Exhibit 4.2

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                          DVI FINANCIAL SERVICES INC.,
                            CONTRIBUTOR AND SERVICER

                                       AND

                            DVI RECEIVABLES CORP. XVI


                      CONTRIBUTION AND SERVICING AGREEMENT


                          Dated as of November 1, 2001

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ALL RIGHTS IN AND TO THIS  AGREEMENT ON THE PART OF DVI  RECEIVABLES  CORP.  XVI
HAVE BEEN ASSIGNED TO DVI RECEIVABLES XVI L.L.C.  AND REASSIGNED 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.


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                                TABLE OF CONTENTS

                                                                            Page

SECTION 1. CAPITAL CONTRIBUTION................................................3
     1.01  Contribution........................................................3

SECTION 2. REPRESENTATIONS, WARRANTIES, COVENANTS AND
           AGREEMENTS OF THE CONTRIBUTOR.......................................5
     2.01  Corporate Organization and Authority................................6
     2.02  Business and Property...............................................6
     2.03  Equipment and Contracts.............................................6
     2.04  Contract Schedule..................................................11
     2.05  Pending Litigation.................................................11
     2.06  No Material Event..................................................12
     2.07  Transactions Legal and Authorized..................................12
     2.08  Governmental Consent...............................................12
     2.09  Compliance with Law................................................12
     2.10  Ordinary Course; No Insolvency.....................................13
     2.11  Assets and Liabilities.............................................13
     2.12  Fair Consideration; Valid Sale.....................................13
     2.13  Ability to Pay Debts...............................................13
     2.14  Bulk Transfer Provisions...........................................14
     2.15  Tax Returns........................................................14
     2.16  Transfer Taxes.....................................................14
     2.17  Principal Executive Office.........................................14
     2.18  Legal Name.........................................................15
     2.19  Servicing Provisions Customary.....................................15
     2.20  Defaults...........................................................15
     2.21  ERISA..............................................................15
     2.22  All Filings Made...................................................15
     2.23  Nonconsolidation...................................................15
     2.24  All Representations and Warranties True............................16
     2.25  Prospectus Supplement..............................................17
     2.26  Insurance..........................................................17
     2.27  No Bankruptcy Petition Against the Transferor, the Managing Member
           or the Issuer......................................................17
     2.28  Delivery of Obligor Contact Information............................17

SECTION 3. REPRESENTATIONS, WARRANTIES, COVENANTS AND
           AGREEMENTS OF THE TRANSFEROR.......................................17
     3.01  Transferor Organization and Authority; Subsidiaries................17
     3.02  Due Authorization and No Violation.................................18
     3.03  No Litigation......................................................18
     3.04  Principal Office...................................................18
     3.05  Tax Returns........................................................18
     3.06  Solvency...........................................................18
     3.07  Approvals..........................................................19


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                                TABLE OF CONTENTS
                                   (continued)
                                                                            Page


     3.08  Nonconsolidation...................................................19

SECTION 4. ADMINISTRATION OF CONTRACTS........................................19
     4.01  Servicer to Act....................................................19
     4.02  Contract Amendments and Modifications; Repurchase of Contracts by
           Servicer...........................................................21
     4.03  Contract Defaults; Residual Realizations...........................22
     4.04  Costs of Servicing; Servicer's Fee.................................22
     4.05  Other Transactions.................................................24
     4.06  Collection of Moneys...............................................24
     4.07  Voluntary Termination..............................................24

SECTION 5. SERVICER ADVANCES; REPURCHASE OF CONTRACTS.........................24
     5.01  Servicer Advances..................................................24
     5.02  Indemnification....................................................25
     5.03  Repurchase and Substitution of Contracts; Other Payments...........25

SECTION 6. INFORMATION TO BE PROVIDED.........................................27
     6.01  Monthly Servicer Report............................................27
     6.02  Tax Reporting and Treatment........................................27
     6.03  Other Information..................................................27
     6.04  Annual Independent Certified Public Accountant's Report............27
     6.05  Payment Advices....................................................28

SECTION 7. SUBSTITUTION OF CONTRACTS..........................................28
     7.01  Substitution.......................................................28
     7.02  Notice of Substitution.............................................30
     7.03  Contributor's and Servicer's Subsequent Obligations................31
     7.04  Usage of Predecessor Contracts in Calculations.....................31

SECTION 8. THE SERVICER.......................................................31
     8.01  Corporate Existence of the Servicer................................31
     8.02  Limitation on Liability of the Servicer and Others.................31
     8.03  Servicer Not to Resign or be Removed...............................32
     8.04  Financial and Business Information.................................32
     8.05  Officer's Certificates.............................................33
     8.06  Inspection.........................................................33
     8.07  Servicer Records...................................................34
     8.08  Insurance..........................................................34
     8.09  No Bankruptcy Petition Against the Transferor, the Managing Member
           or the Issuer......................................................34
     8.10  Fidelity Bond and Errors and Omissions Insurance...................34

SECTION 9. THE CONTRIBUTOR....................................................34
     9.01  Corporate Existence of the Contributor.............................34
     9.02  Financial and Business Information.................................35

                                      -ii-
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                                TABLE OF CONTENTS
                                   (continued)
                                                                            Page

     9.03  Inspection.........................................................36
     9.04  No Bankruptcy Petition Against the Managing Member, the Transferor
           or the Issuer......................................................36
     9.05  Accounts, Books and Records........................................36
     9.06  Tax Returns........................................................37
     9.07  Insurance..........................................................37
     9.08  Protection of Right, Title and Interest............................37
     9.09  Other Liens or Interests...........................................37
     9.10  Costs and Expenses.................................................38

SECTION 10.EVENTS OF DEFAULT..................................................38
     10.01 Servicer Events of Default.........................................38
     10.02 Termination........................................................40
     10.03 Trustee to Act; Appointment of Successor...........................40
     10.04 Servicer to Cooperate..............................................41
     10.05 Remedies Not Exclusive.............................................41
     10.06 Waiver of Past Defaults............................................41

SECTION 11.ASSIGNMENT.........................................................42
     11.01 Assignment to Trustee..............................................42
     11.02 Assignment by Contributor or Servicer..............................42

SECTION 12.NATURE OF CONTRIBUTOR'S OBLIGATIONS AND SECURITY THEREFOR..........42
     12.01 Contributor's Obligations Absolute.................................42
     12.02 Power of Attorney..................................................43

SECTION 13.MISCELLANEOUS PROVISIONS...........................................43
     13.01 Sale...............................................................43
     13.02 Amendment..........................................................44
     13.03 Waivers............................................................44
     13.04 Notices............................................................44
     13.05 Costs and Expenses.................................................45
     13.06 Third Party Beneficiaries..........................................46
     13.07 Survival of Representations........................................46
     13.08 Confidential Information...........................................46
     13.09 Headings and Cross-References......................................46
     13.10 GOVERNING LAW......................................................46
     13.11 Consent to Jurisdiction............................................46
     13.12 Counterparts.......................................................46
     13.13 Statutory References...............................................46


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                      CONTRIBUTION AND SERVICING AGREEMENT

     This Agreement is made and dated as of November 1, 2001, by and between DVI
FINANCIAL SERVICES INC., a Delaware corporation ("DVI"), as contributor (in such
capacity,  the  "Contributor")  and servicer (in such capacity,  the "Servicer")
hereunder,   and  DVI  RECEIVABLES  CORP.  XVI,  a  Delaware   corporation  (the
"Transferor").

                                    RECITALS

     A.  Pursuant  to  this  Agreement,  the  Contributor  is  contributing  and
assigning  to  the  Transferor,  (i)  all  right,  title  and  interest  of  the
Contributor  in, to and under,  inter  alia,  a pool of  non-cancelable  Finance
Leases,  Fair Market  Value  Leases,  Leveraged  Lease Loans,  Lease  Receivable
Purchases and Secured Equipment Notes described in Exhibit A hereto (ii) certain
payments and proceeds  received relating to the Contracts that are payable after
the Cut-Off Date and (iii) an interest in each item of underlying Equipment that
is subject to each Contract  described in Exhibit A hereto.  The Contributor may
contribute  and assign  certain  Substitute  Contracts  and an  interest  in the
Equipment  related  thereto and certain other  related  payments and proceeds in
accordance with the terms of this Agreement.

     B. Pursuant to the  Subsequent  Contract  Transfer  Agreement (the "SCTA"),
dated as of November 1, 2001, by and between the Transferor and the Issuer,  the
Transferor is transferring to the Issuer all of its right, title and interest in
and to the Trust Property.

     C. Pursuant to the Sale Agreement (the "DVI Funding Sale Agreement")  dated
as  of  November  1,  2001,  among  the  Issuer,  the  Transferor,  DVI  Funding
Corporation,  DVI Funding,  L.L.C., and DVI Financial Services Inc., DVI Funding
L.L.C.  will transfer to the Issuer all of its right,  title and interest in, to
and under the Contracts  listed on Exhibit A thereto and the other Sold Borrower
Property  (as  defined  in the DVI  Funding  Sale  Agreement)  and  DVI  Funding
Corporation  will  transfer  to the  Transferor  (all of its  right,  title  and
interest  in, to and under the Sold  Company  (as  defined in the  funding  Sale
Agreement).  Pursuant to the Sale Agreement (the "DVI XV Sale Agreement),  dated
as of November 1, 2001,  among the Issuer,  the  Transferor,  DVI Receivables XV
Corp.,  DVI  Receivables  XV,  L.L.C.,  and DVI  Financial  Services  Inc.,  DVI
Receivables XV, L.L.C.,  will transfer to the Issuer all of its right, title and
interest  in, to and under the  Contracts  listed on  Exhibit A thereto  and the
other Sold Trust  Property  (as  defined in the DVI XV Sale  Agreement)  and DVI
Receivables XV Corp. will transfer to the Transferor all of its right, title and
interest in, to and under the Sold Company Assets (as defined in the DVI XV Sale
Agreement). The Contracts transferred to the Issuer pursuant to the Funding Sale
Agreement and the DVI XV Sale  Agreement  (each a "Sale  Agreement" and together
the "Sale Agreements") were originated by DVI.

     D.  Pursuant  to the  Indenture  (the  "DVI  XVI  Indenture"),  dated as of
November  1, 2001,  the  Issuer is  issuing  its  Asset-Backed  Securities  (the
"Notes").  Pursuant  to the  Indenture,  the Issuer is  granting  to the trustee
thereunder  (the  "Trustee"),  for the benefit and  security of the holders from
time to time of the Notes,  a security,  interest in the Trust  Property,  which
includes,  inter alia, all right,  title (other than ownership of any Equipment)
and interest of the Transferor, DVI Funding LLC, and DVI Receivables XV, LLC in,
to and under the Contracts, the Equipment and this Agreement.


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     E. In connection with the contribution and assignment of such Contracts and
the transfer of an interest in the related Equipment,  the Contributor agrees to
undertake certain obligations set forth herein.

     F.  In  consideration  for the  Servicing  Fee and  other  amounts  as more
particularly  set  forth  herein,  the  Servicer  agrees  to  undertake  certain
obligations set forth herein.

     G. Capitalized  terms used but not defined herein shall have the respective
meanings set forth in Appendix I hereto.


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                                   AGREEMENTS

     SECTION 1. CAPITAL CONTRIBUTION

     1.01 Contribution.

     (a) Upon the terms and conditions herein set forth, the Contributor  hereby
agrees to transfer,  assign and  contribute,  on one or more  Contract  Transfer
Dates (or, in case of any Substitute Contracts,  the related Substitution Date),
without  recourse except as set forth herein,  all right,  title and interest in
and to the Contributed  Property.  The Transferor assumes all of the obligations
under the Contracts  arising after the related Cut-Off Date. All funds which are
part of the Conveyed  Property and which are received by DVI  Receivables  Corp.
XV, DVI  Receivables  XV, LLC,  DVI Funding  Corporation  DVI Funding LLC or the
Contributor under or in connection with the Contracts that are payable after the
applicable  Cut-Off Date shall be  received,  held and applied by such Person in
trust for the benefit of the Transferor as owner of the Contracts.

     (b)  After  giving  effect  to such  contribution,  the  ownership  of each
Contract will be vested in the Transferor (and the Issuer as its assignee).  The
Contract Files and any other  documents  relating to the Contracts and the other
Contributed  Property that are delivered as part of the Contributed  Property or
as  incidental  thereto  are and shall be held in trust by the  Trustee  for the
benefit of the Noteholders. The Contributor agrees to take no (and to not permit
DVI Receivables Corp. XV, DVI Receivables XV, LLC, DVI Funding Corporation,  DVI
Funding LLC or any of its subsidiaries to take any) action inconsistent with the
ownership (by the Transferee  and the Issuer,  as its assignee) of the Contracts
and the other Contributed  Property,  to promptly indicate to all parties with a
valid interest inquiring as to the true ownership of the Contracts and the other
Contributed Property, that the Contracts and the other Contributed Property have
been transferred and assigned to the Transferor (and the Issuer as its assignee)
and to claim no ownership  interest in the Contracts  and the other  Contributed
Property.  Nothing  contained in this Agreement  shall affect in any respect the
rights of the Contributor,  its successors and assigns, to deal in any Unrelated
Property.

     (c) The Servicer shall take, or cause to be taken, such actions and execute
such  documents  as are  necessary  to protect  the  Trustee's  interest  in the
Contracts,  security  interest in the  Equipment  and the other  Trust  Property
against all other Persons, including,  without limitation, the following: (i) in
the case of the  Contracts,  on or before the  Closing  Date (or, in case of any
Substitute Contracts, the related Substitution Date), (A) filing UCC-1 financing
statements  naming the  Contributor as debtor,  the Transferor as secured party,
the Issuer as assignee of the secured  party and the  Contracts as collateral in
the  debtor's  principal  place of business  and the  jurisdiction  in which the
Contributor is "located" (as defined in the UCC), (B) UCC-1 financing statements
naming the  Transferor as debtor,  the Issuer as secured  party,  the Trustee as
assignee of the secured  party and the  Contracts as  collateral in the debtor's
principal  place of business and  jurisdiction  in which the principal  place of
business of the  Transferor  is  "located"  (as defined in the UCC),  (C) filing
UCC-1  financing  statements  naming  the  Issuer as debtor  and the  Trustee as
secured party in the  jurisdiction  in which the principal  place of business of
the  Issuer  is  "located"  (as  defined  in the  UCC),  and  (D)  filing  UCC-3
termination  statements  or releases  from  lenders,  if any,  with liens on the
Contracts;  (ii) in the


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case of the  assignment  or  grant of its  interests  in the  Equipment,  within
thirty,  days after the Closing Date (or, in case of any  Substitute  Contracts,
the  related  Substitution  Date),  (A) with  respect to a security  interest in
Equipment  (other than  Equipment for which the Original  Equipment Cost is less
than $25,000), filing UCC financing statements naming the Obligor as debtor, the
Contributor as secured party, U.S. Bank Trust National Association, as custodian
or as trustee, as assignee of the secured party and the Equipment as collateral,
in the appropriate filing offices, (B) with respect to the Transferor's interest
in the Equipment related to DVI Fair Market Value Leases,  filing  precautionary
UCC-1 financing  statements (i) naming the Contributor,  DVI Funding Corporation
or DVI  Receivables  Corp, XV, as the case may be, as debtor,  the Transferor as
secured party, and the Issuer as assignee of secured party, and the Equipment as
Collateral,  in the appropriate  filing  offices,  (ii) naming the Transferor as
debtor,  the Issuer as secured party, and U.S. Bank Trust National  Association,
as trustee or as custodian,  as assignee of the secured party, and the Equipment
as  Collateral,  in the  appropriate  filing  offices (iii) naming the Issuer as
debtor and U.S. Bank Trust National  Association,  as trustee or as custodian as
secured  party,  and the  Equipment as  Collateral,  in the  appropriate  filing
offices,  (C) with  respect to all Fair Market  Value Leases other than DVI Fair
Market Value Leases, filing UCC-1 financing statements (i) naming the originator
as debtor,  the Contributor as secured party and DVI's interest in the Equipment
as  Collateral,  (ii) naming the  Contributor,  DVI Funding  Corporation  or DVI
Receivables  Corp, XV, as the case may be, as debtor,  the Transferor as secured
party,  and the  Issuer  as  assignee  of the  secured  party,  and the  related
Equipment  as  Collateral,  filed  in  the  appropriate  filing  offices  in the
jurisdiction in which the Transferor maintains its chief executive office, (iii)
naming the  Transferor  as debtor,  the Issuer as secured  party,  and U.S. Bank
Trust  National  Association,  as  custodian  or as trustee,  as assignee of the
secured party, and the related Equipment as Collateral, filed in the appropriate
filing offices in the  jurisdiction in which the Transferor  maintains its chief
executive  office  and its state of  incorporation,  (iv)  naming  the Issuer as
debtor, and U.S. Bank Trust National Association, as custodian or as Trustee, as
secured party and the related Equipment as Collateral,  filed in the appropriate
filing offices in the  jurisdiction in which the Transferor  maintains its chief
executive  office and its state of  incorporation,  (D) with respect to all Fair
Market Value Leases,  filing UCC-1 financing statements naming the Transferor as
debtor,  U.S.  Bank Trust  National  Association,  as custodian  or trustee,  as
secured  party  and the  Transferor's  security  interest  in the  Equipment  as
collateral in the  appropriate  filing offices in the  jurisdiction in which the
Transferor maintains its chief executive office, (E) filing UCC-3 assignments of
any "precautionary"  filings naming the Obligor as debtor, the Contributor,  DVI
Funding  Corporation or DVI Receivables Corp, XV, as the case may be, as secured
party,  U.S. Bank Trust  National  Association,  as custodian or as trustee,  as
assignee  of the  secured  party and the  Equipment  as  collateral  (other than
Equipment for which the Original  Equipment Cost is less than  $25,000),  in the
appropriate  filing  offices (F) with respect to Equipment  subject to Leveraged
Lease Loans or Lease Receivable  Purchases,  filing UCC-3 assignments naming the
Obligor as debtor, the Contributor,  DVI Funding  Corporation or DVI Receivables
Corp,  XV,  as the case may be, as  secured  party,  U.S.  Bank  Trust  National
Association,  as custodian or as trustee,  as assignee of the secured  party and
the Equipment as collateral, in the appropriate filing offices, (G) filing UCC-3
termination  statements  or releases  from  lenders,  if any,  with liens on the
Equipment,  (H) with respect to any Equipment  for which a certificate  of title
has been  issued,  making  an  application  for  notation  of lien on each  such
certificate  of title  indicating  the interest of the  Trustee,  (I) filing UCC
assignments  with respect to each Contract  acquired from a third party,


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naming such person as  debtor/seller,  the  Contributor,  DVI Funding LLC or DVI
Receivables XV LLC, as the case may be, as secured party/purchaser,  the Trustee
as assignee of the secured party and such acquired contracts as collateral,  (J)
filing  UCC  assignments  with  respect  to each  Leveraged  Lease Loan or Lease
Receivable Purchase, naming the related Obligor as debtor, the Contributor,  DVI
Funding LLC or DVI Receivables XV LLC, as the case may be, as secured party, the
Trustee as assignee of the secured  party and the related  underlying  equipment
lease as  collateral,  (K) delivering a certificate  certifying  that it has (1)
made the filings of UCC financing statements set forth above and certifying that
copies of such UCC  financing  statements  are on file with the  Trustee and (2)
made the applications set forth above and attaching copies of such  applications
and (2) the  filing  of the UCC  financing  statements  required  under the Sale
Agreements.  Thereafter, the Contributor promptly shall file such additional UCC
financing  statements,  continuation  statements and assignments and cause to be
made such  notations on  certificates  of title with  respect  thereto as may be
necessary because of equipment replacements in accordance with the provisions of
any  Contract,  or  otherwise so that the interest of the Trustee in (x) each of
the Contracts,  (y) the Equipment  which is subject to the Contracts and (z) the
remainder  of the Trust  Property  will be  perfected  by such  filings with the
appropriate UCC filing offices and/or notations on the appropriate  certificates
of title.

     (d) If (i) any change in any of the  Contributor's  name,  structure or the
location of its  jurisdiction  of  organization,  principal place of business or
chief executive  office occurs,  then the Contributor  shall deliver thirty (30)
days' prior written  notice of such change or relocation to the  Transferor  and
the Trustee and (ii) 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  Transferor's,  the  Issuer's  and the
Trustee's interest in the Contracts, the Equipment and the other Trust Property.
The Contributor shall pay all filing fees or taxes payable in respect of any UCC
financing  or  continuation  statements  required  to be filed  pursuant to this
Section 1.01(d).

     (e) On or prior to the Closing Date or the related  Substitution  Date,  as
applicable,  the  Contributor  shall  deliver to the Trustee the sole  original,
manually executed  counterpart of each Contract that constitutes "chattel paper"
(or, if the original  Contract is in the form of a schedule or  supplement  to a
master lease or loan, all original  counterparts  of such schedule or supplement
previously in the possession of the Contributor or the Transferor  together with
a true and correct  copy of such master lease or loan) or an  "instrument".  The
Contributor  will cause its accounting  records to be clearly and  unambiguously
marked to show that such Contract has been transferred by the Contributor to the
Transferor,  and by the Transferor to the Issuer, and then pledged by the Issuer
to the Trustee for the benefit of the Noteholders.

SECTION  2.  REPRESENTATIONS,   WARRANTIES,  COVENANTS  AND  AGREEMENTS  OF  THE
             CONTRIBUTOR

     The Contributor (in its capacity as such and as the initial  Servicer under
this Agreement)  hereby  represents and warrants to the Transferor and covenants
and agrees with the  Transferor for the benefit of the  Transferor,  the Issuer,
the Trustee and the Noteholders with respect to the Initial Contracts, as of the
Closing Date and, with respect to any Substitute  Contracts (except for Sections
2.02 and 2.25) as of each Substitution Date (unless otherwise indicated herein):


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     2.01 Corporate Organization and Authority. The Contributor (in its capacity
as such and as the initial Servicer under this Agreement):

     (a) is a corporation duly organized,  validly existing and in good standing
under the laws of its jurisdiction of incorporation;

     (b) has all requisite  power and  authority and all necessary  licenses and
permits to own and operate its  properties  and to carry on its  business as now
conducted  (except where the failure to have such licenses and permits could not
individually or in the aggregate have a material  adverse effect on the business
or  condition  (financial  or  otherwise)  of  the  Contributor  or  impair  the
enforceability  of any Contract)  and to enter into and perform its  obligations
under this  Agreement and each  Transaction  Document to which it is a party and
the transactions contemplated hereby, including performance of the duties of the
Servicer and the Contributor hereunder;

     (c) has duly  qualified  and is  authorized  to do business  and is in good
standing as a foreign  corporation in each  jurisdiction  where the character of
its  properties  or  the  nature  of its  activities  makes  such  qualification
necessary (except where the failure to be so qualified or in good standing could
not individually or in the aggregate have a material adverse effect on the Trust
Property  or  the  business  or  condition   (financial  or  otherwise)  of  the
Contributor or impair the enforceability of any Contract); and

     (d) has duly executed and  delivered  this  Agreement and each  Transaction
Document to which it is a party and all other documents  delivered in connection
herewith,  and this  Agreement  and each  Transaction  Document to which it is a
party  are each the  legal,  valid and  binding  obligation  of the  Contributor
enforceable  in accordance  with the terms hereof except as  enforcement of such
terms may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting  the  rights  of  creditors  generally  and  by  equitable  principles
(regardless  of whether such  enforceability  is in a proceeding in equity or at
law).

     2.02 Business and Property.  The  Prospectus  Supplement  (the  "Prospectus
Supplement") dated November 5, 2001, to the Prospectus,  dated January 12, 2000,
correctly  describes in all  material  respects  the Initial  Contracts  and the
general nature of the business of the Contributor.

     2.03 Equipment and Contracts.

     (a) As to each Contract:

          (i) (A)  immediately  prior to the transfers and conveyances set forth
     herein,  the  Contributor  will be the sole  owner  of,  and have  good and
     marketable  title to, the subject  Contracts.  With  respect to any Finance
     Lease,  Leveraged Lease Loan,  Secured  Equipment Note or Lease  Receivable
     Purchase,  the  Contributor  will  have a  valid  first  priority  security
     interest in the equipment  lease and the Equipment that has been pledged as
     collateral  security for such Leveraged Lease Loan, Fair Market Value Lease
     or Lease  Receivable  Purchase and (with  respect to each Fair Market Value
     Lease) a valid first priority  ownership  interest in such Contract and the
     related equipment  subject thereto;  (B) immediately prior to the transfers
     and conveyances set forth herein, the Contributor will


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     have acquired  either good title to each item of Equipment or, with respect
     to the Equipment  that is the subject of a Secured  Equipment  Note,  Lease
     Receivables  Purchase,  Finance  Lease or a Leveraged  Lease Loan,  a valid
     first priority perfected security interest therein from the related Obligor
     (except for  Equipment for which the Original  Equipment  Cost is less than
     $25,000).  Immediately  prior to such  date,  with  respect to each item of
     Equipment  related to Fair Market Value Leases,  the Contributor  will have
     paid in full to the  manufacturer  or supplier or Obligor,  as the case may
     be, the  purchase  price and any  related  charges in  connection  with the
     acquisition of such  Equipment;  (C) upon the transfer to the Transferor by
     the  Contributor  of the  Contributor's  interest in the  Contracts and its
     interest  in the  Equipment  pursuant to Section 1 hereof,  the  Transferor
     will,  after giving  effect to the  provisions of Section  1.01(d),  have a
     valid first priority  perfected  ownership interest in, and have good title
     to the  Contributed  Property  including  the  Contracts and either a valid
     first priority,  security,  interest in the  Contributor's  interest in the
     Equipment  (except for Equipment for which the Original  Equipment  Cost is
     less than  $25,000),  or, with  respect to Fair  Market  Value  Leases,  an
     ownership  interest in the related  Equipment  subject to any Contract;  at
     such time,  the  Contracts and the  Transferor's  interest in the Equipment
     will be free and clear of all Liens  other than the rights of each  Obligor
     under  the  Contract  to which  such  Obligor  is a party  and  Liens to be
     discharged  on the Closing Date;  and there will be no delinquent  taxes or
     other  outstanding  charges  affecting  the  Equipment  which are or may be
     Liens;

          (ii) each of the Contracts is a legal, valid and binding full recourse
     obligation of the related Obligor,  enforceable by the Contributor (and its
     designee) against such Obligor in accordance with the terms thereof, except
     as  such   enforcement   may  be   limited   by   bankruptcy,   insolvency,
     reorganization  or other laws relating to or affecting the  enforcement  of
     creditors' rights and by general equitable principles, and is in full force
     and effect, and any and all requirements of any federal, state or local law
     including,  without limitation,  usury,  truth-in-lending  and equal credit
     opportunity   laws  applicable  to  the  origination,   enforceability   or
     assignment of each Contract have been complied  with;  and the  Contributor
     has no knowledge of any challenge, dispute or claim by the Obligor under or
     affecting any Contract or of the  bankruptcy or the  insolvency of any such
     Obligor;

          (iii) the  obligation of each Obligor to pay Contract  Payments  under
     each of its related Contract(s)  throughout the term thereof is and will be
     unconditional,  without  any right of set-off by such  Obligor  and without
     regard  to any event  affecting  the  Equipment,  the  obsolescence  of any
     Equipment,  any claim of such Obligor against the Contributor or any change
     in circumstance of such Obligor or any other circumstance whatsoever;

          (iv) the  Contributor  has no knowledge that any item of the Equipment
     has suffered  any loss or damage  except for such  Equipment  that has been
     restored to its original condition, ordinary wear and tear excepted;

          (v) each Contract  requires the Obligor  thereunder to either maintain
     insurance covering damage to, destruction or theft of the Equipment subject
     thereto in an amount at least equal to the  remaining  Discounted  Contract
     Balance of such Contract;


                                       7
<PAGE>

          (vi) as of the Cut-Off Date,  (A) no Contract had a remaining  term of
     more  than 85  months,  (B) no  Contract  Payment  under  any  Contract  is
     delinquent  for more than sixty  (60) days and (C) no event of default  has
     occurred and is continuing under any Contract;

          (vii) there will be no facts or circumstances  existing as of the time
     of the transfer  pursuant to this Agreement  which give rise, or would give
     rise  at any  time in the  future,  to any  right  of  rescission,  offset,
     counterclaim or defense, including the defense of usury, to the obligations
     of any Obligor, including the obligation of such Obligor to pay all amounts
     due with respect to any  Contract  and neither the  operation of any of the
     terms of any Contract or the exercise of any right  thereunder  will render
     such Contract  unenforceable in whole or in part or subject to any right of
     rescission,  offset,  counterclaim  or  defense,  including  the defense of
     usury, and no such right of rescission, offset, counterclaim or defense has
     been asserted with respect thereto;

          (viii) no  Contract  has been  amended,  altered  or  modified  in any
     respect and no provision of any Contract has been waived, except in writing
     and copies of all such  writings are attached to the Contract  delivered to
     the Transferor;

          (ix) no Obligor has been  released,  in whole or in part,  from any of
     its  obligations in respect of a Contract;  no Contract has been satisfied,
     cancelled  or  subordinated,  in  whole or in part,  or  rescinded,  and no
     Equipment has been released from the related Contract, in whole or in part,
     nor  has  any   instrument   been  executed  that  would  effect  any  such
     satisfaction, release, cancellation, subordination or rescission;

          (x) each  Contract is in  substantially  one of the forms  included as
     Exhibit G to this Agreement, and no Contract shall have been the subject of
     any restructuring of the terms and provisions thereof;

          (xi) no Contract permits early termination or voluntary  prepayment by
     the Obligor;

          (xii) no right of the Contributor with respect to an Obligor's failure
     to pay all rent due under any Contract has been waived by the Contributor;

          (xiii) each Contract is "chattel paper" or an  "instrument"  under the
     UCC  as in  effect  in  the  applicable  jurisdiction;  the  sole  executed
     counterpart  of  each  Contract  that  constitutes   chattel  paper  or  an
     instrument  is in the  possession  of the Trustee and all of the  documents
     required to be delivered to the Trustee in connection therewith pursuant to
     Section 1 have been so delivered;

          (xiv) no Obligor is an Affiliate of the Contributor or the Servicer;

          (xv) the  Contributor  has no knowledge  that the  obligations  of any
     Obligor under any Contract will not be paid in full;

          (xvi) no Contract  will have been  originated  in or be subject to the
     laws of any jurisdiction  whose laws would make the assignment and transfer
     thereof pursuant to the terms hereof or of the other Transaction  Documents
     unlawful;


                                       8
<PAGE>

          (xvii) in the case of each Contract  which  consists of a master lease
     and one or more exhibits or schedules thereto,  (A) the Contributor has not
     assigned and will not assign such master lease in its entirety, and has not
     delivered and will not deliver physical possession of such master lease, to
     any Person  other  than the  Trustee  and (B) such  exhibits  or  schedules
     constitute a separate  contract and are not part of any other  contract not
     sold to the Transferor;

          (xviii) all  parties to each  Contract  had  requisite  authority  and
     capacity to execute such Contract;

          (xix) prior to the time of assignment, transfer, sale and contribution
     to  the  Transferor,  each  Contract  will  have  been  originated  by  the
     Contributor  in the ordinary,  course of its  business,  except for certain
     Contracts  which have been  acquired  by the  Contributor  in the  ordinary
     course of its business,  and each Contract shall have been  underwritten by
     the  Contributor  in  accordance  with the standards set forth on Exhibit H
     hereto;

          (xx) the  Contributor  is not aware of any fact that would  prevent or
     prohibit  Obligors  from being  reimbursed  by Medicare or Medicaid for any
     services provided;

          (xxi)  the  Contract  Schedule  accurately  reflects  the  information
     relating to each Contract;

          (xxii) there are no proceedings or  investigations  pending or, to the
     knowledge  of the  Contributor,  threatened,  before any court,  regulatory
     body,   administrative   agency   or   other   tribunal   or   governmental
     instrumentality  (A) asserting the invalidity of any of the Contracts,  (B)
     seeking to prevent the payment and discharge of any of the Contracts or (C)
     seeking any  determination  or ruling that would  materially  and adversely
     affect  the  performance  by an Obligor of its  obligations  under,  or the
     validity or enforceability of the Contracts;

          (xxiii) each  Contract  effects  either the lease of or the grant of a
     perfected  first  priority  security  interest  in,  a  specified  item  of
     Equipment  (other than  Equipment for which the Original  Equipment Cost is
     less than $25,000) in favor of the Contributor as lessor,  secured party or
     seller  as the case may be,  and  contains  provisions  sufficient  for the
     realization  of such  leasehold  interest,  security  interest or ownership
     interest as the case may be, as against such  Equipment,  and is assignable
     by the Contributor without the consent of any other Person;

          (xxiv) each Contract  provides that the  Contributor has no obligation
     to assemble,  install,  test,  adjust or service the Equipment subject to a
     Contract.  Each Contract provides that the Obligor, at its sole expense, at
     all times during the term of the Contract and until return of the Equipment
     will maintain the Equipment in good  operating  order,  repair,  condition,
     appearance  and protect the Equipment from  deterioration,  and provide all
     accessories,  upgrades,  repairs,  replacement  parts and service  required
     therefor except that the equipment lease pledged as collateral security for
     a Leveraged  Lease Loan may in


                                       9
<PAGE>

     certain  instances  provide  that the  related  lessor is  responsible  for
     maintaining such Equipment;

          (xxv)  the  Contributor  has no  knowledge  that any  Obligor  under a
     Contract is a Person involved in the business of selling medical  equipment
     of the same type as the Equipment subject to such Contract;

          (xxvi)  with  respect  to each item of  Equipment  either  (A) no such
     Equipment  has  been  relocated  from  the  jurisdiction  set  forth in the
     Contract or, (B) if such Equipment has been relocated from the jurisdiction
     set forth in the Contract  and the  Contributor  has  knowledge of any such
     relocation,  all UCC  filings  necessary  to  continue  the first  priority
     security  interest in such  Equipment  have been made (other than Equipment
     for which the Original Equipment Cost is less than $25,000);

          (xxvii) no  Contract  is a consumer  lease as defined in Article 2A of
     the UCC;

          (xxviii) each Obligor has accepted the related  Equipment  and,  after
     reasonable   opportunity   to  inspect  and  test,  has  not  notified  the
     Contributor of any defects therein;

          (xxix) no Obligor is a government or municipality; and

          (xxx) no Contract requires the prior written consent of the Obligor or
     contains any other  restriction  relating to the transfer or  assignment of
     such Contract by the  Contributor  or the seller except such consent as has
     been obtained on or prior to the date of such transfer.

     (b) The  Contributor  represents  and warrants,  as to the Contracts in the
aggregate:

          (i) the Aggregate  Discounted  Contract Balance of the Contracts as of
     the Closing Date is equal to $429,583,246.18; and

          (ii)  the  Contracts  have  the  following  characteristics:  (A) each
     Initial  Contract has a Discounted  Contract Balance as of the Cut-Off Date
     of not more than  $4,625,790.18;  (B) no Discounted Contract Balance of any
     Contract  will include an amount  attributable  to any (i) Purchase  Option
     Payment for such  Contract,  (ii)  Contract  Payment due on or prior to the
     Cut-Off Date, (iii) security deposit or (iv) advance payment; (C) as of the
     Cut-Off  Date,  no item of Equipment  has been  repossessed;  (D) as of the
     Cut-Off  Date no Contract is a  refinancing  due to  delinquencies  under a
     prior lease,  security  agreement or loan with the same Obligor relating to
     the Equipment; (E) the Obligor with respect to each Contract has a place of
     business in, or is organized  under,  the laws of any state or territory of
     the United  States of America;  (F) with respect to the Initial  Contracts,
     each Contract will have a Scheduled  Termination Date no later than October
     31, 2008; (G) as of the Cut-Off Date, (i) the Discounted  Contract  Balance
     of Contracts that have Balloon  Payments  constitute not more than 7.18% of
     the Aggregate  Discounted  Contract Balance,  (ii) the Discounted  Contract
     Balance  of  Contracts  that  have  non-level  payments  to  the  Scheduled
     Termination   Date  (excluding   Contracts  that  have  Balloon   Payments)
     constitutes not more than 37.13% of, with respect to the Initial


                                       10
<PAGE>

     Contracts,  the  Aggregate  Discounted  Contract  Balance  of  the  Initial
     Contracts as of the Closing Date;  (H) as of the Closing Date,  (i) the sum
     of the Discounted Contract Balances of all Contracts with Equipment located
     in any one State will not exceed  15.94% of,  with  respect to the  Initial
     Contracts,  the  Aggregate  Discounted  Contract  Balance  of  the  Initial
     Contracts,  (ii) no single Obligor will have a Discounted  Contract Balance
     that exceeds  1.70% of the  Aggregate  Discounted  Contract  Balance on the
     Closing Date, (iii) the sum of the Discounted Contract Balances of any five
     Contracts  shall not  exceed  7.50% of the  Aggregate  Discounted  Contract
     Balance on the  Closing  Date and (iv) the sum of the  Discounted  Contract
     Balances  of all  Contracts  for which the  related  Equipment  is magnetic
     resonance imaging  equipment will not exceed  $142,000,000 of the Aggregate
     Discounted Contract Balance as of the Closing Date; (I) not more than 10.0%
     of the  Aggregate  Discounted  Contract  Balance will arise from  Contracts
     which constitute loans to manufacturers,  wholesalers,  and retailers;  (J)
     the Obligor  under each  Contract  has made at least one  Contract  Payment
     under such  Contract  prior to the first Payment Date  occurring  after the
     time such  Contract was executed by the parties  thereto in addition to any
     payment  made  at the  time of the  signing  of such  Contract  except  for
     Contracts representing 7.0% of the Aggregate Discounted Contract Balance as
     of the  Closing  Date  which  Contracts  provide  for the  related  initial
     Contract Payment to be due within 120 days of the Payment Date occurring on
     December 11, 2001;  (K) the sum of the Discounted  Contract  Balance of all
     Contracts  that are Lease  Receivable  Purchases  shall not exceed,  at any
     time, more than 3.0% of the Aggregate Discounted Contract Balance as of the
     Closing Date and, (L) no Balloon  Payment is more than six and a half times
     larger than the average Contract payment related to such Contract.

     2.04 Contract Schedule. The Contract Schedule (i) accurately sets forth the
identifying  number  of each  Contract,  the  Obligor's  name and  address,  the
original  Scheduled  Maturity Date of each Contract,  the remaining  maturity of
each  Contract,  the  Discounted  Contract  Balance of each  Contract  as of the
Cut-Off Date,  the amount and  scheduled  due date of each Contract  Payment due
under each of the  Contracts,  and the original  amount funded on each Contract,
(ii)  accurately  sets forth the  information  with  respect  to  certain  other
characteristics of the Contracts and the Equipment described on such list, (iii)
identifies  those  Contracts  which  constitute Pool A and those Contracts which
constitute  Pool B and  (iv) is  otherwise  true  and  correct  in all  material
respects.

     2.05  Pending  Litigation.   There  are  no  actions,  suits,  proceedings,
investigations or injunctive or other orders pending, or to the knowledge of the
Contributor  or Servicer  threatened,  against or affecting the  Contributor  or
Servicer or any  subsidiary  in or before any court,  governmental  authority or
agency or arbitration board or tribunal, including, but not limited to, any such
actions,  suits,  proceeding,   investigation  or  order  with  respect  to  any
environmental  or other liability  resulting from the ownership or use of any of
the Equipment which,  individually or in the aggregate,  involve the possibility
of materially and adversely  affecting the  properties,  business,  or condition
(financial or otherwise) of the Contributor or Servicer and its subsidiaries, or
the ability of the Contributor or Servicer to perform its obligations under this
Agreement or the payment or enforceability of any Contract.


                                       11
<PAGE>

     2.06 No Material  Event. No event has occurred which  materially  adversely
affects the Contributor's operations, including, but not limited to, its ability
to perform the transaction contemplated hereunder.

     2.07  Transactions  Legal  and  Authorized.  This  Agreement  and all other
documents  delivered in  connection  herewith and the  assignment,  transfer and
contribution  of all right,  title and  interest in and to each  Contract  and a
security  interest in each item of Equipment at any time  transferred  hereunder
and under the Sale Agreement and compliance by the  Contributor and the Servicer
with all of the provisions of this Agreement and the Sale Agreement:

          (a) have been duly authorized by all necessary corporate action and do
     not and will not require any stockholder  approval,  or approval or consent
     of any trustee or holders of any indebtedness or obligations ;

          (b) are within the corporate powers of the respective parties thereto;
     and

          (c) are legal and will not conflict with,  result in any breach in any
     of the provisions of, constitute a default under, or result in the creation
     of any lien upon any property of the respective parties thereto,  under the
     provisions  of,  any  agreement,   charter  instrument,   by-law  or  other
     instrument  to which such  parties,  is or will be a party or by which such
     parties it or its property  may be bound or result in the  violation of any
     law,  regulation,  rule,  order or judgment  applicable  to the  respective
     parties thereto, or its properties,  or any order to which such parties, or
     its properties is subject,  of or by any government or governmental  agency
     or authority.

     2.08  Governmental  Consent.  Except  for the  filing of the UCC  financing
statements  and the  making  of  applications  as set forth in  Section  1.01(c)
hereof,  no consent,  approval or authorization  of, or filing,  registration or
qualification  with,  any  governmental  authority  is or will be  necessary  or
required on the part of DVI  Receivables  Corp. XV, DVI Receivables XV, LLC, DVI
Funding Corporation,  DVI Funding, LLC or the Contributor in connection with the
execution  and  delivery  of  this  Agreement  or  the  Sale  Agreements  or the
assignment,  transfer  and  contribution  of the  Contracts  and  the  Equipment
hereunder or under the Sale Agreements.

     2.09 Compliance with Law. Each of DVI Receivables Corp. XV, DVI Receivables
XV, LLC, DVI Funding  Corporation,  DVI Funding,  LLC., the  Contributor and the
Servicer:

          (a) is not in violation of any laws, ordinances, governmental rules or
     regulations or court orders to which it is subject; and

          (b) has not  failed to obtain any  licenses,  permits,  franchises  or
     other  governmental  authorizations  necessary  to  the  ownership  of  its
     property or to the conduct of its business.


                                       12
<PAGE>

     2.10 Ordinary Course; No Insolvency.  The transactions contemplated by this
Agreement and the Sale Agreements are being consummated by DVI Receivables Corp.
XV, DVI  Receivables  XV, LLC, DVI Funding  Corporation,  DVI Funding,  LLC, the
Contributor and the Servicer, respectively, in furtherance of the their ordinary
business  purposes and constitute a practical and reasonable course of action by
designed to improve their financial position 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  or  the  Sale  Agreements,  nor  immediately  before  or  after  such
transactions,  will DVI  Receivables  Corp.  XV, DVI  Receivables  XV, LLC,  DVI
Funding  Corporation,  DVI Funding,  LLC.,  the  Contributor  or the Servicer be
insolvent,  and each of DVI  Receivables  Corp. XV, DVI Receivables XV, LLC, DVI
Funding Corporation,  DVI Funding,  LLC., the Contributor and the Servicer shall
have  adequate  capital  for the  conduct  of its  business  and the  payment of
anticipated obligations.

     2.11 Assets and Liabilities.

     (a)  Both  immediately  before  and  after  the  assignment,  transfer  and
contribution of Contracts (including the right to receive all payments due or to
become due  thereunder)  and the other  Contributed  Property,  the present fair
salable  value  of the  respective  assets  of DVI  Receivables  Corp.  XV,  DVI
Receivables  XV,  LLC,  DVI  Funding  Corporation,  DVI  Funding,  LLC,  and the
Contributor  will be in excess of the amount  that will be  required  to pay the
respective probable liabilities of DVI Receivables Corp. XV, DVI Receivables XV,
LLC, DVI Funding  Corporation,  DVI Funding,  LLC, and the  Contributor  as such
liabilties then exist and as they become absolute and matured.

     (b) Both  immediately  before  and after the  assignment  and  transfer  of
Contracts and the other  Contributed  Property,  the sum of the  respective  DVI
Receivables  Corp. XV, DVI  Receivables  XV, LLC, DVI Funding  Corporation,  DVI
Funding,  LLC., and the Contributor's assets will be greater than the sum of DVI
Receivables  Corp. XV, DVI  Receivables  XV, LLC, DVI Funding  Corporation,  DVI
Funding,   LLC.,  and  the  Contributor's  debts,   respectively,   valuing  the
Contributor's assets at a fair salable value.

     2.12 Fair Consideration;  Valid Sale. The consideration  received and to be
received by DVI  Receivables  Corp.  XV, DVI  Receivables  XV, LLC,  DVI Funding
Corporation,  DVI  Funding,  LLC,  and  the  Contributor  in  exchange  for  the
assignment,  transfer and  contribution  of the  Contracts  and the  Contributed
Property is fair  consideration  having value  equivalent to or in excess of the
value of the assets being transferred by the Contributor. This Agreement and the
Sale  Agreements  effect a valid  assignment,  transfer and  contribution of the
Contracts and the other Contributed  Property,  enforceable against creditors of
and  purchasers  from DVI  Receivables  Corp. XV, DVI  Receivables  XV, LLC, DVI
Funding Corporation, DVI Funding, LLC, and the Contributor.

     2.13  Ability  to Pay  Debts.  Neither  as a  result  of  the  transactions
contemplated  by this  Agreement or the Sale  Agreements  nor otherwise does the
Contributor  believe that DVI Receivables Corp. XV, DVI Receivables XV, LLC, DVI
Funding Corporation, DVI Funding, LLC, or it will incur debts beyond its ability
to pay or which would be prohibited  by their  respective  charter  documents or
by-laws.  The respective  assets and cash flow of DVI Receivables  Corp. XV, DVI
Receivables  XV,  LLC,  DVI  Funding  Corporation,   DVI  Funding,


                                       13
<PAGE>

LLC or the Contributor enable it to meet its respective  present  obligations in
the ordinary course of business as they become due.

     2.14 Bulk  Transfer  Provisions.  No transfer,  assignment or conveyance of
Contracts or the other Contributed Property by the Contributor to the Transferor
contemplated  by this  Agreement  will be  subject to the bulk  transfer  or any
similar statutory provisions in effect in any applicable jurisdiction.

     2.15 Tax Returns.

     (a) The  provisions  for  taxes on the  books of the  Contributor  and each
subsidiary are in accordance with generally accepted accounting principles.

     (b) The Contributor and the Transferor are members of an affiliated  group,
within the meaning of Section 1504 of the Code, that files a consolidated return
for  federal  income  tax  purposes,  and all of the  entities  with  which  the
Contributor  is  consolidated  for federal  income tax purposes  (including  the
Transferor)  have  timely  filed  all tax  returns  required  to be filed in any
jurisdiction and have paid all taxes,  assessments,  fees and other governmental
charges upon them or their properties, income or franchises, shown to be due and
payable on such returns,  except to the extent any such entity is contesting the
same in good  faith  by  appropriate  proceedings  and  has set  aside  adequate
reserves in accordance  with generally  accepted  accounting  principles for the
payment thereof.  The Contributor  does not know of any proposed  additional tax
assessment  against  any such  entity  in any  material  amount  or of any basis
therefor.

     2.16 Transfer Taxes. No transfer,  assignment or conveyance of Contracts or
the  other  Contributed  Property  contemplated  by this  Agreement  or the Sale
Agreements is subject to or will result in any tax, fee or  governmental  charge
payable by DVI  Receivables  Corp.  XV, DVI  Receivables  XV,  LLC,  DVI Funding
Corporation,  DVI Funding,  LLC, or the  Contributor  or the  Transferor  to any
federal,  state or local government  ("Transfer  Taxes").  In the event that DVI
Receivables  Corp. XV, DVI  Receivables  XV, LLC, DVI Funding  Corporation,  DVI
Funding, LLC, or the Contributor or the Transferor receives actual notice of any
Transfer  Taxes arising out of the transfer,  assignment  and  conveyance of any
Contracts  and/or  the other  Contributed  Property,  on  written  demand by DVI
Receivables  Corp. XV, DVI  Receivables  XV, LLC, DVI Funding  Corporation,  DVI
Funding,  LLC, or the Transferor,  or upon the Contributor otherwise being given
notice  thereof,  the  Contributor  shall pay, and  otherwise  indemnify and DVI
Receivables  Corp. XV, DVI  Receivables  XV, LLC, DVI Funding  Corporation,  DVI
Funding, LLC, or hold the Transferor, 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).

     2.17 Principal  Executive Office. The principal place of business and chief
executive  office of each of the Contributor and the Servicer is located at 2500
York Road, Jamison,  Pennsylvania 18929, and has been located in the same county
and state for at least four months prior to the date of  execution  and delivery
of this Agreement.


                                       14
<PAGE>

     2.18 Legal Name. The legal name of the  Contributor is as set forth in this
Agreement and the Contributor has not changed its name in the last six years and
does not  have any  trade  names,  fictitious  names,  assumed  names or  "doing
business as" names except Medical  Equipment Finance Company,  DVI Capital,  DVI
Vendor,  DVI Strategic  Partner Group,  DVI Health Services  Corp.,  DVI Finance
Inc., DVI Affiliated  Capital,  Third Coast Capital and Medical  Devices Capital
Company.

     2.19 Servicing Provisions Customary.  The servicing arrangements hereunder,
including,  without  limitation,  the terms and conditions pursuant to which the
Contributor  will act as Servicer and the Servicer's Fee and other amounts to be
paid to the  Contributor,  are consistent  with the  arrangements  and customary
practices of the Contributor when providing comparable services to nonaffiliated
entities and of other services in the equipment leasing industry.

     2.20  Defaults.  As of the Closing Date,  neither the  Contributor  nor the
Servicer is in default with respect to any debt or obligation.

     2.21 ERISA. The Contributor neither maintains,  contributes to, nor has any
obligations to contribute to any "employee  pension benefit plans," as such term
is defined in Section 3(2) of ERISA  (other than the 401(k) Plan of DVI,  Inc.).
The  execution  and  delivery  of  this  Agreement  and  the  other   applicable
Transaction  Documents and the  consummation  of the  transactions  contemplated
thereby  will  neither  result  in,  constitute  or  otherwise  give  rise  to a
"prohibited transaction" as described in Section 406 of ERISA or Section 4975 of
the Code,  with respect to a Contributor  Plan.  For the purpose of this Section
2.21,  the term  "Contributor  Plan" shall mean an "employee  benefit  plan" (as
defined in Section 3 of ERISA) which is or has been  established  or maintained,
or to which  contributions  are,  have been or are  required to be made,  by the
Contributor  or by any trade or business,  whether or not  incorporated,  which,
together with the Contributor,  is under common control, as described in Section
414(b) or (c) of the Code or Section 4001 of ERISA.

     2.22 All Filings Made. At the Closing Date, no further filings  (including,
without  limitation,  UCC  filings)  or  other  actions  are  necessary  in  any
jurisdiction to give the Transferor  either a security or an ownership  interest
in the Contracts,  the other Contributed  Property and the assets transferred to
it under the Sale  Agreement,  except that with  respect to the  Equipment,  the
Contributor  shall,  within 30 days of the Closing Date,  file the UCC financing
statements  and made the  necessary  applications  with respect to the Equipment
that are described in Section 1.01(c) hereof.

     2.23 Nonconsolidation. The Contributor is operated in such a manner that it
would not be substantively  consolidated with the Transferor or the Issuer, such
that the separate existence of the Contributor and DVI Receivables Corp. XV, DVI
Receivables XV, LLC, DVI Funding Corporation,  DVI Funding,  LLC, the Transferor
or the  Issuer  would  not  be  disregarded  in the  event  of a  bankruptcy  or
insolvency of the Contributor or DVI  Receivables  Corp. XV, DVI Receivables XV,
LLC, DVI Funding  Corporation,  DVI Funding,  LLC, the Transferor or the Issuer,
and in such regard, among other things:

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


                                       15
<PAGE>

          (b) the Contributor  maintains separate corporate records and books of
     account from DVI Receivables Corp. XV, DVI Receivables XV, LLC, DVI Funding
     Corporation,  DVI Funding, LLC, the Transferor and the Issuer and otherwise
     observes corporate  formalities and has a separate business office from DVI
     Receivables Corp. XV, DVI Receivables XV, LLC, DVI Funding Corporation, DVI
     Funding, LLC, the Transferor and the Issuer;

          (c) the financial  statements and books and records of the Contributor
     prepared after the  respective  dates of creation of the Transferor and the
     Issuer  reflect  and  will  reflect  the  separate  existence  of  the  DVI
     Receivables Corp. XV, DVI Receivables XV, LLC, DVI Funding Corporation, DVI
     Funding, LLC, Transferor and the Issuer;

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

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

          (f) none of DVI  Receivables  Corp. XV, DVI  Receivables  XV, LLC, DVI
     Funding Corporation, DVI Funding, LLC, the Transferor and the Issuer do act
     as an agent of the Contributor in any capacity and the Contributor does not
     act as agent for DVI  Receivables  Corp. XV, DVI  Receivables  XV, LLC, DVI
     Funding  Corporation,  DVI Funding,  LLC, the Transferor or the Issuer, but
     instead  presents  itself to the public as a corporation  separate from the
     Transferor  and the Issuer;  provided that the  Contributor is the Servicer
     hereunder and under certain other  agreements  between the Contribution and
     such entities; and

          (g) the Transferor is not engaged in any other  activities  other than
     the transactions contemplated by the Transaction Documents.

     2.24 All  Representations  and  Warranties  True. All  representations  and
warranties  made  by  the  Contributor  in any  certificate  or  other  document
delivered  at the closing of the  transactions  contemplated  by the  applicable
Transaction  Document,  including all  representations  and  warranties  made to
Thacher  Proffitt & Wood in support of their  opinions,  are true and correct in
all material respects.


                                       16
<PAGE>

     2.25 Prospectus Supplement.  The Prospectus Supplement does not contain any
untrue  statement of material fact or omit to state a material fact necessary to
make  the  statements   contained   therein  not  misleading  in  light  of  the
circumstances  under which they were made;  provided,  however,  the Contributor
makes no  representation  or  warranty  as to the  information  contained  in or
omitted from the Prospectus  Supplement in reliance upon and in conformity  with
information  furnished to the  Contributor in writing by Merrill Lynch,  Pierce,
Fenner & Smith  Incorporated or Banc One Capital  Markets,  Inc. or any of their
respective Affiliates (i.e. the paragraphs under the headings "The Underwriting"
or "Plan of Distribution") or by the Trustee (under the heading "The Trustee").

     2.26  Insurance.  In addition to the  insurance  maintained by the Obligors
with respect to the Equipment, the Contributor maintains,  among other policies,
a general  liability  insurance policy in the aggregate amount of $1,000,000 and
an excess liability insurance policy in umbrella form in the aggregate amount of
$3,000,000  for a total  of  $4,000,000  of  liability  insurance.  Each of such
policies  is in full force and effect  and  covers  all  Equipment  owned by the
Contributor  and the  Transferor.  All premiums in respect of such policies have
been paid. Each of the Trustee on behalf of the Noteholders,  and the Transferor
is named as additional insureds on such liability policies.

     2.27 No Bankruptcy Petition Against the Transferor,  the Managing Member or
the Issuer. The Contributor  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 Transferor, the Managing Member or the
Issuer, any bankruptcy, reorganization, receivership, arrangement, insolvency or
liquidation  proceedings or other similar proceedings under any federal or state
bankruptcy or similar law. This Section 2.27 shall  survive the  termination  of
this Agreement.

     2.28 Delivery of Obligor Contact Information.  With respect to each Initial
Contract and each Contract  contributed by the Contributor to Transferor on each
Contribution  Date, the Contributor  shall, on or before such Contribution Date,
provide the  Trustee,  in writing  and in a form  reasonably  acceptable  to the
Trustee,  contact information of the related Obligor,  including the name, phone
number, facsimile number and address of each key contact individual.

SECTION 3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE
           TRANSFEROR

     The Transferor  hereby represents to the Contributor as of the Closing Date
and warrants, covenants and agrees as follows:

     3.01 Transferor Organization and Authority; Subsidiaries. The Transferor is
a corporation  duly organized,  validly  existing and in good standing under the
laws of its  jurisdiction of formation,  and has full power and authority to own
and convey the  Contracts and execute and deliver the  Transaction  Documents to
which the Transferor is a party (collectively,  the "Transferor  Documents") and
all related  documents,  and to perform  the terms and  provisions  hereof.  The
Transferor has no subsidiaries, but is the sole beneficial owner of the Issuer.


                                       17
<PAGE>

     3.02 Due Authorization and No Violation.  Each of the Transferor  Documents
and all related  documents have been duly authorized,  executed and delivered by
the Transferor, and is the legal, valid and binding obligation of the Transferor
enforceable in accordance  with its terms,  except as the same may be limited by
insolvency,  bankruptcy,  reorganization  or other laws relating to or affecting
the enforcement of creditors'  rights or by general  equitable  principles.  The
consummation of the  transactions  contemplated by the Transferor  Documents and
all related documents and the fulfillment of the terms hereof, will not conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default  under,  or result in the creation or imposition of any lien,  charge or
encumbrance upon any of the property or assets of the Transferor pursuant to the
terms of any indenture,  mortgage,  deed of trust, loan agreement,  guarantee or
similar  agreement  or  instrument  under  which the  Transferor  is a debtor or
guarantor (other than the liens created pursuant to the Transaction  Documents),
nor  will  such  action  result  in  any  violation  of  the  provisions  of the
certificate of  incorporation  or the by-laws of the Transferor.  All applicable
laws,  rules,  regulations,  and  orders  with  respect to the  Transferor,  its
business and properties,  have been complied with. No consents and no filings or
governmental  approvals that have not been made or obtained are required for due
execution, delivery and performance of the agreements by the Transferor.

     3.03 No Litigation.  No legal or  governmental  proceedings  are pending to
which the  Transferor  is a party or of which any property of the  Transferor is
the subject,  and, to the knowledge of the Transferor,  no such  proceedings are
threatened or contemplated  by governmental  authorities or threatened by others
and no injunctions,  writs, restraining orders or other orders of any nature are
in effect or, to the knowledge of the  Transferor,  threatened,  other than such
proceedings  which  will not have a material  adverse  effect  upon the  general
affairs,  financial  position,  net  worth  or  results  of  operations  of  the
Transferor and will not materially and adversely  affect the  performance by the
Transferor of its obligations  under, or the validity and enforceability of, the
Transferor Documents and all related documents.

     3.04 Principal  Office.  The  Transferor's  principal place of business and
chief  executive  office is  located at 2500 York  Road,  Jamison,  Pennsylvania
18929.  The  legal  name  of the  Transferor  is as set  forth  herein  and  the
Transferor  has  no  tradenames,  fictitious  names,  assumed  names  or  "doing
business" names.

     3.05 Tax  Returns.  The  Transferor  has  filed on a timely  basis  all tax
returns  required  to be filed  in any  jurisdiction  and has  paid  all  taxes,
assessments,  fees and other  governmental  charges  upon it or its  properties,
income or franchises, shown to be due and payable on such returns, except to the
extent  the  Transferor  is  contesting  the same in good  faith by  appropriate
proceedings  and has set aside  adequate  reserves in accordance  with generally
accepted accounting  principles for the payment thereof. The Transferor does not
know of any proposed additional tax assessment against it in any material amount
or of any basis therefor.

     3.06  Solvency.  The  Transferor  is solvent and will not become  insolvent
after giving effect to the contemplated  transactions.  The Transferor is paying
its debts as they  become due and will have  adequate  capital  to  conduct  its
business after giving effect to the contemplated transactions.


                                       18
<PAGE>

     3.07 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 the Transferor Documents have been or will be taken or
obtained on or prior to the Closing Date.

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

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

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

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

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

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

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

          (g)  the  Transferor  will  at  all  times  maintain  two  Independent
     Directors (as such term is defined in the certificate of  incorporation  of
     the Transferor).

     SECTION 4. ADMINISTRATION OF CONTRACTS

     4.01 Servicer to Act.

     (a)  Notwithstanding the transfers and assignments of the Contracts and the
other Contributed Property contemplated hereby, the Servicer, for the benefit of
the Transferor, and, upon assignment of the Transferor's rights hereunder to the
Issuer (and the  Issuer's  assignment  thereof to the Trustee for the benefit of
the Trustee and the  Noteholders),  will service


                                       19
<PAGE>

and  administer  each Contract in accordance  with the terms thereof and of this
Agreement. The Servicer shall provide the Obligors with appropriate invoices and
such other  notices as may be  required to ensure  that all  Contract  Payments,
Prepayment  Amounts  and  Partial  Prepayment  Amounts  on or in respect of each
Contract are remitted by the Obligors directly to a Lock-Box Account.

     (b) The Servicer  shall do, and shall have full power and  authority to do,
subject only to the specific  requirements  and  prohibitions of this Agreement,
any and all things in connection  with the servicing and  administration  of the
Contracts  and the  Equipment  which are in the same manner in which it services
contracts and equipment held for its own account (including, without limitation,
servicing  and  administration  of  Contracts  with respect to which the related
Equipment  may be  substituted  or  upgraded)  and  consistent  with prudent and
customary,  practices of servicers in the industry, but in performing its duties
hereunder,  the  Servicer  will  act  on  behalf  and  for  the  benefit  of the
Transferor, the Issuer, the Trustee and the Noteholders, subject at all times to
the provisions of the Transaction Documents,  without regard to any relationship
which the Servicer or any Affiliate of the Servicer may  otherwise  have with an
Obligor. Notwithstanding the prior sentence, the Servicer shall, within ten (10)
Business Days after the Closing  Date,  notify each Obligor to make all payments
with respect to its  respective  Contracts  which are due after the Cut-Off Date
directly  to a Lock-Box  Account.  The  Servicer  shall give the Trustee and the
Rating Agencies prior written notice of any change in the location of a Lock-Box
Account and the Servicer shall give at least ten (10) days' prior written notice
of the new  location to each  Obligor.  The  Servicer  shall at all times act in
accordance  with the provisions of each  Contract,  and shall observe and comply
with all  requirements of law applicable to it. Except as permitted by the terms
of any Contract following a default thereunder,  the Servicer shall not take any
action which would result in the interference  with the Obligor's right to quiet
enjoyment of the Equipment subject to the Contract during the term thereof.

     (c) Without limiting the generality of the foregoing,  the Servicer will be
responsible,  among other  duties,  to (i) invoice each Obligor for all Contract
Payments  required  to be paid by such  Obligor  in such  manner and to the same
extent as the Servicer does with respect to similar  contracts  held for its own
account, (ii) maintain with respect to each Contract and each item of Equipment,
and with respect to each payment by each Obligor and  compliance by each Obligor
with the  provisions  of each  Contract,  complete and accurate  records in such
manner  and to the same  extent as the  Servicer  does with  respect  to similar
contracts  held for its own  account,  and (iii)  execute,  deliver and file (or
cause the same to be done), and the Servicer is hereby  authorized and empowered
to execute,  deliver,  and file on behalf of the Transferor,  the Issuer and the
Trustee,  any and all tax returns with respect to sales,  use, personal property
and other taxes (other than corporate  income and franchise tax returns) and any
and  all  reports  or  licensing  applications  required  to  be  filed  in  any
jurisdiction  with respect to any Contract or any item of Equipment  and any and
all filings required by Section 4.01(d) below.

     (d) The Servicer  will file the UCC  financing  statements  as set forth in
Sections 1.01(c) and 7.01(c) hereof within the time frames set forth therein and
thereafter will file such additional UCC financing  statements and  continuation
statements and assignments in accordance with the provisions of any Contract and
item of Equipment  or  otherwise  so that the security  interest in favor of the
Trustee in each of the Contracts and the related  Equipment will be perfected by
such filings with the appropriate UCC filing offices.  The Transferor  agrees to


                                       20
<PAGE>

execute such UCC financing  statements and  continuation  statements as shall be
necessary  and shall  furnish the Servicer  with any powers of attorney or other
documents   necessary   and   appropriate   to  carry  out  its   servicing  and
administration duties hereunder.

     (e) The Servicer will maintain, or cause to be maintained,  with respect to
the  Contracts  and the  Equipment,  liability  insurance in amounts at least as
great as those described in Section 2.26.

     (f)  The  Servicer  will  notify  the  Trustee,  in  writing  and in a form
reasonably  acceptable to the Trustee,  of any change in the contact information
of any Obligor,  including the name, phone number,  facsimile number and address
of each key  contact  individual,  within 30 days  following  the  discovery  or
receipt of notice of such change.

     4.02  Contract  Amendments  and  Modifications;  Repurchase of Contracts by
Servicer. (a) In performing its obligations hereunder,  the Servicer may, acting
in the name of the  Transferor  and without the necessity of obtaining the prior
consent of the  Transferor or the Trustee,  enter into and grant  modifications,
waivers and  amendments to the terms of any Contract  except for  modifications,
waivers or amendments that (i) are inconsistent with the servicing standards set
forth in Section 4.01 above,  (ii) would  extend the date of the final  Contract
Payment on any Contract by more than 24 months,  (iii) would reduce or adversely
affect,  individually or in the aggregate, the Obligor's obligation to maintain,
service, insure and care for the Equipment or would permit the alteration of any
item of Equipment in any way which could adversely  affect its present or future
value,(iv)  extend the Stated  Maturity  Date of the Notes,  (v) have a material
adverse  effect on the  weighted  average  life of any  Class of Notes,  (vi) be
implemented  on more than  twenty  percent of the Initial  Aggregate  Discounted
Contract  Balance of the  Contracts,  (vii) be effected on any Contract  that is
either 90 days or more  delinquent or Defaulted  Contract,  (viii) provided that
the Issuer fails to deposit an amount into the Collection  Account equal to such
decrease,  decrease  the  Discounted  Contract  Balance of any  Contract or (ix)
otherwise  could  adversely  affect,  individually  or  in  the  aggregate,  the
interests of any of the Transferor,  the Issuer, the Trustee or the Noteholders.
Notwithstanding  the  provisions of clause (ii) of the preceding  sentence,  the
Servicer  may (1)  permit  any of the  actions  set forth in clause  (ii) of the
preceding sentence, which in the Servicer's sole discretion,  in accordance with
the same manner in which it services  contracts and  equipment  held for its own
account,  would  maximize  Recoveries on any Defaulted  Contract,  or (2) permit
termination  of a Contract which does not otherwise  provide for  termination by
requiring, in the case of either clause (1) or (2), that the Obligor pay, or, if
the terms of such  extension or  termination  do not provide for such payment by
the Obligor that the Servicer  deposit,  in lieu of all future Contract Payments
with respect to such Contract,  an amount which equals or exceeds the applicable
Prepayment Amount for such Contract as of 11:00 A.M. New York time on the second
Business  Day prior to the  Payment  Date  next  succeeding  the  making of such
payment is deposited into the Collection Account;  provided,  however,  that the
Servicer  will not be permitted to allow  prepayment  by an Obligor if there are
any amounts due under the related Contract after such prepayment.

     In the event of any  modification,  waiver or  amendment of any Contract in
accordance  with this Section  4.02,  the  Servicer  will  promptly  furnish the
Transferor,  the Issuer and the Trustee  with a copy  thereof,  together  with a
certificate of the Servicer signed by one of


                                       21
<PAGE>

its executive or financial  officers stating that such  modification,  waiver or
amendment is not prohibited by the provisions of this Section 4.02.

     (b) If an Obligor  requests  either an upgrade or a trade-in  of an item of
Equipment,  the  Servicer  may either (x) remove such  Contract  and the related
Equipment from the Trust Property  provided that the Servicer either (i) subject
to the limitations set forth in Section 7.01(c), transfers a Substitute Contract
and the related Equipment to the Transferor in accordance with Section 7 of this
Agreement  or (ii)  deposits an amount equal to the  Prepayment  Amount for such
Contract into the  Collection  Account or (y) permit such Contract and remaining
related  Equipment to remain in the Trust  Property,  provided that the Servicer
deposits an amount equal to the Partial Prepayment Amount for such Contract into
the Collection Account.

     4.03 Contract Defaults; Residual Realizations.

     (a) Upon receipt of notice from the Transferor,  the Issuer, the Trustee or
any other Person, or if the Servicer otherwise learns that the Obligor under any
Contract  is in default  thereunder,  the  Servicer  will take such action as is
appropriate, consistent with the Servicer's administration of contracts held for
its own account and consistent with the customary  practices of servicers in the
industry,  including  such action as may be  necessary  to cause,  or attempt to
cause, the Obligor thereunder to cure such default (if the same may be cured) or
to terminate or attempt to terminate such Contract and to recover, or attempt to
recover, all damages resulting from such default.

     (b) The  Servicer  will use its best  efforts (i) to sell or  re-lease  any
Equipment and realize on any other collateral related to a Defaulted Contract in
a timely manner and upon reasonable  terms and conditions so as to maximize,  to
the extent possible under then prevailing market conditions, as expeditiously as
is  consistent  with  sound  commercial   practice  and  the  Servicer  standard
referenced  in Section  4.01,  the net proceeds  from such  Equipment  and other
collateral,  if any and (ii) to sell or re-lease any Equipment remaining subject
to the lien of the Indenture  upon the  expiration of the Contract to which such
Equipment is subject,  in a timely manner and in a manner  consistent  with that
utilized  by  the  Servicer  with  respect  to  equipment  owned  by it so as to
maximize,  to the extent possible under then prevailing market  conditions,  the
net proceeds from such Equipment.

     (c) In the  event  that  the  Servicer  is  required  to sell  any  item of
Equipment  pursuant to the  provisions  of this  Section 4.03 at a time when the
Servicer  is trying  to lease or sell  other  similar  items of  equipment,  the
Servicer will not favor any such other item in its remarketing efforts.

     4.04 Costs of Servicing; Servicer's Fee.

     (a) All costs of  servicing  each  Contract in the manner  required by this
Section 4 shall be borne by the Servicer,  but the Servicer shall be entitled to
retain, out of any amounts actually recovered by the Servicer in the performance
of its obligations under Section 4.03 hereof with respect to any Contract or the
Equipment  subject  thereto,  the  Servicer's  actual   out-of-pocket   expenses
reasonably  incurred  in the  course of such  performance  with  respect to such
Contract  or  Equipment  (for all  purposes  of this  Section 4, the  Servicer's
"out-of-pocket


                                       22
<PAGE>

expenses"  means only those expenses  incurred to  non-Affiliated  third parties
(e.g.,  outside  counsel in a collection  suit) and shall not include  salaries,
operating  costs,  overtime wages and other such "overhead" costs or expenses of
the Servicer or its Affiliates, and shall not include expenses of or payments to
an agent or subservicer  allowed under Section 11.02,  except that out-of-pocket
expenses  for the  fees and  expenses  of an agent  used to  remarket  Equipment
subject  to  Contracts  shall  be  included  as  "out-of-pocket  expenses").  In
addition,  the Servicer shall be entitled to receive from the Transferor on each
Payment Date any unreimbursed  Nonrecoverable Advances or Servicer Advances with
respect to any Contract (in accordance  with Section 5) and a servicing fee (the
"Servicing Fee") in the amount described in paragraph (b) below.

     (b) As compensation to the Servicer for its servicing of the Contracts, the
Servicer  will be  entitled  to receive  on each  Payment  Date from  amounts on
deposit in the  Collection  Account the  Servicing Fee in an amount equal to the
product of (i) one-twelfth,  (ii) the Servicing Fee Rate and (iii) the Aggregate
Discounted  Contract  Balance  as of the  beginning  of the  related  Collection
Period.  In  addition,  the Servicer  will be entitled to receive as  additional
compensation late payment fees, the penalty portion of interest paid on past due
amounts,  origination fees,  documentation  fees, other  administrative  fees or
similar  charges  allowed by applicable law with respect to the  Contracts,  and
certain  other  similar  fees paid by the  Obligors  ("Servicing  Charges")  and
earnings from any Eligible  Investments  of amounts on deposit in the Collection
Account.

     (c) The Servicer hereby agrees:

          (i) to pay to the Trustee from time to time such  compensation for all
     services rendered by it under the Indenture as the Servicer and the Trustee
     have agreed in writing prior to the Closing  Date,  such payment to be made
     independent of the other payment obligations of the Servicer hereunder;

          (ii) except as otherwise  expressly  provided herein, to reimburse the
     Trustee upon its request for all reasonable  expenses,  disbursements,  and
     advances  incurred or made by the Trustee in accordance  with any provision
     of the Indenture  (including the reasonable  compensation  and the expenses
     and  disbursements  of its agents and  counsel),  except any such  expense,
     disbursement,  or advance as may be  attributable  to its negligence or bad
     faith;

          (iii) to pay the Trustee its annual  administrative fee on the Closing
     Date;

          (iv) to pay the  reasonable  fees and expenses of  Trustee's  counsel,
     Dorsey and Whitney, on the Closing Date; and

          (v) to pay the reasonable annual  administrative  fee of each Lock-Box
     Bank.

     To the extent the Trustee has not been paid pursuant to the Indenture, then
all of the expenses set forth in this clause (c) shall be borne by the Servicer,
and the Servicer shall not be entitled to reimbursement of such amounts from the
Trust Property.


                                       23
<PAGE>

     4.05 Other  Transactions.  Nothing in this  Agreement  shall  preclude  the
Contributor  or the  Servicer  from  entering  into  other  contracts  or  other
financial  transactions  with any  Obligor or selling  or  discounting  any such
contract with any Person.

     4.06 Collection of Moneys.

     (a)  Subject to Section  4.06(b),  the  Servicer  shall remit or cause each
Lock-Box  Bank to remit all  payments  received  by it on or in  respect  of any
Contract or Equipment  (including any Residual  Payment)  during such Collection
Period into the Collection  Account (including any such amounts then held by the
Servicer) as soon as  practicable,  but in any event  within two  Business  Days
after receipt thereof;  provided,  however, that upon satisfaction of conditions
provided  by the  Rating  Agencies  from  time to time,  the  Servicer  shall be
permitted to deposit such amounts received during a particular Collection Period
into the  Collection  Account  within two  Business  Days  prior to the  related
Payment Date.

     (b) Any such  amounts  remitted to the  Collection  Account may not include
Excluded Amounts.

     (c)  Notwithstanding  the provisions of paragraph (a) hereof,  the Servicer
may retain, or will be entitled to be reimbursed, from amounts otherwise payable
into,  or on deposit in, the  Collection  Account  with  respect to a Collection
Period,  amounts  previously  deposited  in the  Collection  Account  but  later
determined to have resulted from mistaken  deposits or payments due before or on
the Cut-Off Date or postings of checks returned for insufficient funds (provided
that the Servicer accounts for such amounts in the Monthly Servicer's Report for
the  related  Collection  Period).  The  amount  to be  retained  or  reimbursed
hereunder shall not be included in funds available for distribution with respect
to the related Payment Date.

     (d) Pending  their deposit into the  Collection  Account,  all  collections
shall be  segregated  by  book-entry  or similar form of  identification  on the
Servicer's books and records and identified as the property of the Transferor.

     4.07 Voluntary Termination.  At the option of the Servicer, the obligations
and  responsibilities of the Servicer with respect to all of the Contracts shall
terminate on any Payment Date on which the Aggregate Discounted Contract Balance
is less than 10% of the Initial Aggregate Discounted Contract Balance so long as
the Servicer deposits or causes to be deposited into the Collection  Account the
Repurchase Amount for each Contract.

     SECTION 5. SERVICER ADVANCES; REPURCHASE OF CONTRACTS

     5.01 Servicer  Advances.  Following each  Determination  Date, the Servicer
shall  advance and remit to the Trustee,  in such manner as will ensure that the
Trustee will have  immediately  available funds on account thereof by 11:00 A.M.
New York time on the second  Business Day prior to the next  succeeding  Payment
Date, a Servicer Advance equal to an amount  sufficient to cover all amounts due
and unpaid on any  Delinquent  Contract  as of the related  Determination  Date;
provided,  however,  that the Servicer  will not be obligated to make a Servicer
Advance with respect to (a) any  Defaulted  Contract,  (b) any Contract that was
finally liquidated on or prior to such Determination Date or (c) any Contract if
the Servicer,  in its good faith judgment,  believes that such Servicer  Advance
would be a Nonrecoverable  Advance. If the


                                       24
<PAGE>

Servicer  determines that any Servicer  Advance it has made, or is contemplating
making,  would be a  Nonrecoverable  Advance,  the Servicer shall deliver to the
Trustee an Officer's Certificate stating the basis for such determination.

     The Servicer shall be reimbursed for Servicer Advances on each Payment Date
from  amounts on  deposit in the  Collection  Account  as  follows:  (i) for any
Servicer  Advance made with respect to a Delinquent  Contract,  from  subsequent
collections  of  such  delinquent  Contract  Payments,   Prepayment  Amounts  or
Repurchase Amounts and (ii) for any Nonrecoverable Advance, from all collections
received on all of the Contracts.

     5.02  Indemnification.  Each of the  Contributor and the Servicer agrees to
indemnify and hold harmless the Transferor, the Issuer, the Managing Member, the
Servicer,  the Trustee,  (which shall include each of their respective  members,
directors, officers, employees and agents), the Contributor and each Noteholder,
as the  case  may  be,  (each  an  "Indemnified  Party")  against  any  and  all
liabilities,  losses, damages, penalties, costs and expenses (including costs of
defense and legal fees and  expenses)  which may be incurred or suffered by such
Indemnified  Party (except to the extent  caused by gross  negligence or willful
misconduct on the part of the Indemnified Party) as a result of claims, actions,
suits or judgments  asserted or imposed against an Indemnified Party and arising
out of the transactions  contemplated  hereby or by the Indenture or arising out
of, or based upon, action or inaction by the Contributor or the Servicer, as the
case may be,  that is  contrary  to the  terms of this  Agreement  or the  other
Transaction  Documents to which it is a party or a breach by the  Contributor or
the  Servicer,  as the case may be, of any of its  covenants set forth in any of
the Transaction Documents to which it is a party or any information certified in
any schedule  delivered by the Contributor or the Servicer,  as the case may be,
being  untrue  in any  material  respect  as of the date of such  Certification,
including  without  limitation,  any claims  resulting from any use,  operation,
maintenance, repair, storage or transportation of any item of Equipment, whether
or not in the  Servicer's  possession  or under  its  control  pursuant  to this
Agreement,  and any tort  claims  and any fines or  penalties  arising  from any
violation of the laws or  regulations of the United States or any state or local
government or  governmental  authority,  provided  that the foregoing  indemnity
shall in no way be deemed to impose on the  Contributor  any  obligation,  other
than to the extent specifically set forth in this Section 5, to make any payment
with  respect  to  principal  or  interest  on the  Notes  or to  reimburse  the
Transferor for any payments on account of the Notes. In every circumstance where
the Indemnified party seeking indemnity  hereunder for legal fees,  counsel fees
and  related  costs and  expenses  is a  Noteholder  it is  understood,  and the
Noteholders  by their  acceptance  of their  respective  Notes agree,  that such
reimbursement, indemnification and holding harmless is limited to the reasonable
fees,  related  costs  and  expenses  of  the  Noteholders   Counsel  only.  The
obligations  of the  Contributor  under  this  Section  5.02 shall  survive  the
termination  of the Agreement the  resignation or removal of the Trustee and the
termination of the Servicer pursuant to the terms hereof.

     5.03  Repurchase and  Substitution of Contracts;  Other  Payments.  (a) The
Contributor  or the Servicer,  as the case may be, shall inform the  Transferor,
the Issuer, the Managing Member and the Trustee promptly,  in writing,  upon the
discovery of a breach of any of the Contributor's representations and warranties
set  forth   herein.   With   respect  to  any   breach  of  the   Contributor's
representations  and warranties set forth herein which  materially and adversely
affects the  interest of the  Noteholders  in any  Contract  or  Contracts,  the
Contributor,  unless


                                       25
<PAGE>

within 90 days  following the discovery or receipt of notice of such breach such
breach has been cured or waived in all  respects by the  Noteholders  evidencing
more than 50% of the Voting Rights,  shall either (a) purchase such Contract and
the security interest in the related Equipment from either the Transferor or the
Issuer,  as the case may be,  or (b)  replace  such  Contract  and the  security
interest in the related Equipment with a Substitute  Contract in accordance with
the provisions of Sections 7.01, 7.02 and 7.03 of this  Agreement.  In the event
of a repurchase of a Contract,  the Contributor shall remit to the Trustee (upon
written notice to the Trustee  thereof) for deposit into the Collection  Account
the  Repurchase  Amount of each such Contract to be  repurchased  on or prior to
11:00 A.M.  New York City time on the second  Business  Day prior to the Payment
Date immediately  following the date when the Contributor shall become obligated
to purchase (or, if such Contract is then a Defaulted Contract,  an amount equal
to the  Repurchase  Amount as of the date such Contract first became a Defaulted
Contract, together with interest thereon at the Discount Rate from the date such
Contract first became a Defaulted Contract to the end of the month preceding the
date of payment).  In connection  with such  repurchase,  the Servicer  shall be
reimbursed in accordance  with Section 3.04(b) of the Indenture for all amounts,
if any,  theretofore  advanced by the  Servicer  pursuant  to Section  5.01 with
respect to such Contract.  The Trustee shall deposit such Repurchase  Amounts in
the  Collection  Account  on or prior to 11:00  A.M.  New York  City time on the
second Business Day immediately following the date on which the Trustee receives
such Repurchase Amounts. Without limiting the generality of the foregoing, it is
agreed and understood  that for purposes of this Section 5.03, any inaccuracy in
any  representation  or warranty with respect to (i) the priority of the lien of
the  Indenture  with  respect to any  Contract  or (ii) the amount (if less than
represented)  of the Contract  Payments or Repurchase  Amount under any Contract
shall be deemed to be material.

     (b) With respect to all Predecessor  Contracts and the security interest in
the related Equipment purchased or replaced by the Contributor  pursuant to this
Section 5 hereof, the Transferor will deliver to the Contributor,  an instrument
substantially  in the form of Exhibit E hereto,  assigning  to the  Contributor,
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  Transferor),  all of the Transferor's  right,  title and interest in and to
such Predecessor  Contracts and the security interest in the related  Equipment,
and all security and documents relating thereto.

     (c) The Transferor, the Issuer and the Trustee agree that the obligation of
the  Contributor  to  repurchase  or  substitute  any Contract  pursuant to this
Section  5.03 shall  constitute  the sole remedy for any such  breach  available
against the  Contributor by the  Transferor,  the Issuer,  any Noteholder or the
Trustee;  provided,  that the limitation  contained in this clause (c) shall not
otherwise limit the rights of any such Person under Section 5.02.

     (d)  The  Servicer  shall  have  the  right,  but not  the  obligation,  to
repurchase  a  Delinquent  Contract in order to more  effectively  service  such
Delinquent  Contract and to enforce the  obligations  of the obligor  under such
Delinquent  Contract;  provided that the Servicer will not repurchase  more than
fifteen percent (15%) of the Initial  Aggregate  Discounted  Contract Balance of
the  Contracts.  In the event of a  repurchase  of a  Delinquent  Contract,  the
Servicer shall remit to the Trustee (upon written notice to the Trustee thereof)
for  deposit  into the  Collection  Account the  Repurchase  Amount of each such
Delinquent  Contract to be  repurchased  on or prior to 11:00 A.M. New York City
time on the second Business Day prior to the Payment Date immediately


                                       26
<PAGE>

following  the date when the  Servicer  desires to  repurchase  such  Delinquent
Contract.  In connection with such repurchase,  the Servicer shall be reimbursed
in accordance  with Section  3.04(b) of the  Indenture for all amounts,  if any,
theretofore  advanced by the  Servicer  pursuant to Section 5.01 with respect to
such Delinquent  Contract.  The Trustee shall deposit such Repurchase Amounts in
the  Collection  Account  on or prior to 11:00  A.M.  New York  City time on the
second Business Day immediately following the date on which the Trustee receives
such Repurchase Amounts.

     SECTION 6. INFORMATION TO BE PROVIDED

     6.01 Monthly Servicer Report. On or prior to each  Determination  Date, the
Servicer shall deliver a report in writing  substantially in the form of Exhibit
B (the "Monthly Servicer Report") to the Trustee and the Rating Agencies.

     6.02 Tax Reporting and  Treatment.  (a) The Servicer shall furnish or cause
to be furnished to each  Noteholder,  within a reasonable  time after the end of
each calendar  year, to each  Noteholder who was a Noteholder at any time during
such year, a report  setting  forth the amount of principal and interest paid on
the  Notes  during  such  year  and  indicating  such  other  customary  factual
information as the Servicer  deems  necessary,  or as any Noteholder  reasonably
requests,  to enable  Noteholders to prepare their  respective  tax returns.  In
addition,  the Servicer shall  provide,  or cause to be provided to the Internal
Revenue Service and each Noteholder, information statements required by the Code
(and the regulations  issued  thereunder) or as such  Noteholders may reasonably
request from time to time with respect to in the case of any class of Notes that
is issued with original issue discount within the meaning of section 1273 of the
Code  ("OID"),  information  statements  with  respect to OID.  For  purposes of
consolidated  federal  and  state  income  and  franchise  tax  reporting,   the
Contributor  will be  treated  (i) as the owner of the  Contracts  and the other
Contributed Property and (ii) as the borrower under the Indenture.

     (b) The Transferor,  the Issuer, the Managing Member, the Contributor,  the
Servicer, any subservicer and each Noteholder by acceptance of its Note (and any
Person that is a beneficial  owner of any interest in a Note,  by virtue of such
Person's acquisition of a beneficial interest therein) agrees to treat the Notes
as  indebtedness  for  purposes of federal,  state and local income or franchise
taxes (and any other tax imposed on or measured by income).

     6.03 Other  Information.  The Servicer  shall,  at the  Trustee's  request,
furnish to the Trustee  from time to time certain  information  and make various
calculations  which are relevant to the  performance of the Trustee's  duties as
set forth in the Indenture. Copies of all information furnished pursuant to this
Section shall also be furnished to the Rating Agencies.

     6.04 Annual Independent  Certified Public Accountant's Report. The Servicer
shall cause a firm of independent  certified  public  accountants  (who may also
render other services to the Servicer or to the  Contributor)  to deliver to the
Trustee,  the Rating Agencies and each  Noteholder  within 90 days following the
end of each fiscal year of the Servicer, beginning with June 30, 2002, a written
statement to the effect that such firm has examined in accordance with generally
accepted practices samples of the accounts, records, and computer systems of the
Servicer  for the fiscal  year ended on the  previous  June 30  relating  to the
Contracts (which accounts,  records,  and computer systems shall be described in
one or more  schedules  to such


                                       27
<PAGE>


statement),  that  such  firm has  compared  the  information  contained  in the
Servicer's  reports delivered in the relevant period with information  contained
in the accounts, records, and computer systems for such period, and that, on the
basis of such  examination and comparison,  such firm is of the opinion that the
Servicer has, during the relevant  period,  serviced the Contracts in compliance
with such servicing procedures, manuals, and guides and in the same manner as it
services  comparable  leases for itself or others,  and that such  certificates,
accounts,  records,  and  computer  systems  have  been  properly  prepared  and
maintained in all material respects, except in each case for (a) such exceptions
as such firm shall  believe to be  immaterial  and (b) such other  exceptions as
shall be set  forth  in such  statement.  Copies  of all  information  furnished
pursuant to this Section shall also be furnished to the Rating Agencies.

     6.05 Payment Advices.  Each payment by the Contributor or the Transferor or
the Servicer to the Trustee pursuant to any of the provisions of the Transaction
Documents  shall  be  accompanied  by  written  advice   containing   sufficient
information  to identify  the  Contract  and/or  Equipment to which such payment
relates, the Section of the Transaction Documents pursuant to which such payment
is made, and the proper application pursuant to the provisions of the applicable
Transaction Document of the amounts being paid.

     SECTION 7. SUBSTITUTION OF CONTRACTS

     7.01  Substitution.  (a) (1) With  respect  to Pool A, in  addition  to the
Servicer's other rights of  substitution,  the Servicer will have the right (but
not the  obligation),  at any time in connection with exercise by the Transferor
of its rights of substitution under the SCTA or the other Transaction Documents,
to  substitute (a "Pool A  Non-Performing  Contract  Substitution")  one or more
Eligible  Contracts and the security  interest in the related  Equipment subject
thereto (the foregoing collectively,  a "Substitute Contract") for a Contract in
Pool A and the security  interest in the related  Equipment subject thereto (the
foregoing collectively, a "Predecessor Contract") if:

          (i) (A) any Contract Payment on the Predecessor Contract is delinquent
     for  at  least  sixty  (60)   consecutive   days  as  of  the  most  recent
     Determination Date; or

               (B) a  bankruptcy  petition  has  been  filed by or  against  the
          Obligor  or,  with  respect to a  Leveraged  Lease  Loan,  the related
          Lessor, under any Predecessor Contract; or

               (C)  the  Predecessor  Contract  was  initially  classified  as a
          Defaulted Contract during the related Collection Period;

          provided,  however,  that  if the  Predecessor  Contract  included  an
          ownership  interest of the Transferor,  and a first priority perfected
          security interest of the Issuer, in Equipment related to a Fair Market
          Value Lease,  then the related  Substitute  Contract,  if related to a
          Fair Market Value Lease, shall also include a valid ownership interest
          in the Transfer and a first priority  perfected  security  interest in
          favor of the Issuer, in the Equipment related thereto; and

          (ii) the conditions  set forth in Section  7.01(d) have been satisfied
     and the sum of (x)  the  Discounted  Contract  Balances  of all  Substitute
     Contracts substituted under this


                                       28
<PAGE>

          Section  7.01(a)(1)  and (y) amounts  deposited by the Servicer in the
          Collection  Account in connection  with all such  substitutions  under
          this  Section  7.01(a)(1)  does not exceed 10% of the Pool A Aggregate
          Discounted Contract Balance as of the Closing Date.

     (2) With respect to Pool A, in addition to the  Servicer's  other rights of
substitution,  the Servicer will have the right (but not the  obligation) at any
time in connection with exercise by the Transferor of its rights of substitution
under the SCTA, to substitute (a "Pool A Prepaid Contract  Substitution") one or
more  Substitute  Contracts  for a  Predecessor  Contract  in  Pool A if (i) the
Predecessor  Contract  has been  prepaid  and (ii) the  conditions  set forth in
Section  7.01(d) have been satisfied and the sum of (x) the Discounted  Contract
Balance of all Substitute  Contracts  substituted under this Section  7.01(a)(2)
and Section 4.02(b) and (y) amounts  deposited by the Servicer in the Collection
Account in connection with all such substitutions  under this Section 7.01(a)(2)
and  Section  4.02(b)  does not  exceed 10% of the Pool A  Aggregate  Discounted
Contract Balance as of the Closing Date.

     (b) (1) With respect to Pool B, in addition to the Servicer's  other rights
of substitution,  the Servicer will have the right (but not the obligation),  at
any  time in  connection  with  exercise  by the  Transferor  of its  rights  of
substitution  under  the  SCTA,  to  substitute  (a  "Pool  B  General  Contract
Substitution")  one or more Substitute  Contracts for a Predecessor  Contract in
Pool B if the  conditions  set forth in Section  7.01(d) have been satisfied and
the sum of (x) the  Discounted  Contract  Balances of all  Substitute  Contracts
substituted  under this  Section  7.01(b)(1)  and (y) amounts  deposited  by the
Servicer in the  Collection  Account in connection  with all such  substitutions
under  this  Section  7.01(b)(1)  does not  exceed  10% of the Pool B  Aggregate
Discounted Contract Balance as of the Closing Date.

     (3) With respect to Pool B, in addition to the  Servicer's  other rights of
substitution,  the Servicer will have the right (but not the obligation), at any
time in connection with exercise by the Transferor of its rights of substitution
under the SCTA, to substitute (a "Pool B Prepaid Contract  Substitution") one or
more  Substitute  Contracts  for a  Predecessor  Contract  in  Pool B if (i) the
Predecessor  Contract  has been  prepaid  and (ii) the  conditions  set forth in
Section  7.01(d) have been satisfied and the sum of (x) the Discounted  Contract
Balance of all Substitute  Contracts  substituted under this Section  7.01(b)(2)
and Section 4.02(b) and (y) amounts  deposited by the Servicer in the Collection
Account in connection with all such substitutions  under this Section 7.01(b)(2)
and  Section  4.02(b)  does not  exceed 10% of the Pool B  Aggregate  Discounted
Contract  Balance  as of the  Closing  Date;  unless the  Rating  Agencies  have
otherwise permitted.

     (c) Any  substitution  pursuant to this  Section 7.01 or Section 5.03 shall
become  effective  upon (i)  delivery to the Trustee and the  Transferor  of the
Substitute  Contract  Contribution Form,  substantially in the form of Exhibit D
hereto,  transferring  to the  Transferor  (and the  Issuer,  as assignee of the
Transferor) all right,  title and interest of the Contributor or the Servicer in
and to the Eligible  Contract being  substituted and a security  interest in the
related  Equipment  subject  thereto  (except in the case of Fair  Market  Value
Leases where the  Contributor or the Servicer,  as the case may be,  transfers a
valid  ownership  interest to the  Transferor in the related  Equipment  subject
thereto and the Issuer,  pursuant to the SCTA is granted 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 subject thereto,


                                       29
<PAGE>

(ii) delivery to the Trustee of amendments to, or executed originals of, the UCC
financing  statements  referred  to in Section  1.01(c)  hereof  reflecting  the
deletion  of the  Predecessor  Contract  and  the  addition  of  the  Substitute
Contract,  (iii) delivery to the Contributor by the Transferor of an instrument,
substantially  in the form of Exhibit E hereto,  transferring to the Contributor
or the Servicer,  without  representation  or warranty,  all of the Transferor's
right, title and interest in and to the Predecessor  Contract,  (iv) delivery to
the Trustee of the sole original, manually executed counterpart of each Contract
that  constitutes  "chattel  paper"  or an  "instrument"  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  "Contributed  Property"  will be
automatically  amended to  include  such  Substitute  Contract  and all  related
property and rights contained in the definition of Contributed Property.

     (d) With respect to a  substitution  of Contracts  in  accordance  with the
provisions of this Section 7 and Section 5.03 hereof,  each proposed  Substitute
Contract   must  (i)  be  an  Eligible   Contract;   (ii)  satisfy  all  of  the
representations  and warranties set forth in Section  2.03(a) of this Agreement;
(iii) have a Discounted  Contract  Balance  such that the sum of its  Discounted
Contract  Balance,  including any additional cash delivered by the Servicer into
the Collection Account in connection therewith,  is not less than the Discounted
Contract Balance of the Contract(s) being replaced; (iv) not cause the remaining
weighted  average life of the Contracts (as  calculated  based upon the Contract
Payments which  constitute the Discounted  Contract Balance of the Contracts) to
be materially  altered;  (v) in accordance  with the Servicer's  standard credit
evaluation  policies,  be of equal or better  credit  quality  than the Contract
being  replaced;  and (vi) with respect to a substitution of a Contract that was
originated by DVI Financial Services, Inc., be a Contract that was originated by
DVI Financial Services,  Inc. For purposes of determining compliance with clause
(iii) of the preceding  sentence,  if more than one Substitute Contract is being
provided  on any  date,  the  Discounted  Contract  Balance  of  the  Substitute
Contracts and the Contracts  being  replaced shall be determined on an aggregate
basis.

     7.02 Notice of Substitution. In the Monthly Servicer Report to be delivered
on each  Determination  Date, the  Contributor  shall give written notice to the
Trustee,  each  Noteholder,  the  Rating  Agencies  and  the  Servicer  of  each
substitution  of  Contracts  pursuant  to  Section  7.01(a)  hereof  and  of any
substitution or repurchase  pursuant to Section 5.03 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,  any Excess Substituted  Discounted Contract Balance, 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(a)
hereof, be accompanied by an Officer's Certificate, substantially in the form of
Exhibit F hereto,  certifying  as to compliance  with the  provisions of Section
7.01(a) hereof.


                                       30
<PAGE>

     7.03  Contributor's  and  Servicer's  Subsequent   Obligations.   Upon  any
substitution of Contracts in accordance with the provisions of this Section 7 or
Section 5.03, the  Contributor's and the Servicer's  obligations  hereunder with
respect to the  Predecessor  Contract  shall cease  (except  for the  Servicer's
obligation  as set  forth in  Section  4.03  hereof  to take  such  action as is
necessary  and  appropriate  to maximize net proceeds to be paid to the Trustee)
but the  Contributor  and the  Servicer  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.

     7.04 Usage of Predecessor  Contracts in  Calculations.  After  substitution
therefore  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  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.

     SECTION 8. THE SERVICER

     8.01  Corporate  Existence of the Servicer.  The Servicer will keep in full
force and effect its existence,  rights and franchise as a corporation under the
laws of its jurisdiction of incorporation and will preserve its qualification to
do  business  as a  foreign  corporation  in each  jurisdiction  in  which  such
qualification is necessary to protect the validity and  enforceability of any of
the  Contracts  or to permit  performance  of the  Servicer's  duties under this
Agreement.

     The Servicer shall not merge or  consolidate  with any other Person unless:
(i)  the  entity,  surviving  such  merger  or  consolidation  is a  corporation
organized  under the laws of the United  States or any state  thereof,  (ii) the
surviving  entity,  if not  the  Servicer,  shall  execute  and  deliver  to the
Transferor and the Trustee, in form and substance  satisfactory to each of them,
(x) an  instrument  expressly  assuming all of the  obligations  of the Servicer
hereunder,  and (y) an Officer's Certificate to the effect that such Person is a
corporation of the type described in the preceding  clause (i), has  effectively
assumed the obligations of the Servicer hereunder, that all conditions precedent
provided for in this Agreement  relating to such  transaction have been complied
with, that all financing  statements and continuation  statements and amendments
thereto have been  executed and filed that are  necessary  fully to preserve and
protect  the  interest  of the  Transferor,  the Issuer and Trustee in the Trust
Property,  and  reciting  the details of such  filings,  or stating that no such
action  shall be necessary  to preserve  and protect  such  interest,  (iii) the
Servicer  shall  deliver to the Trustee a letter from each Rating  Agency to the
effect that such consolidation, merger or succession will not, in and of itself,
result in a downgrading of the ratings for the Notes and (iv) immediately  after
giving effect to such  transaction,  no Servicer Event of Default,  and no event
which,  after notice or lapse of time, or both, would become a Servicer Event of
Default shall have occurred and be continuing.

     8.02  Limitation  on Liability of the Servicer and Others.  (a) Neither the
Servicer nor any of the directors, officers, employees or agents of the Servicer
shall incur any liability,  to the  Transferor,  the Issuer,  the Trustee or the
holders of the Notes,  for any action taken or not taken in good faith  pursuant
to the terms of this  Agreement  with  respect to any


                                       31
<PAGE>

Contract  (including any Defaulted  Contract) or the Equipment  subject thereto;
provided,  however,  that this  provision  shall not protect the Servicer or any
such  person  against any breach of  representations  or  warranties  made by it
herein or in any certificate  delivered in conjunction  with the purchase of the
Notes or for any liability that would  otherwise be imposed by reason of willful
misfeasance  or  negligence  in the  performance  of its duties  hereunder or by
reason of reckless disregard of obligations and duties hereunder.

     (b) Except as provided in this  Agreement,  the Servicer shall not be under
any  obligation to appear in,  prosecute,  or defend any legal action that shall
not be incidental to its duties to service the Contracts in accordance with this
Agreement,  and that in its opinion may involve it in any expense or  liability;
provided,  however,  that  the  Servicer  may  undertake,  at its  expense,  any
reasonable  action that it may deem  necessary  or  desirable in respect of this
Agreement  and the rights and duties of the  parties to this  Agreement  and the
interests of the Noteholders under this Agreement.

     (c) The  Servicer,  and any director or officer or employee or agent of the
Servicer,  may rely in good faith on the advice of counsel  selected  by it with
due care or on any  document of any kind,  prima  facie  properly  executed  and
submitted by any Person respecting any matters arising hereunder.

     8.03  Servicer Not to Resign or be Removed.  The Servicer  shall not resign
from the  servicing  obligations  and  duties  hereby  imposed  on it  except in
connection  with  an  assignment  permitted  by  Section  11.02  hereof  or upon
determination  that  such  duties  hereunder  are no  longer  permissible  under
applicable  law.  Any  such  determination  permitting  the  resignation  of the
Servicer  shall be evidenced by an opinion of independent  counsel,  in form and
substance satisfactory to the Noteholders evidencing more than 50% of the Voting
Rights, to such effect delivered to the Trustee.

     Except as provided  in Section  10.02  hereof,  the  Servicer  shall not be
removed or be replaced as Servicer  with respect to any  Contract or  Equipment;
provided,   however,  that  upon  the  occurrence  of  any  Amortization  Event,
Noteholders evidencing not less than 66-2/3% of the Voting Rights shall have the
right to replace DVI as Servicer with a successor  Servicer in  accordance  with
Section 10.02 hereof.

     No  resignation  or removal of the  Servicer  shall in any event (i) become
effective  until the  successor  Servicer  shall  have  assumed  the  Servicer's
servicing  responsibilities  and  obligations  in accordance  with Section 10.02
hereof, or (ii) affect the Contributor's obligations pursuant to this Agreement.

     8.04 Financial and Business  Information.  The Servicer will deliver to the
Transferor,   the  Issuer,  the  Trustee  (who  shall  forward  copies  to  each
Noteholder) and the Rating Agencies:

          (a) promptly upon their  becoming  available,  one copy of each report
     (including the Servicer's (or for so long as DVI Financial Services Inc. is
     the Servicer,  DVI,  Inc.'s) annual report to  shareholders  and reports on
     Form  8-K,  10-K,  and  10-Q),  proxy  statement,  registration  statement,
     prospectus and notices filed with or delivered to


                                       32
<PAGE>

     any securities  exchange,  the  Securities  and Exchange  Commission or any
     successor agencies, in each case relating to the Transferor or the Notes;

          (b) immediately  upon becoming aware of the existence of any condition
     or event which  constitutes a Servicer  Event of Default,  a written notice
     describing  its nature and period of existence and what action the Servicer
     is taking or proposes to take with respect thereto;

          (c) promptly upon the Servicer's becoming aware of:

               (i)  any  proposed  or  pending   investigation   of  it  by  any
          governmental authority, or agency, or

               (ii) any court or administrative proceeding


     which  individually  or  in  the  aggregate  involves  the  possibility  of
     materially and adversely  affecting the  properties,  business,  profits or
     conditions  (financial  or otherwise)  of the  Servicer,  a written  notice
     specifying the nature of such  investigation  or proceeding and what action
     the  Servicer  is  taking or  proposes  to take with  respect  thereto  and
     evaluating its merits; and

          (d) (i) upon request,  the Servicer  shall furnish to the  Transferor,
     the Issuer and the Trustee,  within ten (10)  Business  Days, a list of all
     Contracts  (by contract  number and name of Obligor),  as of the end of the
     most recent Collection Period, held as part of the Trust Property, together
     with a reconciliation  of such list to the Contract  Schedule and (ii) with
     reasonable  promptness,  any  other  data  and  information  which  may  be
     reasonably requested from time to time.

     8.05 Officer's Certificates.  With each set of documents delivered pursuant
to Section 8.04(a),  the Servicer will deliver an Officer's  Certificate stating
(i) that the officer signing such  Certificate  have reviewed the relevant terms
of this  Agreement  and have made,  or caused to be made  under  such  officer's
supervision,  a review of the  activities  of the  Servicer  during  the  period
covered by the  statements  then being  furnished,  (ii) that the review has not
disclosed the existence of any Servicer Event of Default or, if a Servicer Event
of Default exists,  describing its nature and what action the Servicer has taken
and is taking  with  respect  thereto and (iii) that on the basis of such review
the officer  signing such  certificate is of the opinion that during such period
the Servicer has serviced the Contracts in compliance with the procedures hereof
except as described in such certificate.

     8.06  Inspection.  The Servicer  shall make available to the Trustee or its
duly authorized  representatives,  attorneys or auditors, and the Noteholders or
their  duly  authorized  representative  attorneys  or  auditors  copies  of the
Contract Files and the related accounts, records and computer systems maintained
by the Servicer at such times during normal operating hours as the Trustee shall
reasonably  request which does not  unreasonably  interfere  with the Servicer's
normal  operations  or customer or employee  relations.  Nothing in this Section
8.06 shall affect the  obligation of the Servicer to observe any  applicable law
prohibiting disclosure of information


                                       33
<PAGE>

regarding  the  Obligors,  and the failure of the Servicer to provide  access to
information as a result of such obligation shall not constitute a breach of this
Section  8.06.  Any  expense  incident  to the  exercise  by the  Trustee or any
Noteholder  during the  continuance  of a Servicer Event of Default of any right
under this Section 8.06 shall be borne by the  Servicer,  but any expense due to
the exercise of a right by any such Person prior to the occurrence of a Servicer
Event of Default shall be borne by such Person.

     8.07 Servicer  Records.  On or before the Closing  Date,  the Servicer will
indicate in its records that it is servicing and administering  each Contract in
its  capacity as Servicer  hereunder,  at the request and for the benefit of the
Transferor  (and  subject  to  the  provisions  of  the  applicable  Transaction
Documents)  and  its  successors  and  assigns  (including  the  Issuer  and the
Trustee).

     8.08  Insurance.  The Servicer will track, on a quarterly  basis,  casualty
insurance premium payments by Obligors as required by the Contracts, in the same
manner in which the Servicer would service  contracts and equipment held for its
own account.

     8.09 No Bankruptcy Petition Against the Transferor,  the Managing Member or
the Issuer.  The Servicer  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 Transferor, the Managing Member or the
Issuer, any bankruptcy, reorganization, receivership, arrangement, insolvency or
liquidation  proceedings or other similar proceedings under any federal or state
bankruptcy or similar law. This Section 8.09 shall  survive the  termination  of
this Agreement.

     8.10 Fidelity Bond and Errors and Omissions  Insurance.  The Servicer shall
maintain,  at its own  expense,  a  blanket  fidelity  bond  and an  errors  and
omissions  insurance  policy,  with  coverage  appropriate  and customary in the
industry with responsible companies on all officers,  employees or other persons
acting in any  capacity  with regard to the  Contracts to handle  funds,  money,
documents  and papers  relating to the  Contracts.  Any such  fidelity  bond and
errors and omissions  insurance  shall  protect and insure the Servicer  against
losses, including forgery, theft, embezzlement,  fraud, errors and omissions and
negligent acts of such persons and shall be maintained in a form and amount that
would meet the requirements of a prudent institutional servicer. No provision of
this  Section  8.10  requiring  such  fidelity  bond and  errors  and  omissions
insurance shall diminish or relieve the Servicer from its duties and obligations
as set forth in this Agreement. Any such fidelity bond or insurance policy shall
not be cancelled or modified in a materially  adverse  manner  without ten days'
prior written notice to the Rating Agencies. Promptly upon receipt of any notice
from the surety or the insurer that such fidelity  bond or insurance  policy has
been  terminated or materially  modified,  the Servicer shall notify the Trustee
and the Rating Agency of any such termination or modification.

     SECTION 9. THE CONTRIBUTOR

     9.01 Corporate  Existence of the Contributor.  The Contributor will keep in
full force and effect its existence, rights and franchise as a corporation under
the  laws  of  its   jurisdiction  of   incorporation   and  will  preserve  its
qualification  to do business as a foreign  corporation in each  jurisdiction in
which  such   qualification   is   necessary  to  protect  the   validity,


                                       34
<PAGE>

and  enforceability  of any of the  Contracts  or to permit  performance  of the
Contributor's duties under this Agreement.

     The Contributor shall not merge or consolidate with any other Person unless
(i) the entity surviving such merger or consolidation is a corporation organized
under  the laws of the  United  States  or any  jurisdiction  thereof,  (ii) the
surviving  entity,  if not the  Contributor,  shall  execute  and deliver to the
Transferor, the Servicer and the Trustee, in form and substance satisfactory, to
each of them, (x) an instrument expressly assuming all of the obligations of the
Contributor hereunder,  and (y) an Officer's Certificate to the effect that such
Person is a corporation of the type  described in the preceding  clause (i), has
effectively  assumed the  obligations  of the  Contributor  hereunder,  that all
conditions precedent provided for in this Agreement relating to such transaction
have been complied with, and, that all UCC financing statements and continuation
statements  and  amendments  thereto  have  been  executed  and  filed  that are
necessary  fully to preserve  and protect the  interest of the  Transferor,  the
Issuer and  Trustee in the Trust  Property,  and  reciting  the  details of such
filings,  or stating  that no such action  shall be  necessary  to preserve  and
protect such  interest,  (iii) the  Contributor  shall  deliver to the Trustee a
letter from each Rating Agency to the effect that such consolidation,  merger or
succession  will not, in and of itself,  result in a downgrading  of the ratings
for the Notes and (iv) immediately after giving effect to such  transaction,  no
event of default  under any  Transaction  Document,  and no event  which,  after
notice or lapse of time,  or both,  would become an event of default  shall have
occurred and be continuing.

     9.02 Financial and Business  Information.  The Contributor  will deliver to
the  Transferor,  the  Issuer,  the Trustee and the Rating  Agencies  and,  upon
request, to each Noteholder:

          (a) promptly upon their  becoming  available,  one copy of each report
     (including DVI,  Inc.'s annual report to  shareholders  and reports on Form
     8-K, 10-K, and 10-Q), proxy statement,  registration statement,  prospectus
     and  notice  filed  with  or  delivered  to any  securities  exchange,  the
     Securities and Exchange Commission or any successor agencies;

          (b) promptly upon the Contributor's becoming aware of

               (iii)  any  proposed  or  pending  investigation  of  it  by  any
          governmental authority or agency, or

               (iv) any court or administrative proceedings

     which  individually  or in  the  aggregate  involves  or  may  involve  the
     possibility of materially and adversely affecting the properties, business,
     profits or  conditions  (financial  or  otherwise)  of the  Contributor,  a
     written notice  specifying the nature of such  investigation  or proceeding
     and what action the  Contributor is taking or proposes to take with respect
     thereto and evaluating its merits; and

          (c) with reasonable  promptness,  any other data and information which
     may be reasonably requested from time to time.


                                       35
<PAGE>

     9.03  Inspection.  The Contributor  shall make available to the Transferor,
the  Managing  Member,  the  Issuer  or the  Trustee  or their  respective  duly
authorized  representatives,  attorneys or auditors and the Noteholders or their
duly authorized representatives, attorneys or auditors its accounts, records and
computer  systems  regarding any Contract  maintained by the Contributor at such
times during normal  operating hours as the Trustee,  the Managing  Member,  the
Issuer or the Transferor  shall  reasonably  instruct which do not  unreasonably
interfere  with the  Contributor's  normal  operations  or  customer or employee
relations.  Nothing in this  Section  9.03 shall  affect the  obligation  of the
Contributor to observe any applicable law prohibiting  disclosure of information
regarding the Obligors,  and the failure of the Contributor to provide access to
information as a result of such obligation shall not constitute a breach of this
Section  9.03.  Any  expense  incident  to the  exercise  by the  Trustee or any
Noteholder  during the  continuance  of a Servicer Event of Default of any fight
under this Section 9.03 shall be borne by the  Servicer,  but any expense due to
the exercise of a right by any such Person prior to the occurrence of a Servicer
Event of Default shall be borne by such Person.

     9.04 No Bankruptcy  Petition Against the Managing Member, the Transferor or
the Issuer. The Contributor  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  Indenture,  institute  against,  or join any  other  Person in
instituting  against,  any of the Managing Member, the Transferor or the Issuer,
any  bankruptcy,  reorganization,   receivership,   arrangement,  insolvency  or
liquidation  proceedings or other similar proceedings under any federal or state
bankruptcy or similar law. This Section 9.04 shall  survive the  termination  of
this Agreement.

     9.05 Accounts, Books and Records.

     (a) The Contributor shall maintain accounts and records as to each Contract
accurately and in sufficient  detail to permit the reader thereof to know at any
time the status of such Contract,  including  payments and  recoveries  made and
payments owing (and the nature of each).  Prior to the transfer of the Contracts
to the Transferor,  the Contributor  will clearly mark its books and records and
each Contract File  (including each Contract) to reflect each sale of a Contract
and the Equipment subject thereto to the Transferor,  the sale to the Issuer and
to show that the Issuer owns the Contracts  absolutely.  The  Contributor or the
Transferor,  as the case may be, will cause the electronic  ledger, the Contract
File  (including  the  Contract),  with respect to each Contract and the related
Contract and the  Contract  Schedule to be clearly and  unambiguously  marked to
show that  such  Contract  and the  related  Contract  has been  contributed  by
Contributor  to the  Transferor,  resold by the  Transferor  to the  Issuer  and
pledged by the Issuer to the Trustee for the benefit of the Noteholders pursuant
to the Indenture.

     (b) The Contributor  shall maintain its computer  systems so that, from and
after  the  time of sale  hereunder  of the  Contracts  to the  Transferor,  the
Contributor's  master  computer  records  (including  archives)  that refer to a
Contract and the related  Contract  shall  indicate  clearly the interest of the
Transferor in such Contract and that such Contract has been resold to the Issuer
and pledged by the Issuer to the  Trustee  for the  benefit of the  Noteholders.
Indication  of the  Transferor's  ownership  of a  Contract,  the  resale to the
Issuer,  and the pledge of such  Contract  by the Issuer to the  Trustee for the
benefit  of  the   Noteholders   shall  be  deleted  from  or  modified  on  the
Contributor's computer systems when, and only when, the Contract shall have been
paid in full or  purchased or  substituted  by the  Contributor  pursuant to the
terms hereof.


                                       36
<PAGE>

     9.06 Tax  Returns.  (a) At all  times,  so long as any of the  Notes or the
other obligations secured by the Indenture remain outstanding,  the Contributor,
the Managing  Member and the Transferor  shall be members of the same affiliated
group within the meaning of Section 1504 of the Code (the "DVI Group") and shall
join in the filing of a consolidated return for federal income tax purposes.

     (b) The Contributor shall promptly pay and discharge,  or cause the payment
and discharge of, all federal income taxes (and all other  material  taxes) when
due and payable by  Contributor,  the DVI Group,  the  Managing  Member,  or the
Transferor,  except (i) such as may be paid  thereafter  without penalty or (ii)
such as may be contested in good faith by appropriate  proceedings and for which
an adequate  reserve has been  established  and is maintained in accordance with
GAAP. The Contributor  shall promptly notify the  Transferor,  the Trustee,  the
Managing  Member  and the  Noteholders  of any  material  challenge,  contest or
proceeding  pending by or against  Contributor,  the Managing Member, or the DVI
Group before any taxing authority.

     9.07  Insurance.  The  Contributor  will  at  all  times  maintain  general
liability  and excess  liability  insurance  policies in at least the amount set
forth in Section 2.26.

     9.08 Protection of Right, Title and Interest.

     (a) The  Contributor  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(c) seriously misleading within the meaning of ss. 9-507 of the UCC,
unless it shall have  given the  Transferor  at least  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 Contributor  shall propose to sell, grant a security
interest in, or otherwise  transfer any interest in contracts to any prospective
purchaser,  lender,  or other  transferee,  the  Contributor  shall give to such
prospective  purchaser,  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
has been sold to the Transferor and then resold to the Issuer and pledged by the
Issuer to the Trustee for the benefit of the Noteholders.

     (c) The Contributor  shall deliver to the Transferor,  the Managing Member,
the Rating Agencies and the Trustee promptly after the execution and delivery of
each  amendment  hereto,  an opinion of counsel  either (i) stating that, in the
opinion  of  such  counsel,   all  UCC  financing  statements  and  continuation
statements  necessary  to  preserve  and  protect  fully  the  interest  of  the
Transferor, the Issuer and the Trustee in the Trust Property have been filed or,
with respect to the Equipment,  are required to be filed within thirty (30) days
following  the Closing Date or the  Substitution  Date, as  applicable,  or (ii)
stating that, in the opinion of such counsel,  no such action shall be necessary
to preserve and protect such interest.

     9.09 Other Liens or Interests.  Except for the conveyances  hereunder,  the
Contributor will not sell,  pledge,  assign or transfer to any other Person,  or
grant, create, incur, assume or suffer to exist any lien on the Contracts or any
other Trust Property,  or any interest


                                       37
<PAGE>

therein,  and the Contributor shall defend the right, title, and interest of the
Transferor,  the Issuer and the Trustee in, to and under the  Contracts  and the
other Trust  Property  against all claims of third parties  claiming  through or
under the Contributor;  provided, however, that the Contributor's obligations to
the Trustee under this Section 9.09 shall  terminate  upon the repayment in full
of the Notes and the  expiration of any applicable  preference  period and, with
respect  to any  Contract,  on the date it is paid in full or  purchased  by the
Contributor pursuant to Section 5.03 hereof.

     9.10 Costs and Expenses. The Contributor agrees to pay all reasonable costs
and  disbursements  in  connection  with  the  performance  of  its  obligations
hereunder and under the Indenture.

     SECTION 10. EVENTS OF DEFAULT

     10.01 Servicer Events of Default. The following events and conditions shall
constitute Servicer Events of Default hereunder:

          (i)  failure  on the  part  of the  Servicer  (or  for so  long as the
     Contributor  is the Servicer,  the  Transferor) to (A) remit any payment to
     the Trustee  within the time period  required by Section 4.06 hereof or (B)
     make any Servicer Advance required by Section 5.01 hereof;

          (ii)  failure to pay to the  Trustee on or before the date when due in
     accordance  with the terms hereof,  any deposit  required to be made by the
     Servicer pursuant to Section 4.02 hereof;

          (iii)  failure on the part of either the  Servicer  (or for so long as
     the Contributor is the Servicer, the Transferor) duly to observe or perform
     in any  material  respect  any  other  of  their  respective  covenants  or
     agreements in this Agreement (including without limitation,  failure of the
     Servicer to deliver a Monthly Servicer Report on the date required pursuant
     to Section  6.01 or the  delivery  of a Monthly  Servicer  Report  which is
     materially  incorrect) which failure  materially and adversely  affects the
     rights of the Noteholders and continues  unremedied for a period of 30 days
     after the Servicer  becomes  aware of such failure or the giving of written
     notice  of  such  failure  (A) to  the  Servicer  (or  the  Transferor,  if
     applicable)  by the Trustee or (B) to the Servicer (or the  Transferor,  if
     applicable) and the Trustee by Noteholders evidencing not less than 66-2/3%
     of the Voting Rights, taken together;

          (iv) if any  representation  or warranty of the Servicer  made in this
     Agreement or in any certificate or other writing delivered  pursuant hereto
     or  the  Transaction  Documents  or  made  by  any  successor  Servicer  in
     connection with such successor  Servicer's  assumption of the duties of the
     Servicer shall prove to be incorrect in any material respect as of the time
     when the same shall have been made;

          (v) the entry by a court having  jurisdiction in the premises of (A) a
     decree or order for relief in respect  of the  Servicer  (or for so long as
     the


                                       38
<PAGE>

     Contributor is the Servicer,  the  Transferor)  in an  involuntary  case or
     proceeding under any applicable  federal or state  bankruptcy,  insolvency,
     reorganization, or other similar law or (B) a decree or order adjudging the
     Servicer  (or  for  so  long  as  the  Contributor  is  the  Servicer,  the
     Transferor)  bankrupt  or  insolvent,  or  approving  as  properly  filed a
     petition seeking reorganization, arrangement, adjustment, or composition of
     or in respect of the  Servicer  (or for so long as the  Contributor  is the
     Servicer,  the  Transferor)  under any applicable  federal or state law, or
     appointing   a  custodian,   receiver,   liquidator,   assignee,   trustee,
     sequestrator,  or other similar official of the Servicer (or for so long as
     the Contributor is the Servicer, the Transferor) or of any substantial part
     of the property of either, or ordering the winding up or liquidation of the
     affairs  of either,  and the  continuance  of any such  decree or order for
     relief or any such  other  decree  or order  unstayed  and in effect  for a
     period of 90 consecutive days;

          (vi)  the  commencement  by  the  Servicer  (or  for  so  long  as the
     Contributor  is the  Servicer,  the  Transferor)  of a  voluntary  case  or
     proceeding under any applicable  federal or state  bankruptcy,  insolvency,
     reorganization,  or other similar law or of any other case or proceeding to
     be  adjudicated  a bankrupt or  insolvent,  or the consent by either to the
     entry of a decree or order for relief in respect of the Servicer (or for so
     long as the Contributor is the Servicer,  the Transferor) in an involuntary
     case or  proceeding  under  any  applicable  federal  or state  bankruptcy,
     insolvency,  reorganization, or other similar law or to the commencement of
     any  bankruptcy or insolvency  case or proceeding  against  either,  or the
     filing by either of a petition or answer or consent seeking  reorganization
     or relief  under any  applicable  federal or state law,  or the  consent by
     either to the filing of such  petition or to the  appointment  of or taking
     possession  by  a  custodian,  receiver,  liquidator,   assignee,  trustee,
     sequestrator,  or similar  official of the  Servicer (or for so long as the
     Contributor is the Servicer,  the Transferor) or of any substantial part of
     the property of either,  or the making by either of an  assignment  for the
     benefit of creditors, or the failure by the Servicer (or for so long as the
     Contributor is the Servicer,  the Transferor) to pay its debts generally as
     they become due, or the taking of corporate  action by the Servicer (or for
     so long as the Contributor is the Servicer,  the Transferor) in furtherance
     of any such action;

          (vii) any  assignment by the Servicer,  or any attempt by the Servicer
     to assign its duties or rights hereunder,  except as specifically permitted
     hereunder;

          (viii) (A) the failure of the  Servicer  to make one or more  payments
     with  respect  to  aggregate  recourse   indebtedness  for  borrowed  money
     exceeding  $2,000,000  or (B) the  occurrence  of any  other  event  or the
     existence of any other condition, the effect of which event or condition is
     to cause  more than  $2,000,000  of  aggregate  recourse  indebtedness  for
     borrowed  money of the Servicer to become due before its (or their)  stated
     maturity or before its (or their) regularly  scheduled dates of payment, so
     long as such failure,  event or condition specified in either clause (A) or
     (B) shall be  continuing  and shall not have been  waived by the  Person or
     Persons entitled to performance;


                                       39
<PAGE>

          (ix) the rendering against the Servicer of a final judgment, decree or
     order (all possible appeals having been exhausted) for the payment of money
     in excess of $2,000,000  which is uninsured,  and the  continuance  of such
     judgment,  decree or order  unsatisfied  and in effect for any period of 60
     consecutive days without a stay of execution; or

          (x)  the  occurrence  of  an  Amortization   Event  (so  long  as  the
     Contributor is the Servicer).

     10.02  Termination.  If a Servicer Event of Default shall have occurred and
be  continuing,  the Trustee shall,  upon the request of Noteholders  evidencing
more than 66-2/3% of the Voting  Rights,  give written notice to the Servicer of
the  termination of all of the rights and  obligations of the Servicer (but none
of the  Contributor's  obligations  hereunder,  which  shall  survive  any  such
termination)  under  this  Agreement.  On the  receipt by the  Servicer  of such
written notice, all rights and obligations of the Servicer under this Agreement,
including without limitation the Servicer's right hereunder to receive Servicing
Fees accruing subsequent to such termination date, but none of the Contributor's
obligations hereunder,  shall cease and the same shall pass to and be vested in,
and  assumed  by,  the  Trustee  pursuant  to and under this  Agreement  and the
Indenture subject to the provisions of Section 10.03;  and, without  limitation,
the Trustee is hereby authorized and empowered to execute and deliver, on behalf
of the Servicer,  as  attorney-in-fact  or otherwise,  any and all other acts or
things  necessary  or  appropriate  to effect  the  purposes  of such  notice of
termination, whether to complete the transfer and assignment of any Contract and
the related Contract and Equipment or such passing,  vesting or assumption or to
cause Obligors to remit all future Contract Payments and other amounts due under
any Contract to such account as shall be specified by the Trustee.  The Servicer
may be removed only pursuant to a Servicer Event of Default.

     10.03 Trustee to Act; Appointment of Successor.

     (a) On and after the time the  Servicer  receives  a notice of  termination
pursuant to Section 10.02 hereof, the Trustee (subject to subsection (b) hereof)
shall be the  successor  in all  respects  to the  Servicer  in its  capacity as
servicer  under this  Agreement of the Contracts  and, to such extent,  shall be
subject to all the responsibilities, duties and liabilities (other than the duty
to advance funds and to indemnify)  relating  thereto  placed on the Servicer by
the terms and  provisions  hereof (but not the  obligations  of the  Contributor
contained herein which shall survive any such termination as above provided) and
shall be entitled to receive from the  Transferor  the  Servicing  Fee and other
servicing  compensation  provided for in Section 4.04 hereof;  provided that the
Trustee  shall in no way be  responsible  or liable for any action or actions of
the Servicer before the time the Servicer receives such a notice of termination.

     (b) The Trustee may, if it is  unwilling or unable to act as the  successor
Servicer,  give  notice  of such  fact  to each  Noteholder  and (i)  appoint  a
successor  Servicer  with a net  worth of at least  $15,000,000  and  reasonably
acceptable  to  Noteholders  evidencing  more than 50% of the Voting  Rights and
whose  regular  business  includes  the  servicing of  receivables  arising from
equipment  similar to the  Equipment,  as the  successor  Servicer  hereunder to
assume all of the rights and obligations of the Servicer  hereunder,  including,
without  limitation,  the  Servicer's  right  (but  not the  obligations  of the
Contributor  contained  herein) hereunder to receive


                                       40
<PAGE>

the Servicing Fee (provided  that,  notwithstanding  any other  provision to the
contrary contained in any Transaction  Document, no increase in the Servicer Fee
due to  any  successor  Servicer  shall  be  made  without  the  consent  of the
Noteholders  that hold,  as of the date of  determination,  more than 50% of the
then-Outstanding  Note Balance of each class of Notes then Outstanding) or, (ii)
if  no  such  institution  is  so  appointed,  petition  a  court  of  competent
jurisdiction  to appoint an  institution  meeting such  criteria as the Servicer
hereunder.  Pending appointment of a successor Servicer  hereunder,  the Trustee
shall act in such capacity as  hereinabove  provided.  In  connection  with such
appointment and assumption,  the Trustee shall cause such successor  Servicer to
enter into a servicing  agreement  substantially  in the form of this  Agreement
except  that  such  agreement  shall  not  include  any  of  the   Contributor's
representations, warranties or obligations and the Trustee may make arrangements
for the compensation of such successor Servicer out of payments on Contracts and
the related Contracts as it and such successor  Servicer shall agree;  provided,
however,  that no such  compensation  shall be in  excess  of that  provided  in
Section  4.04  hereof.  Neither the Trustee  nor a Successor  Servicer  shall be
deemed to be in default hereunder by reason of its failure to make, or its delay
in making,  any  distribution  hereunder or any portion thereof which failure or
delay was caused by (i) the failure of the prior  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 prior Servicer.

     10.04 Servicer to Cooperate.  The Servicer  hereby agrees to cooperate with
the  successor  Servicer  appointed in  accordance  with Section  10.02 or 10.03
hereof,  as  applicable,  in  effecting  the  termination  and  transfer  of the
responsibilities and rights of the Servicer hereunder to the successor Servicer,
including,  without limitation, the execution and delivery of assignments of UCC
financing   statements,   and  the  transfer  to  the  successor   Servicer  for
administration  by it of all cash amounts which shall at the time be held by the
Servicer or  thereafter  received  with respect to the Contracts and the related
Contracts.  The Servicer hereby agrees to transfer to any successor Servicer its
electronic records and all other records,  correspondence and documents relating
to the  Contracts  and the related  Contracts in the manner and at such times as
the successor Servicer shall reasonably request.  The Servicer hereby designates
the successor  Servicer its agent and  attorney-in-fact  to execute transfers of
UCC financing statements  (including any and all UCC financing statements naming
an individual  Obligor as debtor and the  Contributor  as secured party) and any
other filings or instruments  which may be necessary or advisable to effect such
transfer of the Servicer's  responsibilities and rights hereunder. Upon any such
termination  or  appointment  of a successor  Servicer,  the Trustee  shall give
prompt written notice thereof to each  Noteholder in the manner  provided in the
Indenture.

     10.05 Remedies Not Exclusive.  Nothing in the preceding  provisions of this
Section  10 shall be  interpreted  as  limiting  or  restricting  any  rights or
remedies which the Transferor,  the Issuer, the Trustee,  the Noteholders or any
other Person would  otherwise  have at law or in equity on account of the breach
or violation  of any  provision of this  Agreement  by the  Servicer,  including
without  limitation  the right to recover full and  complete  damages on account
thereof to the extent not inconsistent with Section 8.02 hereof.

     10.06 Waiver of Past Defaults. Holders of Notes evidencing more than 50% of
the Voting  Rights may waive any default by the Servicer in the  performance  of
its obligations  hereunder and its consequences.  Upon any such waiver of a past
default,  such default shall cease


                                       41
<PAGE>

to  exist,  and any  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 thereon except to the
extent expressly so waived.

     SECTION 11. ASSIGNMENT

     11.01  Assignment to Trustee.  It is understood that this Agreement and all
rights of the Transferor  hereunder and with respect to the Contributed Property
will be  assigned by the  Transferor  to the  Issuer,  and then  assigned by the
Issuer to the Trustee,  for the benefit of the Trustee and the Noteholders,  and
may be subsequently  assigned by the Trustee to any successor  Trustee.  Each of
the Contributor and the Servicer hereby expressly agrees to each such assignment
and  agrees  that  all  of  its  duties,  covenants,  obligations,  indemnities,
representations and warranties hereunder,  and all of the rights and remedies of
the  Transferor  hereunder,  shall be for the  benefit  of, and may be  enforced
directly by, the Issuer,  the Trustee,  the  Noteholders and any successor to or
assignee of any thereof.

     11.02 Assignment by Contributor or Servicer.  None of the respective rights
or obligations  of the  Contributor  and the Servicer  hereunder may be assigned
without the prior written consent of the Transferor and the Trustee (acting upon
the  instructions of Noteholders  evidencing not less than 66-2/3% of the Voting
Rights);   provided  that  nothing  herein  shall  preclude  the  Servicer  from
performing  its duties  hereunder  through  the use of agents to the extent that
such use is consistent  with the Servicer's  business  practices in dealing with
similar contracts and equipment for its own account, and provided, further, that
the use of an agent shall not relieve the Servicer  from any of its  obligations
hereunder.

     SECTION 12. NATURE OF CONTRIBUTOR'S OBLIGATIONS AND SECURITY THEREFOR

     12.01   Contributor's   Obligations   Absolute.   The  obligations  of  the
Contributor hereunder, and the rights of the Issuer and the Trustee, as assignee
of the Transferor,  in and to all amounts payable by the Contributor  hereunder,
shall be absolute and  unconditional  and shall not be subject to any abatement,
reduction,  setoff,  defense,  counterclaim or recoupment  whatsoever including,
without limitation,  abatements, reductions, setoffs, defenses, counterclaims or
recoupments  due or alleged to be due to, or by reason of, any past,  present or
future claims which the Contributor  may have against the Servicer,  the Issuer,
the Managing Member, the Transferor, DVI Funding Corporation,  DVI Funding, LLC,
DVI Receivables  Corp. XV, DVI  Receivables XV, LLC, the Trustee,  any holder of
the  Notes or any  other  Person  for any  reason  whatsoever;  nor,  except  as
otherwise  expressly  provided herein,  shall this Agreement  terminate,  or the
respective  obligations of the  Transferor,  the  Contributor or the Servicer be
otherwise  affected,  by reason of any defect in any  Contract or in any unit of
Equipment  or in the  respective  rights and  interests of the  Transferor,  the
Issuer,  the  Contributor  and the Trustee in any  thereof,  or by reason of any
liens, encumbrances,  security interests or rights of others with respect to any
Contract  or any unit of  Equipment,  or any failure by the  Transferor,  or the
Servicer to perform any of its obligations herein contained, or by reason of any
other indebtedness or liability,  howsoever and whenever arising, of DVI Funding
Corporation,  DVI Funding,  LLC, DVI  Receivables  Corp. XV, DVI Receivables XV,
LLC, the Transferor,  the Issuer, the Managing Member, the Servicer, the Trustee
or any holder of the Notes to the  Contributor  or any other


                                       42
<PAGE>

Person or by reason of any insolvency,  bankruptcy, or similar proceedings by or
against the Contributor,  the Servicer, the Transferor,  the Issuer, the Trustee
or any other Person or for any other cause whether  similar or dissimilar to the
foregoing, any present or future law to the contrary  notwithstanding,  it being
the  intention of the parties  hereto that all  obligations  of the  Contributor
hereunder and all amounts payable by the Contributor hereunder shall continue to
be due and  payable in all  events  and in the  manner  and at the times  herein
provided  unless  and until the  obligation  to perform or pay the same shall be
terminated  or limited  pursuant to the express  provisions  of this  Agreement;
provided that nothing in this Section 12.01 shall be  interpreted  as precluding
the Contributor  from pursuing  independently  any claim it may have against DVI
Funding Corporation, DVI Funding, LLC, DVI Receivables Corp. XV, DVI Receivables
XV, LLC the  Transferor,  the Servicer,  the Issuer,  the Managing  Member,  any
holder of the Notes or any other Person;  provided,  further, that any claims of
the Contributor  against the Transferor shall be subordinate in right of payment
to amounts  due and owing to the  Trustee  under the  Indenture  and any amounts
received  by the  Contributor  on such  claims  shall  be held in  trust  by the
Contributor  for the Trustee  and turned over to the Trustee  until such time as
all amounts due the Trustee under the Transaction Document are fully paid.

     12.02 Power of Attorney. Each of the Contributor and Servicer hereby grants
to each of the Transferor 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 Contributed Property to the Transferor 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 Contributor will execute any document or
instrument  deemed  necessary by the  Transferor  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 Contributor.

     SECTION 13. MISCELLANEOUS PROVISIONS

     13.01  Sale.  The  Contributor  agrees  to  treat  the  conveyances  to the
Transferor of the Contributor's interest in the Contracts and Equipment pursuant
to the terms of this  Agreement  for all purposes  other than taxes  measured by
income (including,  without  limitation,  financial  accounting  purposes of the
Contributor on a stand alone basis) as a sale of the  Contributor's  interest in
the Contracts and Equipment on all relevant books, records, financial statements
and other  applicable  documents.  The execution and delivery of this  Agreement
shall  constitute an  acknowledgment  by the Contributor and the Transferor that
each intends that the assignment and transfer herein contemplated constitutes an
outright  sale  and  assignment  to the  Transferor  by the  Contributor  of its
interest  in the  Contracts  and the  other  Contributed  Property,  and not for
security,  conveying  good title in such  interests free and clear of any liens,
and that such interest  shall not be a part of the  Contributor's  estate in the
event of the bankruptcy or the occurrence of another similar event,  of, or with
respect to, the Contributor,  and that the Contributed Property shall be removed
from the Contributor's estate in connection with an asset-backed transaction. In
that  regard,  each of the  Contributor  and the  Company  each intend that each
transfer of  Contributed  Property  pursuant to this  Agreement  be treated as a
"transfer" of an "eligible asset" (or proceeds  thereof) to an "eligible entity"
in connection with an "asset-backed  securitization",  all within the meaning of
Section 541 of the Bankruptcy  Code and any successor  section  thereto.  In the
event that such  conveyance is determined to be made as security for a loan made
by the Transferor,  the Issuer, the Trust or the Noteholders to the Contributor,
the


                                       43
<PAGE>

parties intend that the Contributor  shall have granted to the  Transferor,  and
its  successors  and assigns,  a security  interest in the  Contracts  and other
Contributed  Property  and that  this  Agreement  shall  constitute  a  security
agreement under applicable law.

     The conveyance to the  Transferor  shall be treated as a sale to the extent
of cash  remitted  to the  Contributor  and shall be  treated  as an  additional
contribution to the capital of the Transferor to the extent of the excess of the
Discounted  Contract Balances of the Contracts  conveyed over the amount of such
cash.

     13.02  Amendment.  This  Agreement  may be amended from time to time by the
parties  hereto,  without  the  consent of any of the  Noteholders,  to cure any
ambiguity,   to  correct  or  supplement  any  provision  herein  which  may  be
inconsistent  with any other  provision  herein or to make any other  provisions
with respect to matters or questions  arising under this  Agreement  which shall
not be materially  inconsistent with the provisions of this Agreement,  provided
that such actions shall not adversely affect in any respect the interests of any
Noteholder.

     This  Agreement may also be amended from time to time by the parties hereto
with the consent of the Holders of Notes  evidencing more than 50% of the Voting
Rights (and with prior written notice to the Rating Agencies) 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 of Notes;  provided,  however,  that such amendment may not, without the
consent  of all of the  Noteholders  (i)  increase  or reduce in any  manner the
amount of, or accelerate or delay the timing of,  collections of payments on the
Contracts or distributions  that are required to be made for the benefit of such
Noteholders, (ii) reduce the aforesaid percentage of the Voting Rights which are
required to consent to any such  amendment,  or (iii) modify this Section 13.02.
The Servicer  shall deliver copies of any amendment to this Agreement to each of
the Rating Agencies and each Noteholder.

     13.03  Waivers.  No  failure  or delay on the part of the  Transferor,  the
Issuer or the  Trustee  in  exercising  any  power,  right or remedy  under this
Agreement  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any such  power,  right or remedy  preclude  any  other or  further
exercise thereof or the exercise of any other power, right or remedy.

     13.04 Notices.  All communications and notices pursuant hereto to any party
shall  be in  writing  or by  telegraph,  telex or  telecopy  and  addressed  or
delivered to it at its address (or in case of telex or telecopy, at its telex or
telecopy  number at such  address) as follows or at such other address as may be
designated  by it by  notice  to the  other  party  and,  if  mailed  or sent by
telegraph  or telex,  shall be deemed  given when  mailed,  communicated  to the
telegraph office or transmitted by telex or telecopy:

          (a) in the case of the Contributor or Servicer:

              2500 York Road
              Jamison, Pennsylvania 18929
              Attention: Securitization Manager
              Telephone: (215) 488-5000
              Telecopier: (215) 488-5416


                                       44
<PAGE>

          (b) in the case of the Transferor:

              2500 York Road
              Jamison, Pennsylvania 18929
              Attention: Securitization Manager
              Telephone: (215) 488-5000
              Telecopier: (215) 488-5416

          (c) in the case of the Managing Member:

              2500 York Road
              Jamison, Pennsylvania 18929
              Attention: Securitization Manager
              Telephone: (215) 488-5000
              Telecopier: (215) 488-5416

          (d) in the case of the Trustee:

              181 Fifth Street
              St. Paul, Minnesota 55101
              Attention: Structured Finance
              Telephone: (651) 244-0727
              Telecopier: (651) 244-0089

          (e) in the case of the Rating Agencies:

              Fitch, Inc.
              55 East Monroe Street
              Chicago, IL 60603
              Attention: Asset-Backed Monitoring (Equipment Leases)
              Telephone: (312) 368-3100
              Telecopier: (312) 368-2069

              Moody's Investors Service, Inc.
              99 Church Street, 4th Floor
              New York, NY 10007
              Attention: ABS Monitoring Department
              Telephone: (212) 553-0300
              Telecopier: (212) 298-7139
              E-Mail: ServicerReports@moodys.com

     13.05 Costs and Expenses.  The Contributor will pay all reasonable expenses
incident to the  performance  of its  obligations  under this  Agreement and any
other  Transaction


                                       45
<PAGE>

Document and the Contributor  agrees to pay all reasonable  out-of-pocket  costs
and  expenses of the  Transferor,  including  fees and  expenses of counsel,  in
connection with the enforcement of any obligation of the Contributor hereunder.

     13.06  Third  Party   Beneficiaries.   The  Issuer,  the  Trustee  and  the
Noteholders are express third party beneficiaries to this Agreement.

     13.07   Survival   of   Representations.    The   respective    agreements,
representations,  warranties  and other  statements by the  Contributor  and the
Transferor set forth in or made pursuant to this Agreement  shall remain in full
force and effect and will survive the Closing Date.

     13.08 Confidential Information.  The Transferor agrees 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 Transferor's  rights hereunder,  under
the Contracts, under the applicable Transaction Documents or as required by law.

     13.09 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.

     13.10  GOVERNING LAW. THIS AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.

     13.11  Consent to  Jurisdiction.  Each of the  parties  hereto  irrevocably
submits to the  jurisdiction  of any New York State or Federal  court sitting in
the  Borough  of  Manhattan  in the City of New York  over any  suit,  action or
proceeding  arising out of or relating  to this  Agreement.  Each of the parties
hereto irrevocably waives, to the fullest extent permitted by law, any objection
which it may  have to the  laying  of the  venue of any  such  suit,  action  or
proceeding  brought in such a court and any claim that any such suit,  action or
proceeding  brought in such a court has been brought in any inconvenient  forum.
Each of the  parties  hereto  agrees  that the final  judgment in any such suit,
action or  proceeding  brought in such a court shall be  conclusive  and binding
upon each of the  parties  hereto and may be  enforced by the courts of New York
(or any other courts to the  jurisdiction of which it is subject) by a suit upon
such judgment; provided that service of process is effected upon it as permitted
by law;  provided  however,  that each of the parties hereto does not waive, and
the foregoing  provisions of this sentence  shall not constitute or be deemed to
constitute a waiver of, (i) any right to appeal any such  judgment,  to seek any
stay or otherwise to seek reconsideration or review of any such judgment or (ii)
any stay of  execution  or levy  pending an appeal  from,  or a suit,  action or
proceeding for reconsideration or review of, any such judgment.

     13.12  Counterparts.  This  Agreement  may  be  executed  in  two  or  more
counterparts and by different  parties on separate  counterparts,  each of which
shall be an original,  but all of which  together  shall  constitute one and the
same instrument.


                                       46
<PAGE>

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


                             [SIGNATURE PAGE FOLLOWS]


                                       47
<PAGE>


                                            Contribution and Servicing Agreement
                                                    Dated as of November 1, 2001

     IN WITNESS  WHEREOF,  the undersigned have caused this Agreement to be duly
executed by their respective  officers  thereunto duly authorized as of the date
first above written.


                                       DVI FINANCIAL SERVICES INC.


                                       By:
                                          ---------------------------------
                                         Name: Matthew E. Goldenberg
                                         Title: Vice President



                                       DVI RECEIVABLES CORP. XIV


                                       By:
                                          ---------------------------------
                                         Name: Matthew E. Goldenberg
                                         Title: Vice President

<PAGE>

                                    EXHIBIT A

                                CONTRACT SCHEDULE

                        See Schedule 1 to the Indenture.



<PAGE>


                                    EXHIBIT B

                             MONTHLY SERVICER REPORT

                                  SEE ATTACHED



<PAGE>


                                    EXHIBIT C

                                    RESERVED



<PAGE>


                                    EXHIBIT D

                        SUBSTITUTE CONTRACT TRANSFER FORM

     DVI Financial  Services Inc. (the  "Contributor") and DVI Receivables Corp.
XV (the  "Transferor"),  pursuant to the Contribution  and Servicing  Agreement,
dated as of  November  1, 2001 (the  "Contribution  and  Servicing  Agreement"),
hereby  confirm  their  understanding  with respect to the  contribution  by the
Contributor  to the  Transferor  of those  substitute  Contracts  listed  on the
Schedule  1  attached  hereto  (the  "Substitute  Contracts"),  together  with a
security interest in all of the Contributor's  right,  title and interest in and
to the related Equipment and other related property described herein.

     Conveyance of Substitute Contracts.  The Contributor hereby makes a capital
contribution  to the  Transferor  of  all of  Contributor's  rights,  title  and
interest  in, to, and under (i) the  Substitute  Contracts  listed on Schedule 1
hereto  including,  without  limitation,  its  interests in the proceeds of such
Substitute  Contracts,  the right to receive  all  amounts  due or to become due
thereunder after  ____________ (the "Cut-Off Date"),  but excluding any Retained
Interest,  (ii) the Contract Files relating to such Contracts,  (iii) a security
interest  in the  Equipment  subject  to such  Substitute  Contracts,  (iv)  any
remarketing  agreement  to the  extent  specifically  relating  to a  Substitute
Contract,  and all  guarantees,  cash deposits or credit support (other than any
accounts  receivable of the related  Obligor)  supporting or securing payment of
any arrangements with the vendor, dealer or manufacturer of the Equipment to the
extent  specifically  relating to any  Substitute  Contract,  (v) any  insurance
carried by any Obligor under any Substitute  Contract (or the related Equipment)
and (vi) all income, payments and proceeds of the foregoing.

     The Contributor hereby confirms that:

     (1)  On  or  prior  to  ________________  (the  "Substitution  Date"),  the
Contributor  shall have deposited in the Collection  Account all  collections in
respect  of the  Substitute  Contracts  that  were due on or after  the  related
Cut-Off Date;

     (2) As of the Substitution Date, the Contributor was not insolvent nor will
it be made  insolvent  by such  transfer nor is any of them aware of any pending
insolvency;

     (3) Each Substitute Contract is an Eligible Contract;

     (4) On or  prior to the  Substitution  Date,  the  Contributor  shall  have
delivered to the Trustee the sole  original,  manually  executed  counterpart of
each Substitute Contract that constitutes "chattel paper" or an "instrument", as
such terms are defined in the UCC;

     (5) The sum of the Discounted  Contract  Balances as of the Cut-Off Date of
the Substitute Contracts listed on Schedule 1 attached hereto is $____________;

     (6) When the  Substitute  Contracts  are added to the Trust  Property,  all
representations  and warranties will be true and correct as of the  Substitution
Date unless any breach of such representations and warranties resulting from the
inclusion  of such  Substitute  Contract  shall  have been  waived in advance by
Noteholders evidencing more than 50% of the Voting Rights;
<PAGE>

     (7) The  Contributor  has  delivered  to the  Trustee  evidence  of all UCC
filings  necessary  to give the  Trustee a  perfected  first  priority  security
interest  in the  Substitute  Contract  and the  related  Equipment  (other than
Equipment for which the Original Equipment Cost is less than $25,000);

     (8) Such  Substitute  Contract(s)  shall be added to, and constitute a part
of, [Pool A] [Pool B]; and

     (9) Such  Substitute  Contract(s)  is/are  being  substituted  pursuant  to
[Section 5.03 of the Agreement]  [Section  7.01(a)(1) of the Agreement] [Section
7.01(a)(2) of the  Agreement]  [Section  7.01(b)(1) of the  Agreement]  [Section
7.01(b)(2) of the Agreement].

     All terms and conditions of the  Contribution  and Servicing  Agreement and
the  other  Transaction  Documents  with  respect  to the  Contributor  and  the
Substitute 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  Substitute  Contract  Transfer  Form shall control over the
conflicting provisions of the Contribution and Servicing Agreement.

     Terms capitalized herein and not defined herein shall have their respective
meanings as set forth in the Contribution and Servicing Agreement.


                                      DVI FINANCIAL SERVICES INC.


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


                                      DVI RECEIVABLES CORP. XIV


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


<PAGE>


                                    EXHIBIT E

       FORM OF RE-ASSIGNMENT BY TRANSFEROR PURSUANT TO SECTION 5.03(b) OR
              7.01(c) OF THE CONTRIBUTION AND SERVICING AGREEMENT

     DVI Receivables  Corp. XV (the  "Transferor")  pursuant to the Contribution
and Servicing  Agreement,  dated as of November 1, 2001,  between the Transferor
and DVI Financial Services Inc. (the "Contributor") does hereby sell,  transfer,
assign,   deliver  and  otherwise  convey  to  Contributor,   without  recourse,
representation or warranty, all of the Transferor'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 CORP. XV


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



<PAGE>

                                    EXHIBIT F

               FORM OF OFFICER'S CERTIFICATE PURSUANT TO SECTION 7

     The undersigned certifies that the undersigned is a duly authorized officer
of DVI  Financial  Services  Inc.  (the  "Contributor"),  and that,  as such the
undersigned  is authorized to execute and deliver this  certificate on behalf of
the  Contributor,  and  further  certifies  pursuant  to  Section  7.02  of  the
Contribution and Servicing  Agreement (the "Agreement")  dated as of November 1,
2001,  between the Contributor and DVI Receivables Corp. XV (the  "Transferor"),
that to his or her knowledge,  the Contributor's  contribution to the Transferor
of those Substitute  Contracts  listed in Schedule 1 attached  hereto,  together
with all of the  Contributor's  right,  title and interest in and to the related
Contracts and the related Contributed  Property, is in compliance with Section 7
of the Agreement.

     IN WITNESS WHEREOF, I have hereunto signed my name.

Date:

                                         DVI FINANCIAL SERVICES INC.


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


<PAGE>


                                    EXHIBIT G

                               FORMS OF CONTRACTS

     Copies are on file at the offices of U.S. Bank Trust National  Association,
as Indenture Trustee, and are available upon request.



<PAGE>


                                    EXHIBIT H

                             UNDERWRITING GUIDELINES

     Copies are on file at the offices of U.S. Bank Trust National  Association,
as Indenture Trustee, and are available upon request.



<PAGE>


                                   APPENDIX I

                 See copy of Appendix I following the Indenture