   Obligations to Transfer Certain Collections ...................3
Section 2.05   Grant of Security Interest ....................................3

                                   ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Section 3.01   Organization and Good Standing ................................5
Section 3.02   Authorization .................................................5
Section 3.03   Binding Obligation ............................................5
Section 3.04   No Violation ..................................................5
Section 3.05   No Proceedings ................................................6
Section 3.06   Approvals .....................................................6
Section 3.07   Ability to Perform ............................................6
Section 3.08   Equipment and Contracts .......................................6
Section 3.09   Principal Executive Office ....................................7
Section 3.10   No Prior Assignments ..........................................7
Section 3.11   Fair Consideration ............................................7
Section 3.12   Nonconsolidation ..............................................7
Section 3.13   Ordinary Course; No Insolvency ................................8
Section 3.14   Assets and Liabilities ........................................8
Section 3.15   Valid Sale; Fair Consideration ................................9
Section 3.16   Ability to Pay Debts ..........................................9
Section 3.17   Bulk Transfer Provisions ......................................9
Section 3.18   Transfer Taxes ................................................9

                                   ARTICLE IV
                             CONDITIONS TO PURCHASE

Section 4.01   Representations and Warranties ................................9

                                    ARTICLE V
                            COVENANTS OF THE COMPANY

Section 5.01   Books and Records ............................................10


                                       i
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)
                                                                            Page


Section 5.02   Preservation of Office .......................................10
Section 5.03   Liens ........................................................10
Section 5.04   No Bankruptcy Petition Against the Issuer or Managing Member..10
Section 5.05   Protection of Right, Title and Interest.......................11

                                   ARTICLE VI
                   REPRESENTATIONS AND COVENANTS OF THE ISSUER

Section 6.01   Nonconsolidation .............................................11
Section 6.02   No Bankruptcy Petition Against the Company ...................12

                                   ARTICLE VII
                                  SUBSTITUTION

Section 7.01   Substitution .................................................12
Section 7.02   Notice of Substitution .......................................13
Section 7.03   Contributor's and Company's Subsequent Obligations ...........13
Section 7.04   Usage of Predecessor Contracts in Calculation ................13

                                  ARTICLE VIII
                                  MISCELLANEOUS

Section 8.01   Amendment ....................................................14
Section 8.02   Effect of Invalidity of Provisions ...........................14
Section 8.03   Notices ......................................................15
Section 8.04   Entire Agreement .............................................15
Section 8.05   Survival .....................................................15
Section 8.06   Consent to Service ...........................................15
Section 8.07   Jurisdiction Not Exclusive ...................................16
Section 8.08   Construction .................................................16
Section 8.09   Further Assurances ...........................................16
Section 8.10   Third Party Beneficiaries ....................................16
Section 8.11   Governing Law ................................................17
Section 8.12   Consent To Jurisdiction; Waiver Of Objection To Venue ........17
Section 8.13   Waiver Of Jury Trial .........................................17
Section 8.14   Headings and Cross-References ................................17
Section 8.15   Costs and Expenses ...........................................17
Section 8.16   Confidential Information .....................................18
Section 8.17   Statutory References .........................................18
Section 8.18   Execution in Counterparts ....................................18
Section 8.19   Power of Attorney ............................................18

EXHIBIT A SUBSEQUENT CONTRACT TRANSFER FORM

                                       ii
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)
                                                                            Page

EXHIBIT B FORM OF  RE-ASSIGNMENT  OF  ISSUER'S  CERTIFICATE  PURSUANT TO SECTION
     1.04(c) or 5.01 OF THE SUBSEQUENT CONTRACT TRANSFER AGREEMENT


                                      iii
<PAGE>

     SUBSEQUENT  CONTRACT TRANSFER AGREEMENT  ("Agreement") dated as of November
1, 2001,  between DVI RECEIVABLES  XVI,  L.L.C.,  a Delaware  limited  liability
company (the "Issuer"),  and DVI RECEIVABLES  CORP. XVI, a Delaware  corporation
(the "Company").

     WHEREAS,  the Company will from time to time acquire certain  Contracts and
other  Contributed  Property  related thereto  pursuant to the  Contribution and
Servicing  Agreement  dated as of the date  hereof,  between the Company and DVI
Financial Services Inc. (the  "Contributor"),  the Company will acquire from DVI
Receivables  Corp. XV ("DVI Corp. XV") pursuant to a Sale Agreement (the "DVI XV
Sale  Agreement"),  dated the date hereof,  among the Company,  the Issuer,  DVI
Receivables  Corp. XV and DVI Receivables XV, L.L.C.  ("DVI Receivables XV") the
Sold Company  Assets (as defined in the DVI XV Sale  Agreement,  and the Company
will acquire from DVI Funding  Corporation  ("DFC") pursuant to a Sale Agreement
(the "Funding Sale Agreement"),  dated the date hereof,  among the Company,  the
Issuer,  DFC and DVI Funding,  L.L.C.  ("DVI  Funding  L.L.C.") the Sold Company
Assets (as defined in the Funding Sale Agreement).

     WHEREAS, the Company desires to transfer to Issuer all Contributed Property
(other than any  ownership  interest in  Equipment)  which it acquires  from the
Contributor  and certain  other  assets,  and Issuer  desires to  purchase  such
Contributed  Property and other assets,  in each instance in accordance with the
terms and conditions set forth in this Agreement.

     WHEREAS, pursuant to the Indenture (the "Indenture"),  dated as of the date
hereof, by and between the Issuer and U.S. Bank Trust National  Association (the
"Trustee"),  the Issuer intends to issue its Series 2001-2 Notes,  which will be
collateralized  by a pledge  by the  Issuer  to the  Trustee,  on  behalf of the
Noteholders  of all of the Issuer's  right,  title and interest in, to and under
the Trust Property.

     WHEREAS,  to facilitate the issuance of its Series 2001-2 Notes, the Issuer
and the Company desire to enter into this Agreement.

     NOW,  THEREFORE,  the  parties,  in  consideration  of  good  and  valuable
consideration,  the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, hereby agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

Section 1.01 Definitions.

     For  purposes  of this  Agreement,  capitalized  terms used  herein but not
otherwise  defined shall have the respective  meanings assigned to such terms in
Appendix I to the Contribution and Servicing Agreement.


<PAGE>

                                   ARTICLE II
                 PROCEDURES FOR PURCHASES OF ELIGIBLE CONTRACTS

SECTION 2.01 Transfer.

     (a) Conveyance. Upon the terms and conditions herein set forth, in exchange
for cash  consideration  received  therefore  and for  other  good and  valuable
consideration,  the Company hereby transfers,  pledges, assigns and sells to the
Issuer on each  Contribution  Date (or, in the case of any Substitute  Contracts
the related Substitution Date), without recourse except as set forth herein, all
of the Company's  right,  title and interest in and to the Company Assets as set
forth on the related  Subsequent  Contract  Transfer Form. All funds received by
the  Company  on or in  connection  with the  Company  Assets  on and  after the
applicable  Cut-off Date shall be  received,  held and applied by the Company in
trust for the  benefit  of the  Issuer as owner of the  Contracts  and the other
Company Assets.

     (b) After giving  effect to such  transfer and sale,  the ownership of each
such  Contract  and  the  other  Company  Assets   transferred  on  the  related
Contribution  Date shall be vested in the  Issuer.  The  Contract  Files and any
other documents  relating to each Contract and the other Company Assets shall be
held in trust by the Trustee for the benefit of the Noteholders  pursuant to the
terms of the Indenture.  The Company agrees to take no action  inconsistent with
the ownership of any Contract or the other Company Assets,  to promptly indicate
to all parties with a valid interest  inquiring as to the true ownership of each
Contract, that each Contract and the other Company Assets have been transferred,
assigned and sold to the Issuer and to claim no  ownership  interest in any such
Contracts and the other Company Assets.

     (c) Any Company Assets  transferred by the  Contributor to the Company from
time to time shall  forthwith be transferred to the Issuer without  further act,
notwithstanding  the  delivery  of any  Subsequent  Contract  Transfer  Forms in
respect thereof.

     SECTION 2.02 Substitute Contracts.

(a) In  consideration  for the  transfer  by the  Issuer to the  Company  of any
Predecessor Contract transferred to the Company by the Issuer in accordance with
the  terms  and  conditions  of  Section  7 of the  Contribution  and  Servicing
Agreement,  the Company shall  transfer to the Issuer on the  Substitution  Date
related thereto,  and the Issuer shall accept, a Substitute  Contract;  provided
that such Substitute  Contract is in accordance with the terms and conditions of
the Contribution and Servicing Agreement.

(b) With respect to all Predecessor  Contracts and the ownership or the security
interest (as the case maybe) in the related  Equipment  purchased or replaced by
the  Contributor  pursuant  to  Section 5 or Section 7 of the  Contribution  and
Servicing  Agreement,  the Issuer shall  deliver to the Company,  an  instrument
substantially in the form of Exhibit B hereto, assigning to the Company, without
recourse, representation or warranty (except as to the absence of liens, claims,
or  encumbrances  resulting  from actions taken,  or failed to be taken,  by the
Issuer),  all of  the  Issuer's  right,  title  and  interest  in  and  to  such
Predecessor  Contracts and the  ownership or the security  interest (as the case
may be) in the  related  Equipment,  and all  security  and  documents  relating
thereto.

     SECTION 2.03 Intent of Parties; Security Interest.

     The  Issuer  and  the  Company   hereby   confirm  that  the   transactions
contemplated   in  this  Agreement  are  intended  as  transfers,   assignments,
conveyances and sales rather than as loan  transactions.  In the event,  for any
reason, and solely in such event, any transaction  hereunder is construed by any
court or  regulatory  authority as a loan or other than a transfer,  assignment,
conveyance  and sale of any or all Company  Assets,  then the  Company  shall be
deemed to have hereby


                                       2
<PAGE>

pledged to the Issuer as security for the  performance  by the Company of all of
its obligations from time to time arising  hereunder and with respect to any and
all  purchases  effected  pursuant  hereto,  and shall be deemed to have  either
assigned or granted to the Issuer a first priority  perfected  (except Equipment
for which the Original  Equipment Cost is less than $25,000,  in which case, the
Company  shall be deemed to have  granted a valid  security  interest)  security
interest in all of the Company Assets. In furtherance of the foregoing, (i) this
Agreement  shall  constitute  a security  agreement,  (ii) the Trustee  shall be
deemed to be a bailee  for  purposes  of  perfection  of the  security  interest
granted to Issuer  (and its  assigns),  (iii) the  Issuer  shall have all of the
rights of a secured  party  with  respect  to the  Company  Assets  pursuant  to
applicable  law and (iv) in the  manner  consistent  with  this  Agreement,  the
Company  shall  execute  all  documents,  including,  but not  limited  to,  UCC
financing  statements,  to  effectively  perfect  and  evidence  Issuer's  first
priority  security  interest in the  Company  Assets  except that UCC  financing
statements  need not be filed with respect to  Equipment  for which the Original
Equipment  Cost is less than $25,000.  The Company also covenants not to pledge,
assign or grant any  security  interest to any other party in any of the Company
Assets. The consideration received and to be received by the Company in exchange
for the transfer, assignment and conveyance of the Company Assets is intended to
be fair  consideration  having value  equivalent to or in excess of the value of
the assets being transferred by the Company.

     SECTION 2.04 Obligations to Transfer Certain Collections. The Company shall
cause the Servicer to pay to the Issuer, by deposit into the Collection  Account
within two (2) business  days after  receipt  thereof,  any and all payments and
other amounts (other than Purchase Option Payments and any Excluded Amounts), if
any,  received by or on behalf of the Company in respect of any Equipment  owned
by the Transferor  following or as a result of any default or early  termination
under the related Contract.

     SECTION 2.05 Grant of Security Interest.

     (a) To secure the timely  payment of all  obligations  owing by the Company
and the performance and observance of all the obligations and liabilities of the
Company  contained  in  this  Agreement  and  the  other  Transaction  Documents
(collectively, the "Company Obligations"), the Company hereby conveys, warrants,
assigns,  transfers,  pledges  and grants a security  interest  unto (all of the
following are collectively,  the "Company  Collateral") (i) the Trustee, for the
benefit and  security  of the  Issuer,  all of the  Company's  right,  title and
interest in and to all Equipment of the Company subject to certificates of title
or similar  evidences  of  ownership,  and all  proceeds  thereof,  and (ii) the
Issuer,  all of the Company's right,  title and interest in and to all Equipment
of the Company, including all proceeds thereof.

     (b) This  Agreement  shall  create a  continuing  security  interest in the
Company Collateral and shall:

          (i)  remain  in full  force  and  effect  until  payment  in full  and
     performance of all Company Obligations;

          (ii) be binding upon the Company and its  successors,  transferees and
     assigns (except with respect to Company  Collateral as to which the Issuer,
     with the prior  written  consent of the  Trustee,  shall have  released its
     security interest therein); and


                                       3
<PAGE>

          (iii)  inure,  together  with the  rights and  remedies  of the Issuer
     hereunder, to the benefit of the Issuer and its successors and assigns.

     (c) Upon the payment in full and  performance  of all Company  Obligations,
the security  interest  granted herein shall,  immediately  and without  further
action, terminate and be released and all rights to the Company Collateral shall
revert to the Company. Upon any such termination and release, the Issuer and the
Trustee  will,  at the  Company's  sole  expense,  deliver  to the  Company  all
certificates and instruments  representing or evidencing any Company Collateral,
and  execute  and deliver to the Company  such  documents  as the Company  shall
reasonably request to evidence such termination and release.

     (d) In the  event  that (i) the  Contributor  or the  Servicer  shall  have
substituted a Substitute Contract and an ownership interest or security interest
(as the case may be) in the Equipment subject thereto for a Predecessor Contract
in  accordance  with  the  Contribution  and  Servicing  Agreement,  or (ii) the
Contributor or the Servicer  shall have  repurchased a Contract and an ownership
interest or security  interest (as the case may be) in the related  Equipment in
accordance  with the  Contribution  and  Servicing  Agreement,  the  Predecessor
Contract or the repurchased Contract, as applicable,  and the ownership interest
or security  interest  (as the case may be) in the  Equipment  subject  thereto,
shall be released from the ownership  interest or security interest (as the case
may be) granted  hereunder  when the  Trustee  shall have (i) in the case of the
repurchase  of a  Contract,  deposited  in the  Collection  Account  all amounts
received  in  accordance  with the  section of the  Contribution  and  Servicing
Agreement  pursuant to which such Contract is  purchased,  (ii) in the case of a
Substitute  Contract,  received  a fully  executed  original  of the  Substitute
Contract  Transfer  Form and the Contract  File with respect to such  Substitute
Contract  plus any cash  amount  delivered  as  provided  in the  section of the
Contribution  and  Servicing  Agreement  pursuant  to  which  such  Contract  is
substituted and (iii) delivered to the Contributor or the Servicer,  as the case
may be,  acknowledgment  of its receipt of the related  Contract Files. If there
are such  unreimbursed  amounts,  any  proceeds  received  with  respect to such
Predecessor Contract or repurchased  Contract,  as applicable,  and the security
interest in the related  Equipment shall be applied hereunder only to the extent
necessary to reimburse the Collection Account for such amounts drawn thereon and
the balance of such  proceeds,  if any, shall be paid to, or as directed by, the
Contributor.

     (e) In the event that the Trustee shall have received written certification
from an  Authorized  Officer of the Servicer  that the Trustee has received from
amounts paid by the Obligor or from the proceeds of the Equipment subject to any
Contract (i) the final Contract  Payment due and payable under any Contractor or
(ii) a Prepayment  Amount in respect of any Contract and,  following  such final
Contract Payment or Prepayment Amount, no further payments on, or in respect of,
such  Contract are or will be due and payable,  such  Contract and the Equipment
subject thereto shall be released from the security interest granted hereunder.

     (f) The Issuer and the Trustee  shall  promptly  execute  and deliver  such
documents  (which  shall be  furnished  to the  Issuer  and the  Trustee  by the
Company) and take such other  actions as the Company may  reasonably  request to
fully effectuate the release from the security interest granted hereunder of any
Contract  and the  security  interest  relating to  Equipment  required to be so
released pursuant to this Section 1.05.


                                       4
<PAGE>

                                  ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company hereby makes the following  representations  and warranties for
the benefit of the Issuer,  the Trustee and the  Noteholders on which the Issuer
relies in purchasing and otherwise acquiring the Company Assets and on which the
Noteholders rely in funding advances under their respective Notes. Other than as
set forth in Section 3.08 hereof,  such  representations  and warranties are and
will be true and correct as of the Closing Date and as of each Contribution Date
or  Substitution  Date,  as the case may be (unless an earlier date is specified
therein) and shall survive each transfer, assignment, conveyance and sale to the
Issuer of the Company  Assets and the  subsequent  pledge  thereof by the Issuer
pursuant to the Indenture.

     SECTION 3.01 Organization and Good Standing.

     The Company is a corporation  duly organized,  validly existing and in good
standing under the laws of the State of Delaware.

     SECTION 3.02 Authorization.

     The  Company  has all  requisite  power  and  authority  and all  necessary
licenses  and  permits  to enter into and  perform  its  obligations  under this
Agreement and each Subsequent  Contract  Transfer Form (each, an "SCTF") and the
transactions  contemplated hereby and thereby, and the execution,  delivery, and
performance  of this Agreement and each SCTF,  have been duly  authorized by the
Company by all necessary corporate action.

     SECTION 3.03 Binding Obligation.

     This Agreement has been,  and each SCTF will be, duly and validly  executed
and  delivered  by the Company and will  constitute  a legal,  valid and binding
obligation of the Company,  enforceable  against the Company in accordance  with
its  respective  terms,  subject  to  bankruptcy,  insolvency  and other laws of
general application  affecting the rights of creditors and equitable  principles
(whether considered in a proceeding at law or in equity).

     SECTION 3.04 No Violation.

     The  consummation  of the  transactions  contemplated by this Agreement and
each SCTF and the  fulfillment  of the terms  thereof,  will not conflict  with,
result in any breach of any of the terms and provisions of, or constitute  (with
or without  notice,  lapse of time or both) a default under the  certificate  of
incorporation or bylaws of the Company, or any indenture,  agreement,  mortgage,
deed of trust or other instrument to which the Company is a party or by which it
is bound,  or result in the creation or  imposition  of any lien upon any of its
properties pursuant to the terms of such indenture, agreement, mortgage, deed of
trust or other such instrument,  other than this Agreement,  or violate any law,
or,  to the best of the  Company's  knowledge,  any  order,  rule or  regulation
applicable  to it of any  court  or of any  federal  or state  regulatory  body,
administrative agency or other governmental  instrumentality having jurisdiction
over the Company or any of its properties.


                                       5
<PAGE>

     SECTION 3.05 No Proceedings.

     The  Company  is  not  subject  to  any  injunction,  writ,  action,  suit,
restraining order or other order of any nature, and there are no actions, suits,
proceedings or investigations to which the Company is a party pending or, to the
knowledge  of the  Company,  threatened,  before  any  court,  regulatory  body,
administrative  agency or other  tribunal or  governmental  instrumentality  (A)
asserting the  invalidity of this  Agreement or any SCTF, (B) seeking to prevent
the  consummation of any of the  transactions  contemplated by this Agreement or
any SCTF or (C) seeking any  determination  or ruling that would  materially and
adversely affect the performance by the Company of its obligations under, or the
validity or enforceability of this Agreement or any SCTF.

     SECTION 3.06 Approvals.

     All  approvals,  authorizations,  consents,  orders or other actions of any
person, corporation or other organization,  or of any court, governmental agency
or body or official,  required in connection with the execution and delivery of,
and compliance  with the terms of, this Agreement or any SCTF, have been or will
be taken or obtained on or prior to the related Contribution Date.

     SECTION 3.07 Ability to Perform.

     The Company has the  ability to perform all of its  obligations  under this
Agreement, any SCTF and the Contribution and Servicing Agreement.

     SECTION 3.08 Equipment and Contracts.

     With respect to each Contract,  the Company hereby  represents and warrants
to the Issuer, as of each Contribution Date that:

     (a) the sale to the Issuer of the  Company's  interest in such  Contract(s)
transferred on such date and the assignment of the Company's  security interest,
or grant of a first priority perfected security interest, as the case may be, in
the Equipment related thereto pursuant to Section 2.01,  Section 2.02 or Section
2.05 hereof  constitutes a valid transfer of all of the Company's  right,  title
and interest in such  Company  Assets or a grant of a  first-priority  perfected
(except  for  Equipment  for  which  the  Original  Equipment  Cost is less than
$25,000,  with  respect to which the Company  shall be deemed to have  granted a
valid security  interest) security interest therein from the Company in favor of
the  Issuer,  free and clear of any and all claims,  charges,  liens or security
interests created by the Company or any of its affiliates (other than the rights
of each Obligor  under the  Contract to which such  Obligor is a party,  claims,
charges,  liens or security  interests to be discharged on the Contribution Date
related  thereto  and any liens for  taxes,  assessments,  and (x)  governmental
charges or levies not yet due and payable  and (y) liens  imposed by law arising
in the ordinary course of business which secure obligations that are not yet due
and  payable,  in  the  case  of (x)  and  (y) to  the  extent  no  enforcement,
collection,   execution,   levy  or  foreclosure   proceeding  shall  have  been
commenced);

     (b) the  Company  did not,  in the  exercise  of its  interest  in any such
Company Assets waive,  discharge,  release or otherwise  permit any modification
thereto not in effect or agreed to at the time the Company acquired its interest
therein; and

     (c) notwithstanding the foregoing clauses (a) and (b), the Company makes no
representation  or warranty with respect to claims,  charges,  liens or security
interests created,  or waivers,  discharges,  releases or modifications made, by
the Contributor.


                                       6
<PAGE>

     The  representations  and  warranties  described in this Section 3.08 shall
survive the conveyance of the Company Assets to the Issuer.

     SECTION 3.09 Principal Executive Office.

     The principal executive office of the Company is located at 2500 York Road,
Jamison,  PA 18929,  and has been  located  in the same  county and state for at
least four months  immediately  preceding the Closing  Date.  The Company has no
trade names,  fictitious names,  assumed names or "doing business as" names, and
at all times has been originated under the laws of the State of Delaware. If any
change in any of the jurisidiction of organization of the Company, the Company's
name,  structure  or the  location of its  principal  place of business or chief
executive office occurs,  then the Company shall deliver thirty (30) days' prior
written notice of such change or relocation to the Issuer and the Trustee, then,
no later  than  sixty  (60) days  after  the  effective  date of such  change or
relocation,  the Company  shall file such  amendments  or  statements  as may be
required to preserve and protect the Issuer's and the Trustee's  interest in the
Contracts, the Equipment and the other Trust Property. The Company shall pay all
filing fees or taxes  payable in respect of any UCC  financing  or  continuation
statements required to be filed pursuant to Section 1.03 of the Contribution and
Servicing Agreement and not paid by the Contributor.

     SECTION 3.10 No Prior Assignments.

     Except as  permitted  by the  Transaction  Documents,  the  Company has not
pledged,  assigned or encumbered or terminated,  in whole or in part, any of the
Company Assets.

     SECTION 3.11 Fair Consideration.

     The  consideration  received by the Company in connection with the transfer
and sale of the Company Assets constitutes  reasonably equivalent value and fair
consideration for the Company Assets.

     SECTION 3.12 Nonconsolidation.

     The Company is operated in such a manner that it would not be substantively
consolidated with Contributor,  such that the separate  existence of the Company
and  Contributor  would  not be  disregarded  in the  event of a  bankruptcy  or
insolvency  of the  Company or  Contributor,  and in such  regard,  among  other
things:

     (a)  the  Company  is  not  involved  in  the  day  to  day  management  of
Contributor;

     (b) the Company maintains  separate  corporate records and books of account
from Contributor and otherwise observes corporate formalities and has a separate
business  office  from  Contributor  (which  may  be  at  the  same  address  as
Contributor,  provided  that the Company and  Contributor  have  entered  into a
written agreement specifying a reasonable allocation of expenses with respect to
overhead  and other  shared  costs  with  respect  to such  premises  or a lease
agreement);

     (c) the financial  statements and books and records of the Company prepared
after the date of creation of Contributor  reflect and will reflect the separate
existence of Contributor;


                                       7
<PAGE>

     (d) the  Company  maintains  its  assets  separately  from  the  assets  of
Contributor  (including through the maintenance of a separate bank account), the
Company's funds and assets, and records relating thereto,  have not been and are
not  commingled  with  those  of  Contributor  and  the  separate  creditors  of
Contributor will be entitled to be satisfied out of  Contributor's  assets prior
to any value in Contributor becoming available to Contributor's equityholders or
the Company's creditors;

     (e) all business correspondence of the Company and other communications are
conducted in the Company's own name and on its own stationery;

     (f) Contributor does not act as an agent of the Company in any capacity and
the Company does not act as agent for  Contributor,  but instead presents itself
to  the  public  as a  corporation  separate  from  Contributor,  provided  that
Contributor is the Servicer under the Contribution and Servicing Agreement; and

     (g) the  Company  has caused  its  accounting  records  to be  clearly  and
unambiguously  marked to show that such  Contract  has been  transferred  by the
Company to the Issuer and  pledged by the Issuer to the  Trustee for the benefit
of the Noteholders.

     SECTION 3.13 Ordinary Course; No Insolvency.

     The  transactions  contemplated by this Agreement are being  consummated by
the  Company and the  Issuer,  respectively,  in  furtherance  of the  Company's
ordinary  business  purposes and constitute a practical and reasonable course of
action by the Company designed to improve the financial  position of the Company
with no  contemplation  of  insolvency  and with no intent to  hinder,  delay or
defraud  any of its  present  or future  creditors.  Neither  as a result of the
transactions  contemplated  by this Agreement,  nor immediately  before or after
such transactions,  will the Company be insolvent,  and the Company has adequate
capital  for  the  conduct  of its  business  and  the  payment  of  anticipated
obligations.

     SECTION 3.14 Assets and Liabilities.

     (a)  Both  immediately  before  and  after  the  assignment,  transfer  and
conveyance of Contracts  (including  the right to receive all payments due or to
become due thereunder)  and the other Company  Assets,  the present fair salable
value of the  Company's  assets  will be in  excess of the  amount  that will be
required to pay the  Company's  probable  liabilities  as they then exist and as
they become absolute and matured.

     (b) Both  immediately  before  and after the  assignment  and  transfer  of
Contracts and the other Company Assets,  the sum of the Company's assets will be
greater than the sum of the Company's  debts,  valuing the Company's assets at a
fair salable value.

     SECTION 3.15 Valid Sale; Fair Consideration.

     This Agreement effects a valid  assignment,  transfer and conveyance of the
Company's interest in the Company Assets,  enforceable  against creditors of the
Company.  The  consideration  received  by the  Transferor  upon the sale of the
Company Assets to the Issuer  constitutes  reasonably  equivalent value and fair
consideration for such Company Assets.


                                       8
<PAGE>

     SECTION 3.16 Ability to Pay Debts.

     Neither as a result of the transactions  contemplated by this Agreement nor
otherwise  does the Company  believe that it will incur debts beyond its ability
to pay or which would be  prohibited  by its charter  documents or by-laws.  The
Company's assets and cash flow enable it to meet its present  obligations in the
ordinary course of business as they become due.

     SECTION 3.17 Bulk Transfer Provisions.

     No transfer,  assignment  or  conveyance  of Contracts or the other Company
Assets by the  Company  to the Issuer  contemplated  by this  Agreement  will be
subject to the bulk  transfer or any similar  statutory  provisions in effect in
any applicable jurisdiction.

     SECTION 3.18 Transfer Taxes.

     No transfer,  assignment or conveyance of Company  Assets  contemplated  by
this  Agreement  is subject to or will  result in any tax,  fee or  governmental
charge  payable  by the  Company or the  Issuer to any  federal,  state or local
government  ("Transfer  Taxes").  In the event  that the  Company  or the Issuer
receives  actual  notice of any  Transfer  Taxes  arising  out of the  transfer,
assignment  and  conveyance  of any  Company  Assets,  on written  demand by the
Issuer,  or upon the Company  otherwise being given notice thereof,  the Company
shall pay,  and  otherwise  indemnify  and hold the Issuer,  the Trustee and the
holders of the Notes harmless,  on an after-tax basis,  from and against any and
all such  Transfer  Taxes (it being  understood  that neither the holders of the
Notes nor the Trustee shall have any obligation to pay such Transfer Taxes).

                                   ARTICLE IV
                             CONDITIONS TO PURCHASE

     SECTION 4.01 Representations and Warranties.

     The  obligation of the Issuer to purchase any Contracts on the Closing Date
and each Contribution Date is subject to receipt by the Issuer of the following:

     (a) an Officer's  Certificate from Company to the effect that, on or before
such  Contribution  Date  (after  giving  effect  to the sale of the  Subsequent
Contracts  on such date),  all  representations  and  warranties  of the Company
contained herein shall be true and correct in all respects, with respect to each
Contract  individually  and all Contracts in the aggregate,  with the same force
and effect as though such representations and warranties had been made on and as
of such date (unless such representations and warranties  specifically relate to
an earlier date); and

     (b) an Officer's Certificate from the Contributor to the effect that, on or
before such  Contribution  Date (after  giving  effect to the sale of Subsequent
Contracts on such date), all  representations  and warranties of the Contributor
contained in Section 2 of the Amended and Restated  Contribution  and  Servicing
Agreement  shall be true and  correct  in all  respects,  with  respect  to each
Contract individually and all Contracts in the aggregate as stated therein, with
the same force and effect as though such representations and warranties had been
made  on and  as of  such  date  (unless  such  representations  and  warranties
specifically relate to an earlier date).


                                       9
<PAGE>

                                   ARTICLE V
                            COVENANTS OF THE COMPANY

     So long as this  Agreement  remains in effect or the Company shall have any
obligations  hereunder,  Company  hereby  covenants  and agrees  with  Issuer as
follows:

     SECTION 5.01 Books and Records.

     The Company will clearly mark its books and records to reflect each sale to
the Issuer of all  Company  Assets and to show that the Issuer  owns the Company
Assets absolutely.

     SECTION 5.02 Preservation of Office.

     The Company will give the Issuer,  each  Noteholder  and the Trustee  prior
written  notice of any  relocation  of its principal  executive  office if, as a
result of such  relocation,  the applicable  provisions of the UCC would require
the filing of any amendment of any previously  filed  financing or  continuation
statement  or of any new  financing  statement.  If any  change  in  either  the
Company's name,  structure or the location of its  jurisdiction of organization,
principal place of business or chief executive  office occurs,  then the Company
shall  deliver  thirty  (30)  days'  prior  written  notice  of such  change  or
relocation  to the Issuer and the Trustee,  then,  no later than sixty (60) days
after  the  effective  date  of such  change  or  relocation,  shall  file  such
amendments or statements as may be required to preserve and protect the Issuer's
and the Trustee's  interest in the Contracts,  the Equipment and the other Trust
Property.  The Company  shall pay all filing fees or taxes payable in respect of
any UCC financing or  continuation  statements  required to be filed pursuant to
SECTION 1.03 of the  Contribution  and  Servicing  Agreement and not paid by the
Contributor.

     SECTION 5.03 Liens.

     The Company shall defend the right, title and interest of the Issuer in the
Company Assets against all claims of third parties claiming through or under the
Company  (excluding  claims  arising  from  actions of the  Contributor,  in its
capacity as Servicer  under the  Contribution  and Servicing  Agreement,  or any
agent of Contributor as such Servicer).

     SECTION 5.04 No Bankruptcy Petition Against the Issuer or Managing Member.

     The Company covenants and agrees it will not, prior to the date that is one
year and one day after the payment in full of all amounts owing  pursuant to the
Transaction   Documents,   institute  against,  or  join  any  other  Person  in
instituting  against,  any of the Issuer,  the  Managing  Member or itself,  any
bankruptcy, reorganization, receivership, arrangement, insolvency or liquidation
proceedings or other similar  proceedings  under any federal or state bankruptcy
or  similar  law.  This  Section  5.04 shall  survive  the  termination  of this
Agreement.

     SECTION 5.05 Protection of Right, Title and Interest.

     (a) The Company shall not change its name, identity, or corporate structure
in any manner that would,  could,  or might make any UCC financing  statement or
continuation  statement  filed by the  Contributor  in  accordance  with Section
1.01(d) of the Contribution and Servicing Agreement seriously  misleading within
the meaning of Section  9-506 of the UCC,  unless it shall have given the Issuer
at least


                                       10
<PAGE>

thirty  (30)  days'  prior  written  notice  thereof  and  shall  promptly  file
appropriate  amendments  to all  previously  filed UCC  financing  statements or
continuation statements.

     (b) If at any time the  Company  shall  propose  to sell,  grant a security
interest in or otherwise  transfer any interest in contracts to any  prospective
lender, or other transferee,  the Company shall give to such prospective lender,
or other  transferee,  computer  tapes,  records,  or print-outs  (including any
restored from archives)that, if they shall refer in any manner whatsoever to any
Contract, shall indicate clearly that such Contract have been sold to the Issuer
and pledged by the Issuer to the Trustee for the benefit of the Noteholders.

     (c) The Company shall not amend its  certificate of  incorporation  without
the prior written consent of the Rating Agencies.

                                   ARTICLE VI
                   REPRESENTATIONS AND COVENANTS OF THE ISSUER

     The Issuer hereby  represents and warrants to the Company as of the Closing
Date and as of each Contribution Date:

     SECTION 6.01 Nonconsolidation.

     The Issuer is operated in such a manner that it would not be  substantively
consolidated  with Contributor,  such that the separate  existence of the Issuer
and  Contributor  would  not be  disregarded  in the  event of a  bankruptcy  or
insolvency of the Issuer or Contributor, and in such regard, among other things:

     (a) the Issuer is not involved in the day to day management of Contributor;

     (b) the Issuer maintains separate company records and books of account from
Contributor  and  otherwise  observes  company  formalities  and has a  separate
business office from the Company;

     (c) the financial  statements and books and records of the Issuer  prepared
after the date of creation of Contributor  reflect and will reflect the separate
existence of Contributor;

     (d)  the  Issuer  maintains  its  assets  separately  from  the  assets  of
Contributor  (including through the maintenance of a separate bank account), the
Issuer's funds and assets,  and records relating thereto,  have not been and are
not  commingled  with  those  of  Contributor  and  the  separate  creditors  of
Contributor will be entitled to be satisfied out of  Contributor's  assets prior
to any value in Contributor becoming available to Contributor's equityholders or
the Issuer's creditors;

     (e) all business  correspondence of the Issuer and other communications are
conducted in the Issuer's own name and on its own stationery;

     (f) Contributor  does not act as an agent of the Issuer in any capacity and
the Issuer does not act as agent for Contributor, but instead presents itself to
the public as a limited  liability  company  separate from  Contributor  and the
Company;  provided that  Contributor is the Servicer under the  Contribution and
Servicing Agreement.


                                       11
<PAGE>

     (g) The Issuer shall not issue any  securities or cause any Person of which
it is the sole shareholder or economic owner to issue any securities (other than
the  Notes,  any Class F  Instruments  and any  securities  issued  prior to the
Closing Date) unless it shall have  received from the Rating  Agencies a written
confirmation  that the issuance of such  securities will not result in a Ratings
Effect with respect to any class of Notes.

     SECTION 6.02 No Bankruptcy Petition Against the Company.

     The Issuer  covenants and agrees it will not, prior to the date that is one
year and one day after the payment in full of all amounts owing  pursuant to the
Transaction   Documents,   institute  against,  or  join  any  other  Person  in
instituting  against,  any of the Company,  the Managing  Member or itself,  any
bankruptcy, reorganization, receivership, arrangement, insolvency or liquidation
proceedings or other similar  proceedings  under any federal or state bankruptcy
or  similar  law.  This  Section  6.01 shall  survive  the  termination  of this
Agreement.

                                  ARTICLE VII
                                  SUBSTITUTION

     SECTION 7.01 Substitution.

     In the event that the Contributor contributes,  transfers, sells or assigns
a  Substitute   Contract  to  the  Company  pursuant  to  Section  7.01  of  the
Contribution  and  Servicing  Agreement,  the  Company  hereby  agrees  to sell,
transfer,  convey and  assign  any such  Substitute  Contract  and the  security
interest in the related  Equipment to the Issuer (or, in the case of Fair Market
Value Leases,  grant a valid  security  interest in the related  Equipment).  In
addition,  the  Company  hereby  agrees  to take any  action to  facilitate  the
transfer of any Predecessor Contract,  including (i) delivery to the Trustee and
the Issuer of the Substitute  Contract Transfer Form,  substantially in the form
of Exhibit C to the  Contribution and Servicing  Agreement,  transferring to the
Issuer all  right,  title and  interest  of the  Company in and to the  Eligible
Contract  being  substituted  and a security  interest in the related  Equipment
subject  thereto,  and granting the Trustee a valid and first priority  security
interest in such Substitute  Contracts and the related  Equipment (in accordance
with the Transaction Documents),  (ii) delivery to the Trustee of amendments to,
or executed  originals of, the UCC financing  statements  referred to in Section
1.01(c) of the Contribution and Servicing  Agreement  reflecting the deletion of
the  Predecessor  Contract and the addition of the  Substitute  Contract,  (iii)
delivery to the Contributor or the Servicer,  as the case may be, by the Company
of an instrument, substantially in the form of Exhibit D of the Contribution and
Servicing  Agreement,  transferring to the  Contributor or the Servicer,  as the
case may be, without  representation  or warranty,  all of the Company's  right,
title and interest in and to the related Predecessor Contract,  (iv) delivery to
the Trustee of the original, manually executed counterpart of each Contract that
constitutes  "chattel paper" or an "instrument" under the UCC as appropriate for
the purposes of perfecting a security interest under the UCC and (v) delivery to
the Trustee of an amendment to the Contract Schedule, reflecting the deletion of
the  Predecessor  Contract and the  addition of the  Substitute  Contract.  Upon
delivery of each Substitute  Contract and the Substitute  Contract Transfer Form
therefor,  the definition of "Company Assets" will be  automatically  amended to
(1)  include  such  Substitute  Contract  and all  related  property  and rights
contained  in the  definition  of  Contributed  Property and (2) not include the
related  Predecessor  Contract and all related  property and rights contained in
the definition of Contributed Property.


                                       12
<PAGE>

     SECTION 7.02 Notice of Substitution.

     In the Monthly Servicer Report to be delivered on each Determination  Date,
the Company shall cause the Servicer to give written notice to the Trustee, each
Noteholder,  and the  Company of each  substitution  of  Contracts  pursuant  to
Section  7.01  hereof  during the  preceding  Collection  Period.  Such  Monthly
Servicer  Report or other  written  notice  shall (i) specify the amount of each
periodic Contract Payment under the Predecessor  Contract and the amount of each
periodic Contract Payment under each Eligible Contract being  substituted,  (ii)
specify the residual values of the Equipment subject to the Predecessor Contract
and the Equipment  subject to the Eligible  Contract  being  substituted,  (iii)
specify  the  Discounted  Contract  Balance of the  Predecessor  Contracts,  the
Discounted Contract Balance of the Substitute  Contracts,  and any amounts to be
deposited in the Collection Account in connection with such Substitute Contracts
and (iv) with respect to a  substitution  pursuant to Section  7.01  hereof,  be
accompanied by an Officer's Certificate,  substantially in the form of Exhibit F
of the  Contribution and Servicing  Agreement,  certifying as to compliance with
the provisions of Section 7.01 hereof.

     SECTION 7.03 Contributor's and Company's Subsequent Obligations.

     Upon any  substitution  of Contracts in accordance  with the  provisions of
this  Section  7,  the  Company's  obligations  hereunder  with  respect  to the
Predecessor  Contract shall cease but the Contributor and the Company shall each
thereafter  have the same  obligations  with respect to the Substitute  Contract
substituted as it has with respect to all other  Contracts  subject to the terms
hereof.

     SECTION 7.04 Usage of Predecessor Contracts in Calculation.

     After substitution  therefor in accordance with the terms and conditions of
the  Transaction  Documents,  no  Predecessor  Contract  or any  other  Contract
repurchased  or substituted  for in accordance  with the terms and conditions of
the  Transaction  Documents,  including the subsequent  default,  delinquency or
breach thereof, shall be included in any calculation or determination made under
the Transaction  Documents,  including,  without limitation,  the calculation of
either any Amortization Event or Indenture Event of Default.

                                  ARTICLE VIII
                                  MISCELLANEOUS

     SECTION 8.01 Amendment.

     (a) This  Agreement  may be amended from time to time by the Issuer and the
Company with the consent of the Rating  Agencies (but without the consent of the
Trustee  or any of the  Noteholders),  to cure  any  ambiguity,  to  correct  or
supplement  any  provision  herein  that  may be  inconsistent  with  any  other
provisions  herein,  or to add or amend any other  provisions  with  respect  to
matters or questions arising under this Agreement;  provided, however, that such
amendment  shall not adversely  affect in any material  respect the interests of
either the Trustee or the Noteholders,  unless so consented to by each entity so
affected.

     (b) This  Agreement may also be amended from time to time by the Issuer and
the Company,  with the consent of the Rating Agencies and the Majority of Voting
Rights, for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement;  provided, however, that no
such  amendment  shall (a)  increase  or reduce in any  manner the


                                       13
<PAGE>

amount of, or  accelerate  or delay the timing of,  collections  of  payments on
Contracts  or  payments  that are  required  to be made on any Note  without the
consent of the Holder of such Note, (b) reduce the aforesaid percentage required
to consent to any such amendment or (c) adversely affect in any material respect
the interests of the Trustee or any Noteholder  without,  in each instance,  the
consent of each entity so affected.

     (c) Approval of the  particular  form of any proposed  amendment or consent
shall not be necessary for the consent of the Noteholders under Section 8.01(b),
but it shall be sufficient if such consent shall approve the substance  thereof.
The manner of obtaining such consents and of evidencing the authorization of the
execution   thereof  by  Noteholders   shall  be  subject  to  such   reasonable
requirements as the Trustee may prescribe.

     (d) Prior to the execution of any such amendment to this Agreement proposed
in  accordance  with Section  8.01(b),  the Issuer  shall  deliver a copy of the
proposed amendment to the Company, the Rating Agencies and the Trustee.

     (e) In executing any amendment to this  Agreement  pursuant to this Section
8.01,  the Trustee shall be entitled to receive (i) an Officer's  Certificate of
the  Company  stating  that all  conditions  precedent  for  entering  into such
amendment as set forth in this  Agreement  have been met, and (ii) an Opinion of
Counsel  stating that the execution of such amendment is authorized or permitted
by this Agreement.

     SECTION 8.02 Effect of Invalidity of Provisions.

     In  case  any one or more of the  provisions  contained  in this  Agreement
should be or become  invalid,  illegal  or  unenforceable  in any  respect,  the
validity,  legality,  and enforceability of the remaining  provisions  contained
herein shall in no way be affected, prejudiced or disturbed thereby.

     SECTION 8.03 Notices.

     All  demands,  notices and  communications  hereunder  shall be in writing,
personally  delivered or mailed by certified  mail-return receipt requested,  or
delivered by courier,  or delivered  by facsimile to a facsimile  and  telephone
number  provided by the relevant Person in writing,  with  subsequent  telephone
confirmation of the receipt thereof, and shall be deemed to have been duly given
upon receipt (a) in the case of the Trustee, at the following address:  180 East
Fifth  Street,  St.  Paul,  Minnesota  55101,  Attention:   Structured  Finance,
Facsimile:  (651)  244-0089,  (b) in the case of the Servicer,  at the following
address: 2500 York Road, Jamison, Pennsylvania 18929, Attention:  Securitization
Manager,  Facsimile:  (215) 488-5416,  (c) in the case of the Issuer,  2500 York
Road, Jamison, Pennsylvania 18929, Attn: Securitization Manager, Facsimile (215)
488-5416,  with a copy to the  Servicer  at the  address set forth in clause (b)
above, (d) in the case of the Company at the following address:  2500 York Road,
Jamison, Pennsylvania 18929, Attention: Securitization Manager, Facsimile: (215)
488-5416,  (e) in the case of the Rating Agencies,  to the following  addresses:
Fitch,  Inc., 55 East Monroe Street,  Chicago,  Illinois 60603,  Attention:  Mr.
Joseph Tuczak,  Facsimile:  (312) 368-2069; and Moody's Investors Service, Inc.,
99 Church Street, 4th Fl., New York, New York 10007,  Attention:  ABS Monitoring
Department,  Facsimile:  (212) 553-3856,  or at other such respective address as
shall be designated by such party in a written notice to the other parties.  Any
notice  required or  permitted  to be mailed to a  Noteholder  shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Note Register. Any notice so mailed within the time prescribed in this


                                       14
<PAGE>

Agreement shall be conclusively presumed to have been duly given, whether or not
the Noteholder receives such notice.

     SECTION 8.04 Entire Agreement.

     This  Agreement,   including  the  Exhibits  hereto,  contains  the  entire
agreement of the parties hereto with respect to the subject  matter hereof,  and
supersedes all prior and  contemporaneous  agreements between them, whether oral
or written, of any nature whatsoever with respect to the subject matter hereof.

     SECTION 8.05 Survival.

     All  indemnities and  undertakings of the Company and the Issuer  hereunder
shall survive the termination of this Agreement.

     SECTION 8.06 Consent to Service.

     Each party irrevocably  consents to the service of process by registered or
certified mail, postage prepaid,  to it at its address provided on the signature
page hereto.

     SECTION 8.07 Jurisdiction Not Exclusive.

     Nothing herein will be deemed to preclude either party hereto from bringing
an action or proceeding in respect of this Agreement in any  jurisdiction  other
than as set forth in Section 8.12 hereof.

     SECTION 8.08 Construction.

     The  headings  in this  Agreement  are  for  convenience  only  and are not
intended to influence its  construction.  References to Sections,  Schedules and
Exhibits in this  Agreement are to the Sections of and Schedules and Exhibits to
this Agreement. Any Schedules and Exhibits are hereby incorporated into and form
a part of this Agreement.  In this Agreement,  the singular includes the plural,
the plural the singular, the words "and" and "or" are used in the conjunctive or
disjunctive as the sense and  circumstances may require and the word "including"
means  "including,  but  not  limited  to."  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 means "to but excluding".

     SECTION 8.09 Further Assurances.

     In  addition  to its  agreements  set forth  herein,  the  Company  (at the
Issuer's  expense)  agrees to do such further acts and things and to execute and
deliver such additional assignments,  agreements,  powers and instruments as are
reasonably  requested  by the Issuer to carry into  effect the  purposes of this
Agreement  and  the  transactions   contemplated  herein,   including,   without
limitation, such documents as are necessary to protect the Trustee's interest in
the  Contracts,  the security  interest in the  Equipment  and the other Company
Assets in accordance with the Transaction Documents.


                                       15
<PAGE>

     SECTION 8.10 Third Party Beneficiaries.

     Each Noteholder and the Trustee shall be an express third party beneficiary
of this Agreement.  The obligations of the Company  hereunder may be assigned by
the Issuer to the Trustee under the Indenture. The Company acknowledges that the
Issuer  intends,  pursuant  to the  Indenture,  to pledge  the  Company  Assets,
together with its  respective  rights under this Agreement to the Trustee on the
Closing Date, each Contribution Date and each Substitution Date, with respect to
each  Contract  and each  Substitute  Contract.  The  Company  acknowledges  and
consents to such  conveyance and waives any further notice thereof and covenants
and agrees that the  representations  and warranties of the Company contained in
this Agreement and the rights of the Issuer  hereunder,  are intended to benefit
the Trustee,  and each  Securityholder.  In furtherance  of the  foregoing,  the
Company covenants and agrees to perform its duties and obligations hereunder, in
accordance  with the terms  hereof and for the  benefit of the  Trustee  and the
Noteholder and that, notwithstanding anything to the contrary in this Agreement,
the Company shall be directly liable to the Trustee (notwithstanding any failure
by the Servicer or the Issuer to perform its duties and  obligations  hereunder,
or under the Indenture or Contribution  and Servicing  Agreement),  and that the
Trustee  may  enforce  the  duties and  obligations  of the  Company  under this
Agreement against the Company for the benefit of the Securityholder.

     SECTION 8.11 GOVERNING LAW.

     THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS RULES REGARDING CONFLICT OF
LAWS.

     SECTION 8.12 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 ISSUER AND THE COMPANY HEREBY AGREED
TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITH THE STATE OF
NEW YORK. EACH OF THE PARTIES HERETO  IRREVOCABLY  SUBMITS TO THE  NON-EXCLUSIVE
JURISDICTION  OF THE  COURTS  OF THE  STATE OF NEW YORK  AND THE  UNITED  STATES
DISTRICT  COURT LOCATED IN THE BOROUGH OF MANHATTAN,  CITY OF NEW YORK, AND EACH
PARTY IRREVOCABLY 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 CONSENT TO THE  GRANTING  OF SUCH LEGAL OR  EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

     SECTION 8.13 WAIVER OF JURY TRIAL.

     TO THE  EXTENT  PERMITTED  BY  APPLICABLE  LAW,  EACH OF THE ISSUER AND THE
COMPANY  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.


                                       16
<PAGE>

     SECTION 8.14 Headings and Cross-References.

     The various  headings in this Agreement are included for  convenience  only
and shall not affect the  meaning or  interpretation  of any  provision  of this
Agreement.  References in this Agreement to Section names or numbers are to such
Sections of this Agreement.

     SECTION 8.15 Costs and Expenses.

     The Company will pay all reasonable expenses incident to the performance of
its  obligations  under this  Agreement  and under the Indenture and the Company
agrees to pay all  reasonable  out-of-pocket  costs and  expenses of the Issuer,
including fees and expenses of counsel,  in connection  with the  enforcement of
any obligation of the Company hereunder.

     SECTION 8.16 Confidential Information.

     The Issuer  agrees and  covenants  that it will neither use nor disclose to
any person the names and  addresses of the Obligors,  except in connection  with
the enforcement of the Issuer's rights hereunder, under the Contracts, under the
applicable Transaction Documents or as required by law.

     SECTION 8.17 Statutory References.

     References  in this  Agreement to any section of the UCC shall mean, on and
after  the  effective  date  of  adoption  of any  revision  to  the  UCC in the
applicable jurisdiction, such revised or successor section thereto.

     SECTION 8.18 Execution in Counterparts.

     This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original,  and all of which shall constitute one and the same
instrument.

     SECTION 8.19 Power of Attorney.  The Company  hereby  grants to each of the
Issuer  and the  Trustee  the  power  as its  attorney-in-fact  (i) to file  UCC
financing statements in the appropriate offices evidencing the conveyance of the
Contracts and other Company  Assets to the Issuer and (ii) in the event an event
of default exists under any Transaction  Document,  to do any and all other acts
as may be  necessary  or  appropriate  to effect  the  transaction  contemplated
herein.  The Company will execute any document or instrument deemed necessary by
the Issuer or the Trustee to effect or to evidence  this power of attorney.  All
costs associated with such filings or instructions shall be paid by the Company.

                            [Signature page follows]


                                       17
<PAGE>

                                          Subsequent Contract Transfer Agreement

     IN WITNESS  WHEREOF,  Issuer and Company have duly executed this Subsequent
Contract Transfer Agreement as of the date and year first above written.


                                   DVI RECEIVABLES CORP. XVI

                                   By________________________________________
                                      Name:   Matthew E. Goldenberg
                                      Title:  Assistant Treasurer

                                   Address:   2500 York Road
                                              Jamison, Pennsylvania 18929
                                   Attention: Securitization Manager

                                   Telephone: (215) 488-5042
                                   Facsimile: (215) 488-5416


                                   DVI RECEIVABLES XVI, L.L.C.

                                   By:        DVI Receivables Corp. VIII,
                                              its managing member

                                   By:_______________________________________
                                      Name:   Matthew E. Goldenberg
                                      Title:  Assistant Treasurer

                                   Address:   2500 York Road
                                              Jamison, Pennsylvania 18929
                                   Attention: Securitization Manager

                                   Telephone: (215) 488-5042
                                   Facsimile: (215) 488-5416

<PAGE>

                                    EXHIBIT A

                        SUBSEQUENT CONTRACT TRANSFER FORM

                                                                          [DATE]

     DVI Receivables  Corp. XVI, (the "Company") and DVI Receivables XVI, L.L.C.
(the "Issuer"), pursuant to the Subsequent Contract Transfer Agreement, dated as
of  November 1, 2001 (the  "SCTA"),  hereby  confirm  their  understanding  with
respect to the sale,  transfer,  assignment and conveyance by the Company to the
Issuer  of  those   Contracts   listed  on  Schedule  1  attached   hereto  (the
"Contracts"),  together with a first priority  perfected  (except with regard to
Equipment  that had an Original  Equipment  Cost of less than $25,000)  security
interest in all of the Company's right, title and interest in and to the related
Equipment (except for (i) such item of Equipment that had an Original  Equipment
Cost of less  than  $25,000  and (ii) any  ownership  interest  in such  item of
Equipment,  with  respect to which the  Company  instead  grants to the Issuer a
first priority perfected security interest therein),  and other related property
described herein.

     Conveyance  of Company  Assets.  On the date set forth  above,  the Company
hereby transfers to the Issuer all of the Company's  rights,  title and interest
in, to, and under the Contracts listed on Schedule 1 hereto  including,  without
limitation,  its  interests  in the  proceeds  of such  Contracts,  the right to
receive all amounts due or to become due thereunder after  _______________  (the
"Cut-off Date") together with all of the other Company Assets related thereto.

     The Company hereby confirms that:

     (1) On or prior to the  date  hereof  (the  "Subsequent  Contract  Transfer
Date"),  the  Contributor  shall have  deposited in the  Collection  Account all
collections  in respect of the  Contracts  that were due on or after the Cut-off
Date;

     (2) Each  representation and warranty of the Company under the Contribution
and Servicing  Agreement and the SCTA is true and correct as of the date hereof,
the  Contributor was not insolvent nor will it be made insolvent by the transfer
contemplated herein nor is it aware of any pending insolvency and the Company is
not in breach of any covenant under the SCTA;

     (3) Each Contract sold, transferred,  assigned and conveyed pursuant hereto
is an Eligible Contract;

     (4) On or prior to the Subsequent Contract Transfer Date, the Company shall
have delivered to the Trustee the sole original,  manually executed  counterpart
of each Contract;

     (5) The sum of the Discounted  Contract  Balances as of the Cut-off Date of
the Contracts  listed on Schedule 1 attached  hereto is $__________  (calculated
using a Discount Rate of __________%);

     (6) Reserved;

     (7) When the Contracts are added to the Trust Property, all representations
and  warranties  of the  Company in the SCTA will be true and  correct as of the
date set forth in the heading of this


                                      A-1
<PAGE>

Subsequent Contract Transfer Form unless any breach of such  representations and
warranties  resulting from the inclusion of such Contract shall have been waived
in advance by Noteholders evidencing more than 50% of the Voting Rights; and

     (8) The  Contributor  has  delivered to the Trustee (i)  amendments  to, or
executed  originals  of, the UCC  financing  statements  referred  to in Section
1.01(d) of the  Contribution  and Servicing  Agreement  (the  "Contribution  and
Servicing  Agreement"),  dated as of  November  1, 2001  between  DVI  Financial
Services Inc. and the Company,  reflecting the addition of the  Contract(s)  and
(ii) an amendment to the Contract Schedule.

     All terms and  conditions  of the SCTA with  respect to the Company and the
Contracts  have  been  complied  with and are  hereby  ratified,  confirmed  and
incorporated herein; provided that, in the event of any conflict, the provisions
of this  Subsequent  Contract  Transfer Form shall control over the  conflicting
provisions of the Contribution and Servicing Agreement.

                            [signature page follows]


                                      A-2
<PAGE>

     Terms capitalized herein and not defined herein shall have their respective
meanings as set forth in the SCTA and if not defined therein, then as such terms
are defined in Appendix I to the Contribution and Servicing Agreement.

                                          DVI RECEIVABLES CORP. XVI

                                               By:
                                               Name:
                                               Title:

                                          DVI RECEIVABLES XVI, L.L.C.

                                               By:  DVI RECEIVABLES CORP. VIII,
                                                    its managing member
                                               By:
                                               Name:
                                               Title:


                                      A-3
<PAGE>

                                    EXHIBIT B

                  FORM OF RE-ASSIGNMENT OF ISSUER'S CERTIFICATE
                   PURSUANT TO SECTION 1.04(c) or 5.01 OF THE
                     SUBSEQUENT CONTRACT TRANSFER AGREEMENT


     DVI  Receivables  XVI,  L.L.C.  (the  "Issuer")  pursuant to the Subsequent
Contract Transfer  Agreement,  dated as of November 1, 2001,  between the Issuer
and DVI  Receivables  Corp.  XVI (the  "Company")  does hereby  sell,  transfer,
assign,   deliver   and   otherwise   convey  to  Company,   without   recourse,
representation or warranty, all of the Issuer's right, title and interest in and
to all of the Predecessor Contracts listed on Schedule A hereto and all security
and documents relating thereto.

     IN  WITNESS  WHEREOF,  I  have  hereunto  set  my  hand  this  ____  day of
__________________.



                                             DVI RECEIVABLES XVI, L.L.C.


                                             By:  DVI Receivables Corp. VIII,
                                                  its managing member


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


                                      B-1