Document:

AGREEMENT OF LIMITED PARTNERSHIP

                               Mallard Hunter L.P.

                            Dated as of May 23, 2000
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                                TABLE OF CONTENTS
                                                                            Page

ARTICLE I                  Formation of Partnership............................1
         Section 1.1.      Formation...........................................1
         Section 1.2.      Name................................................1
         Section 1.3.      Business............................................1
         Section 1.4.      Places of Business, Registered Agent and Addresses..2
         Section 1.5.      Term................................................2
         Section 1.6.      Filings.............................................2

ARTICLE II                 Certain Definitions and References..................3
         Section 2.1.      Certain Defined Terms...............................3
         Section 2.2.      References and Construction........................11

ARTICLE III                Capitalization.....................................12
         Section 3.1.      Capital Contributions of General Partner...........12
         Section 3.2.      Capital Contributions of Limited Partner...........12
         Section 3.3.      Request for Additional Capital Contributions
                                of Limited Partner............................13
         Section 3.4.      Reduced Capital Contributions of Limited Partner...16
         Section 3.5.      Payments of Capital Contributions..................16
         Section 3.6.      Non-payment of Capital Contributions...............17
         Section 3.7.      Interest on and Return of Capital Contributions....20

ARTICLE IV                 Allocations and Distributions......................20
         Section 4.1.      Allocation of Profits and Losses...................20
         Section 4.2.      Special Allocations................................20
         Section 4.3.      Distributions......................................22

ARTICLE V                  Partnership Property...............................23
         Section 5.1.      Title to Partnership Property......................23
         Section 5.2.      Acquisition of the Assets..........................23
         Section 5.3.      Additional Acquisitions............................24
         Section 5.4.      Lease Sales........................................25
         Section 5.5.      Sales of Production................................25
         Section 5.6.      Operations on Partnership Assets...................26
         Section 5.7.      Hedge Arrangement..................................26
         Section 5.8.      Production.........................................27
         Section 5.9.      Environmental, Health and Safety Program...........27

ARTICLE VI                 Management.........................................28

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         Section 6.1.      Power and Authority of General Partner.............28
         Section 6.2.      Certain Restrictions on General Partner's Power
                                and Authority.................................28
         Section 6.3.      Duties and Services of General Partner.............30
         Section 6.4.      Liability of General Partner.......................31
         Section 6.5.      Limitations on Indemnification.....................31
         Section 6.6.      Costs, Expenses and Reimbursement..................31
         Section 6.7.      Organization and Third Party Acquisition Costs.....32
         Section 6.8.      Insurance..........................................33
         Section 6.9.      Tax Elections......................................33
         Section 6.10.     Tax Returns........................................34
         Section 6.11.     Appointment of Trustee to Receive Payments.........34

ARTICLE VII                Rights and Obligations of Limited Partner..........35
         Section 7.1.      Rights of Limited Partner..........................35
         Section 7.2.      Limitations on Limited Partner.....................35
         Section 7.3.      Liability of Limited Partner.......................35
         Section 7.4.      Access of Limited Partner to Data..................36
         Section 7.5.      Withdrawal and Return of Capital Contribution......36

ARTICLE VIII               Books, Records, Reports and Bank Accounts..........36
         Section 8.1.      Capital Accounts, Books and Records................36
         Section 8.2.      Reports............................................39
         Section 8.3.      Bank Accounts......................................41
         Section 8.4.      Information Relating to the Partnership............41
         Section 8.5.      Certain Notices....................................41

ARTICLE IX                 Assignments of Interests and Substitutions.........42
         Section 9.1.      Assignments by Limited Partner.....................42
         Section 9.2.      Assignment by General Partner......................43
         Section 9.3.      Merger or Consolidation............................43
         Section 9.4.      Removal of General Partner.........................43
         Section 9.5.      Right of General Partner Upon Removal..............44
         Section 9.6       Right of First Offer...............................45

ARTICLE X                  Dissolution, Liquidation and Termination...........45
         Section 10.1.     Dissolution........................................45
         Section 10.2.     Withdrawal by General Partner and Reconstitution...47
         Section 10.3.     Liquidation and Termination........................47
         Section 10.4.     Cancellation of Certificate........................49
         Section 10.5.     Certain Additional Agreements Regarding
                                Piggyback Rights..............................49

ARTICLE XI                 Representations and Warranties.....................50
         Section 11.1.     Representations and Warranties of General Partner..50

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         Section 11.2.     Representations and Warranties of Limited Partner..52

ARTICLE XII                Miscellaneous......................................53
         Section 12.1.     Notices............................................53
         Section 12.2.     Amendments.........................................53
         Section 12.3.     Partition..........................................53
         Section 12.4.     Entire Agreement...................................53
         Section 12.5.     No Waiver..........................................53
         Section 12.6.     Applicable Law.....................................53
         Section 12.7.     Successors and Assigns.............................53
         Section 12.8.     Exhibits...........................................53
         Section 12.9.     Survival of Representations and Warranties.........54
         Section 12.10. No Third Party Benefit................................54
         Section 12.11. Public Announcements..................................54
         Section 12.12. Counterparts..........................................54

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                        AGREEMENT OF LIMITED PARTNERSHIP

                               Mallard Hunter L.P.

     THIS  AGREEMENT  OF  LIMITED  PARTNERSHIP  (this  "Agreement")  is made and
entered  into  this  23rd  day of  May,  2000,  by and  between,  Magnum  Hunter
Production,  Inc., a Texas  corporation  (herein  sometimes  called the "General
Partner"),  and TIFD III-X Inc., a Delaware corporation (herein sometimes called
the "Limited Partner").  In consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:

                                    ARTICLE I

                            Formation of Partnership

     Section 1.1.  Formation.  Subject to the provisions of this Agreement,  the
parties hereto do hereby form a limited partnership (the "Partnership") pursuant
to the provisions of the Texas Revised Limited Partnership Act (Article 6132a-1,
Vernon's Texas Civil  Statutes)  (such Act, as amended from time to time, or any
successor statute or statutes thereto, being called the "Act").

     Section 1.2. Name. The name of the Partnership shall be Mallard Hunter L.P.
Subject  to all  applicable  laws,  the  business  of the  Partnership  shall be
conducted  in  the  name  of the  Partnership  unless  under  the  law  of  some
jurisdiction  in which the  Partnership  does  business  such  business  must be
conducted under another name. In such a case, the business of the Partnership in
such jurisdiction may be conducted under such other name or names as the General
Partner shall determine to be necessary so long as it does not affect  adversely
the limited  liability of the Limited  Partner  hereunder or  jeopardize  in any
manner the title to or ownership of any  Partnership  Leases (as herein defined)
or other  assets.  The General  Partner shall cause to be filed on behalf of the
Partnership  such  partnership  or assumed or  fictitious  name  certificate  or
certificates or similar instruments as may from time to time be required by law.

     Section 1.3.  Business.  Subject to the other provisions of this Agreement,
the business of the Partnership  shall be: (a) to acquire the Assets (as defined
herein);  (b) to acquire  additional  Leases (as defined  herein);  (c) to hold,
maintain,  renew,  explore,  drill,  develop  and  operate  the  Assets and such
additional Leases; (d) to produce,  collect, store, treat, deliver, market, sell
or otherwise dispose of oil, gas and related  hydrocarbons and minerals from the
Assets and such additional Leases; (e) to farm-out,  sell, abandon and otherwise
dispose of the Assets,  additional Leases and other Partnership  assets;  (f) to
enter into swaps,  options,  future contracts and other transactions to hedge or
to otherwise  minimize the risk  associated with the fluctuation of prices to be
received by the Partnership  from the sale of oil, gas and related  hydrocarbons
and minerals from the Assets and any additional  Leases acquired pursuant to the
terms hereof;  and (g) to take all such other  actions  incidental to any of the
foregoing as the General Partner may determine to

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be  necessary  or  appropriate.  Notwithstanding  the  foregoing  and any  other
provision  of this  Agreement,  the  Partnership  shall not (i)  acquire (A) any
additional  Leases,  except as expressly provided herein, (B) any carbon-dioxide
removal,  sulfur  removal or other  equipment for the processing or treatment of
gas or other  hydrocarbons,  whether on or off the Assets or  additional  Leases
acquired pursuant to the terms hereof (other than equipment  acquired as part of
and at the same time as the acquisition of the Assets or an additional  Lease or
otherwise in accordance with this Agreement), (C) any refining facilities or (D)
any transportation  facilities except pipelines and gathering systems connecting
the Assets or additional Leases acquired pursuant to the terms hereof with other
gathering  systems or  transmission  pipelines,  or (ii) engage in the  contract
drilling business or any other business except as expressly permitted herein.

     Section 1.4. Places of Business, Registered Agent and Addresses.

     (a) The  principal  United  States  office  and  place of  business  of the
Partnership  and its street address shall be 600 Las Colinas Blvd.,  Suite 1100,
Irving, Texas 75039. The General Partner, at any time and from time to time, may
change the location of the  Partnership's  principal  United  States  office and
place of business as the General  Partner  shall  determine  to be  necessary or
appropriate,  provided  notice  thereof  is  concurrently  given to the  Limited
Partner.

     (b) The  registered  office of the  Partnership  in Texas  shall be 600 Las
Colinas Blvd.,  Suite 1100,  Irving,  Texas 75039,  and the registered agent for
service  of process  on the  Partnership  shall be the  General  Partner,  whose
business address is the same as the Partnership's registered office. The General
Partner,  at any time  and  from  time to time,  may  change  the  Partnership's
registered  office or registered  agent or both by complying with the applicable
provisions  of the Act and  giving  concurrent  notice  thereof  to the  Limited
Partner and may establish,  appoint and change additional registered offices and
registered agents of the Partnership in such other states as the General Partner
shall determine to be necessary or advisable.

     Section 1.5.  Term. The  Partnership  shall be formed and commence upon the
completion of filing for record of an initial certificate of limited partnership
of the Partnership with the Secretary of State of the State of Texas.

     Section 1.6. Filings.  Upon the request of the General Partner, the Limited
Partner  shall  promptly  execute and deliver  all such  certificates  and other
instruments  conforming  hereto as shall be necessary for the General Partner to
accomplish  all filing,  recording,  publishing  and other acts  appropriate  to
comply with all  requirements for the formation and operation of the Partnership
as a  limited  partnership  under  the laws of the  State  of Texas  and for the
qualification  or  reformation  and  operation of the  Partnership  as a limited
partnership in all other  jurisdictions  where the Partnership  shall propose to
conduct  business.  Prior to the conducting of any business in any jurisdiction,
the General Partner shall: (a) to the full extent necessary to establish limited
liability  for the  Limited  Partner  under  the laws of such  jurisdiction  and
otherwise to comply with the laws of such jurisdiction, cause the Partnership to
comply with all requirements for the registration,

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qualification or reformation of the Partnership to conduct business as a limited
partnership in such  jurisdiction and (b) at the request of the Limited Partner,
obtain an opinion of reputable counsel in such jurisdiction  satisfactory in all
respects  to the  Limited  Partner  as to such  registration,  qualification  or
reformation  and as to the limited  liability of the Limited  Partner  under the
laws of such  jurisdiction.  Thereafter,  the  General  Partner  shall cause the
Partnership  to  continue  to comply  with all such  requirements  and all other
requirements  necessary to maintain the limited liability of the Limited Partner
in each  jurisdiction  where the  Partnership  does  business  and,  upon timely
request of the Limited Partner and within 60 days after the end of each calendar
year  commencing  with the calendar year ending  December 31, 2000,  the General
Partner  shall  furnish to the  Limited  Partner an opinion or opinions of legal
counsel for the  Partnership as to compliance  with such  requirements  and such
limited liability.

                                   ARTICLE II

                       Certain Definitions and References

     Section  2.1.  Certain  Defined  Terms.  When used in this  Agreement,  the
following  terms  shall have the  respective  meanings  assigned to them in this
Section 2.1 or in the sections,  subsections or other  subdivisions  referred to
below:

     "Acquisition  Cost" shall  mean,  (a) with  respect to the  purchase by the
Partnership  from the General Partner or its Affiliates of any Lease  (exclusive
of the  acquisition  of the  Assets),  the  costs as  described  in  clause  (b)
immediately  below  incurred by the General  Partner  and/or its  Affiliates  in
acquiring such Lease and (b) with respect to the  acquisition by the Partnership
of any Lease  other  than those  purchased  pursuant  to clause (a)  immediately
above, the sum of (i) the price paid or contractually agreed to be paid for such
Lease to the lessor, assignor or grantor of such Lease, including lease bonuses,
advance  rentals  and  other  acquisition  costs  and (ii)  title  insurance  or
examination costs,  broker's  commissions,  attorneys' fees, due diligence fees,
filing fees,  recording  costs,  and transfer and sales taxes, if any, and other
similar  costs  incurred  with  respect  to such  Lease in  connection  with its
acquisition, but excluding any actual, allocated or imputed interest expense.

     "Act" shall have the meaning assigned to such term in Section 1.1.

     "Adjusted  Capital  Account" shall mean the capital account  maintained for
each  Partner as of the end of each fiscal year (a)  increased by (i) the amount
of any unpaid Capital Contributions  unconditionally agreed to be contributed by
such  Partner  under  Article  III,  if any,  and (ii) an  amount  equal to such
Partner's allocable share of the Partnership's  Minimum Gain, as computed on the
last day of such fiscal year in accordance with applicable Treasury Regulations,
and (b)  reduced  by (i)  the  amount  of all  depletion  deductions  reasonably
expected to be allocated to such Partner in subsequent years and charged to such
Partner's capital account, (ii) the amount of

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all losses and deductions reasonably expected to be allocated to such Partner in
subsequent  years under  Sections  704(e)(2) and 706(d) of the Internal  Revenue
Code and Treasury Regulation ss. 1.751-1(b)(2)(ii),  and (iii) the amount of all
distributions  reasonably expected to be made to such Partner to the extent they
exceed  offsetting   increases  to  such  Partner's  capital  account  that  are
reasonably  expected  to occur  during  (or  prior  to) the  year in which  such
distributions are reasonably expected to be made.

     "Affiliate"  shall  mean (a) any  person  directly  or  indirectly  owning,
controlling or holding with power to vote 10% or more of the outstanding  voting
securities  of the  General  Partner,  (b)  any  person  10% or  more  of  whose
outstanding  voting securities are directly or indirectly  owned,  controlled or
held with  power to vote by the  General  Partner,  (c) any person  directly  or
indirectly  controlling,  controlled by or under common control with the General
Partner, (d) any officer,  director,  member,  manager or partner of the General
Partner or any person described in clause (a), (b) or (c) of this paragraph,  or
(e) any person related by blood,  adoption or marriage to any person referred to
in clause (c) or clause (d) of this paragraph.  As used in this  Agreement,  the
term  "person"  shall  include  an  individual,  an  estate,  a  corporation,  a
partnership,  a limited  liability  company,  an association or other entity,  a
joint stock company and a trust.

     "Agreed  Rate"  shall mean a rate per annum which is equal to the lesser of
(a) a rate which is one  percent  (1%) above the prime rate of interest of Chase
Bank,  New York,  New York,  as announced or published by such bank from time to
time (adjusted from time to time to reflect any changes in such rate  determined
hereunder)  or (b) the maximum rate from time to time  permitted  by  applicable
law.

     "Agreement" shall mean this Agreement,  as hereafter  changed,  modified or
amended in accordance with the terms hereof.

     "Area of Mutual  Interest"  shall  mean the  areas  covered  by each  Lease
acquired by the Partnership pursuant to the terms hereof plus all areas within a
one-half mile radius of the boundary lines of such Lease.

     "Assets"  shall  mean the  "Properties,"  as such  term is  defined  in the
Purchase Agreement.

     "Capital  Contributions"  shall mean for any Partner at the particular time
in question the aggregate of the dollar  amounts of any cash  contributed to the
capital  of the  Partnership,  or, if the  context in which such term is used so
indicates, the dollar amounts of cash agreed to be contributed,  or requested to
be contributed, by such Partner to the capital of the Partnership.

     "Capital  Costs"  shall  mean  (a) all  geological  and  geophysical  costs
incurred  by the  Partnership  to the extent any of such costs are  incurred  in
connection  with  Partnership  wells  drilled or  proposed  to be drilled on the
Assets or any additional  Lease acquired  pursuant to the terms hereof,  (b) all
costs incurred by the Partnership in locating, drilling, completing, equipping,

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deepening or  sidetracking a well located on the Assets or any additional  Lease
acquired pursuant to the terms hereof,  including (i) the costs of surveying and
staking such well,  the costs of any surface  damages and the costs of clearing,
coring,  testing,  logging and evaluating  such well,  (ii) the costs of casing,
cement  and  cement  services  for such  well,  (iii) the cost of  plugging  and
abandoning such well (including  standard and customary  remediation  activities
associated  therewith) if it is  determined  that such well would not produce in
commercial  quantities  and should be abandoned and (iv) all direct  charges and
overhead  chargeable  to the  Partnership  with  respect  to such well under any
applicable operating agreement until such time as all operations are carried out
as required by applicable  regulations and sound  engineering  practices to make
such well  ready for  production,  including  the  installation  and  testing of
wellhead equipment, or to plug and abandon a dry hole; (c) all costs incurred by
the Partnership in  recompleting or plugging back any Partnership  well; (d) all
costs  incurred by the  Partnership in reworking any  Partnership  well when the
Partnership's  reasonably  anticipated  share  of such  costs  is  greater  than
$50,000;  (e) all costs  incurred  by the  Partnership  in  locating,  drilling,
completing,  equipping, deepening or sidetracking any enhanced recovery producer
or injector well (including the costs of all necessary surface equipment such as
steam generators,  compressors, water treating facilities, injection pumps, flow
lines and steam lines) or otherwise conducting Enhanced Recovery Operations; and
(f) all costs incurred by the Partnership in constructing production facilities,
pipelines and other  facilities  necessary to develop the Assets and  additional
Leases acquired pursuant to the terms hereof and produce, collect, store, treat,
deliver,  market,  sell or otherwise dispose of oil, gas and other  hydrocarbons
and minerals therefrom;  but such term shall not include any Lease Operating and
Production Costs, Acquisition Costs, or Catastrophe Costs.

     "Catastrophe Costs" shall mean all costs,  expenses and damages incurred by
the  Partnership as a result of the failure of the General  Partner to cause the
Partnership to obtain or carry the types or amounts of insurance coverage agreed
upon from time to time by the Partners in accordance  with Section 6.8, but such
term shall not include (a) the deductible  amounts under any insurance  coverage
arranged by or on behalf of the  Partnership  or with respect to its property or
operations to the extent such deductible amounts have been approved or agreed to
by the  Limited  Partner  in  accordance  with  Section  6.8 and (b) any  costs,
expenses  and  damages  incurred  by the  Partnership  that are in excess of the
agreed upon insurance coverage maintained in accordance with the terms hereof.

     "Change  in  Control"  shall  mean the  occurrence  during  the term of the
Partnership  of any of the  following:  (a) any  person (as such term is used in
Section 13(d) and 14(d(2) of the Securities and Exchange Act of 1934, as amended
(the "Exchange  Act")) is or becomes the "beneficial  owner" (as defined in Rule
13d-3 of the Exchange  Act),  directly or  indirectly,  of  securities of Parent
representing  40% or more of the combined voting power of the General  Partner's
then outstanding securities; (b) if, during any period of two consecutive years,
individuals  who at the  beginning  of  such  period  constitute  the  board  of
directors of the Parent cease for any reason to  constitute  at least a majority
thereof,  unless the  election or  nomination  for the  election by the Parent's
stockholders  of each new director was approved by a vote of at least  two-third
of the

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directors  then  still in office who were  directors  at the  beginning  of such
period; or (c) Parent ceases to own at least 80% of the voting securities of the
General Partner.

     "Contributing  Partner"  shall have the  meaning  assigned  to such term in
Section 3.6(d).

     "Cumulative  Payout"  shall mean,  with  respect to each month,  X minus Y,
where:

     "X"= the sum of (i) such  month's  Monthly  Payout  plus (ii) all  previous
months' Monthly Payouts; and

     "Y" = the sum of (i) the Capital  Contribution  made by the Limited Partner
pursuant to the terms hereof during such month times the Payout  Discount Factor
for such  month  plus  (ii) each  Capital  Contribution  previously  made by the
Limited  Partner  pursuant to the terms hereof times the Payout  Discount Factor
for the month in which such Capital Contribution was made.

     "Defaulting  Partner"  shall  have the  meaning  assigned  to such  term in
Section 3.6(d).

     "Deficit  Partner" shall have the meaning  assigned to such term in Section
4.3(i).

     "Delivery  Date" shall mean the date on which this Agreement has been fully
and unconditionally executed and delivered by each of the parties hereto.

     "Depletable  Property"  shall  have the  meaning  assigned  to such term in
Section 4.3(b).

     "Enhanced  Recovery  Operations"  shall  mean  any  operations  or  project
intended to increase  the  recovery of oil and/or gas from a pool by  artificial
means or by the application of energy  extrinsic to the pool,  which  artificial
means or application shall include pressuring,  cycling,  pressure  maintenance,
injection to the pool of a substance or form of energy,  or other  operations or
projects that would be commonly  considered  secondary or tertiary operations or
projects, but such term shall not include the injection in a well of a substance
or form of energy for the sole purpose of (a) aiding in the lifting of fluids in
the  well,  or (b)  stimulation  of the pool at or near the well by  mechanical,
chemical, thermal or explosive means.

     "Environmental  Laws" shall mean all  applicable  federal,  state and local
laws,  rules  and  regulations,  orders,  judgments,  decrees  and  other  legal
requirements  relating to pollution or the  regulation  and  protection of human
health, safety, the environment or natural resources, including, but not limited
to, the Comprehensive Environmental Response, Compensation, and Liability Act of
1980,  as  amended  (42   U.S.C.ss.9601   et  seq.);   the  Hazardous   Material
Transportation   Act,  as  amended  (49   U.S.C.ss.180  et  seq.);  the  Federal
Insecticide,  Fungicide,  and  Rodenticide  Act, as amended (7  U.S.C.ss.136  et
seq.); the Resource  Conservation and Recovery Act, as amended (42 U.S.C.ss.6901
et seq.);  the Toxic  Substance  Control  Act, as amended (42  U.S.C.ss.7401  et
seq.);  the Clean Air Act, as amended  (42  U.S.C.ss.740  et seq.);  the Federal
Water Pollution Control Act, as

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     amended (33 U.S.C.ss.1251 et seq.); the Occupational Safety and Health Act,
as amended (29 U.S.C.  ss.651 et seq.);  the Safe Drinking Water Act, as amended
(42  U.S.C.ss.300f  et  seq.);  and  their  state  and  local   counterparts  or
equivalents and any transfer of ownership notification or approval statute.

     "Event of Default" shall have the meaning  assigned to such term in Section
3.6(b).

     "General  Partner"  shall mean  Magnum  Hunter  Production,  Inc.,  a Texas
corporation,  in its  capacity  as general  partner of the  Partnership  and any
person who becomes a substituted general partner of the Partnership  pursuant to
the terms hereof.

     "GP Monthly Cash Distribution" shall mean, with respect to any month:

     (a)  the  Production   Sales  Proceeds   received  during  such  month  and
attributable to any Hedging Transaction  multiplied by the GP Sharing Percentage
for such month plus the  Production  Sales Proceeds  received  during such month
from  the  sale  of  hydrocarbons  (other  than  in  connection  with a  Hedging
Transaction) multiplied by the GP Sharing Percentage for such month; less

     (b) Lease Operating and Production  Costs paid during such month multiplied
by the GP Sharing Percentage for such month; less

     (c) Hedge  Costs  paid  during  such  month  multiplied  by the GP  Sharing
Percentage for such month; less

     (d) the amounts which the General Partner  reasonably  determines should be
added to the Partnership's cash reserves multiplied by the GP Sharing Percentage
(it being agreed that the Partnership's  cash reserves,  including all additions
thereto,  shall not  exceed the  remainder  of the total  Partnership  costs and
expenses the General Partner reasonably anticipates will be incurred within a 60
day period commencing as of the date of the determination of the GP Monthly Cash
Distribution,  minus the total  Production  Sales  Proceeds the General  Partner
reasonably  anticipates will be received by the Partnership during such period);
plus

     (e) any cash reserves which the General Partner reasonably  believes are no
longer  necessary to retain  multiplied  by the GP Sharing  Percentage  for such
month; plus

     (f) the net  proceeds  derived  from  the  sale of  Partnership  properties
multiplied by the GP Sharing Percentage for such month; plus

     (g)  any  other  funds  received  by  the  Partnership  during  such  month
(including  insurance  proceeds,  to the extent not expended by the Partnership)
multiplied by the GP Sharing Percentage for such month; less

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     (h) payments  made during such month on principal and interest on permitted
Partnership indebtedness multiplied by the GP Sharing Percentage for such month;
less

     (i) the  Management  Fee  multiplied by the GP Sharing  Percentage for such
month; less

     (j) other direct,  third party  out-of-pocket costs paid by the Partnership
for such month (e.g.'s, costs of obtaining audits of the Partnership's books and
records,  fees and expenses attributable to the preparation of the Partnership's
tax returns) multiplied by the GP Sharing Percentage for such month.

     "GP Sharing  Percentage"  shall mean,  when used with respect to any month,
100% minus the LP Sharing Percentage in effect during such month.

     "Guaranty"  shall mean that certain Guaranty dated as of even date herewith
executed by Parent in favor of the Partnership and the Limited Partner.

     "Hedge Costs" shall mean the costs of arranging, modifying or terminating a
Hedging  Transaction,  or which  otherwise  arise in respect or as a result of a
Hedging Transaction.

     "Hedging   Transaction"  shall  mean  any  commodity  hedging   transaction
pertaining to oil, gas and related  hydrocarbons  and  minerals,  whether in the
form of a swap  agreement,  option to acquire or dispose of a futures  contract,
whether on an organized  commodities  exchange or otherwise,  or similar type of
financial  transaction  classified as "notional principal contracts" pursuant to
Treasury Regulation Section  1.512(b)-1(a)(1).  Any Hedging Transaction shall be
identified  in  the  books  and  records  of  the   Partnership  as  a  "hedging
transaction"  in the manner and at the times  prescribed by Treasury  Regulation
ss.1.1221-2(e).

     "Internal  Revenue  Code" shall mean the Internal  Revenue Code of 1986, as
amended from time to time, and any successor statute or statutes.

     "Lease"  shall  mean a  lease,  mineral  interest,  royalty  or  overriding
royalty,  fee right,  mineral  servitude,  license,  concession  or other  right
covering oil, gas and related  hydrocarbons  (or a contractual  right to acquire
such an interest) or an undivided interest therein or portion thereof,  together
with  all   appurtenances,   easements,   permits,   licenses,   servitudes  and
rights-of-way  situated upon or used or held for future use in  connection  with
such an interest or the exploration, development or operation thereof. A "Lease"
shall also mean and include all rights and  interests in all lands and interests
unitized or pooled therewith pursuant to any law, rule, regulation or agreement.

     "Lease Operating and Production Costs" shall mean all costs incurred by the
Partnership in connection  with the maintenance of the Assets and any additional
Leases acquired pursuant to

                                        8
<PAGE>
the terms hereof (except  drilling and similar  obligations)  and the production
and  marketing  of oil,  gas  and  related  hydrocarbons  from  completed  wells
(including  wells which have been involved in Enhanced  Recovery  Operations) in
which the  Partnership  has an interest  pursuant to this  Agreement,  including
costs incurred for all delay rentals,  shut-in  royalties and similar  payments,
royalties  on lost or flared  gas or gas used for  which  payment  is  required,
labor, fuel,  repairs,  transportation,  supplies,  utility charges, ad valorem,
severance,  excise and similar taxes,  the cost of reworking any well (except to
the extent provided in the definition of Capital  Costs),  the costs of plugging
and  abandoning  any well (except to the extent  provided in the  definition  of
Capital Costs) and  compensation to well  operators,  consultants and others and
insurance in connection with the foregoing;  but such term shall not include any
Capital Costs, Catastrophe Costs or Acquisition Costs.

     "Limited Partner" shall mean TIFD III-X Inc., a Delaware  corporation,  and
any person who becomes a substituted limited partner of the Partnership pursuant
to the terms hereof.

     "LP Monthly Cash Distribution" shall mean, with respect to any month:

     (a)  the  Production   Sales  Proceeds   received  during  such  month  and
attributable to any Hedging Transaction  multiplied by the LP Sharing Percentage
for such month plus the  Production  Sales Proceeds  received  during such month
from  the  sale  of  hydrocarbons  (other  than  in  connection  with a  Hedging
Transaction) multiplied by the LP Sharing Percentage for such month; less

     (b) Lease Operating and Production  Costs paid during such month multiplied
by the LP Sharing Percentage for such month; less

     (c) Hedge  Costs  paid  during  such  month  multiplied  by the LP  Sharing
Percentage for such month; less

     (d) the amounts which the General Partner  reasonably  determines should be
added to the Partnership's cash reserves multiplied by the LP Sharing Percentage
(it being agreed that the Partnership's  cash reserves,  including all additions
thereto,  shall not  exceed the  remainder  of the total  Partnership  costs and
expenses the General Partner reasonably anticipates will be incurred within a 60
day period commencing as of the date of the determination of the LP Monthly Cash
Distribution,  minus the total  Production  Sales  Proceeds the General  Partner
reasonably  anticipates will be received by the Partnership during such period);
plus

     (e) any cash reserves which the General Partner reasonably  believes are no
longer  necessary to retain  multiplied  by the LP Sharing  Percentage  for such
month; plus

                                        9
<PAGE>
     (f) the net  proceeds  derived  from  the  sale of  Partnership  properties
multiplied by the LP Sharing Percentage for such month; plus

     (g)  any  other  funds  received  by  the  Partnership  during  such  month
(including  insurance  proceeds,  to the extent not expended by the Partnership)
multiplied by the LP Sharing Percentage for such month; less

     (h) payments  made during such month on principal and interest on permitted
Partnership indebtedness multiplied by the LP Sharing Percentage for such month;
less

     (i) the  Management  Fee  multiplied by the LP Sharing  Percentage for such
month; less

     (j) other direct,  third party  out-of-pocket costs paid by the Partnership
for such month (e.g.'s, costs of obtaining audits of the Partnership's books and
records,  fees and expenses attributable to the preparation of the Partnership's
tax returns) multiplied by the LP Sharing Percentage for such month.

     "LP  Sharing  Percentage"  shall mean,  (a) when used with  respect to each
month  during the Phase I Period,  99%,  and (b) when used with  respect to each
month during the Phase II Period, 65%.

     "Management  Fee" shall have the  meaning  assigned to such term in Section
6.6(b).

     "Minimum  Gain"  shall  mean (a) with  respect to  Partnership  Nonrecourse
Liabilities,  the amount of gain that would be realized by the Partnership if it
disposed of (in a taxable  transaction)  all  Partnership  properties  which are
subject to  Partnership  Nonrecourse  Liabilities in full  satisfaction  of such
liabilities, computed in accordance with applicable Treasury Regulations and (b)
with respect to each Partner  Nonrecourse Debt, the amount of gain that would be
realized by the  Partnership  if it disposed of (in a taxable  transaction)  the
Partnership  property that is subject to such liability in full  satisfaction of
such liability, computed in accordance with applicable Treasury Regulations.

     "Monthly  Payout" shall mean, with respect to any month, an amount equal to
the LP Monthly Cash  Distribution  received by the Limited  Partner  during such
month times the Payout Discount Factor.

     "Organization  and Third Party  Acquisition  Costs"  shall have the meaning
assigned to such term in Section 6.7.

     "Parent" shall mean Magnum Hunter Resources, Inc.

                                       10
<PAGE>
     "Partner   Nonrecourse  Debt"  shall  mean  any  nonrecourse  debt  of  the
Partnership (or portions  thereof) for which any Partner bears the economic risk
of loss.

     "Partner  Nonrecourse  Deductions"  shall  mean the  amount of  deductions,
losses and expenses  equal to the net  increase  during the year in Minimum Gain
attributable  to a Partner  Nonrecourse  Debt,  reduced  (but not below zero) by
proceeds of such Partner  Nonrecourse  Debt  distributed  during the year to the
Partners  who bear the economic  risk of loss for such debt,  as  determined  in
accordance with applicable Treasury Regulations.

     "Partners" shall mean the General Partner and the Limited Partner.

     "Partnership" shall have the meaning assigned to it in Section 1.1.

     "Partnership   Nonrecourse   Liabilities"   shall   mean  any   nonrecourse
liabilities (or portions  thereof) of the Partnership for which no Partner bears
the economic risk of loss.

     "Payout  Discount  Factor" shall mean, as of any given month, the value for
such month as set forth in Exhibit 2.1--Cash Discount Factor Table.

     "Phase I Period" shall mean the period from the Delivery Date until the end
of the first month in which Cumulative Payout is greater than or equal to zero.

     "Phase II Period"  shall mean the period  commencing  immediately  upon the
expiration of the Phase I Period and ending upon the liquidation and termination
of the Partnership.

     "Positive  Partner" shall have the meaning assigned to such term in Section
4.3(i).

     "Production  Sales Proceeds" shall mean revenues  received from the sale of
production  from the  Partnership's  Assets and any additional  Leases  acquired
pursuant to the terms hereof, net of any royalties, overriding royalty interests
and other similar  interests  burdening such Assets and Leases,  plus production
taxes and ad valorem taxes paid with respect to such Assets and Leases.

     "Purchase  Agreement"  shall  have the  meaning  assigned  to such  term in
Section 5.2(a).

     "Purchase  Price"  shall  have the  meaning  assigned  to such  term in the
Purchase Agreement.

     "Retained  Outside  Interest"  shall mean (a) the  properties and interests
described in Section 2.2 of the Purchase Agreement and (b) any other interest in
the Assets or other Leases hereafter acquired by the Partnership pursuant to the
terms hereof which the General Partner or an Affiliate acquires and owns for its
own account in accordance with the terms of this Agreement.

     "Seller"  shall  have the  meaning  assigned  to such term in the  Purchase
Agreement.

                                       11
<PAGE>
     "Simulated Basis",  "Simulated Gain",  "Simulated Depletion" and "Simulated
Loss"  shall  have the  respective  meanings  assigned  to such terms in Section
8.1(b).

     Section 2.2. References and Construction.

     (a) All references in this Agreement to articles, sections, subsections and
other subdivisions refer to corresponding  articles,  sections,  subsections and
other subdivisions of this Agreement unless expressly provided otherwise.

     (b) Titles  appearing at the beginning of any of such  subdivisions are for
convenience only and shall not constitute part of such subdivisions and shall be
disregarded in construing the language contained in such subdivisions.

     (c) The words "this  Agreement",  "this  instrument",  "herein",  "hereof",
"hereby",  "hereunder"  and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so limited.

     (d) Words in the singular form shall be construed to include the plural and
vice versa, unless the context otherwise requires.

     (e) Examples shall not be construed to limit,  expressly or by implication,
the matter they illustrate.

     (f)  The  word  "or"  is not  exclusive  and the  word  "includes"  and its
derivatives means "includes, but is not limited to" and corresponding derivative
expressions.

     (g) No  consideration  shall be given to the fact or  presumption  that one
party had a greater or lesser hand in drafting this Agreement.

     (h) All  references  herein to $ or  dollars  shall  mean to United  States
dollars.

     (i) Unless the  context  otherwise  requires or unless  otherwise  provided
herein,  the  terms  defined  in this  Agreement  which  refer  to a  particular
agreement,  instrument  or  document  also refer to and  include  all  renewals,
extensions,  modifications,   amendments  or  restatements  of  such  agreement,
instrument or document, provided that nothing contained in this subsection shall
be construed to authorize such renewal,  extension,  modification,  amendment or
restatement.

                                       12
<PAGE>
                                   ARTICLE III

                                 Capitalization

     Section 3.1. Capital  Contributions of General Partner. The General Partner
shall  contribute in cash to the Partnership  such amounts as shall be necessary
to pay timely  the costs and  expenses  allocated  and  charged  to the  General
Partner in Sections 3.3 and 4.1 and elsewhere herein. Such Capital Contributions
shall be paid to the Partnership by the General Partner from time to time in the
appropriate  amounts  concurrently  with each payment to the  Partnership by the
Limited Partner of its Capital Contributions or, with respect to costs allocated
solely to the General Partner,  when necessary for the Partnership to pay timely
such costs.

     Section 3.2. Capital Contributions of Limited Partner.

     (a) Subject to the  provisions  of this Section 3.2 and Section  3.5(a) and
except as otherwise  provided  herein,  the Limited Partner shall make a Capital
Contribution  to  the   Partnership  in  an  aggregate   amount  not  to  exceed
$22,918,500,  which  Capital  Contribution  shall  be  used  exclusively  by the
Partnership  for the  payment  of the  Limited  Partner's  allocated  share  (in
accordance with Section 4.1) of the Purchase Price.

     (b) Subject to the  provisions  of this Section 3.2 and Section  3.5(b) and
except as otherwise  provided  herein,  the Limited Partner shall make a Capital
Contribution to the Partnership in an aggregate  amount not to exceed  $200,000,
which Capital Contributions shall be used exclusively by the Partnership for the
payment of the Limited  Partner's  allocated  share (in accordance  with Section
4.1) of Organization and Third Party Acquisition Costs.

     (c) Subject to the  provisions  of this Section 3.2 and Section  3.5(b) and
except as otherwise  provided  herein,  the Limited  Partner  shall make Capital
Contributions  to the  Partnership  in an  aggregate  amount  not to exceed  its
allocated share (in accordance  with Section 4.1) of Hedge Costs,  which Capital
Contributions shall be used exclusively by the Partnership for such purpose.

     (d)   Notwithstanding   anything  to  the  contrary  herein,   the  Capital
Contributions  referenced  in  subsections  (a),  (b) and (c) above shall be the
maximum  contribution  to the  Partnership  that the  Limited  Partner  shall be
required to make  (unless the Limited  Partner  otherwise  elects as provided in
Section 3.3) and shall be subject to reduction as provided in Section 3.4.

                                       13
<PAGE>
     Section  3.3.  Request  for  Additional  Capital  Contributions  of Limited
Partner.

     (a) Subject to this Section 3.3 and the other terms and provisions  hereof,
the General  Partner  may  request  additional  Capital  Contributions  from the
Limited  Partner to be used  exclusively  for the payment of its allocated share
(pursuant to Section 4.1) of (i) Capital  Costs of the type  described in clause
(a) of the  definition  thereof,  (ii)  Capital  Costs of the type  described in
clause (b) of the definition thereof,  (iii) Capital Costs of the type described
in  clause  (c) of the  definition  thereof,  (iv)  Capital  Costs  of the  type
described in clause (d) of the definition thereof, (v) Capital Costs of the type
described in clause (e) of the  definition  thereof,  (vi) Capital  Costs of the
type described in clause (f) of the definition thereof,  (vii) Acquisition Costs
under the  circumstances  described  in Section  5.3,  and (viii) cost  overruns
associated  with any  project or  operation  with  respect to which the  Limited
Partner has previously agreed to make Capital Contributions  hereunder.  Each of
the categories of expenditures described in clauses (i), (ii), (iii), (iv), (v),
(vi),  (vii) and (viii) of this  Section  3.3(a)  may  include  such  contingent
amounts as the General  Partner in good faith shall  determine to be appropriate
under the circumstances.

     (b) Requests for additional Capital Contributions  pursuant to this Section
3.3 shall be made by the General  Partner  and agreed to by the Limited  Partner
separately  with respect to each operation or acquisition  included in any given
category of expenditures as specified in subsection (a) above. Requests pursuant
to this  Section 3.3 shall not be made more often than  quarterly  each year (i)
except for requests  pursuant to clause (vii) or clause (ix) of  subsection  (a)
above,  (ii) except in the event the request is  attributable to a proposal from
an unrelated  third party or (iii) unless an emergency or some other urgent need
for funds  exists  outside of the  reasonable  control of the  General  Partner.
Payments  of any  additional  Capital  Contributions  agreed  to be  made by the
Limited  Partner  pursuant to this Section 3.3 shall be requested by the General
Partner and made by the Limited  Partner in the manner  provided  for in Section
3.5(c).

     (c) Notice of any request for additional Capital  Contributions made by the
General  Partner  shall be in  writing  and sent to the  Limited  Partner at its
address as  provided  in Section  12.1.  With  respect to the  category of costs
described in clauses (i), (ii),  (iii),  (iv),  (v) and (vi) of Section  3.3(a),
each request shall cover all of the Capital Costs intended to be incurred during
the next three  months  (and with  respect to any  Partnership  well or Enhanced
Recovery Operation or facility, the costs estimated to be incurred in connection
with such well or operation or facility).  With respect to the category of costs
described in clause (vii) of Section  3.3(a),  each  request  shall  contain the
information  specified  in Section  5.3.  With  respect to the category of costs
described  in clause  (viii) of Section  3.3(a),  each  request  shall cover the
reasonably  anticipated  overruns  associated  with  the  subject  operation  or
project.  Each  such  request  shall  also set  forth  (i) the date by which the
Limited Partner must elect in writing to make the requested  additional  Capital
Contributions,  which  date  shall  not be less  than 30 days  from the date the
General Partner mails or sends such request, unless a shorter period is provided
to  the  General  Partner  under  any  applicable  "authority  for  expenditure"
submitted  by an operator  other than the General  Partner or an  Affiliate,  in
which event such shorter period shall also be applicable to the election  period
of the Limited Partner (provided that in no

                                       14
<PAGE>
event  shall  such  shorter  period be less than 15 days),  (ii) the  purpose or
purposes  for  which  the   proceeds  of  the   requested   additional   Capital
Contributions  are to be used,  (iii) a copy of the  applicable  "authority  for
expenditure"  submitted in connection  with the well or  operation,  (iv) to the
extent practicable,  a summary of the pertinent geological data relating to each
well or operation  with respect to which the proceeds  that are requested are to
be expended and financial  projections  with respect to the  expenditure of such
additional  Capital  Contributions  and the  revenue  projected  to be  received
therefrom,  (v) with respect to any well or operation  with respect to which the
proceeds  requested  are to be  expended,  a statement  as to whether or not the
General  Partner  recommends the  Partnership  participate  therein,  and (vi) a
summary of the action that the General  Partner  anticipates  it will take under
Section 3.3(d) and any  applicable  operating  agreement if the Limited  Partner
does not elect to make  such  requested  additional  Capital  Contributions.  In
connection with any request  pertaining to an Enhanced Recovery  Operation,  the
General Partner shall endeavor to confine such request to the extent possible in
accordance with generally  accepted industry standards to those matters or items
which  should be  conducted  in  conjunction  with each other.  Thereafter,  the
General  Partner shall promptly  furnish to the Limited  Partner such additional
information  concerning  the use and  application  of the  requested  additional
Capital  Contributions as the Limited Partner shall reasonably  request.  In the
event  the  Limited  Partner  does  not  elect to pay all of the  categories  of
requested additional Capital Contributions (or operations or acquisitions within
a  given  category),  it may  elect  to pay  all  of the  Capital  Contributions
requested to be used for any of the remaining  categories of costs designated in
the General Partner's request as provided above (or, as to a given category, the
costs associated with any other operation or acquisition  within such category).
The General  Partner shall not use any Capital  Contributions  received from the
Limited  Partner  pursuant to this Section 3.3 and designated for payment of one
category of costs to pay any other category of costs.

     (d)  If the  Limited  Partner  declines  to  make  any  additional  Capital
Contributions requested by the General Partner or fails to give timely notice to
the General Partner pursuant to a request for additional  Capital  Contributions
made  pursuant  to Section  3.3(a),  the  General  Partner may elect to take any
action specified in paragraphs (1) through (7) below with respect to each Lease,
Partnership  well,  operation  or  project  to which the  request  pertains,  if
appropriate:

     (1) With respect to the  acquisition of Leases pursuant to Section 5.3, the
General  Partner or its  Affiliates  may purchase or retain for its or their own
account the Leases not acquired by the Partnership.

     (2) The General  Partner may cause the Partnership (to the extent it can do
so under any  applicable  operating  agreement)  to  abandon  the  operation  or
project, in which event all costs (if any) thereafter incurred in abandoning the
operation or project shall be borne by the Partnership.

     (3) The General  Partner  may cause the  Partnership  to sell,  farm-out or
otherwise dispose of the well or Lease (or the applicable part thereof) to which
such operation or

                                       15
<PAGE>
     project  pertains  to any  person;  provided,  however,  that no such sale,
farm-out  or  other  disposition  may be  made  to the  General  Partner  or any
Affiliate thereof without the prior written consent of the Limited Partner.

     (4) In the  event a well or Lease  to  which  such  proposed  operation  or
project pertains is subject to an operating  agreement,  the General Partner may
cause the Partnership to elect not to participate in a proposed operation and to
assume the status of a "non- consenting  party" under such operating  agreement;
provided,  however,  that neither the General  Partner nor any of its Affiliates
shall be permitted to pay or shall pay the Partnership's non-consenting share of
costs or expenses or any part thereof with respect to such  operation or project
under such operating agreement;

     (5) The General Partner may (provided that it has recommended under Section
3.3(c) that the Partnership  participate in such proposed  operation or project)
pay the requested additional Capital  Contributions the Limited Partner declined
to pay, and the amount so paid by the General  Partner with respect to such well
shall be credited to a separate account, which separate account shall be charged
and credited as follows:

     (x)  Subject to  subparagraph  (y) of this  Section  3.3(d)(5),  all of the
Limited Partner's share of costs and expenses with respect to such well shall be
charged to such separate  account,  and such separate  account shall be credited
with the Limited Partner's share of revenues from such well (after deducting all
production,  severance,  excise and similar taxes relating  thereto).  Until the
total amount  credited to such separate  account equals the amount  specified in
subparagraph  (y) of this  Section  3.3(d)(5)  with  respect to such  well,  the
General Partner shall be allocated all of the costs and expenses charged to such
separate  account,  and the Limited Partner shall be deemed to have relinquished
to the General  Partner,  and the General Partner shall have allocated to it and
be entitled to receive, all of the revenues credited to such separate account.

     (y) If, as and when the total  amount of revenues  received by and credited
and  allocated to the General  Partner  under  subparagraph  (x) of this Section
3.3(d)(5)  shall  equal  the  sum  of  the  following  to the  extent  they  are
appropriate:

     a. 200% of the amount  charged to such separate  account for Capital Costs;
and

     b. 100% of the amount charged to such separate  account for Lease Operating
and Production Costs;

     no further  amounts shall be charged or credited to such separate  account,
and  the  Limited  Partner's  share  of all  revenues  and  costs  and  expenses
thereafter arising

                                       16
<PAGE>
     or  accruing  with  respect to such well shall be  allocated,  charged  and
credited to the Limited Partner.

     (6) With respect to a request pertaining to the category of costs specified
in clause (vi) of Section 3.3(a),  the General Partner shall take such action as
shall be mutually agreed upon by the Partners.

     (7) The  General  Partner  may take such other  actions as may be  mutually
agreed upon by the Partners.

     Section 3.4. Reduced Capital Contributions of Limited Partner. In the event
the Partnership or the General Partner properly retains a portion of the Limited
Partner's  share  of  Partnership   revenues  for  the  purpose  of  paying  any
Acquisition  Costs,  Capital Costs,  Hedge Costs or Organization and Third Party
Acquisition  Costs allocated to the Limited Partner hereunder in accordance with
Section 4.3, the amount so retained and not  distributed  shall reduce pro tanto
the  amount  of  Capital  Contributions  the  Limited  Partner  is  required  to
thereafter make.

     Section 3.5. Payments of Capital Contributions.

     (a) The Limited Partner shall pay the Capital  Contributions  referenced in
Section 3.2(a) on the Delivery Date.

     (b) The Limited Partner shall pay the Capital  Contributions  referenced in
Section 3.2(b) within five business days after receipt by the Limited Partner of
a request from the General Partner for such purpose.

     (c) The Limited Partner shall pay the Capital  Contributions  referenced in
Section 3.2(c)  promptly after receipt by the Limited  Partner of a request from
the General Partner for such purpose.

     (d) Except as otherwise provided in subsections (a), (b) and (c) above, the
Limited Partner shall pay its Capital  Contributions monthly upon request by the
General  Partner in such  amounts as are  required to pay its share of all costs
and expenses properly allocated to it hereunder. The General Partner may request
on a monthly basis additional payments of the Capital Contributions agreed to be
made by the Limited Partner for the Limited Partner's share of (i) all costs and
expenses  estimated to have been and/or to be incurred by the Partnership during
that calendar month except those for which advances have previously been made or
for which  payment  will be made from  another  source and (ii) those  costs and
expenses  estimated to be incurred by the Partnership during the next succeeding
calendar month. Each monthly request for payment shall be adjusted to the extent
the Limited Partners'  cumulative share of actual Partnership  disbursements for
the preceding calendar month's costs and expenses is either greater or less than
the amounts previously  contributed by the Limited Partner for such purpose. Any
request for payment by the

                                       17
<PAGE>
     Limited Partner of Capital  Contributions shall be in writing and shall set
forth (1) the type,  nature or items of Partnership  costs or expenses for which
such payment will be used by the Partnership,  including a division of the costs
and expenses as  contemplated in clauses (i) and (ii) of this Section 3.5(d) and
the  adjustment  referred to in this Section  3.5(d),  (2) the net amount of the
Capital  Contributions  to be paid by the  Limited  Partner  and (3) the date by
which payment of such Capital  Contributions shall be received,  which shall not
be less than five  business  days from the date the  notice is  received  by the
Limited Partner.

     (e) Payments by the Limited Partner of its Capital  Contributions  shall be
made by wire  transfer  of  immediately  available  funds  to the  Partnership's
account as  designated by the General  Partner by notice to the Limited  Partner
pursuant to Section 12.1.

     (f) Any additional Capital  Contributions  agreed to be made by the Limited
Partner  pursuant  to  Section  3.3 may be  requested  only  during  the  period
commencing  on the date they were  originally  requested by the General  Partner
under  Section 3.3 and ending  three months  thereafter  with respect to Capital
Contributions to be used to pay Acquisition Costs and six months thereafter with
respect to Capital  Contributions to be used to pay Capital Costs and shall only
be  requested  for and expended on the  respective  purposes for which they were
agreed to be made.

     Section 3.6. Non-payment of Capital Contributions.

     (a) Except as otherwise provided in the following sentence, the Partnership
shall have the right to pursue the  remedies  described  in this Section 3.6 and
any remedy  existing at law or in equity for the collection of the unpaid amount
of the  Capital  Contributions  agreed  to be  made in  Sections  3.1 and 3.2 or
hereafter  agreed to be made in  accordance  with  Section  3.3,  including  the
prosecution of a suit against a defaulting Partner. In the event of a default by
a Partner of its  obligation to make Capital  Contributions  with respect to its
allocable share hereunder of Hedge Costs, the provisions of subsection (d) below
shall be the exclusive remedy of the Partnership and the other Partner.

     (b) In the event that the Limited Partner fails or refuses to make when due
its share of Capital  Contributions,  the General Partner shall be entitled (but
shall not be obligated) to make such Capital  Contributions  to the  Partnership
which the Limited  Partner is obligated to make and the amount so advanced shall
be treated as a loan to the  Limited  Partner and shall bear  interest  from the
date of such  advance at a rate equal to the Agreed  Rate.  The General  Partner
shall notify the Limited  Partner of any such advance and request payment by the
Limited Partner of the amount so advanced,  together with interest  thereon from
the date of the advance.  If the Limited  Partner fails or refuses to pay to the
General Partner the amount so advanced,  together with interest thereon from the
date of the advance,  and if such failure or refusal persists for a period of 30
days  following  notice from the General  Partner to the Limited  Partner  (such
occurrence being called herein an "Event of Default"), the General Partner shall
be entitled to proceed under this Section  3.6(b).  In addition to the rights in
Section 3.6(a), the Limited Partner hereby grants to the Partnership a

                                       18
<PAGE>
     lien upon and security  interest in the Limited  Partner's  interest in the
Partnership  and in or to all assets  attributable  to and  proceeds of and from
such interest in the Partnership to secure the payment of contributions required
under this Agreement, and authorizes the General Partner, upon the occurrence of
an Event of  Default,  if it  elects  to  proceed  under  this  alternative,  to
foreclose such lien or security  interest in any manner provided for by the laws
of the State of Texas for the  foreclosure  of such  lien or  security  interest
(including the exercise of the rights of a secured party under the Texas Uniform
Commercial  Code). If the General Partner elects this  alternative,  the Limited
Partner  shall be liable for all costs and  expenses of the  General  Partner in
instituting  and  prosecuting  such suit or  foreclosing  such lien or  security
interest,  including  all  reasonable  attorneys'  fees  expended in  connection
therewith.  The Limited  Partner hereby agrees that the General Partner may file
one or more financing  statements with respect to the security  interest granted
hereby in order to perfect  such  security  interest,  and the  Limited  Partner
hereby agrees to execute such financing statements at the request of the General
Partner.  The Limited Partner further hereby appoints the General Partner as its
agent and  attorney-in-fact  for the  purpose  of  signing  and  filing any such
financing  statements,  which  appointment  is  coupled  with  an  interest  and
expressly  made  irrevocable.  In the event of a non-judicial  foreclosure,  the
proceeds of the disposition of the  Partnership  interest of the Limited Partner
shall be applied as follows:  (i) first, to the reasonable  expenses incurred by
the Partnership in collecting such proceeds;  and (ii) next, to the satisfaction
of the  portion of the  Limited  Partner's  contribution  then due.  The Limited
Partner  shall be liable  for any  deficiency,  and the  General  Partner  shall
account to the Limited  Partner for any  surplus.  Any  purchaser of the Limited
Partner's  interest  in the  Partnership  shall  assume the  obligations  of the
Limited  Partner  under  this  Agreement  and shall  succeed to the right of the
Limited  Partner  as to the  allocation  of  profits  and  losses  of, and as to
distributions from, the Partnership  thereafter.  The defaulting Limited Partner
hereby  grants the General  Partner an  irrevocable  special  power of attorney,
coupled with an interest,  which shall survive the dissolution,  bankruptcy,  or
legal  disability of the Limited Partner,  to take all actions  necessary on its
behalf to sell,  assign or  transfer  the  Partnership  interest  of the Limited
Partner to such person or persons as shall acquire such Partnership  interest as
provided  in this  Section  3.6(b)  should an Event of Default be deemed to have
occurred  with  respect to the  Limited  Partner.  In the event that the General
Partner  elects  to  foreclose  upon  the  Limited  Partner's  interest  in  the
Partnership,  the Partners  agree that 30 days prior notice shall be  reasonable
notice of any proposed public or private  foreclosure sale.  Notwithstanding the
foregoing,  the General  Partner  shall not  foreclose  upon the interest of the
Limited  Partner in the  Partnership  if the Event of Default giving rise to the
exercise of remedies  under this  Section 3.6 arises out of a bona fide  dispute
regarding the interpretation or implementation of this Agreement.

     (c) The Partnership may retain any revenues otherwise  distributable to the
Limited Partner  pursuant to this Agreement in an amount equal to the amount the
Limited  Partner  failed or refused to  contribute  as required  pursuant to the
terms of this  Agreement,  together with interest on such past-due  amounts at a
rate equal to the Agreed Rate. Any amount so withheld  shall be deemed,  for all
purposes of this Agreement, to have been distributed to the Limited Partner and,
other than that portion of such amounts representing interest, be deemed to have
been recontributed

                                       19
<PAGE>
     by the Limited  Partner to the capital of the  Partnership for the purposes
for which contributions were initially  requested.  If any dispute as to whether
an Event of Default  existed is resolved in favor of the Limited  Partner,  then
the General Partner shall pay to the Partnership for distribution to the Limited
Partner an amount equal to any amounts  wrongly  paid by the Limited  Partner to
the  Partnership  which should have instead been paid to the  Partnership by the
General  Partner,  or any amounts  distributed by the Partnership to the General
Partner instead of the Limited Partner, in connection with such Event of Default
together with interest thereon at a rate equal to the Agreed Rate, and all costs
and expenses of the Limited  Partner in resolving  such  dispute,  including all
attorneys' fees expended in connection therewith. The General Partner shall give
notice of its election of the alternatives  listed above to the Limited Partner,
and if the General Partner elects the alternative  provided under Section 3.6(a)
and/or  Section  3.6(b),  the General  Partner shall be free at any time also to
proceed under this Section 3.6(c).

     (d) If a  Partner  (the  "Defaulting  Partner")  fails or  refuses  to make
Capital Contributions to the Partnership hereunder when due to pay its allocable
share  hereunder  of  Hedge  Costs  and the  other  Partner  (the  "Contributing
Partner") in the Defaulting Partner's stead makes such Capital  Contributions to
the  Partnership,  then the terms and provisions of this Section 3.6(d) shall be
operative.  Specifically,  in the instance  described  above,  the  Contributing
Partner may exercise either of the following options:

     (i) The Contributing  Partner may treat the payment by it of the Defaulting
Partner's Capital Contributions as a loan to the Defaulting Partner,  which loan
shall  bear  interest  from the date the  payment is made at a rate equal to the
Agreed Rate.  Further,  as between the  Contributing  Partner and the Defaulting
Partner, the terms and provisions of Section 3.6(b) shall be applicable, mutatis
mutandis, except that the last sentence of such Section shall be disregarded.

     (ii) The Contributing Partner may treat the payment by it of the Defaulting
Partner's Capital  Contributions as Capital  Contributions from the Contributing
Partner, in which case the Contributing Partner shall be entitled to receive all
of the  distributions  that would  otherwise be paid to the  Defaulting  Partner
hereunder  until  that  point  in time at which  the  Contributing  Partner  has
received  from such  distributions  an amount equal to 300% of the amount of the
Capital  Contributions  made  by the  Contributing  Partner  in  the  Defaulting
Partner's  stead;  provided,  however,  that  if this  option  is  elected,  the
Defaulting   Partner's   share  of  the  Hedge  Costs  paid  with  such  Capital
Contributions,  and any  deductions  or  losses  relating  thereto  for state or
federal income tax purposes, shall be allocated to the Contributing Partner; and
provided further,  that the Defaulting Partner's share of Partnership  revenues,
and any  income  or gain  relating  thereto  for  state or  federal  income  tax
purposes,  shall be allocated to the Contributing  Partner until the revenues so
allocated equal the  distributions to be made to the Contributing  Partner under
this paragraph (ii).

                                       20
<PAGE>
     Section 3.7. Interest on and Return of Capital Contributions.

     (a) No interest  shall  accrue on any  contributions  to the capital of the
Partnership;  however,  all interest which accrues on Partnership funds shall be
allocated and credited to the Partners in accordance with Section 4.2.

     (b) No Partner  shall have the right to  withdraw  or be repaid any capital
contributed  by such Partner except (a) as provided in Sections 10.2 and 10.3 or
(b) in the instance when the  Partnership  receives a return of cash funds under
the Purchase  Agreement  due to an  adjustment  to the Purchase  Price (in which
event the General Partner shall cause the  Partnership to refund  immediately to
the Partners their respective allocable share of such cash funds).

                                   ARTICLE IV

                          Allocations and Distributions

     Section  4.1.  Allocation  of Profits  and  Losses.  Except as  provided in
Section 4.2,  each item of profit and loss of the  Partnership,  and all related
items of income, gain, loss, deduction and credit for income tax purposes, shall
be allocated for each fiscal year of the  Partnership to the General  Partner in
accordance  with  its GP  Sharing  Percentage,  and to the  Limited  Partner  in
accordance  with  its  LP  Sharing  Percentage;   provided,  however,  that  all
Catastrophe  Costs  and any  deductions  or  losses  relating  thereto  shall be
allocated to the General  Partner.  The General Partner shall make the foregoing
allocations as of the last day of each fiscal year,  taking into account whether
and when the end of the Phase I Period has occurred.

     Section 4.2. Special Allocations.

     (a) Cost and  percentage  depletion  deductions and the gain or loss on the
sale or other  disposition of property the  production  from which is subject to
depletion  (herein  sometimes  called  "Depletable  Property") shall be computed
separately by the Partners rather than the Partnership.  For purposes of Section
613A(c)(7)(D) of the Internal Revenue Code, the Partnership's  adjusted basis in
each Depletable Property shall be allocated to the General Partner in accordance
with its GP Sharing Percentage and to the Limited Partner in accordance with its
LP Sharing Percentage at the time of the acquisition of the Depletable Property,
and the amount  realized  on the sale or other  disposition  of each  Depletable
Property  shall  be  allocated  first  to the  Partners  in  proportion  to each
Partner's  respective  share of the Simulated  Basis in the Depletable  Property
sold,  and then in such amounts as to cause,  as nearly as  possible,  the total
amount realized from such sale or disposition allocated to the Partners to be in
proportion to the amounts they are entitled to receive under Section 4.3.

     (b) All recapture of income tax deductions resulting from the sale or other
disposition of Partnership  property shall, to the maximum extent  possible,  be
allocated to the Partner to whom

                                       21
<PAGE>
     the deduction that gave rise to such  recapture was allocated  hereunder to
the  extent  that  such  Partner  is  allocated  any gain from the sale or other
disposition of such property.

     (c) Notwithstanding  any of the foregoing  provisions of this Article IV to
the contrary: ----------

     (i) If during any fiscal year of the Partnership there is a net increase in
Minimum  Gain  attributable  to a Partner  Nonrecourse  Debt that  gives rise to
Partner Nonrecourse  Deductions,  each Partner bearing the economic risk of loss
for such  Partner  Nonrecourse  Debt  shall be  allocated  items of  Partnership
deductions  and  losses  for such year  (consisting  first of cost  recovery  or
depreciation deductions with respect to property that is subject to such Partner
Nonrecourse Debt and then, if necessary, a pro rata portion of the Partnership's
other items of deductions  and losses,  with any  remainder  being treated as an
increase  in  Minimum  Gain  attributable  to  Partner  Nonrecourse  Debt in the
subsequent   year)  equal  to  such  Partner's  share  of  Partner   Nonrecourse
Deductions, as determined in accordance with applicable Treasury Regulations.

     (ii) If for any fiscal year of the  Partnership  there is a net decrease in
Minimum Gain attributable to Partnership Nonrecourse  Liabilities,  each Partner
shall  be  allocated  items  of  Partnership  income  and  gain  for  such  year
(consisting  first  of gain  recognized,  including  Simulated  Gain,  from  the
disposition  of  Partnership   property  subject  to  one  or  more  Partnership
Nonrecourse  Liabilities  and then,  if  necessary,  a pro rata  portion  of the
Partnership's  other items of income and gain, and if necessary,  for subsequent
years) equal to such Partner's share of such net decrease  (except to the extent
such  Partner's  share of such  net  decrease  is  caused  by a  change  in debt
structure  with such Partner  commencing to bear the economic risk of loss as to
all  or  part  of any  Partnership  Nonrecourse  Liability  or by  such  Partner
contributing  capital to the Partnership  that the  Partnership  uses to repay a
Partnership Nonrecourse Liability),  as determined in accordance with applicable
Treasury Regulations.

     (iii) If for any fiscal year of the Partnership  there is a net decrease in
Minimum Gain  attributable to a Partner  Nonrecourse Debt, each Partner shall be
allocated items of Partnership  income and gain for such year (consisting  first
of  gain  recognized,   including   Simulated  Gain,  from  the  disposition  of
Partnership   property  subject  to  Partner  Nonrecourse  Debt,  and  then,  if
necessary,  a pro rata  portion of the  Partnership's  other items of income and
gain, and if necessary,  for subsequent  years) equal to such Partner's share of
such  net  decrease  (except  to the  extent  such  Partner's  share of such net
decrease is caused by a change in debt structure or by the  Partnership's use of
capital  contributed  by such  Partner  to repay  Partner  Nonrecourse  Debt) as
determined in accordance with applicable Treasury Regulations.

     (d) The General  Partner  shall use all  reasonable  efforts to prevent any
allocation  or  distribution  from  causing a negative  balance  in the  Limited
Partner's Adjusted Capital Account.  Consistent  therewith,  and notwithstanding
any of the foregoing provisions of this Section 4.2 to the contrary,  if for any
fiscal year of the  Partnership  the allocation of any loss or deduction (net of
any income or gain) to any Partner would cause or increase a negative balance in
such Partner's  Adjusted  Capital Account as of the end of such fiscal year (the
"Deficit Partner") after taking into account the provisions of subsection (c) of
this  Section 4.2,  only the amount of such loss or  deduction  that reduces the
balance to zero shall be  allocated to such  Deficit  Partner and the  remaining
loss or

                                       22
<PAGE>
     deduction shall be allocated to the Partner whose Adjusted  Capital Account
has a positive balance  remaining at such time (the "Positive  Partner").  After
any such allocation,  any Partnership income or gain (including  Simulated Gain)
that would  otherwise  be allocated  to the Deficit  Partner  shall be allocated
instead to the Positive Partner up to an amount equal to the Partnership loss or
deduction  allocated  to the  Positive  Partner  under the  preceding  sentence;
provided,  however,  that no allocation of income or gain realized shall be made
under  this  sentence  if the  effect of such  allocation  would be to cause the
Adjusted  Capital Account of the Deficit Partner to be less than zero. If, after
taking into account the allocation in the first sentence of this Section 4.2(d),
the Adjusted  Capital  Account  balance of the Deficit Partner remains less than
zero at the end of a fiscal year, a pro rata portion of each item of Partnership
income or gain (including  Simulated  Gain) otherwise  allocable to the Positive
Partners  for such fiscal year (or if there is no such income or gain  allocable
to the  Positive  Partners  for  such  fiscal  year,  all  such  income  or gain
(including  Simulated Gain) so allocable in the succeeding fiscal year or years)
shall be  allocated to the Deficit  Partner in an amount  necessary to cause its
Adjusted  Capital  Account balance to equal zero;  provided,  that no allocation
under this  sentence  shall have the effect of causing  the  Positive  Partner's
Adjusted Capital Account to be less than zero.  After any such  allocation,  any
Partnership  gain  (including  Simulated  Gain) resulting from the sale or other
disposition  of  Partnership  property that would  otherwise be allocated to the
Deficit  Partner for any fiscal year shall be allocated  instead to the Positive
Partner  until  the  amount  of gain so  allocated  equals  the  amount  of gain
(including  Simulated Gain)  previously  allocated to such Deficit Partner under
the  preceding  sentence of this  Section  4.2(d);  provided,  however,  that no
allocation of gain (including  Simulated Gain) shall be made under this sentence
if the effect of such allocation  would be to cause the Adjusted Capital Account
of a Deficit Partner to be less than zero.

     Section 4.3. Distributions.

     (a) Within five days after the end of each month, the General Partner shall
cause the  Partnership to make a distribution  (i) to the Limited Partner of its
LP Monthly Cash  Distribution  for such month and (ii) to the General Partner of
its GP Monthly Cash Distribution for such month.

     (b)  Notwithstanding the foregoing or any other provision contained in this
Agreement,  (i) unless the  Limited  Partner  otherwise  consents  in writing or
defaults  in the payment of any Capital  Contributions  previously  agreed to be
made by it, the General  Partner shall not be entitled to cause the  Partnership
to retain any of the Limited  Partner's  share of  Partnership  revenues for the
purpose of paying (directly or indirectly) any Acquisition Costs, Capital Costs,
Hedge Costs or  Organization  and Third  Party  Acquisition  Costs,  or (ii) the
Partnership may retain such insurance  proceeds and other amounts as the General
Partner shall reasonably determine are necessary to pay Partnership  liabilities
and expenses upon the occurrence of an accident  (e.g., a blowout),  catastrophe
or similar event (and, in connection therewith, to restore,  preserve or protect
Partnership  property)  or to comply  with all  applicable  environmental  laws,
ordinances, rules and regulations.

     (c) Payment of all  distributions  made by the  Partnership  to the Limited
Partner  shall  be made by wire  transfer  of  immediately  available  funds  in
accordance  with such  written  instructions  to the  General  Partner as may be
provided by the Limited Partner from time to time.

     (d) Nothing contained in this Section 4.3 shall relieve the General Partner
from its  obligation  to bear 100% of  Catastrophe  Costs  pursuant  to  Section
4.1(a), and any Catastrophe Costs

                                       23
<PAGE>
     shall be charged against and reduce the GP Monthly Cash  Distribution  only
and shall have no impact on the LP Monthly Cash Distribution.

     (e)  All  distributions  in  liquidation  of a  Partner's  interest  in the
Partnership shall be made in accordance with Section 10.3.

                                    ARTICLE V

                              Partnership Property

     Section 5.1.  Title to  Partnership  Property.  All  property  owned by the
Partnership,  whether real or personal, tangible or intangible,  shall be deemed
to be owned by the Partnership as an entity, and no Partner, individually, shall
have any  ownership  of such  property.  The  Partnership  shall hold all of its
assets in the name of the Partnership  unless under the law of some jurisdiction
in which the  Partnership  owns assets such assets must be held in another name.
In such a case, such assets in such jurisdiction  shall be held under such other
name or names  (except the name of the General  Partner,  any  Affiliate  of the
General Partner or the name of the Limited Partner) as the General Partner shall
determine to be necessary  so long as it does not affect  adversely  the limited
liability of the Limited Partner hereunder or jeopardize in any manner the title
to or ownership of any Partnership  Leases or other assets.  The General Partner
shall promptly take all such action as it shall deem  necessary or  appropriate,
or as may be required by law, to perfect and preserve the ownership  interest of
the  Partnership in all Leases,  and (if requested by the Limited  Partner) upon
recordation of title to a Lease shall promptly supply the Limited Partner with a
copy of such recorded title.  In the event the Partnership  acquires assets in a
jurisdiction  which  prohibits the  Partnership  from holding such assets in the
name of the  Partnership  and such assets are held in another name,  the General
Partner  shall  obtain an opinion  of  reputable  counsel  in such  jurisdiction
addressed to the Limited Partner and satisfactory in all respects to the Limited
Partner that the Partnership has taken all action necessary and appropriate,  or
required  by  law,  to  perfect  and  preserve  the  ownership  interest  of the
Partnership in all such assets.

     Section  5.2.  Acquisition  of  the  Assets.   Contemporaneously  with  the
execution and delivery of this Agreement by the Partners, the General Partner is
hereby  authorized  to,  and shall,  (a)  execute  and  deliver on behalf of the
Partnership  that  certain  Purchase  and Sale  Agreement  dated as of even date
herewith (the "Purchase  Agreement") by and between the  Partnership,  as buyer,
and Magnum Hunter Production,  Inc., as seller, and (b) cause the Partnership to
consummate the acquisition of the Assets pursuant thereto.

     Section 5.3. Additional Acquisitions.

     (a) During the 180-day  period  commencing on the date hereof,  the General
Partner and its Affiliates  shall be permitted to acquire for their own separate
account an additional 10% working  interest in any of the Leases  comprising the
Walker Creek Unit.

                                       24
<PAGE>
     (b) Except to the extent  otherwise  provided in subsection (a) above,  if,
during the term of this Agreement,  the General Partner or an Affiliate  thereof
acquires  (or  proposes to acquire) a Lease or Leases  within the Area of Mutual
Interest (in this Section called the "Subject Leases"), the terms and provisions
of this Section 5.3(b) shall be operative.  Specifically,  upon the  acquisition
(or proposed  acquisition) under the circumstances  described above, the General
Partner  shall  notify the Limited  Partner,  which notice shall (i) specify the
interest  the General  Partner or its  Affiliates  have  acquired (or propose to
acquire) in the Subject  Leases,  (ii) specify the  purchase  price (or proposed
purchase  price),  (iii)  describe  the  development  and/or  Enhanced  Recovery
Operations,  if any, the General Partner reasonably  anticipates will be engaged
in on the Subject  Leases and the estimated  costs  associated  therewith,  (iv)
include a summary of the pertinent  geological and geophysical  data relating to
the Subject Leases or proposed  development/Enhanced  Recovery  Operations,  (v)
include financial  projections relating to the Subject Leases and any internally
or externally prepared related engineering or reserve reports, (vi) describe the
nature  and  extent of  planned  title  examination  and  property  related  due
diligence (including, without limitation, environmental due diligence) and (vii)
such other  information as the General Partner deems material.  Thereafter,  the
General  Partner shall  promptly  furnish to the Limited  Partner any additional
information  concerning the Subject Leases or the proposed  development/Enhanced
Recovery  Operations as the Limited Partner may reasonably  request  (including,
without limitation,  the reports of consultants and outside engineers).  Subject
to the Limited Partner agreeing to make additional Capital  Contributions to the
Partnership  with  respect to the Subject  Leases  pursuant to Section  3.3, the
Partnership  shall acquire the  Applicable  Percentage (as defined in subsection
(c) below) of the  interest of the General  Partner and its  Affiliates  in such
Subject Leases (or, if applicable,  which the General  Partner or its Affiliates
propose to acquire therein).  Prior to the acquisition by the Partnership of the
Subject  Leases,  the General  Partner  shall notify the Limited  Partner of any
material  change in the nature and extent of the title  examination and property
related due diligence plan and the reason therefor and of any fact discovered in
due  diligence  that  materially   adversely  affects  the  economics  or  risks
associated with the Subject  Leases;  provided that no such notice need be given
to the Limited Partner if the Limited Partner has elected not to make additional
Capital Contributions with respect thereto. The Limited Partner may withdraw its
election to make additional  Capital  Contributions with respect to the proposed
acquisition  and  related  activity,  at  any  time  prior  to  the  Partnership
committing to acquire the Subject Leases, by so notifying the General Partner in
writing  if (A) there is  discovered  during due  diligence  a fact or facts not
presented  to the Limited  Partner in the  initial  evaluation  of the  proposed
acquisition that materially  adversely affects the economics or risks associated
with the Subject  Leases to be acquired and such material  adverse effect cannot
be remedied to the reasonable  satisfaction  of the Limited Partner prior to the
acquisition  by the  Partnership or (B) more than three months have passed since
the Limited  Partner  notified  the General  Partner of such  Limited  Partner's
election to make  Capital  Contributions  with respect to such  acquisition  and
related activity. The interest in each Lease assigned by the General Partner and
each Affiliate thereof to the Partnership  pursuant to this Section 5.3 shall be
assigned,  conveyed and transferred without warranty of title, either express or
implied,  except  as to all  persons  claiming  or to claim the same or any part
thereof  by,  through and under the General  Partner or such  Affiliate  but not
otherwise and with a further

                                       25
<PAGE>
     warranty  that the  General  Partner or such  Affiliate  has not placed any
lien, encumbrance,  burden or other restriction on such Lease or, if the General
Partner or such Affiliate has previously placed a lien,  encumbrance,  burden or
other  restriction on such Lease, that such lien,  encumbrance,  burden or other
restriction is being concurrently  released or has been released.  In connection
with any acquisition of Leases by the Partnership  pursuant to this Section 5.3,
the General  Partner or an Affiliate  thereof shall not retain from or otherwise
burden the interest in any Lease assigned to the Partnership with any overriding
royalty,  net  profits  interest,   carried  interest,   reversionary  interest,
production payment or other burden in favor of itself,  its officers,  directors
and employees or any other person,  except in connection  with an acquisition by
the  General  Partner  or such  Affiliate  pursuant  to a  transaction  where an
unrelated third party  transferring the Lease retains such an interest or burden
with respect to all of the Lease  acquired by the General  Partner or Affiliate.
With respect to each Lease acquired by the Partnership  pursuant to this Section
5.3, such acquisition  shall include all rights to all horizons under such Lease
which were available for purchase and considered  appropriate for acquisition by
the  Partnership.  Under no  circumstances  shall  the  General  Partner  or any
Affiliate of either  thereof  acquire  rights to any separate  horizon within or
under a Lease in which the  Partnership  has an interest  without first offering
such rights to the Partnership under this Section 5.3.

     (c) As used in subsection (b) above, the term "Applicable Percentage" shall
mean (i) when used with reference to an acquisition  under  subsection (b) of an
interest in the Walker Creek Unit,  50%, and (ii) when used with reference to an
acquisition  under  subsection (b) other than as provided in clause (i) above, a
percentage  computed by reference to the  Partnership's  pro rata portion of the
then existing aggregate interest held by the Partnership and the General Partner
(or an Affiliate of the General  Partner) in the Subject  Leases or the field or
other  applicable  portion or area of the Area of Mutual  Interest  in which the
Subject Leases are located.

     Section 5.4. Lease Sales.

     (a) Except as provided in this Section 5.4, in Section 6.2(d) and elsewhere
herein, the General Partner may sell, farm-out,  abandon or otherwise dispose of
any Partnership Lease, on such terms as the General Partner deems reasonable and
in the best interests of the Partnership and the Limited Partner.

     (b) Except as  expressly  permitted  in Section  10.3,  neither the General
Partner  or any of its  Affiliates  nor any of their  employees  shall  acquire,
directly or indirectly, any Lease (or any interest therein) from the Partnership
unless the Limited Partner has previously approved in writing such acquisition.

     Section 5.5. Sales of Production.  The General Partner shall have the right
to cause the  Partnership  to sell any oil or gas produced by or for the account
of the Partnership,  including but not limited to crude oil, condensate, natural
gas liquids and natural  gas  (including  casinghead  gas) which may be produced
from or allocated to the Assets or any additional Leases acquired pursuant

                                       26
<PAGE>
     to the terms hereof,  to such purchaser and on such terms and conditions as
the  General  Partner  shall  determine  to be  in  the  best  interest  of  the
Partnership;  provided,  however,  that all such  sales  shall be upon terms and
conditions  which are the best terms and  conditions  available as determined in
good  faith  by  the  General   Partner   taking  into   account  all   relevant
circumstances,  including  but not limited  to,  price,  quality of  production,
access to markets,  minimum  purchase  guarantees,  identity of  purchaser,  and
length of  commitment  and,  in any  event,  on terms no less  favorable  to the
Partnership  than the General  Partner or any  Affiliate  thereof  has  recently
obtained or is obtaining for arm's length sales,  exchanges or  dispositions  of
the General  Partner's or such  Affiliate's  production of similar  quantity and
quality  in the same  geographic  area  where the  Partnership's  production  is
located.

     Section 5.6.  Operations on Partnership  Assets.  The General Partner or an
Affiliate,  shall  act  as  operator  in  connection  with  operations  on  each
Partnership  Lease unless (a) another  person is  currently  serving as operator
under an  agreement  to which a Lease is subject or (b) any third party or third
parties (not  Affiliates of the General  Partner)  jointly owning such Lease and
with a controlling  interest will not otherwise  agree. As to those  Partnership
Leases  with  respect  to which the  General  Partner is not the  operator,  the
General  Partner  shall take such actions and exercise  such rights and remedies
which are  reasonably  available to it to cause the actual  operator to properly
develop,  maintain and operate such Leases. In the event the Partnership and any
third party jointly own any Lease and operations  thereon are conducted pursuant
to an  operating  agreement,  (i) if the third party is  designated  as operator
thereunder,  the  Partnership  shall pay the costs and  expenses  charged  to it
thereunder  and  (ii)  if the  General  Partner  or any  of  its  Affiliates  is
designated as operator,  the General Partner or such Affiliate shall receive for
its account from the third party such third  party's  share of all  compensation
and reimbursement provided to the operator thereunder;  provided,  however, that
the charges to the  Partnership by the General  Partner or any of its Affiliates
when  acting as the  designated  operator  (regardless  of  whether  there is an
operating  agreement  or  regardless  of whether or not a third  party is also a
party  thereto)  shall  not  exceed  those  set  forth in or  permitted  by this
Agreement or the  "Accounting  Procedure" (as herein called)  attached hereto as
Exhibit 5.6. In no event shall the terms of any  operating or similar  agreement
under which the General  Partner or an Affiliate is  designated as operator vary
or  effect  this  Agreement  or  the  Accounting  Procedure  or the  duties  and
obligations of the General Partner hereunder (and in the event of a conflict the
terms and provisions of this Agreement shall prevail).  The General Partner,  or
any  Affiliate,  shall not  substitute  another  party as operator or assign its
obligations as operator with respect to any  Partnership  Lease where it acts as
operator,  unless the Limited Partner  requests in the event the General Partner
is removed as such pursuant to Section 9.4 or the Limited Partner  dissolves the
Partnership  pursuant to any of subsections (c), (e), (f), (g) or (i) of Section
10.1 (and the General Partner agrees to use its reasonable best efforts to cause
the person designated by the Limited Partner to be the successor operator).

     Section 5.7. Hedge  Arrangement.  The General Partner  covenants and agrees
that, at the request of the Limited Partner,  the General Partner will cause the
Partnership  to hedge up to 85% of (a) the  Partnership's  proved  producing gas
reserves attributable to the Assets for not

                                       27
<PAGE>
     less than 60 months and (b) oil reserves attributable to the Assets for the
period  of not  less  than  24  months,  on such  terms  and  conditions  as are
satisfactory to the Limited  Partner.  The General Partner  covenants and agrees
that,  at the request of the Limited  Partner,  it will execute on behalf of the
Partnership such additional  Hedging  Transactions of the  Partnership's  proved
producing reserves attributable to the Assets and any additional Leases acquired
pursuant to the terms hereof on such terms and conditions as are satisfactory to
the Limited Partner. Any Hedging Transaction  contemplated  hereunder shall be a
"hedging transaction" as described in Treasury Regulation  ss.1.1221-2 to reduce
the risk of price changes for oil and gas produced by the Partnership in volumes
equal to the notional amounts provided in the documents  evidencing such Hedging
Transaction. At the time of the execution and delivery by the Partnership of the
documents evidencing a Hedging Transaction,  the General Partner shall take such
additional steps as may be necessary to identify the Hedging  Transaction in the
books and records of the  Partnership as a "hedging  transaction"  in the manner
and at the time prescribed by Treasury Regulation ss.1.1221- 2(e).

     Section  5.8.  Production.  Throughout  the  term of the  Partnership,  the
General Partner shall instruct any operator of any Partnership  Lease to produce
on behalf of the  Partnership  not less than the  Partnership's  entire  working
interest in the production  attributable to such Lease;  provided,  however, the
General  Partner  shall  not be so  obligated  (a) in  circumstances  when it is
necessary  to restrict  production  on such Lease for the purpose of  performing
general   maintenance  and  workover   activities  thereon  in  connection  with
maintaining production; (b) if the Partnership is precluded from so doing by any
applicable  state,  local  or  federal  law,  order  or  regulation;  (c) if the
Production  Sales  Proceeds  attributable  to such Lease are inadequate to cover
Lease  Operating and Production  Expenses  attributable  thereto;  or (d) if the
General  Partner  gives  notice to the  Limited  Partner  that due to a cause or
causes beyond the  reasonable  control of the General  Partner,  including,  for
purposes of  illustration,  an act of God,  strike,  act of public  enemy,  war,
blockade,  public riot,  lightening,  fire, violent storm,  flood,  explosion or
governmental restraint, it is unable to do so.

     Section 5.9. Environmental, Health and Safety Program. The General Partner,
at the cost and expense of the  Partnership,  shall  implement,  and  maintain a
formal,  comprehensive written environmental health and safety (in this Section,
"EH&S") program (in this Section, the "EH&S Program"),  including regular review
and  evaluations,  aimed at ensuring  that the  Partnership's  operations on the
Assets or any  additional  Leases  acquired  pursuant  to the terms  hereof  are
conducted in compliance  with all applicable  Environmental  Laws. At a minimum,
the EH&S Program shall include:  (i)  identification  of environmental  concerns
associated with any  environmental  regulations  applicable to the Partnership's
operations;  (ii) adoption and  implementation  of an  environmental  management
system to assess and  control  the  environmental  impacts of the  Partnership's
operations;  and (iii)  implementation  of periodic EH&S audits conducted either
internally or by  independent  consultants  with  documented  corrective  action
responding to such audits.  The EH&S Program shall involve senior  management of
the General Partner,  include a formal written corporate  environmental  policy,
and identify by name or position the person with overall responsibility for EH&S
compliance,  as well as those  person(s) who are  responsible  for specific EH&S
areas.

                                       28
<PAGE>
                                   ARTICLE VI

                                   Management

     Section 6.1. Power and Authority of General Partner.  Except as provided in
Section 6.2 and elsewhere in this Agreement and except as otherwise  provided by
applicable  law, the General  Partner  shall have full and  exclusive  power and
authority  on behalf of the  Partnership  to  manage,  control,  administer  and
operate the  properties,  business and affairs of the  Partnership in accordance
with this Agreement and to do or cause to be done any and all acts deemed by the
General Partner to be necessary or appropriate thereto.

     Section 6.2. Certain Restrictions on General Partner's Power and Authority.
Notwithstanding  any other  provisions of this  Agreement to the  contrary,  the
General  Partner  shall not have the power or  authority  to, and shall not, do,
perform or authorize any of the following  without the prior written  consent of
the Limited Partner:

     (a) To borrow  any money in the name or on  behalf of the  Partnership,  or
otherwise draw, make, execute and issue promissory notes and other negotiable or
non-negotiable  instruments  and  evidences  of  indebtedness,  except  that the
General Partner may borrow money in the name and on behalf of the Partnership in
such amounts as the General Partner shall reasonably  determine are necessary to
preserve and protect  Partnership  property  upon the  occurrence of an accident
(e.g., a blowout), catastrophe or similar event or to comply with all applicable
Environmental Laws, ordinances, rules and regulations;

     (b) To  mortgage,  pledge,  assign  in  trust  or  otherwise  encumber  any
Partnership  property,  or to  assign  any  monies  owing  or to be owing to the
Partnership,  except to secure the payment of any borrowing permitted in Section
6.2(a)  and  except  for  customary  liens  contained  in or  arising  under any
operating agreements,  construction contracts and similar agreements executed by
or binding on the  Partnership  with  respect to amounts  not yet due or not yet
delinquent  (or, if delinquent,  that are being contested by the General Partner
in good faith) or except for statutory  liens for amounts not yet due or not yet
delinquent  (or, if delinquent,  that are being contested by the General Partner
in good faith),  provided that in no event shall the General  Partner  mortgage,
pledge, assign in trust or otherwise encumber the Partnership's right to receive
Capital Contributions from the Limited Partner;

     (c) To guarantee in the name or on behalf of the Partnership the payment of
money or the  performance  of any  contract  or other  obligation  of any person
except for  responsibilities  customarily  assumed  under  operating  agreements
considered standard in the industry;

                                       29
<PAGE>
     (d)  To  sell,  assign,  farm-out,  abandon  or  otherwise  dispose  of any
Partnership  Lease  except (i) where the Lease  disposed of  consists  solely of
horizons or depths which do not have  attributable to them any proved  reserves,
(ii) as provided in Sections 3.3(d)(2) and 3.3(d)(3),  (iii) with respect to any
given calendar year, for sales or other  dispositions by the Partnership  during
such year up to (but not to exceed) an aggregate  (non-cumulative)  amount equal
to $10,000 in proceeds  received by the  Partnership  or (iv) for such Leases or
interests  therein  or other  assets as the  General  Partner  shall  reasonably
determine  to be  necessary to raise funds to pay  Partnership  liabilities  and
expenses  (other than  Catastrophe  Costs) upon the  occurrence  of an accident,
catastrophe or similar event (and, in connection therewith, to restore, preserve
and protect Partnership property) or to comply with all applicable environmental
or other laws, ordinances, rules and regulations;

     (e) To make any advance payments of compensation or other  consideration to
the General Partner or any of its Affiliates;

     (f) To bind or obligate the Partnership  with respect to any matter outside
the scope of the Partnership business;

     (g) To merge or consolidate the  Partnership  with any partnership or other
person or entity,  convert the  Partnership  to a general  partnership  or other
entity or agree to an exchange of interests with any other person;

     (h) To use  the  Partnership  name,  credit  or  property  for  other  than
Partnership purposes;

     (i) To loan any  Partnership  funds to the  General  Partner  or any of its
Affiliates;

     (j) To enter into a Hedging Transaction, except as provided in Section 5.7,
and to amend or terminate any agreements or other document  evidencing a Hedging
Transaction or waive any rights of the Partnership thereunder;

     (k) To acquire any Lease in violation of the terms of this Agreement;

     (l) To alter,  supplement,  modify or amend the  Purchase  Agreement or any
other  document or instrument  executed in connection  therewith in any material
respect,  waive any of the General Partners' or the Partnership's  rights or any
of Seller's duties and obligations  thereunder in any material respect,  or make
any material election, determination or agreement thereunder;

     (m) To  compromise  or settle any lawsuit,  administrative  matter or other
dispute  where the amount the  Partnership  may recover or might be obligated to
pay, as applicable, is in excess of $25,000;

                                       30
<PAGE>
     (n) To enter into any contract or agreement with the General Partner or any
Affiliate thereof for the rendering of services or the sale or lease of supplies
(except that the  foregoing  shall not  preclude  (i) the General  Partner or an
Affiliate (including Gruy Petroleum Management Company) from serving as operator
in accordance with Section 5.6 or (ii) the Partnership  contracting  with Hunter
Gathering,  Inc.,  an  Affiliate  of the  General  Partner,  for the  gathering,
transporting,  processing and marketing of Partnership production, provided that
any charges to the  Partnership  by such Affiliate for such services shall be no
less favorable to the  Partnership  than those  available  from unrelated  third
parties in the area engaged in the business of rendering comparable services and
shall in no event exceed the charges  currently being assessed by such Affiliate
as of the date hereof with respect to such production); or

     (o) Except as expressly provided herein, to take any action with respect to
the assets or property of the Partnership  which benefits the General Partner or
any  of  its  Affiliates  to  the  detriment  of  the  Limited  Partner  or  the
Partnership,  including,  among  other  things,  utilization  of  funds  of  the
Partnership as compensating balances for its own benefit.

     Section 6.3. Duties and Services of General Partner.

     (a) The General Partner shall comply in all respects with the terms of this
Agreement  and shall use its best efforts (i) to cause its  Affiliates to comply
with the terms of this  Agreement  and (ii) in the conduct of the  business  and
operations  of the  Partnership  to cause the  Partnership  (A) to comply in all
material  respects with the terms and  provisions of all agreements to which the
Partnership is a party or to which its properties are subject,  (B) to comply in
all material respects with all applicable laws, ordinances or governmental rules
and  regulations to which the  Partnership is subject  (including all applicable
Environmental  Laws) and (C) to  obtain  and  maintain  all  licenses,  permits,
franchises and other governmental  authorizations  necessary with respect to the
ownership of Partnership  properties and the conduct of Partnership business and
operations.

     (b) With respect to the maintenance, exploration, development and operation
of the Assets and any additional  Leases acquired  pursuant to the terms hereof,
the General Partner shall have the standard of care of a reasonably  prudent and
diligent operator.  With respect to the Limited Partner and its interests in the
Partnership, the General Partner shall have the duties set forth in Section 4.04
of the Texas Revised  Partnership  Act and shall  discharge  such as provided in
Section  4.04(d) of the Texas  Revised  Partnership  Act,  provided that (i) the
General  Partner  shall at all times act with  integrity  and in good  faith and
utilize its reasonable best efforts in all activities relating to the conduct of
the business of the  Partnership  and in resolving  conflicts of interest;  (ii)
during the existence of the  Partnership,  the General Partner shall devote such
time and effort to the Partnership business and operations as shall be necessary
to promote fully the interests of the  Partnership and the mutual best interests
of the  Partners;  however,  and subject to the  foregoing and the other express
provisions of this Agreement,  it is specifically understood and agreed that the
General  Partner  shall  not be  required  to devote  full  time to  Partnership
business;  and (iii) subject to the other express  provisions of this Agreement,
the Limited Partner acknowledges that

                                       31
<PAGE>
     the General Partner currently engages in and possesses, and agrees that the
General  Partner  may  continue  to engage in and  possess,  interests  in other
business  ventures of any and every type and description,  independently or with
others,  including  the  ownership,   acquisition,   exploration,   development,
operation  and  management  of oil and  gas  properties,  oil  and gas  drilling
programs  and  partnerships  similar  to  this  Partnership,   and  neither  the
Partnership  nor the Limited  Partner shall by virtue of this Agreement have any
right, title or interest in or to such independent ventures. With respect to the
maintenance and safekeeping of Partnership  funds, the General Partner shall owe
the Partnership and the Limited Partner a fiduciary duty.

     (c) The  General  Partner  covenants  and agrees  that it will at all times
retain and have  available to it and the  Partnership a  professional  staff and
outside  consultants  which  together  will  be  reasonably  adequate  in  size,
experience and competency to discharge  properly the duties and functions of the
General  Partner  hereunder  and  under  any  applicable   operating  and  other
agreements,  including,  engineers,  geologists and other  technical  personnel,
attorneys, accountants and secretarial and clerical personnel.

     Section 6.4. Liability of General Partner. The General Partner shall not be
liable, responsible or accountable in damages or otherwise to the Partnership or
the Limited  Partner for, and  (subject to Section  6.5) the  Partnership  shall
indemnify and save harmless the General Partner from any costs, expenses, losses
or damages (including attorneys' fees and expenses,  court costs,  judgments and
amounts paid in  settlement)  incurred by reason of its being  General  Partner,
provided it has acted in good faith on behalf of the Partnership and the Limited
Partner and in a manner reasonably  believed by it to be within the scope of the
authority  granted  to it by this  Agreement  and in the best  interests  of the
Partnership, and provided further that (i) the General Partner was not guilty of
a breach of this Agreement,  gross negligence,  willful or wanton misconduct or,
if  applicable,  breach of a  fiduciary  duty owed by the General  Partner  with
respect  to  such  acts  or  omissions,   and  (ii)  the   satisfaction  of  any
indemnification and any saving harmless shall be from and limited to Partnership
assets  (which shall be  converted  to cash to the extent  necessary in a manner
appropriate  to protect the  interests of all Partners) and not from any Capital
Contributions  to be made by the  Limited  Partner  hereunder,  and the  Limited
Partner shall not have any personal liability on account thereof.

     Section  6.5.  Limitations  on  Indemnification.  The rights of the General
Partner under Section 6.4 with respect to  indemnification  from the Partnership
shall be subject to the provisions of Article 11 of the Act. Any indemnification
under Section 6.4 shall be made by the Partnership only as permitted herein and,
unless the General  Partner  was wholly  successful  on the merits,  only upon a
determination  by a  court  upon  the  request  of  the  General  Partner  or by
independent  legal counsel  selected by the General Partner and  satisfactory to
the Limited  Partner in a written  opinion that  indemnification  of the General
Partner  is  permitted  (a)  under  the  circumstances  because  it has  met the
applicable  standard  of conduct  set forth in Section  6.4 and (b)  pursuant to
Article 11 of the Act.

                                       32
<PAGE>
     Section 6.6. Costs, Expenses and Reimbursement.

     (a) Subject to the other express provisions of this Agreement,  all direct,
third-party  out  of  pocket  costs  and  expenses  reasonably  incurred  in the
Partnership's  business shall be paid from Partnership funds, including costs of
obtaining audits of the Partnership's  books and records (including the fees and
expenses of the  Partnership's  independent  public  accountants),  the fees and
expenses  attributable to the preparation of the  Partnership's  tax returns and
reports, the fees and expenses of the independent  petroleum engineer referenced
in Section 8.2(f),  outside legal costs, general taxes, fees, costs and expenses
in connection with the winding up and termination of the Partnership's  business
and affairs,  and other direct,  third-party out of pocket costs and expenses of
the Partnership.

     (b)  Commencing  on the Delivery  Date and subject to the last  sentence of
this subsection (b), the Partnership shall pay, and the General Partner shall be
entitled to receive,  a monthly fee (the "Management Fee") in an amount equal to
the lesser of (i) 1% of Net Operating  Income (as defined  below) for such month
or (ii)  $8,000;  provided,  that  the  General  Partner  shall  not be paid the
Management  Fee for any month (or portion  thereof)  in which the  Partnership's
right to receive  revenues  has been  assigned to a trustee  pursuant to Section
6.11, if the General  Partner  withdraws from the  Partnership or if the General
Partner has been removed as provided herein;  provided further, that the General
Partner shall not be paid the Management Fee for any month (or portion  thereof)
during which the business and affairs of the  Partnership are being wound up for
liquidation  purposes  pursuant to Section 10.3,  if the General  Partner is not
acting as  liquidator  hereunder.  With  respect to the month  during  which the
Delivery  Date  occurs and the last month  during  which the  Management  Fee is
payable hereunder if the obligation to pay such fee terminates prior to the last
day of such month,  the monthly  Management  Fee shall be prorated  based on the
number of days  during  such month in which the  General  Partner is entitled to
receive the Management Fee divided by the total number of days in such month. As
used in this  subsection  (b), the term "Net Operating  Income" shall mean, with
respect to a given month,  (i) the gross proceeds for such month received by the
Partnership  and  attributable  to any Hedging  Transaction  plus (ii) the gross
proceeds  for  such  month  received  by  the  Partnership   from  the  sale  of
hydrocarbons  (other than in connection with any Hedging  Transaction)  produced
from or otherwise  attributable to the Assets and any additional Leases acquired
pursuant to the terms  hereof  less (iii) any Hedging  Costs for such month less
(iv) Lease Operating and Production Costs for such month less (v) direct, third-
party out of pocket costs and expenses  reasonably  incurred in connection  with
the  administration  of the  Partnership  for such  month,  including  the costs
referenced in Section 6.6(a).  Notwithstanding  the foregoing,  if at the end of
any  calendar  year  during  the term of the  Partnership  (or  portion  of such
calendar year if the Partnership is in existence for less than the full calendar
year), X is less than Y (with "X" being equal to the aggregate  Management  Fees
actually  paid to the  General  Partner  for  such  calendar  year  (or  portion
thereof), and "Y" being equal to the lesser of (A) 1% of aggregate Net Operating
Income for such calendar year (or portion thereof) or (B) $96,000 (or a pro rata
portion thereof if less than a full calendar year)), then the General Partner

                                       33
<PAGE>
     shall be entitled to receive,  and the Partnership shall pay to the General
Partner, a cash amount equal to the difference between X and Y.

     (c) Except as provided in this  Section  and in Sections  5.6 and 6.7,  the
General  Partner and its Affiliates  shall not be paid any fee,  compensation or
reimbursement  or be entitled to or charge the  Partnership for or on account of
their services,  services of their officers,  employees or consultants,  fees or
compensation of those  geologists,  geophysicists and engineers who are employed
by them or otherwise  retained by them,  office  expense,  overhead or any other
general or administrative costs or expense.

     Section  6.7.   Organization  and  Third  Party   Acquisition   Costs.  The
Partnership from time to time shall pay directly, or shall reimburse the General
Partner and the Limited  Partner for any payment by them of, the following fees,
costs and expenses  incurred in connection with the initial  organization of the
Partnership  and the  acquisition of the Assets  ("Organization  and Third Party
Acquisition  Costs"):  (a) all  reasonable  fees and  expenses  incurred by them
(including  fees for outside legal  services) in connection with the preparation
and filing of all  certificates,  opinions and  documents  required  pursuant to
Sections  1.2  and  1.6;  (b)  the  fees,  costs  and  expenses  of the  outside
consultants  retained by the Limited  Partner in  connection  with its  proposed
investment in the  Partnership;  (c) all reasonable  fees, costs and expenses of
legal  counsel to the Limited  Partner in connection  with (i) the  negotiation,
preparation  and execution (or review,  as  applicable) of this  Agreement,  the
Purchase Agreement and all related documents, (ii) a due diligence review of the
Assets and (iii) the closing of the transactions contemplated under the Purchase
Agreement;  and (d) all  reasonable  fees and  expenses of legal  counsel to the
Limited Partner in connection with the Limited  Partner's  consideration  of any
waiver  of its  rights  under  this  Agreement  or  any  proposed  amendment  or
supplement to this Agreement.

     Section 6.8. Insurance.  The General Partner shall cause the Partnership to
obtain (and maintain during the entire term of the Partnership),  or the General
Partner shall carry for the benefit of the  Partnership,  insurance  coverage in
such amounts,  with provisions for such deductible amounts and for such purposes
as the  General  Partner  and the  Limited  Partner  have  agreed upon below and
thereafter  shall  agree upon in writing on or about July 1 of each year or such
other time as shall be mutually agreed upon by the Partners.  Where appropriate,
the  General  Partner  may include  the  Partnership  or the Limited  Partner as
additional insureds on any policies otherwise carried by the General Partner and
the costs  thereof  shall be allocated to the  Partnership  on a basis  mutually
agreed upon in writing by the General  Partner and the Limited Partner from time
to time.  The Partners  hereby agree that the General  Partner  shall  initially
carry for the benefit of the Partnership insurance coverage in the amounts, with
provisions  for such  deductible  amounts  and for the  purposes,  specified  in
Exhibit  6.8.  Thereafter,   the  Partners  shall  review  and  agree  upon  the
Partnership's insurance coverage as provided above.

     Section 6.9. Tax Elections.

                                       34
<PAGE>
     (a) The General Partner shall make the following elections on behalf of the
Partnership:

     (i) To elect,  in accordance  with Section  263(c) of the Internal  Revenue
Code and applicable  regulations and comparable state law provisions,  to deduct
as an expense all  intangible  drilling  and  development  costs with respect to
productive  and  non-productive  wells  and the  preparation  of  wells  for the
production of oil or gas;

     (ii) To  elect  the  calendar  year  as the  Partnership's  fiscal  year if
permitted by applicable law;

     (iii) To elect the accrual method of accounting;

     (iv) If requested by the Limited  Partner,  to elect,  in  accordance  with
Sections  734,  743  and  754  of  the  Internal  Revenue  Code  and  applicable
regulations and comparable  state law  provisions,  to adjust basis in the event
any Partnership interest is transferred in accordance with this Agreement or any
Partnership property is distributed to any Partner;

     (v) To  elect  to  treat  all  organizational  and  start-up  costs  of the
Partnership as deferred  expenses  amortizable over 60 months under Sections 195
and 709 of the Internal Revenue Code; and

     (vi) To elect  with  respect  to such  other  federal,  state and local tax
matters as the General  Partner and the  Limited  Partner  shall agree upon from
time to time.

     (b) No Partner shall elect or cause the  Partnership to elect to be treated
as an association taxable as a corporation.

     (c) The  General  Partner  agrees to use its best  efforts to cause any tax
partnership  which governs any of the Assets or any Additional  Leases  acquired
pursuant  to the  terms  hereof to make an  election  under  Section  754 of the
Internal Revenue Code if such election would be beneficial to the Partnership.

     Section  6.10.  Tax Returns.  The General  Partner shall prepare and timely
file all  federal,  state and local  income and other tax returns and reports as
may be required as a result of the business of the Partnership. Not less than 30
days prior to the date (as  extended) on which the  Partnership  intends to file
its  federal  income  tax  return or any state  income  tax  return,  the return
proposed to be filed by the General  Partner  shall be  furnished to the Limited
Partner for review and  comments.  In addition,  not more than 10 days after the
date on which the  Partnership  actually  files its federal income tax return or
any state  income  tax  return,  a copy of the  return  so filed by the  General
Partner shall be furnished to the Limited Partner.  The General Partner shall be
designated  the tax matters  partner under Section 6231 of the Internal  Revenue
Code and shall promptly  notify the Limited  Partner if any tax return or report
of the Partnership is audited or if

                                       35
<PAGE>
     any adjustments  are proposed by any  governmental  body. In addition,  the
General  Partner  shall  promptly  furnish to the  Limited  Partner  all notices
concerning administrative or judicial proceedings relating to federal income tax
matters as required under the Internal Revenue Code.  During the pendency of any
such administrative or judicial proceeding, the General Partner shall furnish to
the Limited Partner periodic  reports,  not less often than monthly,  concerning
the status of any such  proceeding.  Without the consent of the Limited Partner,
the General Partner shall not extend the statute of limitations,  file a request
for administrative adjustment, file suit concerning any tax refund or deficiency
relating  to  any  Partnership  administrative  adjustment  or  enter  into  any
settlement  agreement  relating to any Partnership  item of income,  gain, loss,
deduction or credit for any fiscal year of the Partnership.

     Section  6.11.  Appointment  of Trustee to Receive  Payments.  The  Limited
Partner may cause the  Partnership  at the  Partnership's  expense to assign the
Partnership's  right to  receive  revenues  to a  trustee  named by the  Limited
Partner (a) if the General Partner has committed  fraud,  willful or intentional
misconduct or gross negligence in the performance of its duties  hereunder,  (b)
if the General  Partner is in default in the  performance  or  observance of any
material agreement,  covenant, term, condition or obligation hereunder, (c) if a
representation  or warranty made by the General Partner herein or by the General
Partner or any of its officers in any writing  furnished in  connection  with or
pursuant to this Agreement shall be false in material  respect on the date as of
which made, or (d) upon the occurrence of any of the events  described in either
Section 4.02(a)(4) or in Section 4.02(a)(5) of the Act (except that with respect
to Section  4.02(a)(5) the operative number of days shall be 60 instead of those
set forth in such  Section).  Such trustee  shall  receive and hold  Partnership
revenues for the benefit of all the  Partners,  but shall not have the rights of
the General Partner hereunder. The trustee's sole right and responsibility shall
be to receive  Partnership  funds and disburse them in accordance with the other
provisions of this  Agreement.  In the event a trustee is appointed  pursuant to
this  Section 6.11 and the default is cured or the action or event under or with
respect to the bankruptcy law is completely dismissed or eliminated, the General
Partner  and the  Limited  Partner  shall,  at the request of either the General
Partner  or the  Limited  Partner,  cause the  trustee to be  discharged  at the
Partnership's expense; provided that in the judgment of the Limited Partner, its
interest  under  this  Agreement  will  not be  adversely  affected  by any such
discharge.

                                   ARTICLE VII

                    Rights and Obligations of Limited Partner

     Section  7.1.  Rights of Limited  Partner.  In addition to the other rights
specifically set forth herein,  the Limited Partner shall have the right to: (a)
have the Partnership books and records (including those required in Section 1.07
of the Act) kept at the principal United States office of the Partnership and at
all reasonable  times to inspect and copy any of them, (b) have  dissolution and
winding up by decree of court as provided  for in the Act,  (c) consult  with or
advise the General

                                       36
<PAGE>
     Partner  and (d)  exercise  all rights of a limited  partner  under the Act
(except to the extent otherwise specifically provided for herein).

     Section 7.2.  Limitations on Limited Partner. The Limited Partner shall not
have the authority or power in its capacity as a Limited Partner to act as agent
for or on behalf of the  Partnership or any other  Partner,  to do any act which
would be  binding  on the  Partnership  or any  other  Partner,  or to incur any
expenditures  on behalf  of or with  respect  to the  Partnership.  The  General
Partner  shall not hold out or  represent  to any third  party that the  Limited
Partner  has any such right or power or that the  Limited  Partner  is  anything
other than a "limited partner" in the Partnership.

     Section 7.3. Liability of Limited Partner. The Limited Partner shall not be
liable  for the  debts,  liabilities,  contracts  or  other  obligations  of the
Partnership except to the extent of any unpaid Capital  Contributions  agreed to
be made by the  Limited  Partner  as set forth in Section  3.2  (which  shall be
subject to reduction as provided for in Section  3.4),  any  additional  Capital
Contributions  hereafter  agreed to be made by the Limited Partner in accordance
with  Section 3.3 (which  shall also be subject to  reduction as provided for in
Section  3.4)  and  the  Limited   Partner's  share  of  the  assets  (including
undistributed  revenues)  of the  Partnership;  and in all  events,  the Limited
Partner  shall  be  liable  and  obligated  to  make  payments  of  its  Capital
Contributions  only as and when such  payments  are due in  accordance  with the
terms of this  Agreement,  and the Limited Partner shall not be required to make
any loans to the Partnership.  The Partnership shall indemnify and hold harmless
the Limited Partner in the event it (a) becomes liable for any debt,  liability,
contract or other  obligation of the Partnership  except to the extent expressly
provided in the preceding sentence or (b) is directly or indirectly  required to
make any payments with respect thereto.

     Section  7.4.  Access of Limited  Partner  to Data.  During the term of the
Partnership,  the  Partnership  may  acquire  or  have  access  to  geophysical,
geological and other similar data and  information.  The Limited Partner and its
agents  and  representatives,  at any time  either  during  the term of or after
termination of the Partnership, shall have the right to inspect, review and copy
any such data or information (or studies,  maps,  evaluations or reports derived
therefrom)  which  relates to the Assets or other Leases  which the  Partnership
owns or has  owned or which  has been  paid for with  Partnership  funds  and to
consult with the  Partnership's  independent  certified  public  accountants and
independent  petroleum  engineers and the General Partner's  technical personnel
with respect to Partnership matters. Upon liquidation of the Partnership, copies
of all such documents  shall be  distributed  to the General  Partner and to the
Limited  Partner if so  requested  by it.  Notwithstanding  the  foregoing,  the
Limited Partner shall not have the right to inspect, review or copy geophysical,
geological  and other similar data and  information  if the  Partnership  or the
General  Partner is subject to a valid,  bona fide  agreement  prohibiting  such
inspection,  review or copying. If requested by the Limited Partner, the General
Partner shall attempt to obtain an amendment or waiver of any such  agreement to
permit such data or other information to be provided to the Limited Partner upon
the execution by the Limited Partner of a similar agreement

                                       37
<PAGE>
     and in any  event  shall  attempt  in  advance  of  execution  of any  such
agreement to obtain  permission for the Limited  Partner to inspect,  review and
copy any such data or other information.

     Section 7.5.  Withdrawal  and Return of Capital  Contribution.  The Limited
Partner shall not be entitled to (a) withdraw from the  Partnership  except upon
the assignment by the Limited  Partner of all of its interest in the Partnership
and the substitution of such Limited Partner's  assignee as a Limited Partner of
the Partnership in accordance with Section 9.1, or (b) the return of its Capital
Contributions  except to the extent, if any, that distributions made pursuant to
the  express  terms of this  Agreement  may be  considered  as such by law or by
unanimous agreement of the Partners,  or upon dissolution and liquidation of the
Partnership,  and  then  only  to the  extent  expressly  provided  for in  this
Agreement and as permitted by law.

                                  ARTICLE VIII

                    Books, Records, Reports and Bank Accounts

     Section 8.1. Capital Accounts, Books and Records.

     (a) Except as may  otherwise  be  required by this  Agreement,  the General
Partner  shall keep books of account  for the  Partnership  in  accordance  with
generally accepted accounting principles consistently applied in accordance with
the terms of this  Agreement.  Such books shall be  maintained  at the principal
United States office of the  Partnership  and shall be maintained by the General
Partner for review by the Limited Partner during the term of the Partnership and
for a period of five years  thereafter.  The calendar  year shall be selected as
the  accounting  year of the  Partnership  and the  books  of  account  shall be
maintained on an accrual basis.

     (b) An individual  capital  account shall be maintained by the  Partnership
for each Partner as provided below:

     (i) The capital account of each Partner shall, except as otherwise provided
herein, be (A) credited by such Partner's Capital  Contributions  when made, (B)
credited by the fair market value of any property contributed to the Partnership
by such Partner (net of liabilities  secured by such  contributed  property that
the  Partnership is considered to assume or take subject to under Section 752 of
the Internal  Revenue Code), (C) credited with the amount of any item of taxable
income or gain and the  amount of any item of  income  or gain  exempt  from tax
allocated to such Partner  (taking  into  account any  reallocation  pursuant to
Sections 3.3 and 3.6),  (D) credited with the Partner's  share of Simulated Gain
as provided in paragraph (ii) of this Section 8.1(b),  (E) debited by the amount
of any item of tax  deduction or loss  allocated  to such  Partner  (taking into
account any reallocation pursuant to Sections 3.3 and 3.6), (F) debited with the
Partner's  share of  Simulated  Loss and  Simulated  Depletion  as  provided  in
paragraph (ii) of this Section 8.1(b), (G) debited by such

                                       38
<PAGE>
     Partner's allocable share of expenditures of the Partnership not deductible
in computing the  Partnership's  taxable  income and not properly  chargeable as
capital  expenditures,   including  any  non-deductible  book  amortizations  of
capitalized  costs,  and (H)  debited by the  amount of cash or the fair  market
value of any property distributed to such Partner (net of liabilities secured by
such  distributed  property  that such Partner is  considered  to assume or take
subject to under Section 752 of the Internal Revenue Code). Immediately prior to
any  distribution  of  assets  by the  Partnership  that  is not  pursuant  to a
liquidation  of the  Partnership  or all or any portion of a Partner's  interest
therein,  the Partners'  capital accounts shall be adjusted by (X) assuming that
the distributed assets were sold by the Partnership for cash at their respective
fair market values as of the date of  distribution  by the  Partnership  and (Y)
crediting or debiting each Partner's  capital account with its respective  share
of the  hypothetical  gains or losses,  including  Simulated Gains and Simulated
Losses,  resulting  from  such  assumed  sales in the same  manner  as each such
capital account would be debited or credited for gains or losses on actual sales
of such assets.  Notwithstanding the foregoing  sentence,  the Partnership shall
not distribute any property in kind to any Partner except as provided in Section
10.3.

     (ii) The  allocation of basis  prescribed by Section  613A(c)(7)(D)  of the
Internal  Revenue  Code and provided  for in Section  4.3(b) and each  Partner's
separately computed depletion deductions shall not reduce such Partner's capital
account,  but such  Partner's  capital  account  shall be decreased by an amount
equal to the  product  of the  depletion  deductions  that  would  otherwise  be
allocable  to the  Partnership  in the absence of Section  613A(c)(7)(D)  of the
Internal  Revenue  Code  (computed  without  regard  to  any  limitations  which
theoretically could apply to any Partner) times such Partner's  percentage share
of the adjusted  basis of the property  (determined  under Section  4.3(b)) with
respect  to  which  such  depletion  is  claimed   (herein   called   "Simulated
Depletion"). The Partnership's basis in any Depletable Property as adjusted from
time to time for the  Simulated  Depletion  allocable to all Partners (and where
the context requires,  each Partner's allocable share thereof, which share shall
be  determined  in the same  manner as the  allocation  of basis  prescribed  in
Section 4.3(b)) is herein called "Simulated Basis". No Partner's capital account
shall be decreased,  however, by Simulated Depletion deductions  attributable to
any  Depletable  Property to the extent such  deductions  exceed such  Partner's
allocable share of the Partnership's remaining Simulated Basis in such property.
The Partnership  shall compute  simulated gain  ("Simulated  Gain") or simulated
loss  ("Simulated  Loss")  attributable  to the sale or other  disposition  of a
Depletable  Property  based on the difference  between the amount  realized from
such sale or other  disposition  and the Simulated  Basis of such  property,  as
theretofore adjusted.  Any Simulated Gain shall be allocated to the Partners and
shall  increase  their  respective  capital  accounts  in the same manner as the
amount realized from such sale or other disposition in excess of Simulated Basis
shall have been allocated  pursuant to Section 4.3(b).  Any Simulated Loss shall
be allocated to the Partners and shall reduce their respective  capital accounts
in the same  percentages  as the costs of the property sold were allocated up to
an
                                       39
<PAGE>
     amount equal to each Partner's share of the  Partnership's  Simulated Basis
in such property at the time of such sale.

     (iii) Any adjustments of basis of Partnership  property  provided for under
Sections 734 and 743 of the Internal  Revenue Code and comparable  provisions of
state law (resulting from an election under Section 754 of the Internal  Revenue
Code or  comparable  provisions  of state law) and any election by an individual
Partner  under  Section  59(e)(4) of the Internal  Revenue Code to amortize such
Partner's share of intangible  drilling and  development  costs shall not affect
the capital  accounts of the Partners (unless  otherwise  required by applicable
Treasury  Regulations),  and the Partners'  capital accounts shall be debited or
credited  pursuant to the terms of this  Section 8.1 as if no such  election had
been made.

     (iv) Capital accounts shall be adjusted,  in a manner  consistent with this
Section 8.1, to reflect any  adjustments in items of Partnership  income,  gain,
loss or deduction that result from amended  returns filed by the  Partnership or
pursuant to an agreement by the Partnership with the Internal Revenue Service or
a final court decision.

     (v) In the case of property  carried on the books of the  Partnership at an
amount which differs from its adjusted  basis,  the Partners'  capital  accounts
shall be debited or credited for items of depreciation, cost recovery, Simulated
Depletion,  amortization and gain or loss (including Simulated Gain or Simulated
Loss) with  respect to such  property  computed in the same manner as such items
would be computed if the adjusted tax basis of such  property were equal to such
book value, in lieu of the capital account  adjustments  provided above for such
items, all in accordance with Treasury Regulation ss. 1.704-1(b)(2)(iv)(g).

     (vi) It is the intention of the Partners that the capital  accounts of each
Partner  be  kept  in  the  manner   required  under  Treasury   Regulation  ss.
1.704-1(b)(2)(iv).  To the  extent  any  additional  adjustment  to the  capital
accounts  is  required  by  such  regulation,  the  General  Partner  is  hereby
authorized to make such adjustment after notice to the Limited Partner.

     Section 8.2.  Reports.  The General  Partner  shall  deliver to the Limited
Partner the following  financial  statements and reports at the times  indicated
below:

     (a) Daily,  via facsimile,  when the  Partnership  has any direct  drilling
operations in progress,  a drilling report detailing the progress as reported by
the subject drilling superintendent.

     (b)  Monthly,  within 30 days  after  the end of the  month for which  such
report is given,  (i) a general  description  of the Assets  and any  additional
Leases acquired  pursuant to the terms hereof,  except  succeeding  reports need
contain only material changes (if any) regarding the Assets and such Leases, and
(ii) a description of each sale, farmout or other transfer or disposition by the
Partnership  of any Lease  occurring  during such month,  including  the reasons
therefor, parties
                                       40
<PAGE>
     thereto and terms thereof; provided, that if there is no activity to report
with respect to a given month, the report may so state that.

     (c)  Monthly,  within 30 days  after the end of each  month for which  such
schedule  is given,  (i) a schedule  prepared on a cash basis for such month and
substantially in the form of Exhibit 8.2(c)(i) in all material respects and (ii)
a schedule  prepared  on a cash basis for all months of the  Partnership's  term
prior to such month, not to exceed twelve months,  and substantially in the form
of Exhibit 8.2(c)(ii) in all material respects.

     (d)  Monthly,  within 60 days  after the end of each  month for which  such
report is given and  prepared  on a  production  month  basis,  a schedule  with
respect to such month and for all months of the Partnership's term prior to such
month, not to exceed twelve months,  substantially in the form of Exhibit 8.2(d)
in all material  respects.  For purposes of preparing such  schedule,  projected
amounts  shall be derived from that certain  engineering  report with respect to
the Assets as of May 1, 2000, prepared by Cawley,  Gillespie & Associates,  Inc.
and identified in writing by the Partners on the Delivery Date.

     (e)  Quarterly  within 60 days after the end of each fiscal  quarter of the
Partnership  and  annually  within 120 days after the end of each fiscal year of
the Partnership,  (i) financial statements as of the end of and for such period,
including a balance sheet and statements of income,  Partners' equity, status of
Cumulative Payout and cash flows, prepared in accordance with generally accepted
accounting  principles  and,  with respect to the annual  financial  statements,
accompanied  by a  report  of the  Partnership's  independent  certified  public
accountants  stating  that (A) their  examination  was made in  accordance  with
generally  accepted auditing  standards and that in their opinion such financial
statements  fairly  present the  Partnership's  financial  position,  results of
operations  and cash  flow in  accordance  with  generally  accepted  accounting
principles  consistently  applied,  and (B) in the  normal  course of making the
examination and reporting on the financial  statements  described above, nothing
came to their attention which caused them to believe that the revenues and costs
and  expenses  allocated  to  the  Partners  hereunder  were  not  allocated  in
accordance with the specific  allocation  provisions of this  Agreement,  (ii) a
schedule  reflecting for such period the total costs of the  Partnership and the
costs  charged to the  General  Partner  and the costs  charged  to the  Limited
Partner,  the total revenues of the Partnership and the revenues credited to the
account of the General  Partner and to the account of the Limited  Partner and a
reconciliation of such expenses and revenues to the provisions of Article IV and
Sections 3.3 and 3.6, (iii) a summary itemization by type and/or  classification
of the total fees,  compensation and  reimbursement  paid by the Partnership (or
indirectly  on  behalf  of the  Partnership)  to the  General  Partner  and  its
Affiliates,   which   summaries   shall  be  accompanied  by  a  report  of  the
Partnership's independent certified public accountants stating that in preparing
such summaries nothing came to their attention which caused them to believe that
any  transaction  between the General  Partner or an  Affiliate  thereof and the
Partnership did not comply with Section 6.2(n) or Section 6.6, or if they did so
conclude,  a  statement  specifying  such  noncompliance,  and  (iv) a  schedule
reflecting the capital account balances of each Partner prepared pursuant to the
provisions of Section 8.1(b). The

                                       41
<PAGE>
     independent  certified  public  accountants  for the  Partnership  shall be
Deloitte & Touche LLP or such other  nationally  recognized  firm of independent
certified  public  accountants as shall be designated by the General Partner and
approved by the Limited Partner.

     (f)  Annually  within  90 days  after  the end of each  fiscal  year of the
Partnership,  beginning with the fiscal year ending  December 31, 2000, a report
containing  (i) an  estimation  of the  oil  and  gas  reserves,  classified  by
appropriate categories,  as of the end of the preceding fiscal year attributable
to the interest of the Partnership and of the Limited  Partner  therein,  (ii) a
projection  of the rate of  production of and net income from such reserves with
respect to each such interest,  (iii) a calculation of the present worth of such
net income  discounted  at a rate or rates  designated  from time to time by the
Limited Partner, and (iv) a schedule or complete description of all assumptions,
estimates  and  projections  made  or used in the  preparation  of such  report,
including  estimated  future product  prices,  capital  expenditures,  operating
expenses  and taxes.  Each such  report  shall be prepared  in  accordance  with
customary  and  generally   accepted   standards  and  practices  for  petroleum
engineers,  and shall be based on such  assumptions as to costs,  product prices
and similar factors as (x) prescribed by Rule 4-10 of Regulation S-X promulgated
by the  Securities  and Exchange  Commission  and (y) the Limited  Partner shall
designate  from time to time and shall be prepared by an  independent  petroleum
engineer designated by the General Partner and approved by the Limited Partner.

     (g)  Promptly  upon  their  becoming  available,  copies  of all  financial
statements, reports, notices and proxy statements sent by the General Partner to
its  stockholders and all  registration  statements,  periodic reports and other
statements  filed by the General  Partner  with any  securities  exchange or any
similar governmental authority.

     (h)  Quarterly,  within 45 days after the end of each fiscal quarter of the
Partnership, a description and the status of any environmental investigation and
remediation activities then being conducted by the Partnership.

     (i)  Annually,  within  90 days  after the end of each  fiscal  year of the
Partnership,  a statement  from the General  Partner to the effect that,  to the
best of its knowledge, the Partnership is in compliance in all material respects
with all applicable  environmental laws and regulations  (provided,  that if the
General  Partner is unable to make such statement on an unqualified  basis,  the
General Partner shall  generally  describe any  qualifications  or exceptions to
such statement).

     (j) Such other  reports and  financial  statements  as the General  Partner
shall determine or as the Limited Partner shall reasonably  request from time to
time.

     The  cost of such  reporting  paid to third  parties  (except  pursuant  to
Section 8.2(g)) shall be paid by the Partnership as a Partnership expense.

                                       42
<PAGE>
     Section 8.3.  Bank  Accounts.  The General  Partner shall cause one or more
accounts to be  maintained in the name of the  Partnership  in one or more banks
which each have capital, surplus and undivided profits of at least $250,000,000,
which  accounts  shall be used for the payment of  expenditures  incurred by the
Partnership  in  connection  with the business of the  Partnership  and in which
shall be deposited any and all receipts of the Partnership. All amounts shall be
and remain the  property  of the  Partnership  and shall be  received,  held and
disbursed by the General  Partner for the purposes  specified in this Agreement.
There shall not be deposited in any of such  accounts any funds other than funds
belonging to the Partnership,  and no other funds shall in any way be commingled
with such funds.

     Section 8.4. Information  Relating to the Partnership.  The Limited Partner
shall  have on demand  true and full  information  of all things  affecting  the
Partnership  and its  activities  and a formal  account of  Partnership  affairs
whenever circumstances render it just and reasonable. During normal and ordinary
business   hours,   the   Limited   Partner  and  its   authorized   agents  and
representatives shall have reasonable access to all books, records and materials
in the Partnership's offices regarding the Partnership or its activities and, at
the sole risk of the  Limited  Partner,  to the drill  site of each  Partnership
well.

     Section 8.5. Certain Notices.  Without limiting its obligations  hereunder,
the General Partner shall promptly notify the Limited Partner in writing:

     (a) of the occurrence of any material  adverse change in the  Partnership's
operations or properties;

     (b) of the  occurrence  of  any  material  adverse  change  in the  General
Partner's financial condition taken on a consolidated basis;

     (c) of any default by the General  Partner in the performance of any of its
obligations hereunder;

     (d) of any  inspection by  governmental  authorities,  notice of violations
issued by any such  entities,  pending  administrative  or judicial  proceeding,
claim or any violation identified by the General Partner, to the extent any such
inspection,  notice, proceeding,  claim or violation relate to compliance by the
Partnership with  Environmental  Laws and could reasonably be expected to result
in a fine, penalty, loss or damage to the Partnership of $50,000 or more;

     (e) in the event the General  Partner changes the location of its principal
office or principal place of business; and

     (f) in the event the Limited Partner becomes entitled to remove the General
Partner pursuant to Section 9.4,  immediately  after the General Partner becomes
aware of such event.
                                       43
<PAGE>
                                   ARTICLE IX

                   Assignments of Interests and Substitutions

     Section 9.1. Assignments by Limited Partner.

     (a) The  interest  of the  Limited  Partner  in the  Partnership  shall  be
assignable in whole or in part, subject to the following: (i) no such assignment
shall be made if such assignment would result in the violation of any applicable
federal or state  securities laws; (ii) the General Partner shall have given its
consent to such assignment  (which consent shall not be  unreasonably  withheld)
and (iii) the Partnership shall not be required to recognize any such assignment
until the  instrument  conveying such interest has been delivered to the General
Partner for recordation on the books of the Partnership.

     (b) Unless an assignee becomes a substituted  Limited Partner in accordance
with the provisions set forth below,  such assignee shall not be entitled to any
of the rights granted to the Limited Partner hereunder,  other than the right to
receive allocations of income, gain, loss,  deduction,  credit and similar items
and  distributions  to which the assignor  would  otherwise be entitled,  to the
extent such items are assigned. In the event of multiple assignees,  the General
Partner  shall have the right to request that one person be designated to act on
behalf of all assignees.

     (c) An assignee of the  interest  of the  Limited  Partner,  or any portion
thereof,  shall  become a  substituted  Limited  Partner  entitled to all of the
rights  of the  Limited  Partner  if,  and only if (i) the  assignor  gives  the
assignee  such right,  (ii) the General  Partner  consents to such  substitution
(which  consent  shall not be  unreasonably  withheld)  and  (iii) the  assignee
executes  and  delivers  such  instruments,  in form  and  substance  reasonably
satisfactory to the General  Partner,  as the General Partner may deem necessary
or desirable  to effect such  substitution  and to confirm the  agreement of the
assignee to be bound by all of the terms and provisions of this Agreement.  Upon
the satisfaction of such  requirements,  the General Partner shall  concurrently
(or as of such later date as shall be  provided  for in any  applicable  written
instruments  furnished  to the  General  Partner)  admit any such  assignee as a
substituted  Limited  Partner of the  Partnership and reflect such admission and
the date thereof in the records of the Partnership.

     (d) The  Partnership and the General Partner shall be entitled to treat the
record owner of any  Partnership  interest as the absolute  owner thereof in all
respects  and  shall  incur  no  liability  for  distributions  of cash or other
property  made  in good  faith  to  such  owner  until  such  time as a  written
assignment of such  interest that complies with the terms of this  Agreement has
been received by the General Partner.

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<PAGE>
     Section 9.2.  Assignment  by General  Partner.  The interest of the General
Partner in the Partnership shall not be assigned,  mortgaged, pledged, subjected
to a security interest or otherwise encumbered, in whole or in part, without the
prior  written  consent  of  the  Limited  Partner  in  its  sole  and  absolute
discretion.

     Section 9.3.  Merger or  Consolidation.  Notwithstanding  the provisions of
Sections  9.1 or 9.2,  the merger or  consolidation  by a Partner  with  another
entity shall not be considered an assignment of an interest in the  Partnership,
and upon the merger or consolidation of such Partner, the resulting entity shall
continue as a Partner.

     Section 9.4. Removal of General Partner.

     (a) Subject to the provisions  hereof,  the Limited  Partner may remove the
General Partner with cause and select a new General Partner to operate and carry
on the business and affairs of the Partnership.  As used in this Section 9.4 and
in Section 9.5,  "with cause" shall mean the occurrence of any of the following:
(i) the  commission  by the  General  Partner of fraud,  willful or  intentional
misconduct, or gross negligence in the performance of its duties hereunder; (ii)
a default  by the  General  Partner in the  performance  or  observation  of any
material agreement,  covenant, term, condition or obligation hereunder;  (iii) a
representation  or warranty made by the General Partner herein or by the General
Partner or any of its officers in any writing  furnished in  connection  with or
pursuant to this Agreement shall be false in any material respect on the date as
of which made;  (iv) the  occurrence  of any of the events  described in Section
4.02(a)(4) or Section 4.02(a)(5) of the Act (except that with respect to Section
4.02(a)(5),  the operative number of days shall be 60 instead of the numbers set
forth in such Section); (v) a Change in Control; (vi) a default by Parent in the
performance  or  observation  of any  agreement,  covenant,  term,  condition or
obligation of the Guaranty; or (vii) a representation or warranty made by Parent
or by Parent or any of its officers in any writing  furnished in connection with
or pursuant to this  Agreement  or the  Guaranty  shall be false in any material
respect on the date as of which made.

     (b) In the event the Limited  Partner elects to remove the General  Partner
in accordance with the provisions of Section 9.4(a)  hereinabove,  any successor
General  Partner will be named in, and its appointment as such will be effective
as of a date  specified  in, a notice to the  General  Partner  from the Limited
Partner  exercising  its right to remove  the  General  Partner  and  select the
successor General Partner. The removal of the General Partner shall be effective
only if and when the following  conditions have been satisfied:  (i) a successor
General  Partner  shall have been  selected  and shall have agreed to accept the
responsibilities  of  a  General  Partner;  and  (ii)  this  Agreement  and  the
Certificate  of  Limited  Partnership  of the  Partnership  shall have been duly
amended to name the new General  Partner.  To the extent required by the laws of
any  jurisdiction  to which the  Partnership or this  Agreement is subject,  the
Partners hereby  unanimously  consent to the admission of such successor General
Partner  and hereby  appoint  such  successor  General  Partner as the agent and
attorney in fact for each Partner  (including the retiring  General Partner) for
the purpose of signing,  swearing to and filing an amendment to the  certificate
of limited

                                       45
<PAGE>
     partnership  of the  Partnership  and all other  necessary  or  appropriate
documents in connection with the substitution of such successor General Partner.

     (c) The  provisions of this Section 9.4 shall not be the sole remedy of the
Limited Partner in the event the General  Partner is removed with cause,  and in
such event the  Partnership  and/or  the  Limited  Partner  shall have all other
rights and remedies as shall be available to them pursuant to this Agreement, at
law or in  equity to  redress  any  wrong or  damage  arising  from the event or
circumstances giving rise to the General Partner's removal with cause.

     Section  9.5.  Right of  General  Partner  Upon  Removal.  In the event the
General Partner is removed in accordance with Section 9.4, the incoming  General
Partner shall have the right to purchase from the removed  General Partner a one
percent  general  partner  interest in the  Partnership  at a price equal to the
appraised value thereof. Such appraised value shall be determined by a qualified
independent  appraiser who is mutually  agreed upon by both the removed  General
Partner and the incoming  General  Partner within 30 days after the selection of
the incoming  General  Partner.  If the removed General Partner and the incoming
General Partner cannot mutually agree upon a single independent appraiser within
such period,  they shall each select their own  independent  appraiser and those
two  appraisers  shall select a third  independent  appraiser.  The cost of such
appraisal shall be borne by the removed General  Partner.  The incoming  General
Partner's  option to  acquire  such  interests  must be  exercised  by notice in
writing to the removed General Partner not more than 20 days after the selection
of the incoming  General  Partner and the purchase price for such interest shall
be paid in cash not more than 30 days after receipt by the parties of the report
of the appraiser  setting forth the appraised  value.  In the event the incoming
General  Partner  does not elect to  purchase  the one percent  general  partner
interest of the removed  General  Partner  pursuant  to the  provisions  of this
Section 9.4, such interest shall be converted to a limited  partner  interest in
the Partnership. Further, in any event any remaining general partner interest of
the removed General Partner in the Partnership  (i.e., the additional  interests
to be received after Cumulative  Payout) shall be converted to a limited partner
interest in the  Partnership and the removed General Partner shall continue as a
limited partner,  but without any right to vote,  consent,  approve or otherwise
make  any  determination  under  this  Agreement;   provided,  that  after  such
conversion  any amendment to this  Agreement that would change (a) the status of
the removed General Partner as a limited partner hereof, (b) the removed General
Partner's  participation in the income,  gain, loss, credits or distributions of
the  Partnership,  (c) the removed  General  Partner's  obligation to contribute
capital to the  Partnership  or (d) this  proviso,  shall  require  the  written
consent of the removed General Partner.

     Section 9.6 Right of First Offer.

     (a) If the Limited Partner  proposes to make any sale or other  disposition
of all or any portion of its interest in the  Partnership  (other than a sale or
other disposition to a person controlling, controlled by or under common control
with the Limited  Partner and whether or not the Limited Partner has received an
offer for such interest), the Limited Partner shall so inform

                                       46
<PAGE>
     the  General  Partner  by notice  in  writing  (in this  Section  9.6,  the
"Transfer  Notice")  describing  the interest (or portion  thereof)  that is the
subject  of such  proposed  disposition  (in  this  Section  9.6,  the  "Offered
Interest") and requesting  that the General  Partner submit an offer to purchase
the Offered Interest. The General Partner shall thereupon have thirty days after
receipt of the  Transfer  Notice to submit an offer in  writing  to the  Limited
Partner to purchase  the Offered  Interest,  which offer shall be in  reasonable
detail.  Failure  of the  General  Partner  to submit an offer in writing to the
Limited  Partner to purchase the Offered  Interest within such thirty day period
shall be deemed an election by the  General  Partner not to submit an offer.  If
the General Partner submits an offer in writing to purchase the Offered Interest
in accordance  with this Section,  the Limited  Partner shall have the option to
accept such offer, to decline the offer and retain the Offered  Interest,  or to
sell the Offered  Interest  to a third  party,  provided  that (i) any sale to a
third party is  consummated  within 120 days after the  expiration  of the above
thirty  day  period  and is on terms and  conditions  no less  favorable  to the
Limited  Partner  than those  contained  in the offer  submitted  by the General
Partner  and (ii) the terms of Section  9.1 are  complied  with.  If the General
Partner  elects  not to, or fails to,  deliver  any such offer in writing to the
Limited  Partner within such thirty-day  period,  the Limited Partner shall have
the  option to sell the  Offered  Interest  to a third  party on such  terms and
conditions  as  agreed  upon  between  them,  provided  that  any  such  sale is
consummated  within 120 days after the expiration of the above thirty day period
and the terms of Section 9.1 are complied with.

     (b) If the Limited Partner elects to accept an offer of the General Partner
to purchase  the Offered  Interest as  provided  in  subsection  (b) above,  the
closing of the purchase and sale of an Offered  Interest shall take place on the
fifteenth  day  following  the date of delivery  to the  General  Partner of the
Limited  Partner's  election to accept such offer (or if such day is a Saturday,
Sunday,  or legal holiday in the State of Connecticut,  the first day thereafter
that is not a Saturday,  Sunday, or legal holiday) at 10:00 a.m., local time, in
the offices of the Limited Partner set forth on the Limited Partner's  signature
page of this  Agreement,  or on such other date and at such other time and place
as may be agreed to by both Partners.  At the closing, the Limited Partner shall
take all action necessary to convey the Offered Interest to the General Partner,
free of all  liens and  encumbrances,  against  receipt  of the  purchase  price
therefor.

                                    ARTICLE X

                    Dissolution, Liquidation and Termination

     Section 10.1.  Dissolution.  The  Partnership  shall be dissolved  upon the
occurrence of any of the following:

     (a) The occurrence of December 31, 2020.

     (b) The consent in writing of the General Partner and the Limited Partner.

                                       47
<PAGE>
     (c) The  election of the Limited  Partner by written  notice to the General
Partner  if at the  time  such  notice  is given  (i) the  General  Partner  has
committed  fraud,  willful or intentional  misconduct or gross negligence in the
performance of its duties  hereunder,  (ii) the General Partner has defaulted in
the  performance  or  observation  of any material  agreement,  covenant,  term,
condition or obligation hereunder, or (iii) a representation or warranty made by
the General  Partner herein or by the General  Partner or any of its officers in
any writing  furnished in connection with or pursuant to this Agreement shall be
false in any material respect on the date as of which made.

     (d) The sale or other disposition of all or substantially all of the assets
of the Partnership.

     (e) The  occurrence of an event of withdrawal  from the  Partnership by the
General Partner as provided for in Section 4.02(a) of the Act.

     (f) The  election of the Limited  Partner by written  notice to the General
Partner if at the time such notice is given (i) the General Partner has breached
Section 9.2 or (ii) the General Partner has merged or consolidated  with another
entity without the prior written consent of the Limited Partner.

     (g) The  election of the Limited  Partner by written  notice to the General
Partner at any time after the third anniversary of the Delivery Date.

     (h) The  election of the Limited  Partner by written  notice to the General
Partner (i) upon a default by Parent in the  performance  or  observation of any
agreement,  covenant, term, condition or obligation under the Guaranty,(ii) if a
representation or warranty made by Parent or by Parent or any of its officers in
any writing  furnished in connection  with or pursuant to this  Agreement or the
Guaranty shall be false in any material respect on the date as of which made, or
(iii) upon the occurrence of any of the events  described in Section  4.02(a)(4)
or  Section  4.02(a)(5)  of the Act with  respect  to Parent  (except  that with
respect to Section 4.02(a)(5),  the operative number of days shall be 60 instead
of the numbers set forth in such Section).

     (i) The  election of the Limited  Partner by written  notice to the General
Partner upon a Change in Control.

     (j) The  occurrence  of any other  event  which  under the Act  causes  the
dissolution of a limited partnership.

     Section 10.2. Withdrawal by General Partner and Reconstitution.

     (a) Except as  specifically  permitted in Section 9.2, the General  Partner
covenants  and  agrees not to (i)  withdraw  voluntarily  from the  Partnership,
either directly,  by dissolution,  by transfer of its Partnership interest or by
any other voluntary act (including any event of withdrawal

                                       48
<PAGE>
     from the  Partnership by the General Partner as provided in Section 4.02(a)
of the Act) or (ii) allow seizure, attachment, garnishment, foreclosure or other
taking  of  its  Partnership  interest.  If the  General  Partner  breaches  any
provision of this Section 10.2 or Section 9.2, if an event  described in Section
10.1(e) occurs, or if an election is made by the Limited Partner to dissolve the
Partnership pursuant to Section 10.1(f) or Section 10.1(i): (A) and such breach,
event or election occurs prior to Cumulative  Payout,  all interests and amounts
which the General Partner would otherwise receive under Section 10.3 (as General
Partner, unless a limited partnership interest is held by the General Partner as
a result of  Section  9.4 of this  Agreement  if the  General  Partner  has been
removed for cause) shall be reduced by 90%;  and (B) and such  breach,  event or
election  occurs after  Cumulative  Payout,  all interests and amounts which the
General Partner would otherwise  receive under Section 10.3 (as General Partner,
unless a limited partnership interest is held by the General Partner as a result
of Section 9.4 of this  Agreement  if the General  Partner has been  removed for
cause)  shall be reduced by 15%.  The  distribution  to the  Limited  Partner of
assets  under the  immediately  preceding  sentence  which  would  otherwise  be
distributable  to the General Partner in accordance with this Section 10.2 shall
constitute  liquidated  damages to the Limited  Partner  for a violation  by the
General  Partner  prior to  Cumulative  Payout  of the  covenant  and  agreement
contained in the first  sentence of this Section 10.2, the parties having agreed
that the amount of actual damages would be difficult or impossible to calculate.

     (b) Notwithstanding the foregoing Section 10.2(a) or any other provision of
this  Agreement,  (i) the  Partnership  may be  reconstituted  and its  business
continued  without being wound up as provided for in Section 8.03 of the Act and
(ii) the  provisions of Section 6.02  (including  subsection (b) thereof) of the
Act shall be  applicable  to the  Partnership  except  that the right to recover
damages from the withdrawing  General Partner pursuant to Section 6.02(a) of the
Act shall be governed by Section 10.2(a) of this Agreement.

     Section  10.3.  Liquidation  and  Termination.   Upon  dissolution  of  the
Partnership (unless it is reconstituted and its business continued without being
wound up as provided for in Section  10.2(b)),  the General Partner shall act as
liquidator or may appoint in writing one or more liquidators who shall have full
authority to wind up the affairs of the Partnership and make final  distribution
as provided herein;  provided,  however,  that if one of the events specified in
Section 10.1(c),(e),  (f), (g), (h) or (i) has occurred as a result of an act by
the General Partner, the liquidator shall be a person selected in writing by the
Limited  Partner.  The  liquidator  shall  continue to operate  the  Partnership
properties with all of the power and authority of the General Partner. The steps
to be accomplished by the liquidator are as follows:

     (a) As  promptly  as  possible  after  dissolution  and again  after  final
liquidation,  the liquidator  shall cause a proper  accounting to be made by the
Partnership's  independent accountants of the Partnership's assets,  liabilities
and operations through the last day of the month in which the dissolution occurs
or the final liquidation is completed, as appropriate.

     (b) The  liquidator  shall  pay all of the  debts  and  liabilities  of the
Partnership  or  otherwise  make  adequate  provision  therefor  (including  the
establishment  of a cash escrow fund for  contingent  liabilities in such amount
and for such term as the liquidator may reasonably determine). After

                                       49
<PAGE>
     making  payment  or  provision  for  all  debts  and   liabilities  of  the
Partnership,  the  Partners'  capital  accounts  shall then be  adjusted  by (i)
assuming the sale of all remaining  assets of the  Partnership for cash at their
respective  fair market values (as  determined  by an appraiser  selected by the
Limited  Partner  within 30 days after receipt by the Limited  Partner of notice
that the liquidator has paid or made provision for all debts and  liabilities of
the Partnership) as of the date of termination of the Partnership, (ii) assuming
the  distribution  of such cash at such time in the  percentages  required under
Sections  4.3,  taking  into  account  whether the end of the Phase I Period has
occurred or would occur as a result of such distribution,  and (iii) debiting or
crediting  each  Partner's  capital  account  with its  respective  share of the
hypothetical  gains or  losses  resulting  from such  assumed  sales in the same
manner as each such  capital  account  would be debited or credited for gains or
losses on actual  sales of such  assets.  In the event that the Limited  Partner
fails to notify the General Partner of its selection of an appraiser pursuant to
the preceding  sentence within the time period  specified  therein,  the General
Partner shall be entitled to select such  appraiser.  The liquidator  shall then
distribute  all remaining  cash and property to the Partners in the  percentages
provided in Section 4.3 with any distribution of property (valued as of the date
of distribution at its fair market value by the appraiser selected in the manner
provided  above)  being  treated  as a  distribution  of cash  for  purposes  of
determining  whether the end of the Phase I Period has occurred or will occur as
a result of such  distribution.  To the extent  possible and  provided  that the
ownership of such  property  would not be in violation of any rule or regulation
then  applicable to the Limited  Partner,  such a distribution  shall be in kind
unless otherwise  agreed to by the General Partner and the Limited  Partner.  In
making any distributions of property,  the liquidator shall  distribute,  to the
extent  possible,  undivided  interests in each Lease in the same percentages as
the Partners share  revenues from such Lease.  It is intended that the foregoing
distributions  to each  Partner  will be  equal  to  each  Partner's  respective
positive  capital  account  balance as  determined  after  giving  effect to the
foregoing  adjustments  and to all  adjustments  attributable  to allocations of
items of income, gain, loss and deduction realized by the Partnership during the
taxable year in question and all adjustments  attributable to contributions  and
distributions of money and property effected prior to such distribution.  To the
extent  that  any such  Partner's  positive  capital  account  balance  does not
correspond to such distribution, the allocations provided for in Section 4.1 and
Section  4.2 shall be  adjusted,  to the least  extent  necessary,  to produce a
capital account balance for the Partner which  corresponds to the amount of such
distribution.  Each Partner shall have the right to designate  another person to
receive  any  property  which  otherwise  would be  distributed  in kind to that
Partner  pursuant  to this  Section  10.3 and  Section  10.2 if that  Section is
applicable.  Any distributions to the Partners in liquidation of the Partnership
shall  be made  by the  later  of the  end of the  taxable  year  in  which  the
liquidation occurs, or 90 days after the date of such liquidation.  For purposes
of the preceding sentence, the term "liquidation" shall have the same meaning as
set forth in Treasury Regulation ss.  1.704-1(b)(2)(ii)(g)  as in effect at such
time.

     (c)  Any  Leases  distributed  to the  Partners  shall  be  subject  to the
operating  agreements  then in effect  with  respect to such  Leases;  provided,
however,  that if any of such  Leases is subject to an  operating  agreement  to
which an unaffiliated  third person is not a party, such Leases shall be subject
to a standard form operating  agreement as shall be agreed upon by the Partners.
Upon  written  request  made by any  Partner,  the  liquidator  shall  sell  the
Partnership  Leases and other  properties  and assets  that  otherwise  would be
distributable  to such  Partner  under this  Section 10.3 at the best cash price
available  therefor  and  distribute  such cash (after  deducting  all  expenses
reasonably relating to such sale) to such Partner.  Such sale shall be on behalf
of such Partner and shall be treated as the

                                       50
<PAGE>
     sale by such  Partner of its interest in such  properties,  and any gain or
loss  attributable  to such  sale and any  proceeds  therefrom  shall be for the
account of such Partner.

     (d) The provisions of subsections (b) and (c) of this Section 10.3 shall be
subject to the effect of Section 10.2 if that Section is applicable.

     (e) Except as expressly  provided herein,  the liquidator shall comply with
any applicable  requirements of the Act and all other applicable laws pertaining
to the winding up of the affairs of the Partnership  and the final  distribution
of its assets.

     (f) The  distribution  of cash and/or  property to the Limited  Partners in
accordance with the provisions of this Section 10.3 shall  constitute a complete
return to the  Limited  Partner  of its  Capital  Contributions  and a  complete
distribution  to the Limited Partner of its interests in the Partnership and all
Partnership property.

     (g) No Partner  with a negative  balance in its  capital  account  shall be
liable to the  Partnership  or any other Partner for the amount of such negative
balance upon dissolution and liquidation.

     Section  10.4.  Cancellation  of  Certificate.  Upon the  completion of the
distribution of Partnership  assets as provided herein, the Partnership shall be
terminated,  and the liquidator  (or the Partners if necessary)  shall cause the
cancellation  of the  certificate of limited  partnership of the Partnership and
shall take such other actions as may be necessary to terminate the Partnership.

     Section 10.5. Certain Additional Agreements Regarding Piggyback Rights.

     (a) In the event the General Partner receives an offer to purchase all or a
portion of its Retained  Outside  Interest,  the General  Partner agrees that it
will not  consummate  any such  sale  unless  the  proposed  purchaser  has also
submitted a bona fide written offer to the Partnership to purchase an equivalent
pro rata portion of Partnership's  interest in the same assets on the same terms
and  conditions  as those offered to the General  Partner  (except to the extent
proportionately  adjusted to take into  account the  relative  interests  of the
parties in such assets).

     (b) In the event the  Partnership  receives an offer to  purchase  all or a
portion  of its  assets,  the  Partners  agree  that  the  Partnership  will not
consummate any such sale unless the proposed purchaser has also submitted a bona
fide written  offer to the General  Partner to purchase an  equivalent  pro rata
portion of the General Partner's  interest in the same assets (which interest is
a part of the Retained  Outside  Interest) on the same terms and  conditions  as
those offered to the Partnership (except to the extent proportionately  adjusted
to take into account the relative interests of the parties in such assets).

                                       51
<PAGE>
                                   ARTICLE XI

                         Representations and Warranties

     Section  11.1.  Representations  and  Warranties  of General  Partner.  The
General  Partner  represents,  warrants and covenants to the Limited  Partner as
follows:

     (a) The General Partner is a corporation  duly organized,  validly existing
and in good standing under the laws of the State of Texas.

     (b) The  General  Partner is duly  qualified  or will  qualify to  transact
business in every  jurisdiction  where the character of the properties  owned or
held by the  Partnership  or where the nature of the business  transacted by the
Partnership makes  qualification by it necessary or appropriate in order for the
Partnership to conduct its business.

     (c) The General  Partner has the  requisite  power and authority to execute
and deliver this Agreement and to perform its obligations  hereunder (including,
without  limitation,  the power and  authority to act as General  Partner of the
Partnership).

     (d) The execution,  delivery and performance by the General Partner of this
Agreement  has been  duly and  validly  authorized  by all  requisite  corporate
action,  and no other director or shareholder  action is required to be taken to
authorize such execution, delivery and performance.

     (e) The execution,  delivery and performance by the General Partner of this
Agreement is within its corporate powers and will not (i) be in contravention of
or violate  any  provisions  of its  charter or other  governing  documents,  as
amended  to the date  hereof,  or (ii) be in  contravention  of or result in any
breach or  constitute a default  under any  applicable  law,  rule,  regulation,
judgment,  license,  permit or order or any  loan,  note or other  agreement  or
instrument to which the General  Partner is a party or by which it or any of its
properties are bound.

     (f) When  delivered to the Limited  Partner,  this Agreement will have been
duly and  validly  executed  and will be binding  upon the  General  Partner and
enforceable in accordance with the terms hereof.

     (g)  Except  for a change of law over  which  the  General  Partner  has no
control (and the General  Partner shall  immediately  notify the Limited Partner
when  the  General   Partner   learns  of  such   occurrence),   the   foregoing
representations,  warranties and covenants shall remain true and accurate during
the term of the  Partnership,  and the General  Partner will neither take action
nor  permit  action  to  be  taken  which  would  cause  any  of  the  foregoing
representations to become untrue or inaccurate.

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<PAGE>
     (h)  No  consent,  approval,   authorization  or  order  of  any  court  or
governmental  agency  or  authority  or of any  third  party  which has not been
obtained is required in connection with the execution,  delivery and performance
by the General Partner of this Agreement.

     (i) Neither the General  Partner nor any of its  Affiliates has employed or
retained any broker,  agent or finder in connection  with this  Agreement or the
transactions  contemplated  herein,  or paid or agreed to pay any brokerage fee,
finder's  fee,  commission  or similar  payment to any person on account of this
Agreement or the transactions provided for herein; and the General Partner shall
indemnify and hold  harmless the  Partnership  and the Limited  Partner from any
costs,  including  attorneys' fees, and liability  arising from the claim of any
broker,  agent  or  finder  employed  or  retained  by the  General  Partner  in
connection with the Partnership or this Agreement.

     (j) As of the date hereof none of the financial statements or other written
documents or information delivered herewith or heretofore by or on behalf of the
General  Partner or Parent to the Limited Partner in connection with the General
Partner,  Parent, this Agreement,  the Assets and the operations to be conducted
hereunder contains any untrue statement of a material fact or omits to state any
material  fact  (other than facts which the  Limited  Partner  recognizes  to be
industry risks normally  associated with the oil and gas business)  necessary to
keep the statements contained herein or therein from being misleading.  There is
no fact peculiar to the General Partner,  Parent or the Assets (other than facts
which the Limited  Partner  recognizes to be industry risks normally  associated
with the oil and gas  business)  which  materially  adversely  affects or in the
future may (so far as the General Partner can now foresee) materially  adversely
affect (i) the  business,  property or assets,  or  financial  condition  of the
General  Partner or Parent or (ii) the Assets,  and which has not been set forth
in  this  Agreement  or in the  other  documents,  certificates  and  statements
furnished  to the  Limited  Partner  by or on behalf of the  General  Partner or
Parent prior to the date hereof in connection with the transactions contemplated
hereby.

     (l) To the best knowledge of the General  Partner,  the General Partner and
its Affiliates and persons acting on their behalf have not taken any action,  or
failed to take any action,  which has caused the organization of the Partnership
and  the  issuance  of the  interests  in the  Partnership  to come  within  the
registration  requirements  of the  Securities  Act of 1933, as amended,  or any
applicable state blue sky laws.

     (m) There is no pending or, to the best of the General Partner's knowledge,
threatened  judicial,  administrative  or arbitral  action,  suit or  proceeding
against or  investigation  of the  General  Partner  which is not fully  insured
against  (except  standard  deductible  amounts) and which might  materially and
adversely  affect the financial  condition of the General Partner or its ability
to perform its obligations under this Agreement.

     (n) During the  preceding  12-month  period,  the  General  Partner and its
Affiliates and persons acting on their behalf have not sold (except to a limited
number of persons who have represented themselves to be accredited investors, as
defined in Rule 501 promulgated by the

                                       53
<PAGE>
     Securities  and Exchange  Commission)  any interest in the  Partnership  or
similar  interests;  with  respect  to any  sales of  interests  similar  to the
Partnership  by the General  Partner and its  Affiliates  and persons  acting on
their behalf  subsequent  to the Delivery  Date,  the General  Partner  shall do
nothing  which  would  require the  registration  of these  interests  under the
Securities Act of 1933, and the rules and regulations promulgated thereunder, as
well as applicable state securities laws.

     Section  11.2.  Representations  and  Warranties  of Limited  Partner.  The
Limited  Partner  represents,  warrants and covenants to the General  Partner as
follows:

     (a) The Limited  Partner is duly  organized,  validly  existing and in good
standing under the laws of its state of incorporation.

     (b) The Limited  Partner has all  requisite  power and authority to execute
and deliver this Agreement and to perform its obligations hereunder.

     (c) The execution,  delivery and performance by the Limited Partner of this
Agreement  are  within  its  powers  and do not and will not (i)  contravene  or
violate any provisions of its Certificate of Incorporation or Bylaws, as amended
to the date hereof,  or (ii) contravene or result in any breach of or constitute
a default under any  applicable  law,  rule or  regulation or any loan,  note or
other  agreement or  instrument  to which it is a party or by which it or any of
its properties are bound.

     (d) When delivered to the General Partner,  this Agreement will be duly and
validly  executed  by the  Limited  Partner  and  will  be  binding  upon  it in
accordance with the terms hereof.

     (e)  Neither the  Limited  Partner nor any person  acting on its behalf has
employed  or  retained  any  broker,  agent or  finder  in  connection  with the
transactions  provided for herein,  or agreed to pay any brokerage fee, finder's
fee,  commission or similar payment to any person on account of the transactions
provided for herein;  and the Limited  Partner shall indemnify and hold harmless
the  Partnership and the General  Partner from any costs,  including  attorneys'
fees,  and  liability  arising  from the  claim of any  broker,  agent or finder
employed or retained by the Limited  Partner in connection  with the Partnership
or this Agreement.

     (f) It is acquiring its interest in the  Partnership  as an investment  and
not with a view to the resale or other  distribution  to the  public;  provided,
however,  that the  disposition of its interest shall at all times be and remain
within its control.

     (g) As of the Delivery  Date,  it is a  wholly-owned  subsidiary of General
Electric Capital Corporation.

                                       54
<PAGE>
                                   ARTICLE XII

                                  Miscellaneous

     Section  12.1.   Notices.   All  notices,   elections,   demands  or  other
communications  required  or  permitted  to be made or  given  pursuant  to this
Agreement  shall be in writing and shall be considered as properly given or made
if given by (a) personal delivery,  (b) expedited delivery service with proof of
delivery,  (c) first class mail postage prepaid, or (d) prepaid telegram,  telex
or facsimile  (provided that such  telegram,  telex or facsimile is confirmed by
expedited delivery service in the manner previously  described).  Each Partner's
address for notices and other  communications  hereunder shall be that set forth
opposite such Partner's  signature  hereto.  The Limited  Partner may change its
address by giving  notice in writing to the General  Partner of its new address,
and the General  Partner  may change its address by giving  notice in writing to
the Limited Partner of its new address.

     Section  12.2.  Amendments.  This  Agreement may be changed,  modified,  or
amended only by an instrument in writing duly executed by all Partners.

     Section 12.3. Partition. Each of the Partners hereby irrevocably waives for
the term of the Partnership any right that such Partner may have to maintain any
action for partition with respect to the Partnership property.

     Section 12.4.  Entire  Agreement.  This  Agreement and the other  documents
contemplated hereunder constitute the full and complete agreement of the parties
hereto  with  respect to the  subject  matter  hereof and  supersedes  all prior
agreements and understandings, both written and oral, between the parties hereto
with respect to the subject matter hereof.

     Section 12.5.  No Waiver.  The failure of any Partner to insist upon strict
performance of a covenant hereunder or of any obligation hereunder, irrespective
of the length of time for which such failure continues, shall not be a waiver of
such Partner's  right to demand strict  compliance in the future.  No consent or
waiver, express or implied, to or of any breach or default in the performance of
any obligation hereunder shall constitute a consent or waiver to or of any other
breach  or  default  in the  performance  of the  same or any  other  obligation
hereunder.

     Section 12.6. Applicable Law. This Agreement and the rights and obligations
of the parties  hereunder  shall be governed by and  interpreted,  construed and
enforced in accordance with the laws of the State of Texas.

     Section 12.7. Successors and Assigns. Subject to Article IX, this Agreement
shall be binding  upon and inure to the benefit of the parties  hereto and their
respective successors and assigns.

                                       55
<PAGE>
     Section 12.8. Exhibits. Exhibits 2.1--Cash Factor Discount Table, 5.6, 6.8,
8.2(c)(i),  8.2(c)(ii)  and 8.2(d) to this Agreement are attached  hereto.  Each
Exhibit  is  incorporated  herein by  reference  and made a part  hereof for all
purposes and references to this Agreement shall also include such Exhibit unless
the context in which used shall otherwise require.

     Section   12.9.   Survival   of   Representations   and   Warranties.   All
representations,  warranties  and covenants  made by the General  Partner or the
Limited Partner in this Agreement or any other document  contemplated thereby or
hereby  shall be  considered  to have been relied upon by the other party hereto
and shall  survive the  execution  and delivery of this  Agreement or such other
document,  regardless  of any  investigation  made by or on  behalf  of any such
party.

     Section 12.10. No Third Party Benefit.  Nothing in this  Agreement,  either
express or implied,  is intended to or shall  confer upon any person  other than
the parties hereto, and their respective  successors and permitted assigns,  any
rights,  benefits,  or remedies of any nature  whatsoever  under or by reason of
this Agreement.

     Section  12.11.  Public  Announcements.   Except  as  may  be  required  by
applicable  law or by  obligations  pursuant to any listing  agreement  with any
national  securities  exchange,  neither  the  General  Partner  nor the Limited
Partner  shall issue any press  release or otherwise  make any public  statement
with respect to this Agreement or the transactions  contemplated  hereby without
the prior  written  approval of the other  party,  which  approval  shall not be
unreasonably  withheld.  Any such press release or public statement  required by
applicable  law or by  obligations  pursuant to any listing  agreement  with any
national  securities  exchange shall only be made after reasonable notice to the
other party.

     Section  12.12.  Counterparts.  This  Agreement  may be executed in several
counterparts,  each of which shall be deemed an original  and all of which shall
constitute but one and the same instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       56
<PAGE>
     IN WITNESS  WHEREOF,  the undersigned has executed this Agreement as of the
day and year first above written.

                                            GENERAL PARTNER:

                                            MAGNUM HUNTER PRODUCTION, INC.

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

                                            ADDRESS FOR NOTICE PURPOSES:

                                            600 Las Colinas Blvd., Suite 1100
                                            Irving, Texas  75039
                                            Attention: Chris Tong
                                            Telecopy No.: (972)401-3110

     SIGNATURE   PAGE--Agreement  of  Limited  Partnership   providing  for  the
formation of Mallard Hunter L.P.

                                       57
<PAGE>
     IN WITNESS  WHEREOF,  the undersigned has executed this Agreement as of the
day and year first above written.

                                            LIMITED PARTNER:

                                            TIFD III-X INC.

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

                                             ADDRESS FOR NOTICE PURPOSES:

                                             c/o GE Capital Corp.--SFG
                                             120 Long Ridge Road - 3rd Floor
                                             Stamford, Connecticut 06927-1550
                                             Attention: Global Asset Management
                                                        Operations
                                             Telecopy No.: 203-961-2017

     SIGNATURE   PAGE--Agreement  of  Limited  Partnership   providing  for  the
formation of Mallard Hunter L.P.

                                       58EXHIBIT 4.1

                                   See Tab A.3

<PAGE>

                         AMENDED AND RESTATED INDENTURE

          This AMENDED AND RESTATED INDENTURE ("AMENDED AND RESTATED INDENTURE")
dated as of April 1, 2000, is between DVI RECEIVABLES XII, L.L.C., a Delaware
limited liability company (herein called the "ISSUER"), and U.S. BANK TRUST
NATIONAL ASSOCIATION, a national banking association, as trustee (herein called
the "TRUSTEE").

                             RECITALS OF THE ISSUER

          The Issuer has duly authorized the issuance of $39,975,000 in
aggregate principal amount of its 6.7094% Asset Backed Notes, Series 2000-2,
Class A-1 (the "CLASS A-1 NOTES"), $41,000,000 in aggregate principal amount of
its 6.759% Asset Backed Notes, Series 2000-2, Class A-2 (the "CLASS A-2 NOTES"),
$74,000,000 in aggregate principal amount of its 6.808% Asset Backed Notes,
Series 2000-2, Class A-3 (the "CLASS A-3 NOTES"), $85,804,000 in aggregate
principal amount of its 7.115% Asset Backed Notes, Series 2000-2, Class A-4 (the
"CLASS A-4 NOTES"), together with the Class A-1 Notes, the Class A-2 Notes and
the Class A-3 Notes, the "CLASS A NOTES"), $4,104,000 in aggregate principal
amount of its 7.063% Asset Backed Notes, Series 2000-2, Class B (the "CLASS B
NOTES") $8,208,000 in aggregate principal amount of its 7.208% Asset Backed
Notes, Series 2000-2, Class C (the "CLASS C NOTES"), $5,472,000 in aggregate
principal amount of its 7.693% Asset Backed Notes, Series 2000-2, Class D (the
"CLASS D NOTES") and $6,840,000 in aggregate principal amount of its 10.267%
Asset Backed Notes, Series 2000-2, Class E (the "CLASS E NOTES" and together
with the Class A Notes, the Class B Notes, the Class C Notes and the Class D
Notes, the "OFFERED NOTES"), of substantially the tenor hereinafter set forth,
and to provide therefor the Issuer has duly authorized the execution and
delivery of this Amended and Restated Indenture.

          Subsequent to the execution and delivery of this Amended and Restated
Indenture, the Issuer may, subject to the restrictions described herein, enter
into a Supplement directing the issuance of a sixth class of securities (the
"CLASS F INSTRUMENTS", and together with the Offered Notes, the "NOTES") which
will be subordinate to the Class A Notes, the Class B Notes, the Class C Notes,
the Class D Notes and the Class E Notes.

          All things necessary to make the Notes, when executed by the Issuer
and authenticated and delivered hereunder, the valid obligations of the Issuer,
and to make this Amended and Restated Indenture a valid agreement of the Issuer,
in accordance with its terms, have been done.

          NOW, THEREFORE, THIS AMENDED AND RESTATED INDENTURE WITNESSETH:

          For and in consideration of the premises and the purchase of the Notes
by the holders thereof, it is mutually covenanted and agreed, for the benefit of
all Noteholders, as follows:

<PAGE>

                                 GRANTING CLAUSE

          The Issuer hereby Grants to the Trustee, for the benefit and security
of the Noteholders and the Trustee as their interests appear herein, all of the
Issuer's right, title and interest in and to the Trust Property. The Issuer also
hereby assigns to the Trustee, for the benefit of the Noteholders and the
Trustee, its security interest in the Equipment (which shall be a first priority
perfected security interest in Equipment other than with respect to Equipment
relating to a Secured Equipment Note or Finance Lease and for which the Original
Equipment Cost is less than $25,000) subject to the underlying equipment lease
related to the Contracts and all of the Issuer's rights in all income, payments
and proceeds related thereto. The Grants of the Trust Property effected by this
Amended and Restated Indenture shall include all rights, powers, and options
(but none of the obligations) of the Issuer with respect thereto, including,
without limitation, the immediate and continuing right to claim for, collect,
receive, and give receipts for Contract Payments in respect of the Contracts and
all other moneys payable thereunder, to give and receive notices and other
communications, to recover on the Equipment pursuant thereto, to make waivers,
amendments or other agreements, to exercise all rights and options, to bring
judicial proceedings in the name of the Issuer or otherwise, to terminate a
Contract pursuant to the terms thereof, enforce all rights and remedies of the
Issuer with respect to the duties, covenants, obligations, indemnities,
representations and warranties of the Contributor and the Servicer under the
Amended and Restated Contribution and Servicing Agreement, and generally to do
and receive anything that the Issuer is or may be entitled to do or receive
thereunder or with respect thereto. Such Grants are made in trust to secure (i)
the payment of all amounts due on the Notes in accordance with their terms,
equally and ratably without prejudice, priority, or distinction between any Note
of the same class and any other Note of the same class by reason of differences
in time of issuance or otherwise, except as otherwise may be provided in this
Amended and Restated Indenture or any Supplement, (ii) the payment of all other
sums payable under this Amended and Restated Indenture and (iii) compliance with
the provisions of this Amended and Restated Indenture and any Supplement with
respect to the Notes.

          The Trustee acknowledges such Grants, accepts the trusts hereunder in
accordance with the provisions hereof, and agrees to perform the duties herein
required to the best of its ability and to the end that the interests of the
Noteholders may be adequately and effectively protected as hereinafter provided.

                                       2

<PAGE>

                                    ARTICLE I

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

          SECTION 1.01 DEFINITIONS.

          For purposes of this Amended and Restated Indenture, capitalized terms
used herein but not otherwise defined shall have the respective meaning assigned
to such terms in Appendix I hereto.

          SECTION 1.02 COMPLIANCE CERTIFICATES.

          Upon any application or request by the Issuer to the Trustee to take
any action under any provision of this Amended and Restated Indenture or any
Supplement, other than any request that (i) the Trustee authenticate the Notes
specified in such request, (ii) the Trustee invest moneys in the Collection
Account or the Reserve Account pursuant to the written directions specified in
such request, or (iii) the Trustee pay moneys due and payable to the Issuer
hereunder to the Issuer's beneficial owner or other assignee specified in such
request, the Trustee may require the Issuer to furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Amended and Restated Indenture or any Supplement relating to the
proposed action have been complied with, except that in the case of any such
requested action as to which other evidence of satisfaction of the conditions
precedent thereto is specifically required by any provision of this Amended and
Restated Indenture or any Supplement, no additional certificate need be
furnished.

          SECTION 1.03 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

          In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

          Any Officer's Certificate delivered to the Trustee may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such Officer's Certificate or opinion and any Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Authorized Officer or Authorized Officers
of the Managing Member as to such factual matters unless such Authorized Officer
or counsel of the Managing Member knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous. Any Opinion of Counsel may be based on the written
opinion of other counsel, in which event such Opinion of Counsel shall be
accompanied by a copy of such other counsel's opinion.

                                       3

<PAGE>

          Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Amended and Restated Indenture or any Supplement, they
may, but need not, be consolidated and form one instrument.

          Wherever in this Amended and Restated Indenture or any Supplement, in
connection with any application or certificate or report to the Trustee, it is
provided that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of compliance with any term hereof,
it is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Section 7.01(a)(ii).

          SECTION 1.04 ACTS OF NOTEHOLDERS, ETC.

          (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Amended and Restated Indenture or any
Supplement to be given or taken by Noteholders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Noteholders in person or by agents duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, with a copy (or if
expressly required an original) to the Issuer and the Servicer. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "ACT" of the Noteholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Amended and Restated Indenture or any Supplement and (subject to Section 7.01)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section 1.04.

          (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.

          (c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the holder of any Note shall bind every future holder of
the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Issuer in
reliance thereon, whether or not notation of such action is made upon such Note.

          (d) By accepting the Notes issued pursuant to this Amended and
Restated Indenture and any Supplement, each Noteholder irrevocably appoints the
Trustee hereunder as the special attorney-

                                       4

<PAGE>

in-fact for such Noteholder vested with full power on behalf of such Noteholder
to effect and enforce the rights of such Noteholder pursuant hereto and the
provisions hereof for the benefit of such Noteholder.

          (e) Each holder of a Note, by acceptance of such Note, agrees to treat
such Note as indebtedness for federal, state and local income or franchise tax
purposes.

          SECTION 1.05 NOTICES.

          Any request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders, or other document provided or permitted by this
Amended and Restated Indenture or any Supplement to be made upon, given or
furnished to, or filed with, the Trustee, the Issuer or the Servicer shall be
sufficient for every purpose hereunder if in writing and telexed, telecopied
(with the original of the telexed or telecopied material sent to the recipient
by overnight courier on the day of the telex or telecopy), mailed, first-class
postage prepaid, or hand delivered. Unless otherwise specifically provided
herein, no such request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders or other document shall be effective until received
and any provision hereof requiring the making, giving, furnishing, or filing of
the same on any date shall be interpreted as requiring the same to be sent or
delivered in such fashion that it will be received on such date. Any such
request, demand, authorization, direction, notice, consent, waiver, Act of
Noteholders, or other document shall be sent or delivered to the following
addresses:

               (i) if to the Trustee, at the Corporate Trust Office, Attention:
     Structured Finance, 180 Fifth Street, St. Paul, Minnesota, 55101 (Number
     for telecopy: (651) 244-0089; Number for telephonic confirmation: (651)
     244-0727;

               (ii) if to the Issuer, Attention: Securitization Manager, at 2500
     York Road, Jamison, Pennsylvania 18929 (Number for telecopy: (215)
     488-5416; Number for telephonic confirmation: (215) 488-5024) or at any
     other address previously furnished in writing to the Trustee, the Servicer
     or the Contributor by the Issuer;

               (iii) if to the Contributor, Attention: Securitization Manager,
     at 2500 York Road, Jamison, Pennsylvania 18929 (Number for telecopy: (215)
     488-5416; Number for telephonic confirmation: (215) 488-5024) or at any
     other address previously furnished in writing to the Trustee, the Issuer
     and the Servicer by the Contributor;

               (iv) if to the Servicer, Attention: Servicing Manager, at 2500
     York Road, Jamison, Pennsylvania 18929 (Number for telecopy: (215)
     488-5416; Number for telephonic confirmation: (215) 488-5024) or at any
     other address previously furnished in writing to the Trustee, the Issuer
     and the Contributor by the Servicer;

               (v) if to Moody's, at 99 Church Street, New York, New York 10007,
     Attention: ABS Monitoring Department (Number for telecopy: (212) 553-3856),
     or at any other address or telecopy number previously furnished in writing
     to the Trustee, the Issuer and the Servicer by Moody's; or

                                       5

<PAGE>

               (vi) if to Fitch, Inc., at 55 East Monroe Street, Chicago,
     Illinois 60603, Attention: ABS Group (Number for telecopy: (312) 368-2069),
     or at any other address or telecopy number previously furnished in writing
     to the Trustee, the Issuer and the Servicer by Fitch, Inc.

          SECTION 1.06 NOTICE TO NOTEHOLDERS; WAIVER.

          (a) Where this Amended and Restated Indenture or any Supplement
provides for notice to Noteholders of any event, or the mailing of any report to
Noteholders, such notice or report shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first class postage
prepaid, or sent by private courier or confirmed telecopy (with a copy of the
telecopied material sent to the recipient by overnight courier on the day of the
telecopy) to each Noteholder affected by such event or to whom such report is
required to be mailed, at such Noteholder's address as it appears in the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice or the mailing of such report. In
any case where a notice or report to Noteholders is mailed, neither the failure
to mail such notice or report, nor any defect in any notice or report so mailed,
to any particular Noteholder shall affect the sufficiency of such notice or
report with respect to other Noteholders. Where this Amended and Restated
Indenture or any Supplement provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

          (b) In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to mail or send notice to
Noteholders, in accordance with Section 1.06(a), of any event or any report to
Noteholders when such notice or report is required to be delivered pursuant to
any provision of this Amended and Restated Indenture or any Supplement, then
such notification or delivery as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

          SECTION 1.07 TABLE OF CONTENTS, HEADINGS, ETC.

          The Table of Contents and the Article and Section headings are for
convenience only and shall in no way modify or restrict any of the terms or
provisions hereof.

          SECTION 1.08 SUCCESSORS AND ASSIGNS.

          All covenants and agreements in this Amended and Restated Indenture by
the Issuer or the Trustee shall bind its respective successors and permitted
assigns, whether so expressed or not.

          SECTION 1.09 SEVERABILITY CLAUSE.

          In case any provision in this Amended and Restated Indenture, any
Supplement or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

                                       6

<PAGE>

          SECTION 1.10 BENEFITS OF AMENDED AND RESTATED INDENTURE.

          Nothing in this Amended and Restated Indenture, any Supplement or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any separate trustee or co-trustee
appointed under Section 7.11 and the holders of Notes, any benefit or any legal
or equitable right, remedy or claim under this Amended and Restated Indenture.

          SECTION 1.11 GOVERNING LAW.

          THIS AMENDED AND RESTATED INDENTURE, ANY SUPPLEMENT AND THE NOTES
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. THIS
AMENDED AND RESTATED INDENTURE IS SUBJECT TO THE TRUST INDENTURE ACT OF 1939, AS
AMENDED FROM TIME TO TIME, AS IN EFFECT ON ANY RELEVANT DATE (THE "TIA") AND
SHALL BE GOVERNED THEREBY OR CONSTRUED IN ACCORDANCE THEREWITH.

          SECTION 1.12 LEGAL HOLIDAYS.

          In any case where any Payment Date or the Stated Maturity Date or any
other date on which principal of or interest on any Note is proposed to be paid
shall not be a Business Day, then (notwithstanding any other provision of this
Amended and Restated Indenture or of the Notes) such payment shall be made on
the next succeeding Business Day, and no interest shall accrue for the
intervening period.

          SECTION 1.13 EXECUTION IN COUNTERPARTS.

          This Amended and Restated Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.

          SECTION 1.14 INSPECTION.

          The Issuer agrees that, on reasonable prior notice, it will permit the
representatives of the Trustee or any Noteholder, during the Issuer's normal
business hours, to examine all of the books of account, records, reports and
other papers of the Issuer, to make copies thereof and extracts therefrom, to
cause such books to be audited by independent accountants selected by the Issuer
and reasonably acceptable to the Trustee or such Noteholder, as the case may be,
and to discuss its affairs, finances and accounts with its officers, employees
and independent accountants with an Authorized Officer of the Transferor (as
sole beneficiary of the Issuer) present (and by this provision the Issuer hereby
authorizes its accountants to discuss with such representatives such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested for the purpose of reviewing or evaluating the financial
condition or affairs of the Issuer or the performance of and compliance with the
covenants and undertakings of the Issuer in this Amended and Restated Indenture,
the Amended and Restated Contribution and Servicing Agreement, the other
Transaction Documents, or any of the other documents referred to herein or
therein. Any expense incident to the exercise by the Trustee or any Noteholder
during the continuance of any Default or Indenture Event of Default of any right
under this Section 1.14 shall be borne by the Issuer, but any expense due to the
exercise of a right

                                       7

<PAGE>

by any such Person prior to the occurrence of a Default or Indenture Event of
Default shall be borne by such Person.

          SECTION 1.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

          The representations, warranties and certifications of the Issuer made
in this Amended and Restated Indenture or in any certificate or other writing
delivered by the Issuer pursuant hereto shall survive the authentication and
delivery of the Notes hereunder, but unless explicitly provided to the contrary,
they are made only as of the Closing Date.

          SECTION 1.16 INCORPORATION BY REFERENCE TO TRUST INDENTURE ACT.

          The provisions of TIA Sections 310 through 317 inclusive that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded by the provisions of this Amended and Restated
Indenture) are a part of and govern this Amended and Restated Indenture, whether
or not physically contained herein.

          If any provision of this Amended and Restated Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Amended and Restated Indenture by the TIA, the required provision of the
TIA shall control.

          SECTION 1.17 COMMUNICATIONS BY NOTEHOLDERS WITH OTHER NOTEHOLDERS.

          A Noteholder may communicate with other Noteholders pursuant to TIA
Section 312(b) with respect to their rights under this Amended and Restated
Indenture or the Notes. The Issuer, the Trustee and anyone else shall have the
protection of Section 312(c) of the TIA.

          SECTION 1.18 STATEMENTS REQUIRED IN OFFICER'S CERTIFICATE.

          Each Officer's Certificate with respect to compliance with a condition
or covenant provided for in this Amended and Restated Indenture shall include:

               (i) a statement that the Person making such certification has
     read such covenant or condition;

               (ii) a brief statement as to the nature and scope of the
     examination or investigation upon which the statements contained in such
     certificate are based;

               (iii) a statement that, in the opinion of such Person, he or she
     has made such examination or investigation as is necessary to enable him to
     express an informed opinion as to whether or not such covenant or condition
     has been complied with; and

               (iv) a statement as to whether or not, in the opinion of such
     Person, such covenant or condition has been complied with.

          SECTION 1.19 WHEN TREASURY SECURITIES ARE DISREGARDED.

                                       8

<PAGE>

          In determining whether the Noteholders of the required principal
amount of Notes have concurred in any direction, waiver or consent hereunder,
Notes owned by the Issuer or any other obligor on the Notes or by any Affiliate
of the Issuer or such obligor related thereto shall be disregarded, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which a Responsible
Officer of the Trustee actually knows are so owned shall be so disregarded.
Notes so owned which have been pledged in good faith shall not be disregarded if
the pledgee establishes to the reasonable satisfaction of the Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Issuer or any other obligor upon the Notes or any Affiliate of the Issuer or
such obligor.

          SECTION 1.20 RULES BY TRUSTEE.

          The Trustee may make reasonable rules for action by or at a meeting of
Noteholders.

          SECTION 1.21 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

          This Amended and Restated Indenture may not be used to interpret
another indenture, loan or debt agreement of the Issuer or an Affiliate of the
Issuer. Any such indenture, loan or debt agreement may not be used to interpret
this Amended and Restated Indenture.

          SECTION 1.22 NO RECOURSE AGAINST OTHERS.

          All liability described in the Notes of any director, officer,
employee or member, as such, of the Issuer is waived and released.

          SECTION 1.23 INDEPENDENCE OF COVENANTS.

          All covenants and agreements in this Amended and Restated Indenture
shall be given independent effect so that if any particular action or condition
is not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Indenture Event of Default if
such action is taken or condition exists.

          SECTION 1.24 CONSENT TO JURISDICTION.

          Each of the Issuer and the Trustee 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 Amended and Restated Indenture or any Note. Each of
the Issuer and the Trustee irrevocably waives, to the fullest extent permitted
by laws, 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 Issuer and the Trustee agrees that final
judgment in any such suit, action or proceeding brought in such a court shall be
conclusive and binding upon the Issuer or the Trustee, as the case may be, and
may be enforced in the courts of New York (or any other courts to the
jurisdiction of which the Issuer or the Trustee, as the case may be, is subject)
by a suit upon such judgment, provided that service of process is effected upon
the Issuer as permitted

                                       9

<PAGE>

by law; PROVIDED, HOWEVER, that each of the Issuer and the Trustee 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.

          SECTION 1.25 NO BANKRUPTCY PETITION.

          Notwithstanding any provision contained herein, each of the
Noteholders and the Trustee covenants and agrees that prior to the date which is
one year and one day after the payment in full of all Notes issued by the
Issuer, it will not institute against, or join any other Person in instituting
against, the Issuer or its Managing Member any bankruptcy, reorganization,
receivership, arrangement, insolvency or liquidation proceedings, or other
similar proceedings under any federal or state bankruptcy or similar law. The
Issuer represents, warrants, and covenants that it and has obtained, and will in
the future obtain, a no-petition agreement from each and every Person that
enters into any agreement of any kind with the Issuer or its Managing Member.
This Section 1.25 shall survive the termination of this Amended and Restated
Indenture.

          SECTION 1.26 VOTING RIGHTS OF CLASS F INSTRUMENTS.

          Upon the irrevocable payment in full of all of the Class A Notes, the
Class B Notes the Class C Notes, the Class D Notes and the Class E Notes, all
voting and consent rights otherwise granted to the Class A Noteholders, the
Class B Noteholders, the Class C Noteholders, the Class D Noteholders and the
Class E Noteholders shall be exercised by the requisite percentage of holders of
the Class F Instruments, if any.

          SECTION 1.27 INDEBTEDNESS TREATMENT.

          This Amended and Restated Indenture and the Notes have been structured
with the intention that the Notes will qualify under applicable tax law as
indebtedness. Each Noteholder agrees to treat the Notes for purposes of federal,
state and local income or franchise taxes (and any other tax imposed on or
measured by income) as indebtedness and to cause any Person acquiring an
interest in a Note by, through or under it to acknowledge the characterization
of the Notes as indebtedness and to agree to treat the Notes as indebtedness for
such tax purposes.

                                       10

<PAGE>

                                   ARTICLE II

                                   THE NOTES

          SECTION 2.01 GENERAL PROVISIONS.

          (a) The Notes issuable hereunder shall be issued as registered Notes
without coupons in no more than five classes as from time to time shall be
authorized by the Issuer. The Notes of all classes shall be known and entitled
generally as the "DVI Receivables XII, L.L.C. Asset-Backed Notes, Series 2000-2"
The Notes of each class shall have further particular designation as the Issuer
may adopt for each class, and each Note issued hereunder shall bear upon the
face thereof the designation so adopted for the class to which it belongs. The
Trustee is hereby authorized and directed upon the written order of the Issuer
to authenticate and deliver Notes to be issued hereunder in five classes, and,
with respect to the Class A Notes only, in four tranches, entitled "6.7094%
Asset-Backed Notes, Series 2000-2, Class A-1", "6.759% Asset-Backed Notes,
Series 2000-2, Class A-2", "6.808% Asset- Backed Notes, Series 2000-2 Class
A-3", "7.115% Asset-Backed Notes, Series 2000-2 Class A-4", "7.063% Asset-Backed
Notes, Series 2000-2, Class B", "7.208% Asset-Backed Notes, Series 2000-2, Class
C", "7.693% Asset-Backed Notes, Series 2000-2, Class D" and "10.267%
Asset-Backed Notes, Series 2000-2, Class E", respectively. The Issuer may issue
in accordance with Section 2.06 hereof, the Class F Instruments which will be
subordinate to the Class A Notes, the Class B Notes, the Class C Notes, the
Class D Notes and the Class E Notes by entering into a Supplement. The form of
each class of Offered Notes and of the Trustee's certificate of authentication
shall be in substantially the forms set forth in Exhibits A-1, A-2, A-3, A-4, B,
C, D and E hereto, with such appropriate insertions, omissions, substitutions,
and other variations as are required or permitted by this Amended and Restated
Indenture. The aggregate principal amount of Notes which may be authenticated
and delivered under this Amended and Restated Indenture is limited to
$265,403,000 except for Notes authenticated and delivered upon registration of,
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section
2.04, 2.05, or 9.04. The Notes shall be issuable only in registered form and
only in denominations of at least $500,000 and integral multiples of $1,000
thereof; PROVIDED that the foregoing shall not restrict or prevent the transfer
or issuance in accordance with Section 2.04 or 2.05 of any Note having a
remaining outstanding principal amount of less than $500,000; PROVIDED, FURTHER,
that a single Note of each Class may be issued in a different amount as may be
necessary so that the Notes of such Class evidence the full initial principal
balance thereof. The Class F Instruments, if any, shall be issued in the minimum
denominations indicated in the related Supplement.

          (b) The aggregate amount of principal due and payable on each class of
Notes on each Payment Date shall be equal to the sum of (i) Monthly Principal
for such class and (ii) any other due and unpaid principal for such class.
Except (i) for optional redemption pursuant to Section 10.01, (ii) for
Prepayment Amounts or Partial Prepayment Amounts or (iii) as otherwise provided
in Section 6.02, no part of the principal of any Note shall be paid prior to the
Payment Date on which such principal is due in accordance with the preceding
provisions of this Section 2.01(b).

          (c) Interest and principal on the Notes shall be payable on each
Payment Date commencing with the Initial Payment Date to Noteholders of record
on the Record Date. Interest on the Notes is required to be paid to Noteholders
in an amount equal to the Monthly Interest plus Overdue Interest. Interest on
the Notes shall be computed on the basis of a 360-day year consisting

                                       11

<PAGE>

of twelve 30-day months PROVIDED that for Class A-1, interest shall be computed
using the actual number of days elapsed over a 360-day year.

          (d) All payments made with respect to any Note shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts and shall be applied first
to the interest then due and payable on such Notes and then to the principal
thereof.

          (e) All Notes of the same class issued under this Amended and Restated
Indenture or any Supplement shall be in all respects equally and ratably
entitled to the benefits hereof and thereof without preference, priority or
distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Amended and
Restated Indenture or any Supplement. Payments of principal and interest on
Notes of the same class shall be made pro rata among all outstanding Notes of
such class, without preference or priority of any kind.

          (f) The Issuer, the Trustee and each Class A, Class B, Class C, Class
D and Class E Noteholder by acceptance of its Class A, Class B, Class C, Class D
or Class E Note, respectively, (and any Person that is a beneficial owner of any
interest in a Class A, Class B, Class C, Class D or Class E Note, respectively,
by virtue of such Person's acquisition of a beneficial interest therein) agrees
to treat such Note(s) for purposes of federal, state and local income or
franchise taxes (and any other tax imposed on or measured by income) as
indebtedness. Each Class A, Class B, Class C, Class D and Class E Noteholder
agrees that it will cause any Person acquiring an interest in a Class A, Class
B, Class C, Class D or Class E Note through it to acknowledge the Class A, Class
B, Class C, Class D or Class E Notes', respectively, characterization as
indebtedness and to agree to comply with this Amended and Restated Indenture as
to treatment of such Notes as indebtedness for such tax purposes.

          SECTION 2.02 GLOBAL NOTES.

          (a) Initially, the Class A Notes, the Class B Notes, the Class C Notes
and the Class D Notes shall be issued in the form of one or more Public Global
Notes and the Class E Notes shall be issued in the form of one or more Rule 144A
Global Note(s) which (i) shall represent, and shall be denominated in an
aggregate amount equal to, the aggregate principal amount of all Class A Notes,
the Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes to
be issued hereunder, (ii) shall be delivered as one or more Notes held by the
Book Entry Custodian, or, if appointed to hold such Notes as provided below, the
Depositary shall be registered in the name of the Depositary or its nominee,
(iii) shall be substantially in the form of the Note specified pursuant to
Section 2.01, with such changes therein as may be necessary to reflect that each
such Note is a global security, and (iv) shall each bear a legend substantially
to the effect included in the form of the face of the Notes as set forth in
Exhibits A-1, A-2, A-3, A-4, B, C, D and E hereto. Notwithstanding anything in
any Transaction Document to the contrary, no Class E Note shall be purchased by
a Person who is not a U.S. Person, as defined herein and no Class E Note shall
be purchased by a Person who is not a "qualified institutional buyer" as defined
in Rule 144A of the Securities Act.

          (b) Notwithstanding any other provisions of this Section 2.02 or of
Section 2.04, unless and until a Global Note is exchanged in whole for Notes in
definitive form, a Global Note may be transferred, in whole, but not in part,
and in the manner provided in this Section 2.02, only by the

                                       12

<PAGE>

Depositary to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary selected or approved by the Issuer or
to a nominee of such successor Depositary or in the manner specified in Section
2.02(c). The Depositary shall order the Note Registrar to authenticate and
deliver the following Book-Entry Notes: with respect to the E Notes only, a Rule
144A Global Note having an aggregate initial Outstanding principal balance equal
to the Initial Class Note Balance of such Class, and, with respect to the Class
A Notes, the Class B Notes, the Class C Notes and the Class D Notes only, a
Public Global Note, having an initial Outstanding principal balance equal to
zero. Note Owners shall hold their respective Ownership Interests in and to such
Notes through the book-entry facilities of the Depositary. Without limiting the
foregoing, Class A, Class B, Class C and Class D Note Owners shall hold their
respective Ownership Interests, if any, in Public Global Notes only through
Depositary Participants, Euroclear or Clearstream Banking, Luxembourg.

          (c) If (i) the Depositary for the Notes represented by one or more
Global Notes at any time notifies the Issuer that it is unwilling or unable to
continue as Depositary of the Notes or if at any time the Depositary shall no
longer be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation, and a successor Depositary is not appointed or
approved by the Issuer within 90 days after the Issuer receives such notice or
becomes aware of such condition, as the case may be, (ii) the Trustee, at the
direction of Noteholders evidencing not less than 66 2/3% of the Voting Rights,
elects to terminate the book-entry system through the Depositary or (iii) after
an Indenture Event of Default or a Servicer Event of Default, Noteholders
representing more than 50% of the Voting Rights advise the Depositary, or
Book-Entry Custodian, as the case may be, in writing that the continuation of a
book-entry system through the Depositary, or the Book-Entry Custodian, as the
case may be, is no longer in such Noteholder's best interest upon the request of
such Noteholder, but only with respect to the interests of such Noteholder, the
Issuer will promptly execute, and the Trustee, upon receipt of an Officer's
Certificate evidencing such determination by the Issuer, will promptly
authenticate and make available for delivery, Notes in definitive form without
coupons, in authorized denominations and in an aggregate principal amount equal
to the principal amount of the Global Note or Notes then outstanding in exchange
for such Global Note or Notes and this Section 2.02 shall no longer be
applicable to the Notes. Upon the exchange of the Global Notes for such Notes in
definitive form without coupons, in authorized denominations, such Global Notes
shall be canceled by the Trustee. Such Notes in definitive form issued in
exchange of the Global Notes pursuant to this Section 2.02(c) shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee may conclusively rely on any such
instructions furnished by the Depositary and shall not be liable for any delay
in delivery of such instructions. The Trustee shall make such Notes available
for delivery to the Persons in whose names such Notes are so registered.

          (d) As long as the Notes outstanding are represented by one or more
Global Notes:

               (i) the Note Registrar and the Trustee may deal with the
     Depositary for all purposes (including the payment of principal of and
     interest on the Notes) as the authorized representative of the Note Owners;

               (ii) the rights of Note Owners shall be exercised only through
     the Depositary and shall be limited to those established by law and
     agreements between such Note Owners

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<PAGE>

     and the Depositary and/or the Depositary Participants. Unless and until
     Definitive Notes are issued, the Depositary will make book-entry transfers
     among the Depositary Participants and receive and transmit payments of
     principal of and interest on the Notes to such Depositary Participants; and

               (iii) whenever this Amended and Restated Indenture requires or
     permits actions to be taken based upon instructions or directions of
     Holders of Notes evidencing a specified percentage of the Voting Rights,
     the Depositary shall be deemed to represent such percentage only to the
     extent that it has received instructions to such effect from Note Owners
     and/or Depositary Participants owning or representing, respectively, such
     required percentage of the beneficial interest in the Notes (or Class of
     Notes) and has delivered such instruction to the Trustee.

          (e) If Notes are to be issued in global form other than as Global
Notes, the provisions governing such Notes shall be specified pursuant to an
Officer's Certificate with respect thereto and by an indenture supplemental
hereto.

          (f) Whenever a notice or other communication to the Noteholders is
required under this Amended and Restated Indenture, unless and until Notes have
been issued in definitive form to Note Owners, the Trustee shall give all such
notices and communications to the Depositary.

          (g) The Trustee is hereby initially appointed as the Book-Entry
Custodian and hereby agrees to act as such in accordance with the agreement that
it has with the Depositary authorizing it to act as such. The Book-Entry
Custodian may, and, if it is no longer qualified to act as such, the Book-Entry
Custodian shall, appoint, by written instrument delivered to the Issuer and the
Depositary, any other transfer agent (including the Depositary or any successor
Depositary) to act as Book-Entry Custodian under such conditions as the
predecessor Book-Entry Custodian and the Depositary or any successor Depositary
may prescribe, PROVIDED that the predecessor Book-Entry Custodian shall not be
relieved of any of its duties or responsibilities by reason of any such
appointment of other than the Depositary. If the Trustee resigns or is removed
in accordance with the terms hereof, the successor Trustee or, if it so elects,
the Depositary shall immediately succeed to its predecessor's duties as Book-
Entry Custodian. The Issuer shall have the right to inspect, and to obtain
copies of, any Notes held as Book-Entry Notes by the Book-Entry Custodian.

          (h) The provisions of this Section 2.02(h) shall apply to all
transfers of Definitive Notes, if any, issued in respect of Ownership Interests
in the Rule 144A Global Notes.

          (1) No transfer of any Class of Note or interest therein shall be made
     unless that transfer is made pursuant to an effective registration
     statement under the Securities Act, and effective registration or
     qualification under applicable state securities laws, or is made in a
     transaction that does not require such registration or qualification. If a
     transfer of any Definitive Note is to be made without registration under
     the Securities Act (other than in connection with the initial issuance
     thereof or a transfer thereof by the Depositary or one of its Affiliates),
     then the Note Registrar shall refuse to register such transfer unless it
     receives (and upon receipt, may conclusively rely upon) either: (i) a
     certificate from such Noteholder substantially in the form attached as
     Exhibit G hereto or such other certification reasonably acceptable to the

                                       14

<PAGE>

     Trustee and a certificate from such Noteholder's prospective transferee
     substantially in the form attached as Exhibit G hereto or such other
     certification reasonably acceptable to the Trustee; or (ii) an Opinion of
     Counsel satisfactory to the Trustee to the effect that such transfer may be
     made without registration under the Securities Act (which Opinion of
     Counsel shall not be an expense of the Issuer or any Affiliate thereof that
     is a trust or of the Depositary, the Servicer, the Trustee or the Note
     Registrar in their respective capacities as such), together with the
     written certification(s) as to the facts surrounding such transfer from the
     Noteholder desiring to effect such transfer and/or such Noteholder's
     prospective transferee on which such Opinion of Counsel is based. If such a
     transfer of any interest in a Book-Entry Note is to be made without
     registration under the Securities Act, the transferor will be deemed to
     have made each of the representations and warranties set forth on Exhibit G
     hereto in respect of such interest as if it was evidenced by a Definitive
     Note and the transferee will be deemed to have made each of the
     representations and warranties set forth in either Exhibit G hereto in
     respect of such interest as if it was evidenced by a Definitive Note. None
     of the Depositary, the Trustee or the Note Registrar is obligated to
     register or qualify any Class of Notes under the Securities Act or any
     other securities law or to take any action not otherwise required under
     this Amended and Restated Indenture to permit the transfer of any Note or
     interest therein without registration or qualification. Any Noteholder or
     Note Owner desiring to effect such a transfer shall, and does hereby agree
     to, indemnify the Depositary, the Trustee and the Note Registrar against
     any liability that may result if the transfer is not so exempt or is not
     made in accordance with such federal and state laws.

          SECTION 2.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

          (a) The Notes shall be executed manually or by facsimile signature on
behalf of the Issuer by an Authorized Officer of the Issuer.

          (b) Any Note bearing the signature of an individual who was at the
time of execution thereof a proper authorized signatory of the Issuer shall bind
the Issuer, notwithstanding that such individual did not hold such office at the
date of such Note.

          (c) No Note shall be entitled to any benefit under this Amended and
Restated Indenture or any Supplement or be valid or obligatory for any purpose
unless there appears on such Note a certificate of authentication substantially
in the form provided for herein, executed by the Trustee by manual signature,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
Each Note shall be dated the date of its authentication.

          (d) The Notes may from time to time be executed by the Issuer and
delivered to the Trustee for authentication together with an Issuer Request to
the Trustee directing the authentication and delivery of such Notes and
thereupon the same shall be authenticated and delivered by the Trustee in
accordance with such Issuer Request.

          All Notes and the interest thereon shall be nonrecourse obligations of
the Issuer and shall be payable from and secured by the Trust Property. The
Notes shall never constitute obligations of the Trustee, the Contributor, the
Servicer, the Transferor, the Managing Member or of any shareholder

                                       15

<PAGE>

or any Affiliate of such parties (other than any Affiliate that guarantees any
Notes) or any officers, directors, employees or agents of any thereof, and no
recourse may be had under or upon any obligation, covenant or agreement of this
Amended and Restated Indenture, any Supplement or of any Notes, or for any claim
based thereon or otherwise in respect thereof, against any incorporator or
against any past, present, or future owner, partner of an owner or any officer,
employee or director thereof or of any successor entity, or any other Person,
either directly or through the Issuer, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed that this Amended and Restated Indenture
and the obligations issued hereunder are solely obligations of the Issuer, and
that no such personal liability whatever shall attach to, or is or shall be
incurred by, any other Person under or by reason of this Amended and Restated
Indenture, any Supplement or any Notes or implied therefrom, or for any claim
based thereon or in respect thereof, all such liability and any and all such
claims being hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Amended and Restated Indenture and the
issue of such Notes. Except as provided in any Supplement, no Person other than
the Issuer shall be liable for any obligation of the Issuer under this Amended
and Restated Indenture or any Note or any losses incurred by any Noteholder.

          SECTION 2.04 REGISTRATION, TRANSFER AND EXCHANGE.

          (a) The Issuer shall cause to be kept at the Corporate Trust Office a
register (the "NOTE REGISTER") in which, subject to such reasonable regulations
as the Trustee may prescribe, the Issuer shall provide for the registration of
Notes and of transfers of Notes. The Trustee is hereby appointed "NOTE
REGISTRAR" for the purpose of registering Notes and transfers of Notes as herein
provided.

          (b) Upon surrender for registration of transfer of any Note at the
Corporate Trust Office, the Issuer shall execute and the Trustee upon request
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of the same class, of any authorized
denominations and of a like aggregate original principal amount.

          (c) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Amended and Restated Indenture and
any Supplement, as the Notes surrendered upon such registration of transfer or
exchange.

          (d) Every Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the Issuer or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed, by the holder thereof
or his attorney duly authorized in writing.

          (e) No service charge shall be made for any registration of transfer
or exchange of Notes but the Issuer or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, but this
provision shall not apply to any exchange pursuant to Section 9.04 not involving
any transfer.

                                       16

<PAGE>

          (f) If Notes are issued or exchanged in definitive form under Section
2.02, such Notes will not be registered by the Trustee unless each prospective
initial Noteholder acquiring a Note, each prospective transferee acquiring a
Note and each prospective owner (or transferee thereof) of a beneficial interest
in Notes acquiring such beneficial interest provides the Servicer, the Issuer,
the Trustee and any successor Servicer with a representation that the statements
in either subsections (1) or (2) of Section 2.11 is an accurate representation
as to all sources of funds to be used to pay the purchase price of the Notes.

          (g) No transfer of a Note shall be deemed effective unless the
registration and prospectus delivery requirements of Section 5 of the Securities
Act of 1933, as amended, and any applicable state securities laws are complied
with, or such transfer is exempt from the registration and prospectus delivery
requirements under said Securities Act and laws. In the event that a transfer is
to be made without registration or qualification, such Noteholder's prospective
transferee shall deliver to the Trustee an investment letter substantially in
the form of Exhibit G hereto (the "INVESTMENT LETTER"). The Trustee is not under
any obligation to register the Notes under said Act or any other securities law
or to bear any expense with respect to such registration by any other Person or
monitor compliance of any transfer with the securities laws of the United States
regulations promulgated in connection thereto or ERISA unless the Notes are
issued or exchanged in definitive form under Section 2.02.

          (h) No Class E Noteholder shall transfer, sell, assign, pledge or
otherwise grant a security interest in ("TRANSFER"), a Class E Note to any
Person that is not a United States person within the meaning of section
7701(a)(30) of the Code. In the event of any Transfer with respect to a Class E
Note, the Trustee shall require, in addition to any other applicable
requirements set forth in this Amended and Restated Indenture, including without
limitation, the delivery of the Investment Letter, (A) the purchaser to execute
a Tax Certificate in substantially the form attached as Exhibit I hereto
certifying to the transferor and the Trustee as to the matters set forth therein
and (B) the transferee to certify, in form and substance reasonably acceptable
to the Trustee, that (1) the transferee is acquiring the Class E Note for its
own behalf and is not acting as agent or custodian for any other person or
entity in connection with such acquisition and (2) the transferee is a United
States person within the meaning of section 7701(a)(30) of the Code.

          In addition, no Class E Noteholder shall Transfer a Class E Note to
any Person that is a grantor trust, partnership or S corporation (each a
"PASS-THROUGH ENTITY") if substantially all of the value of the assets of the
Pass-Through Entity is attributable to the Pass-Through Entity's ownership
interest in securities of the Issuer other than the Class A, Class B, Class C
and Class D Notes, nor may the Class E Notes be Transferred or sold to any
Person if, for the purposes of Section 7704 of the Code and the Treasury
regulations promulgated thereunder, after giving effect to such Transfer the
Issuer would be treated under the Code (by virtue of calculating the aggregate
number, Class E Noteholders and holders of the Class F Instrument (if issued))
as being owned by more than 100 persons. In the event of any Transfer with
respect to a Class E Note, the Trustee shall require, in addition to any other
applicable requirements set forth in this Agreement, including without
limitation, the delivery of the Investment Letter, (A) the purchaser to execute
a Tax Certificate substantially in the form attached as Exhibit I hereto in form
and substance reasonably acceptable to the Trustee certifying to the transferor
and the Trustee as to the matters set forth therein and (B) the transferee to
certify, in form and substance reasonably acceptable to the Trustee, that (1)
the transferee is acquiring the Class E Note for its own

                                       17
<PAGE>

behalf and is not acting as agent or custodian for any other person or entity in
connection with such acquisition and (2) the transferee is (x) not a
Pass-through Entity or (y) is a Pass-through Entity but after giving effect to
such purchase of such Class E Note by such person, substantially all of the
value of the assets of the Pass-Through Entity is not attributable to the
Pass-Through Entity's ownership interest in the Class E Notes.

          SECTION 2.05 MUTILATED, DESTROYED, LOST AND STOLEN NOTES.

          (a) If any mutilated Note is surrendered to the Trustee, the Issuer
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a replacement Note of the same class, of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

          (b) If there shall be delivered to the Issuer and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Note and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of actual notice
to the Issuer or the Trustee that such Note has been acquired by a bona fide
purchaser, the Issuer shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
replacement Note of the same class, of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

          (c) In case the final installment of principal on any such mutilated,
destroyed, lost or stolen Note has become or will at the next Payment Date
become due and payable, the Issuer in its discretion may, instead of issuing a
replacement Note, pay such Note.

          (d) Upon the issuance of any replacement Note under this Section, the
Issuer or the Trustee may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed as a result of the issuance
of such replacement Note.

          (e) Every replacement Note issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Amended and Restated Indenture and any Supplement
equally and proportionately with any and all other Notes of the same class, duly
issued hereunder.

          (f) The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.

          SECTION 2.06 DELIVERY OF CLASS F INSTRUMENTS.

          (a) The Issuer may issue the Class F Instruments upon delivery to the
Trustee of the following: (i) a Supplement in form reasonably satisfactory to
the Trustee executed by the Issuer, the Trustee and any other applicable party
and specifying the items provided in Section 2.06(c) and any other terms (the
"PRINCIPAL TERMS"), (ii) any related credit enhancement agreements as
contemplated by such Supplement, (iii) written confirmation from each Rating
Agency that the issuance of such Class F Instruments will not result in a
Ratings Effect with respect to any class of Notes; PROVIDED,

                                       18

<PAGE>

HOWEVER, that no such written confirmation shall be required if the Class F
Instruments are issued on the Closing Date, (iv) such other closing documents,
certificates and Opinions of Counsel as may be required by this Amended and
Restated Indenture or the applicable Supplement and (v) an Officer's Certificate
from the Issuer stating that each of the conditions to the issuance of the Class
F Instruments set forth in this Section 2.06 have been satisfied. In no event
shall the Issuer issue a Class F Instrument to the order of the Issuer or an
Affiliate.

          (b) Any such Class F Instrument shall be substantially in the form of
Exhibit F hereto and shall bear, upon its face, the designation for such class
to which it belongs so selected by the Issuer and set forth in the related
Supplement. All Class F Instruments shall be identical in all respects except
for the denominations thereof and shall be equally and ratably entitled among
themselves to the benefits of this Amended and Restated Indenture and any
Supplement thereof without preference, priority or distinction on account of the
actual title or times of authentication and delivery, all in accordance with the
terms and provisions of this Amended and Restated Indenture and such Supplement.
Notwithstanding anything contained in any Supplement, such Class F Instruments,
if any, shall be subordinate to the Class A Notes, the Class B Notes, the Class
C Notes, the Class D Notes and the Class E Notes, and no Class F Instruments
shall adversely affect the method of allocating Available Funds to Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes or the Class E
Notes for any period or alter or affect the manner or timing of distributions to
the Class A, Class B, Class C, Class D or Class E Noteholders or the rights or
priority of such holders in and to the Trust Property.

          (c) Any Supplement relating to Class F Instruments shall define or
provide for, but shall not be limited to, the following Principal Terms: (i) the
name or designation of the Class F Instruments, (ii) the initial balance of the
Class F Instrument (or method for calculating such amount), (iii) the rate of
interest applicable to such Class F Instrument (or formula for the determination
thereof, which may provide that such rate is a floating rate), (iv) the Class F
Percentage, (v) the Stated Maturity Date, (vi) the Redemption Price, if any,
(vii) the Payment Dates and the date or dates from which interest shall accrue
and (viii) if the Class F Instruments are entitled to receive less than the
entire amount distributable to the Issuer or its designee pursuant to Section
3.04(b)(xiii), the amount that the Class F Instruments are entitled to receive;
PROVIDED that no such Supplement shall conflict with the terms of this Amended
and Restated Indenture in any respect.

          (d) The Issuer will not issue, sell, assign, pledge or otherwise grant
a security interest in, the Class F Instruments without an Opinion of Counsel
acceptable in form and substance to the Trustee and addressed to the Trustee
delivered by outside counsel to the Issuer to the effect that for federal income
tax purposes (i) such issuance, sale, assignment, pledge or grant of a security
interest in the Class F Instruments will not affect the tax characterization of
any of the Class A Notes, Class B Notes, Class C Notes or Class D Notes as
indebtedness or Class E Notes as indebtedness or partnership interests, (ii)
such issuance, sale, assignment, pledge or grant of a security interest in the
Class F Instruments will not constitute a deemed reissuance of the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes or the Class E
Notes under Treasury Regulations ss.1.1001-3 and (iii) such issuance, sale,
assignment, pledge or grant of a security interest in the Class F Instruments
will not prevent the income from the Trust Property from being properly included
in the consolidated federal income tax return of the DVI Group.

                                       19

<PAGE>

          SECTION 2.07 PAYMENT OF INTEREST AND PRINCIPAL; RIGHTS PRESERVED.

          (a) Any installment of interest or principal payable on any Note that
is paid or duly provided for by the Issuer on the applicable Payment Date shall
be paid to the Person in whose name such Note was registered at the close of
business on the Record Date for such Payment Date by wire transfer of
immediately available funds to the account and number specified in the Note
Register on such Record Date for such Person or, if no such account or number is
so specified, then by check mailed to such Person's address as it appears in the
Note Register on such Record Date.

          (b) All reductions in the principal amount of a Note effected by
payments of installments of principal made on any Payment Date shall be binding
upon all holders of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, whether or not such
payment is noted on such Note. All payments on the Notes shall be paid without
any requirement of presentment but each holder of any Note shall be deemed to
agree, by its acceptance of the same, to surrender such Note at the Corporate
Trust Office for the payment of the final installment of principal on such Note.

          SECTION 2.08 PERSONS DEEMED OWNERS.

          Prior to due presentment of a Note for registration or transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Noteholder as the owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Issuer, the Trustee nor any
agent of the Issuer or the Trustee shall be affected by notice to the contrary.

          SECTION 2.09 CANCELLATION.

          All Notes surrendered for registration of transfer or exchange or
final payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Issuer may
at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section, except as expressly permitted by this
Amended and Restated Indenture. All cancelled Notes held by the Trustee may be
disposed of in the normal course of its business or as directed by an Issuer
Order.

          SECTION 2.10. NOTEHOLDER LISTS; COMMUNICATIONS TO NOTEHOLDERS.

          (a) The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Note Registrar, the Issuer or other
obligor, if any, shall furnish to the Trustee at least three Business Days prior
to each Record Date and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Noteholders.

                                       20

<PAGE>

          (b) If any Noteholder (herein referred to as an "APPLICANT") applies
in writing to the Trustee, and such application states that the applicant
desires to communicate with other Noteholders with respect to their rights under
this Amended and Restated Indenture or under the Notes, then the Trustee shall,
within three Business Days after the receipt of such application, afford such
applicant(s) access to the information preserved at the time by the Trustee in
accordance with Section 2.10(a).

          (c) Every Noteholder, by receiving and holding the same, agrees with
the Issuer and the Trustee that neither the Issuer nor the Trustee nor any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Noteholders in accordance
with Section 2.10(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 2.10(b).

          SECTION 2.11. ERISA DEEMED REPRESENTATIONS

          Each prospective initial Noteholder acquiring Notes, each prospective
transferee acquiring the Notes, and each prospective owner (or transferee
thereof) of a beneficial interest in Notes (each a "PROSPECTIVE OWNER") will be
deemed to have represented by such purchase to the Issuer, the Trustee, the
Servicer and any successor Servicer that either (1) it is not a plan within the
meaning of Section 3(3) of ERISA or Section 4975 of the Code ("PLAN") and is not
directly or indirectly acquiring the Notes on behalf of, as investment manager
of, as named fiduciary of, as trustee of, or with the assets of a Plan; or (2)
the acquisition and holding of the Notes will not give rise to a prohibited
transaction under Section 406(a) of ERISA or Section 4975 of the Code for which
a statutory or administrative exemption is unavailable.

                                       21

<PAGE>

                                   ARTICLE III

                   ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
                       AND APPLICATION OF MONEYS; REPORTS

          SECTION 3.01 ACCOUNTS; INVESTMENTS BY TRUSTEE.

          (a) The Servicer, pursuant to a Lock-Box Agreement, shall establish a
Lock-Box Account, which account shall be an Eligible Deposit Account, in the
name of the Trustee for the benefit of the Noteholders. Each Lock-Box Account
shall be a segregated account initially established and maintained with First
Union National Bank, First National Bank of Chicago or such other Lock-Box Bank
as the Servicer may select; PROVIDED, HOWEVER, that the Servicer (i) shall give
the Trustee and the Rating Agencies written notice of any change in the location
of a Lock-Box Account and (ii) shall give at least 10 days' prior written notice
of the new location to each Obligor.

               In addition, on or before the Closing Date, the Trustee shall
establish in the name of the Trustee for the benefit of the Noteholders and the
Issuer to the extent of their interests therein as provided in this Amended and
Restated Indenture and in the Amended and Restated Contribution and Servicing
Agreement, the following accounts, which accounts shall be trust accounts
maintained at the Corporate Trust Office:

              (i) Collection Account;

              (ii) Distribution Account; and

              (iii) Reserve Account.

Each of such accounts shall be established and maintained as an Eligible Deposit
Account. In addition, the Trustee shall establish a sub-account to the
Distribution Account for each Class of Notes (such sub-accounts the "CLASS A
DISTRIBUTION SUB-ACCOUNT," the "CLASS B DISTRIBUTION SUB-ACCOUNT," the "CLASS C
DISTRIBUTION SUB-ACCOUNT" the "CLASS D DISTRIBUTION SUB-ACCOUNT," the "CLASS E
DISTRIBUTION SUB-ACCOUNT" and, if necessary, the "CLASS F DISTRIBUTION
SUB-ACCOUNT"). Subject to the further provisions of this Section 3.01(a), the
Trustee shall, upon receipt or upon transfer from another account, as the case
may be, deposit into such accounts all amounts received by it which are required
to be deposited therein in accordance with the written direction of the Servicer
and the provisions of this Amended and Restated Indenture. All such amounts and
all investments made with such amounts, including all income and other gain from
such investments, shall be held by the Trustee in such accounts as part of the
Trust Property as herein provided, subject to withdrawal by the Trustee in
accordance with, and for the purposes specified in the written direction of the
Servicer pursuant to the provisions of, this Amended and Restated Indenture.

          The Collection Account shall be comprised of more than one such
Eligible Deposit Account, but shall, for the purposes of the Transaction
Documents, be deemed to be one account. Funds shall be withdrawn equally from
each such Eligible Account that constitutes the Collection Account to make all
payments from the Collection Account in accordance with the terms and conditions
of this Amended and Restated Indenture.

                                       22

<PAGE>

          (b) The Trustee shall hold in trust but shall not be required to
deposit in any account specified in Section 3.01(a) any payment received by it
until such time as the Trustee shall have identified to its reasonable
satisfaction the nature of such payment and, on the basis thereof, the proper
account or accounts into which such payment is to be deposited. In determining
into which of the accounts, if any, referred to above any amount received by the
Trustee is to be deposited, the Trustee may conclusively rely (in the absence of
bad faith on the part of the Trustee) on the written instructions of the
Servicer. Unless otherwise advised in writing by the Servicer, the Trustee shall
assume that any amount remitted to it is to be deposited into the Collection
Account pursuant to Section 3.03(b). The Trustee may establish from time to time
such deadline or deadlines as it shall determine are reasonable or necessary in
the administration of the Trust Property after which all amounts received or
collected by the Trustee on any day shall not be deemed to have been received or
collected until the next succeeding Business Day.

          (c) The Trustee shall have no right of set-off with respect to any
Lock-Box Account, the Collection Account, the Reserve Account, the Distribution
Account, the Class A Distribution Sub- Account, the Class B Distribution
Sub-Account, the Class C Distribution Sub-Account, the Class D Distribution
Sub-Account, the Class E Distribution Sub-Account, the Class F Distribution Sub-
Account or any investment therein, or any Trust Property, including collections
or proceeds with respect thereto regardless of when or how held by the Trustee
and whether or not commingled.

          (d) So long as no Default or Indenture Event of Default shall have
occurred and be continuing, the amounts in the Collection Account and the
Reserve Account shall be invested and reinvested by the Trustee pursuant to a
Servicer Order in one or more Eligible Investments. Subject to the restrictions
on the maturity of investments set forth in Section 3.01(f), each such Servicer
Order may authorize the Trustee to make the specific Eligible Investments set
forth therein, to make Eligible Investments from time to time consistent with
the general instructions set forth therein, or to make specific Eligible
Investments pursuant to instructions received in writing or by telegraph or
facsimile transmission from the employees or agents of the Servicer identified
therein, in each case in such amounts as such Servicer Order shall specify. The
Issuer, and any Class F Instrumentholder, agrees to report as income for
financial reporting and tax purposes (to the extent reportable) all investment
earnings on amounts in the Collection Account and the Reserve Account.

          (e) In the event that either (i) the Servicer shall have failed to
give investment directions to the Trustee by 12:00 P.M. New York time on any
Business Day on which there may be uninvested cash or (ii) a Default or
Indenture Event of Default shall have occurred and be continuing, then the
Trustee shall invest and reinvest the funds then in the Collection Account, the
Reserve Account, as the case may be, to the fullest extent practicable in one or
more Eligible Investments as specified in paragraph (vii) of the definition of
Eligible Investments. All investments made by the Trustee shall mature no later
than the maturity date therefor permitted by Section 3.01(f).

          (f) No investment of any amount held in the Collection Account or the
Reserve Account shall mature later than the second Business Day immediately
preceding the Payment Date which is scheduled to occur immediately following the
date of investment; all such investments shall be held to maturity. All income
or other gains from the investment of moneys deposited in the Collection Account
or the Reserve Account shall be deposited by the Trustee in such account
immediately upon receipt. Any net loss of principal (determined on a month by
month basis) resulting

                                       23

<PAGE>

from such investment of amounts in the Collection Account or the Reserve Account
shall be charged to the Issuer, and the Issuer shall reimburse such account for
such loss within three Business Days.

          (g) Any investment of any funds in the Collection Account or the
Reserve Account, and any sale of any investment held in such accounts, shall be
made under the following terms and conditions:

               (i) each such investment shall be made in the name of the Trustee
     (in its capacity as such) for the benefit of the Noteholders or in the name
     of a nominee of the Trustee;

               (ii) the investment earnings of any investment shall be credited
     to the account for which such investment was made;

               (iii) any certificate or other instrument evidencing such
     investment shall be delivered directly to the Trustee or its agent and the
     Trustee shall have sole possession of such instrument, and all income on
     such investment; and

               (iv) the proceeds of any sale of an investment shall be remitted
     by the purchaser thereof directly to the Trustee for deposit in the account
     in which such investment was held.

          (h) The Trustee shall not in any way be held liable by reason of any
insufficiency in the Collection Account or the Reserve Account, resulting from
losses on investments made in accordance with the provisions of this Section
3.01 (but the institution serving as Trustee shall at all times remain liable
for its own debt obligations, if any, constituting part of such investments).
The Trustee shall not be liable for any investment losses or any liquidation
prior to its maturity or any investment made by it in accordance with this
Section 3.01 on the grounds that it could have made a more favorable investment.

          SECTION 3.02 RESERVED.

          SECTION 3.03 COLLECTION OF MONEYS.

          (a) Except as otherwise expressly provided herein, the Trustee may
demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Trustee pursuant to
this Amended and Restated Indenture. The Trustee shall apply all such money
received by it as provided in this Amended and Restated Indenture. Except as
otherwise expressly provided in this Amended and Restated Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Trust Property, the Trustee may take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings. Notwithstanding the
foregoing, the Trustee shall not be obligated to act as Servicer prior to its
being appointed Successor Servicer. Any such action shall be without prejudice
to any right to claim a Default or Event of Default under this Amended and
Restated Indenture and any right to proceed thereafter as provided in Article
VI. If at any time the Issuer shall receive any payment on or in respect of any
Contract or Equipment (including any Residual

                                       24

<PAGE>

Payment), it shall hold such payment in trust for the benefit of the Trustee and
the Noteholders, shall segregate such payment from the other property of the
Issuer, and shall, within two Business Days of receipt, deliver such payment in
immediately available funds to the Trustee.

          (b) If at any time the Trustee shall receive any payment on or in
respect of any Contract or Equipment (including any Residual Payment), it shall,
within two Business Days of receipt, deposit such payment by it into the
Collection Account in accordance with the written direction of the Servicer.

          (c) If at any time the Trustee shall receive any Residual Payment in
respect of any Contract, it shall hold such Residual Payment in trust for the
benefit of the Contributor and deposit such Residual Payment as instructed in
writing by the Servicer, including, without limitation, as the Servicer may so
instruct as contemplated in Section 3.04(a)(v) hereof or to such other designee
or account as the Servicer instructs.

          SECTION 3.04 COLLECTION ACCOUNT.

          (a) The Trustee shall deposit the following into the Collection
Account in accordance with the written instructions delivered to the Trustee by
the Servicer:

               (i) promptly upon receipt, each Contract Payment or Servicer
     Advance received by the Trustee, including all Contract Payments deposited
     with the Trustee by the Contributor on the Closing Date;

               (ii) promptly upon receipt, the proceeds of any purchase of
     Contracts and Equipment pursuant to Section 4.02 of this Amended and
     Restated Indenture;

               (iii) promptly upon receipt, each Prepayment Amount or Partial
     Prepayment Amount received by the Trustee and any amounts remitted by the
     Contributor in connection with any substitution of Contracts;

               (iv) promptly upon receipt, any amount required to be deposited
     in the Collection Account pursuant to this Amended and Restated Indenture;

               (v) promptly upon receipt, each Residual Payment received by the
     Trustee;

               (vi) promptly upon receipt, any proceeds received by the Trustee
     pursuant to any insurance policy covering Equipment or any other amounts
     received by the Trustee relating to a Contract or Equipment; and

               (vii) promptly upon receipt, any amounts the Trustee receives
     pursuant to Section 3.03 of this Amended and Restated Indenture.

          (b) Unless the Notes have been declared due and payable pursuant to
Section 6.02 hereof and moneys collected by the Trustee are being applied in
accordance with Section 6.06 hereof, the Trustee shall by 3:00 P.M., New York
City time, on each Payment Date disburse all Available

                                       25

<PAGE>

Funds deposited in the Collection Account (including any investment income with
respect to monies on deposit in the Collection Account) in the amounts required,
and in the following order of priority in accordance with the Monthly Servicer
Report:

               (i) (A) to the Servicer, the Servicing Fee due to the Servicer on
     such Payment Date and if the Servicer is no longer DVI, and the Servicer
     has, in its good faith and reasonable business judgment, deemed the
     Servicing Fee to be commercially unreasonable, then, to the Servicer, the
     amount agreed upon between the then Servicer and the Trustee, each in their
     good faith and commercially reasonable judgment, as necessary to make the
     Servicing Fee commercially reasonable and to cover the reasonable costs in
     transferring the servicing obligations and (B) if the Servicer is no longer
     DVI, to the Trustee, the Trustee Fee;

               (ii) to the Servicer, any unreimbursed Nonrecoverable Advances or
     Servicer Advances previously made with respect to Delinquent Contracts in
     accordance with Section 5.01 of the Amended and Restated Contribution and
     Servicing Agreement;

               (iii) first, to the Class A Distribution Sub-Account, in the
     following order of priority, the sum of: (A) the Class A-1 Monthly
     Interest; and (B) the Class A-1 Overdue Interest, if any; second, to the
     Class A Distribution Sub-Account, in the following order of priority, the
     sum of: (A) the Class A-2 Monthly Interest; and (B) the Class A-2 Overdue
     Interest, if any; third, to the Class A Distribution Sub-Account, in the
     following order of priority, the sum of: (A) the Class A-3 Monthly
     Interest; and (B) the Class A-3 Overdue Interest, if any; and fourth, to
     the Class A Distribution Sub-Account, in the following order of priority,
     the sum of: (A) the Class A-4 Monthly Interest; and (B) the Class A-4
     Overdue Interest, if any;

               (iv) to the Class B Distribution Sub-Account, in the following
     order of priority, in the sum of:

                    (A)   the Class B Monthly Interest; and

                    (B)   the Class B Overdue Interest, if any;

               (v) to the Class C Distribution Sub-Account, in the following
     order of priority, the sum of:

                    (A)   the Class C Monthly Interest; and

                    (B)   the Class C Overdue Interest, if any;

               (vi) to the Class D Distribution Sub-Account, in the following
     order of priority, in the sum of:

                    (A)   the Class D Monthly Interest; and

                    (B)   the Class D Overdue Interest, if any;

                                       26

<PAGE>

               (vii) to the Class E Distribution Sub-Account, in the following
     order of priority, the sum of:

                    (A)   the Class E Monthly Interest; and

                    (B)   the Class E Overdue Interest, if any;

               (viii) PROVIDED that no Amortization Event shall have occurred
     and be continuing, to the Class A Distribution Sub-Account, in the
     following order of priority, the sum of:

                    (A)   the Class A-1 Overdue Principal, if any;

                    (B)   the Class A-1 Monthly Principal;

                    (C)   the Class A-2 Overdue Principal, if any;

                    (D)   the Class A-2 Monthly Principal;

                    (E)   the Class A-3 Overdue Principal, if any;

                    (F)   the Class A-3 Monthly Principal;

                    (G)   the Class A-4 Overdue Principal, if any; and

                    (H)   the Class A-4 Monthly Principal;

               (ix) PROVIDED that no Amortization Event shall have occurred and
     be continuing, to the Class B Distribution Sub-Account, in the following
     order of priority, the sum of:

                    (A)   the Class B Overdue Principal, if any; and

                    (B)   the Class B Monthly Principal;

               (x) PROVIDED that no Amortization Event shall have occurred and
     be continuing, to the Class C Distribution Sub-Account, in the following
     order of priority, the sum of:

                    (A)   the Class C Overdue Principal, if any; and

                    (B)   the Class C Monthly Principal;

               (xi) PROVIDED that no Amortization Event shall have occurred and
     be continuing, to the Class D Distribution Sub-Account, in the following
     order of priority, the sum of:

                                       27

<PAGE>

                    (A)   the Class D Overdue Principal, if any; and

                    (B)   the Class D Monthly Principal;

               (xii) PROVIDED that no Amortization Event shall have occurred and
     be continuing, to the Class E Distribution Sub-Account, in the following
     order of priority, the sum of:

                    (A)   the Class E Overdue Principal, if any; and

                    (B)   the Class E Monthly Principal;

               (xiii) PROVIDED that no Amortization Event shall have occurred
     and be continuing, to the Reserve Account, the Reserve Account Deposit
     Amount;

               (xiv) if an Amortization Event shall have occurred and is
     continuing and is not subject to a continuing waiver from Noteholders
     evidencing not less than 662/3% of the Voting Rights, in the following
     order of priority:

                    FIRST, to the Class A Distribution Sub-Account the amount
               necessary to reduce the Class A-1 Note Balance to zero; then, to
               the Class A Distribution Sub- Account, the amount necessary to
               reduce the Class A-2 Note Balance to zero; then, to the Class A
               Distribution Sub-Account, the amount necessary to reduce the
               Class A-3 Note Balance to zero; and then, to the Class A
               Distribution Sub- Account, the amount necessary to reduce the
               Class A-4 Note Balance to zero; PROVIDED, HOWEVER, that upon the
               occurrence of a Subordination Deficiency Event, after the Class
               A-1 Note Balance has been reduced to zero and the Class A-2 Note
               Balance has been reduced to zero, then the Class A-3 Note Balance
               and the Class A-4 Note Balance will be paid on a PRO RATA, PARI
               PASSU basis; and

                    SECOND, to the Class B Distribution Sub-Account the amount
               necessary to reduce the Class B Note Balance to zero; and

                    THIRD, to the Class C Distribution Sub-Account the amount
               necessary to reduce the Class C Note Balance to zero;

                    FOURTH, to the Class D Distribution Sub-Account the amount
               necessary to reduce the Class D Note Balance to zero; and

                    FIFTH, to the Class E Distribution Sub-Account the amount
               necessary to reduce the Class E Note Balance to zero;

               (xv) any remaining Available Funds on deposit in the Collection
     Account shall be paid to DVI Receivables Corp. VIII, as sole member of the
     Issuer, or, if the Class F Instrument has been issued, to the Class F
     Distribution Sub-Account.

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<PAGE>

Noteholders evidencing not less than 662/3% of the Voting Rights shall have the
ability to waive or defer any Amortization Event by written notice delivered to
the Trustee. If at any time any amount or portion thereof previously distributed
pursuant to this Section 3.04(b) shall have been recovered, or shall be subject
to recovery, in any proceeding with respect to the Issuer or otherwise, then for
purposes of determining future distributions pursuant to this Section 3.04(b)
such amount or portion thereof shall be deemed not to have been previously so
distributed. The Trustee shall make the disbursements in accordance with the
Monthly Servicer Report on each Payment Date to the extent of Available Funds
for such Payment Date.

          (c) If on any Payment Date, the Available Funds on deposit in the
Collection Account (the "DEPOSITED AVAILABLE FUNDS") are less than the sum
necessary to make the payments required pursuant to Section 3.04(b), clauses
(iii) through (xii) inclusive and clause (xiv), each as applicable (the sum of
such payments, the "PRIORITY PAYMENTS"), then the Trustee shall withdraw from
the Reserve Account, to the extent that such funds are on deposit in the Reserve
Account and after taking into account payments to be made pursuant to clauses
(i) and (ii) of Section 3.04(b), and either (A) if an automatic stay under
Section 362(a) of the Bankruptcy Code has not been applied to the Trust
Property, deposit into the Distribution Account for payment on such Payment Date
funds equal to the amount of the Priority Payments less any Deposited Available
Funds for payment in accordance with Section 3.04(b)(iii) through and including
(xii) and (xiv) hereof, as applicable or (B) if an automatic stay under Section
362(a) of the Bankruptcy Code has been applied to the Trust Property, deposit
into the Distribution Account for payment on such Payment Date funds equal to
the amount of payments required pursuant to Section 3.04(b), clauses (iii)
through (vii) less any Deposited Available Funds for payment in accordance with
Section 3.04(b)(iii) through and including (vii) hereof, as applicable (the
amount calculated pursuant to Clause (A) or (B), as applicable, the "AVAILABLE
RESERVE ACCOUNT FUNDS").

          SECTION 3.05 CLASS A DISTRIBUTION SUB-ACCOUNT; CLASS B DISTRIBUTION
SUB-ACCOUNT; CLASS C DISTRIBUTION SUB-ACCOUNT; CLASS D DISTRIBUTION SUB-ACCOUNT;
CLASS E DISTRIBUTION SUB-ACCOUNT; CLASS F DISTRIBUTION SUB-ACCOUNT.

          (a) On each Payment Date in accordance with the Monthly Servicer
Report the Trustee shall pay to the Class A Noteholders, from the amounts then
on deposit in the Class A Distribution Sub- Account and allocated pursuant to
Section 3.04 hereof, first to the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders and the Class A-4 Noteholders, PRO RATA
among the Noteholders of each such Class, in the following order of priority:

                     (i)   the Class A-1 Monthly Interest;
                    (ii)   the Class A-1 Overdue Interest, if any;
                   (iii)   the Class A-2 Monthly Interest;
                    (iv)   the Class A-2 Overdue Interest, if any;
                     (v)   the Class A-3 Monthly Interest;
                    (vi)   the Class A-3 Overdue Interest, if any;
                   (vii)   the Class A-4 Monthly Interest; and
                  (viii)   the Class A-4 Overdue Interest, if any;

                                       29

<PAGE>

          second, to the Class A-1 Noteholders, Class A-2 Noteholders, the Class
A-3 Noteholders and the Class A-4 Noteholders, PRO RATA among the Noteholders of
each such Class, in the following order of priority:

                     (i)   the Class A-1 Overdue Principal, if any;
                    (ii)   the Class A-1 Monthly Principal;
                   (iii)   any additional Class A-1 principal payable pursuant
                           to the Amended and Restated Indenture;
                    (iv)   the Class A-2 Overdue Principal, if any;
                     (v)   the Class A-2 Monthly Principal;
                    (vi)   any additional Class A-2 principal payable pursuant
                           to the Amended and Restated Indenture;
                   (vii)   the Class A-3 Overdue Principal, if any;
                  (viii)   the Class A-3 Monthly Principal;
                    (ix)   any additional Class A-3 principal payable pursuant
                           to the Amended and Restated Indenture;
                     (x)   the Class A-4 Overdue Principal, if any;
                    (xi)   the Class A-4 Monthly Principal; and
                   (xii)   any additional Class A-4 principal payable under the
                           Amended and Restated Indenture;

PROVIDED, HOWEVER, that in the event that a Subordination Deficiency Event has
occurred and is continuing, after the Class A-1 Note Balance has been reduced to
zero, and the Class A-2 Note Balance has been reduced to zero, the Class A-3
Note Balance and the Class A-4 Note Balance will be paid on a PRO RATA, PARI
PASSU basis.

          (b) On each Payment Date in accordance with the Monthly Servicer
Report the Trustee shall pay to the Class B Noteholders, PRO RATA among the
Noteholders of such Class, the amount then on deposit in the Class B
Distribution Sub-Account and allocated pursuant to Section 3.04 hereof. Such
payments to the Class B Noteholders shall be made in the following order of
priority:

                     (i)   the Class B Monthly Interest;
                    (ii)   the Class B Overdue Interest, if any;
                   (iii)   the Class B Overdue Principal, if any;
                    (iv)   the Class B Monthly Principal; and
                     (v)   any additional principal payable to the Class B
                           Noteholders pursuant to the Amended and Restated
                           Indenture.

          (c) On each Payment Date in accordance with the Monthly Servicer
Report the Trustee shall pay to the Class C Noteholders, PRO RATA among the
Noteholders of such Class, the amount then on deposit in the Class C
Distribution Sub-Account and allocated pursuant to Section 3.04 hereof. Such
payments to the Class C Noteholders shall be made in the following order of
priority:

                     (i)   the Class C Monthly Interest;
                    (ii)   the Class C Overdue Interest, if any;
                   (iii)   the Class C Overdue Principal, if any;

                                       30

<PAGE>

                    (iv)   the Class C Monthly Principal; and
                     (v)   any additional principal payable to the Class C
                           Noteholders pursuant to the Amended and Restated
                           Indenture.

          (d) On each Payment Date in accordance with the Monthly Servicer
Report the Trustee shall pay to the Class D Noteholders, PRO RATA among the
Noteholders of such Class, the amount then on deposit in the Class D
Distribution Sub-Account and allocated pursuant to Section 3.04 hereof. Such
payments to the Class D Noteholders shall be made in the following order of
priority:

                     (i)   the Class D Monthly Interest;
                    (ii)   the Class D Overdue Interest, if any;
                   (iii)   the Class D Overdue Principal, if any;
                    (iv)   the Class D Monthly Principal; and
                     (v)   any additional principal payable to the Class D
                           Noteholders pursuant to the Amended and Restated
                           Indenture.

          (e) On each Payment Date in accordance with the Monthly Servicer
Report the Trustee shall pay to the Class E Noteholders, PRO RATA among the
Noteholders of such Class, the amount then on deposit in the Class E
Distribution Sub-Account and allocated pursuant to Section 3.04 hereof. Such
payments to the Class E Noteholders shall be made in the following order of
priority:

                     (i)   the Class E Monthly Interest;
                    (ii)   the Class E Overdue Interest, if any;
                   (iii)   the Class E Overdue Principal, if any;
                    (iv)   the Class E Monthly Principal; and
                     (v)   any additional principal payable to the Class E
                           Noteholders pursuant to the Amended and Restated
                           Indenture.

          (f) If the Class F Instruments have been issued, on each Payment Date
in accordance with the Monthly Servicer Report the Trustee shall distribute to
the Class F Instrumentholders, PRO RATA among all holders of Class F
Instruments, the amount then on deposit in the Class F Distribution Sub- Account
in the priority set forth in the Supplement.

          SECTION 3.06 RESERVED.

          SECTION 3.07 RESERVED.

          SECTION 3.08 RESERVE ACCOUNT.

          (a) On each Payment Date the Trustee shall promptly deposit into the
Reserve Account all amounts required to be deposited into the Reserve Account
and actually received by the Trustee pursuant to this Amended and Restated
Indenture. The obligation of the Trustee to deposit amounts into the Reserve
Account in accordance with the terms of this Amended and Restated Indenture
shall be limited to the deposit of amounts in the Collection Account pursuant to
Section 3.04(b) hereof. The Trustee shall not have any responsibility to
determine the amount or adequacy of funds on deposit in the Reserve Account, or
the amount of any deposits to or withdrawals from the Reserve Account. The

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<PAGE>

Issuer, or Class F Instrumentholder, if any, by its acceptance of the Class F
Instrument, agrees to treat such assets (and all earnings thereon) (the "RESERVE
ACCOUNT PROPERTY") as its assets (and earnings) for federal, state and local tax
purposes and not to sell, transfer or otherwise dispose of its interest therein.

          (b) On each Payment Date, the Trustee shall, on the basis of the
Monthly Servicer Report, deposit in the Reserve Account, pursuant to Section
3.04(b), an amount equal to the Reserve Account Deposit Amount. If on any
Payment Date, Deposited Available Funds are less than the Priority Payments, the
Trustee shall withdraw from the Reserve Account the excess of the Priority
Payments over the Available Funds in accordance with Section 3.04(c) hereof. On
each Payment Date, if, after giving effect to all deposits and withdrawals
therefrom on such Payment Date, the balance in the Reserve Account is greater
than the Reserve Account Requirement, the Trustee shall release and, at the
instruction of the Servicer, shall pay the amount (such amount, a "RESERVE
ACCOUNT WITHDRAWAL") of the excess to the Issuer or its designee, or Class F
Instrumentholder, if any. Amounts properly paid to the Issuer or its designee,
or Class F Instrumentholder, if any, pursuant to this Section 3.08, either
directly from the Distribution Account without deposit in the Reserve Account or
from the Reserve Account, shall be deemed released from the Trust Property, and
the Issuer or its designee, or Class F Instrumentholder, if any, shall not in
any event thereafter be required to refund any such paid amounts.

          (c) With respect to the Reserve Account Property, the Issuer and the
Trustee agree that any Reserve Account Property that is held in deposit accounts
shall be held solely in the name of the Trustee, on behalf of the Noteholders.
Each such deposit account shall be subject to the exclusive custody and control
of the Trustee, and the Trustee shall have sole signature authority with respect
thereto.

          (d) Upon termination of this Amended and Restated Indenture, any
amounts on deposit in the Reserve Account, after payment of amounts due to the
Class A Noteholders, the Class B Noteholders, the Class C Noteholders, the Class
D Noteholders, the Class E Noteholders upon the Managing Member's written
request to the Trustee, shall be paid to the Managing Member (as sole beneficial
owner of the Issuer), or Class F Instrumentholders, if any.

          SECTION 3.09 REPORTS; NOTICES OF CERTAIN PAYMENTS.

          (a) Following each payment to the Noteholders, the Trustee shall mail
to the Issuer, Cede & Co. and the Rating Agencies, and make available to each
Noteholder, the Monthly Servicer Report furnished to the Trustee by the Servicer
on the Determination Date prior to such Payment Date (or if such report has not
been received, a written statement to such effect).

          (b) The Trustee shall deliver to the Servicer, and within two Business
Days after the request of the Issuer, deliver to the Issuer a written statement
setting forth the amounts on deposit in the Collection Account and the Reserve
Account, and identifying the investments included therein.

          SECTION 3.10. TRUSTEE MAY RELY ON CERTAIN INFORMATION FROM CONTRIBUTOR
AND SERVICER.

          Pursuant to the Amended and Restated Contribution and Servicing
Agreement, the Contributor and the Servicer are required to 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 in this Article

                                       32

<PAGE>

III and in Article IV of this Amended and Restated Indenture. The Trustee shall
be entitled to rely conclusively in good faith on any such information and
calculations in the performance of its duties hereunder, (i) unless and until a
Responsible Officer of the Trustee has actual knowledge that such information or
calculations is or are incorrect, or (ii) unless there is a manifest error in
any such information; PROVIDED that the Trustee shall verify the mathematical
accuracy of the Class A-1 Monthly Principal, the Class A-2 Monthly Principal,
the Class A-3 Monthly Principal, the Class A-4 Monthly Principal, the Class B
Monthly Principal, the Class C Monthly Principal, the Class D Monthly Principal,
the Class E Monthly Principal, the Class A-1 Monthly Interest, the Class A-2
Monthly Interest, the Class A-3 Monthly Interest, the Class A-4 Monthly
Interest, the Class B Monthly Interest, the Class C Monthly Interest, the Class
D Monthly Interest and the Class E Monthly Interest to be paid on each Payment
Date.

                                       33

<PAGE>

                                   ARTICLE IV

                             CONTRACTS AND EQUIPMENT

          SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE ISSUER.

          The Issuer hereby restates and incorporates herein each of the
representations and warranties, IN MUTATIS MUTANDIS, set forth in Section 2.03
and Section 2.04 of the Amended and Restated Contribution and Servicing
Agreement. The Trustee shall rely on such representations and warranties in
accepting the Contracts and the other Trust Property in trust and authenticating
the Notes. Such representations and warranties shall speak as of the Closing
Date.

          SECTION 4.02 PURCHASE UPON BREACH; AMENDED AND RESTATED CONTRIBUTION
AND SERVICING AGREEMENT.

          The Issuer shall inform the Trustee promptly, in writing, upon the
discovery of a breach of any of the Contributor's representations and warranties
set forth in Section 2 of the Amended and Restated Contribution and Servicing
Agreement. With respect to any breach of the Contributor's representations and
warranties set forth in Section 2 of the Amended and Restated Contribution and
Servicing Agreement, which materially and adversely affects the interest of the
Noteholders in such Contract or Contracts, the Issuer shall cause the
Contributor to either (a) replace such Contract and the related Equipment with a
Substitute Contract in accordance with the provisions of Section 5.03 of the
Amended and Restated Contribution and Servicing Agreement (and for the
Transferor to receive from the Contributor and transfer to the Issuer such
Substitute Contract) or (b) purchase from the Transferor (which Transferor shall
purchase from the Issuer and resell to the Contributor) the Contract and the
security interest in the related Equipment that are affected by such breach,
unless, in each such instance such breach has been cured, or waived in all
respects by Noteholders evidencing more than 50% of the Voting Rights, within 90
days following the Issuer's discovery or receipt of notice of such breach. In
the event of a repurchase of a Contract, the Issuer and the Managing Member (as
sole beneficial owner of the Issuer) shall cause the Contributor to remit to the
Trustee (upon written notice to the Trustee thereof) the Repurchase Amount of
such Contract (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 in
which the repurchase is to be made). The Trustee shall, to the extent received,
deposit such Repurchase Amounts and any cash received in connection with a
substitution in the Collection Account on or prior to 11:00 a.m. New York City
time on the second Business Day after receipt thereof. The sole remedy of the
Trustee or the Noteholders against the Contributor with respect to a breach of a
representation or a warranty set forth in Section 2 of the Amended and Restated
Contribution and Servicing Agreement, and against the Issuer or the Transferor
with respect to a breach under this agreement or the Amended and Restated
Subsequent Contract Transfer Agreement (the "SCTA") by reason of such breach by
the Contributor, shall be to require the Contributor to purchase or substitute
Contracts pursuant to the Amended and Restated Contribution and Servicing
Agreement, PROVIDED that the limitation contained in this sentence shall not
otherwise limit the rights of any such Person under Section 5.02 of the Amended
and Restated Contribution and Servicing Agreement. In the event that the
Contributor fails to purchase or substitute for any Contract that it is required
to substitute or repurchase pursuant to the Amended and Restated Contribution
and Servicing Agreement, the Trustee,

                                       34

<PAGE>

upon the written direction of the Noteholders, shall enforce the Issuer's and
the Transferor's rights against the Contributor under and in accordance with the
terms of the Amended and Restated Contribution and Servicing Agreement, and the
SCTA, as assigned to the Trustee, to require the purchase or replacement of the
Contract.

          SECTION 4.03 RELEASE OF CONTRACTS AND EQUIPMENT FOLLOWING SUBSTITUTION
OR PURCHASE.

          In the event that (i) the Contributor shall have substituted a
Substitute Contract and a security interest in the Equipment subject thereto for
a Predecessor Contract and a security interest in the Equipment subject thereto
in accordance with Section 7 of the Amended and Restated Contribution and
Servicing Agreement, or (ii) the Contributor shall have purchased a Contract and
a security interest in the related Equipment in accordance with Section 5.03 of
the Amended and Restated Contribution and Servicing Agreement, the Predecessor
Contract or the repurchased Contract, as applicable, and the security interest
in the Equipment subject thereto, shall be released from the lien of this
Amended and Restated Indenture when the Trustee shall have (i) in the case of
the purchase of a Contract, deposited in the Collection Account all amounts
received pursuant to Section 5.03 of the Amended and Restated Contribution and
Servicing Agreement, (ii) in the case of a Substitute Contract, received a fully
executed original of the Substitute Contract Transfer Form and the Contract File
with respect to such Substitute Contract plus any cash amount delivered as
provided in Section 7.01(d) of the Amended and Restated Contribution and
Servicing Agreement, (iii) received written certification from an Authorized
Officer of the Servicer that there are no unreimbursed Servicer Advances with
respect to such Contract and (iv) delivered to the Contributor acknowledgment of
its receipt of the related Contract Files. If there are such unreimbursed
amounts, any proceeds received with respect to such Predecessor Contract or
repurchased Contract, as applicable, and the security interest in the related
Equipment shall be applied hereunder only to the extent necessary to repay such
Servicer Advances (and clause (iii) of the foregoing sentence shall be deemed
satisfied) and to reimburse the Collection Account for any other amounts drawn
thereon and the balance of such proceeds, if any, shall be paid to, or as
directed by, the Contributor.

          In connection with the substitution of a Contract, if the Discounted
Contract Balance of such Substitute Contract is less than the Discounted
Contract Balance of the Predecessor Contract, the Contributor shall, on the date
of substitution, deposit an amount equal to such difference into the Collection
Account.

          SECTION 4.04 RELEASE OF CONTRACTS AND EQUIPMENT UPON FINAL CONTRACT
PAYMENT.

          (a) In the event that the Trustee shall have received written
certification from an Authorized Officer of the Servicer that the Trustee has
received from amounts paid by the Obligor or from the proceeds of the Equipment
subject to any Contract (i) the final Contract Payment due and payable under any
Contract (including, if applicable, any Purchase Option Payment paid by the
Obligor) or (ii) a Prepayment Amount in respect of any Contract and, following
such final Contract Payment or Prepayment Amount, no further payments on, or in
respect of, such Contract are or will be due and payable, such Contract and the
Equipment subject thereto shall be released from the lien of this Amended and
Restated Indenture except if a Restricting Event or an Amortization Event shall
have occurred and then be continuing.

                                       35

<PAGE>

          (b) If a Restricting Event or Amortization Event shall have occurred
and then be continuing, then each Contract and the security interest in all
Equipment (except for security interests relating to Equipment subject to a
conditional sales agreement or an equipment note) which would otherwise be
released from the lien of this Amended and Restated Indenture pursuant to this
Section 4.04 shall instead remain subject to such lien and all of the provisions
of this Amended and Restated Indenture, including, without limitation, Article
VI hereof.

          SECTION 4.05 EXECUTION OF DOCUMENTS.

          The Trustee shall promptly execute and deliver such documents (which
shall be furnished to the Trustee by the Issuer) and take such other actions as
the Issuer, by Issuer Request, may reasonably request to fully effectuate the
release from this Amended and Restated Indenture of any Contract and the
security interest relating to Equipment required to be so released pursuant to
Sections 4.03 and 4.04 hereof.

                                       36

<PAGE>

                                    ARTICLE V

                 SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER

          SECTION 5.01 SERVICER EVENTS OF DEFAULT.

          If a Servicer Event of Default shall have occurred and be continuing
under Section 10.01 of the Amended and Restated Contribution and Servicing
Agreement, the Trustee shall, upon the written request of Noteholders evidencing
not less 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 thereunder, which shall survive any such
termination) under the Amended and Restated Contribution and Servicing Agreement
and the Trustee shall act as successor Servicer in accordance with Section 10 of
the Amended and Restated Contribution and Servicing Agreement.

          SECTION 5.02 SUBSTITUTE SERVICER.

          Notwithstanding the provisions of Section 5.01, the Trustee may, if it
shall be unwilling or unable to act as the Successor Servicer in accordance with
Section 5.01, appoint a Successor Servicer in accordance with the provisions of
Section 10.03 of the Amended and Restated Contribution and Servicing Agreement.

          SECTION 5.03 NOTIFICATION TO NOTEHOLDERS AND RATING AGENCIES.

          Upon any termination of the Servicer or appointment of a Successor
Servicer, the Trustee shall give prompt notice of such termination, resignation,
discharge, removal or appointment, together with the conditions of default, if
applicable, to the Rating Agencies and each Noteholder in the manner provided
herein.

                                       37

<PAGE>

                                   ARTICLE VI

                           EVENTS OF DEFAULT; REMEDIES

          SECTION 6.01 EVENTS OF DEFAULT.

          "INDENTURE EVENT OF DEFAULT," wherever used herein, means any one of
the following (whatever the reason for such Indenture Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

               (i) default in the payment of (A) any interest payment on any
     outstanding Class A Note, Class B Note, Class C Note, Class D Note or Class
     E Note when it becomes due and payable, or (B) the then outstanding
     principal balance of the Class A-1 Notes on the Class A-1 Stated Maturity
     Date, of the Class A-2 Note on the Class A-2 Stated Maturity Date, of the
     Class A-3 Note on the Class A-3 Stated Maturity Date, of the Class A-4 Note
     on the Class A-4 Stated Maturity Date, of the Class B Notes on the Class B
     Stated Maturity Date, of the Class C Notes on the Class C Stated Maturity
     Date, of the Class D Notes on the Class D Stated Maturity Date or of the
     Class E Notes on the Class E Stated Maturity Date or (C) any payment of
     principal of or interest on any outstanding Note when it becomes due and
     payable to the extent that sufficient Available Funds were on deposit in
     the Collection Account and to the extent that sufficient Available Reserve
     Account Funds are on deposit in the Reserve Account with respect to such
     Payment Date;

               (ii) default in the performance, or breach, of any covenant set
     forth in Section 8.04, 8.07(c) or 8.08;

               (iii) default in the performance, or breach, of any covenant of
     the Issuer in the Notes or this Amended and Restated Indenture (other than
     a covenant described in (ii) above), or of any party to the Amended and
     Restated Contribution and Servicing Agreement, or the other Transaction
     Documents and continuance of such default or breach for a period of 30 days
     after the earliest of (A) any officer of the Transferor or the Issuer first
     acquiring knowledge thereof, (B) the Trustee's giving written notice
     thereof to the Issuer or (C) the holder of any Note giving written notice
     thereof to the Issuer;

               (iv) if any representation or warranty of the Issuer, the
     Transferor or the Contributor made in this Amended and Restated Indenture,
     the SCTA or the Amended and Restated Contribution and Servicing Agreement,
     respectively, or any other writing provided to the Noteholders in
     connection with the foregoing documents shall prove to be incorrect in any
     material respect as of the time when the same shall have been made;
     PROVIDED, HOWEVER, that the breach of any representation or warranty made
     by the Contributor in Section 2.03 or 2.04 of the Amended and Restated
     Contribution and Servicing Agreement, with respect to any of the Contracts
     or the security interest in the Equipment subject thereto shall not
     constitute an Indenture Event of Default if the Contributor substitutes one
     or more Substitute Contracts and the security interest in the Equipment
     subject thereto for such Contract and a security interest in the related
     Equipment in accordance with Section 7.01 of the Amended and Restated

                                       38
<PAGE>

     Contribution and Servicing Agreement, or repurchases a Contract and the
     security interest in the related Equipment in accordance with Section 5.03
     of the Amended and Restated Contribution and Servicing Agreement;

               (v) the entry by a court having jurisdiction in the premises of
     (A) a decree or order for relief in respect of the Issuer 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 Issuer a bankrupt or insolvent, or approving as properly
     filed a petition seeking reorganization, arrangement, adjustment, or
     composition of or in respect of the Issuer under any applicable federal or
     state law, or appointing a custodian, receiver, liquidator, assignee,
     trustee, sequestrator, or other similar official of the Issuer or of any
     substantial part of its property, or ordering the winding up or liquidation
     of its affairs, 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; or

               (vi) the commencement by the Issuer 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 it to the entry
     of a decree or order for relief in respect of the Issuer 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 it, or the filing
     by it of a petition or answer or consent seeking reorganization or relief
     under any applicable federal or state law, or the consent by it 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 Issuer or of any substantial part of its property,
     or the making by it of an assignment for the benefit of creditors, or the
     Issuer's failure to pay its debts generally as they become due, or the
     taking of company action by the Issuer in furtherance of any such action.

          SECTION 6.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

          (a) If an Indenture Event of Default occurs and is continuing, of
which a Responsible Officer of the Issuer written notice (PROVIDED that such
written notice need not have been received by the Trustee in connection with a
payment default as described in Section 6.01(i)), then and in every such case
the Trustee with the consent of Noteholders evidencing not less than 662/3% of
the Voting Rights may declare the unpaid principal amount of all the Notes to be
due and payable immediately, by a notice in writing to the Issuer, and upon any
such declaration such principal amount shall become immediately due and payable
together with all accrued and unpaid interest thereon, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Issuer.

          (b) At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, Noteholders evidencing
not less than 662/3% of the Voting Rights, by written notice to the Issuer and
the Trustee, may rescind and annul such declaration and its consequences if:

               (i) the Issuer has paid or deposited with the Trustee a sum
     sufficient to pay:

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<PAGE>

                         (A) all sums paid or advanced, together with interest
          thereon, by the Trustee hereunder and the reasonable compensation,
          expenses, disbursements, and advances, if any, of the Trustee, its
          agents and counsel;

                         (B) all principal of any Notes which have become due
          otherwise than by such declaration of acceleration, and interest
          thereon from the date when the same first became due at the applicable
          Note Rate; and

                         (C) all interest which has become due with respect to
          the Notes;

               (ii) all Indenture Events of Default, other than the non-payment
     of the aggregate principal amount of the Notes which has become due solely
     by such declaration of acceleration, have been cured or waived as provided
     in Section 6.13; and

               (iii) the rescission would not conflict with any judgment or
     decree of a court of competent jurisdiction.

No such rescission shall affect any subsequent Indenture Event of Default or
impair any right consequent thereon.

          SECTION 6.03 OTHER REMEDIES.

          (a) If an Indenture Event of Default occurs and is continuing of which
a Responsible Officer of the Trustee has received written notice (PROVIDED that
such written notice need not have been received by the Trustee in the case of a
payment default as described in Section 6.01(i)), the Trustee shall give notice
to each Noteholder as set forth in Section 7.02. The Trustee shall then take
such action, if any, as may be directed by Noteholders evidencing not less than
662/3% of the Voting Rights.

          (b) Following any acceleration of the Notes, the Trustee shall have
all of the rights, powers and remedies with respect to the Trust Property as are
available to secured parties under the Uniform Commercial Code or other
applicable law or as are otherwise available to it under applicable law to
protect and enforce the rights and remedies of the Trustee and the Noteholders
hereunder and under the other Transaction Documents; PROVIDED that, so long as
the Offered Notes are outstanding, the Trustee, in acting during the pendency of
an Indenture Event of Default shall act solely on behalf of the holders of the
Offered Notes and shall not take into account any Class F Instruments that may
have been issued in so acting. Such rights, powers and remedies may be exercised
by the Trustee in its own name as trustee of an express trust.

          SECTION 6.04 TRUSTEE MAY FILE PROOFS OF CLAIM.

          (a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other judicial proceeding relative to the Issuer, the Transferor, the
Contributor, the Servicer or any other obligor upon the Notes or the other
obligations secured hereby or relating to the property of the Issuer, the
Transferor, the Contributor, the Servicer or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of

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<PAGE>

whether the Trustee shall have made any demand on the Issuer, the Transferor,
the Contributor or the Servicer for the payment of overdue principal or overdue
interest or any such other obligation) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

               (i) to file and prove a claim for the whole amount of principal
     and interest owing and unpaid in respect of the Notes and any other
     obligation secured hereby and to file such other papers or documents as may
     be necessary or advisable in order to have the claims of the Trustee
     (including any claim for the reasonable compensation, expenses,
     disbursements and advances of the Trustee, its agents and counsel) and of
     the Noteholders allowed in such judicial proceeding,

               (ii) to collect and receive any moneys or other property payable
     or deliverable on any such claims and to distribute the same;

               (iii) unless prohibited by applicable law and regulations, to
     vote on behalf of the Noteholders in any election of a trustee, a standby
     trustee or Person performing similar functions in any such proceedings; and

               (iv) to file such proofs of claim and other papers or documents
     as may be necessary or advisable in order to have the claims of the Trustee
     or the Noteholders allowed in any proceedings relative to the Issuer, its
     creditors and its property;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Noteholders
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.06.

          (b) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any holder thereof or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceeding, except as
aforesaid to vote for the election of a trustee in bankruptcy or similar Person.

          SECTION 6.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.

          All rights of action and claims under this Amended and Restated
Indenture or the Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the holders of the Notes in respect of which such
judgment has been recovered.

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          SECTION 6.06 APPLICATION OF MONEY COLLECTED.

          Any money, securities or property collected by the Trustee pursuant to
this Article, and any moneys, securities or property that may then be held or
thereafter received by the Trustee, shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of the
entire amount due on account of principal or interest, upon presentation of the
Notes and surrender thereof:

          FIRST, to the payment of all costs and expenses of collection incurred
          by the Trustee (including the reasonable fees and expenses of any
          counsel to the Trustee) and all other amounts due the Trustee under
          Section 7.06 (the parties hereto agree that when the Trustee renders
          services following an Indenture Event of Default under Section 6.01
          (v) or (vi), compensation for such services and expenses in connection
          therewith are intended to constitute administrative expenses under
          applicable bankruptcy law);

          SECOND, to the payment of all unreimbursed Servicer Advances due to
          the Servicer;

          THIRD, only in the event that DVI is no longer the Servicer, and the
          Servicer has, in its good faith and reasonable business judgment,
          deemed the Servicing Fee to be commercially unreasonable, then, to the
          Servicer, the amount agreed upon between the then Servicer and the
          Trustee, each in their good faith and commercially reasonable
          judgment, as necessary to make the Servicing Fee commercially
          reasonable and to cover the reasonable costs in transferring the
          servicing obligations;

          FOURTH, to the payment of all accrued and unpaid interest on the
          outstanding Class A Note Balance to the date of payment thereof,
          ratably to each Class A Noteholder, without preference or priority of
          any kind;

          FIFTH, to the payment of all accrued and unpaid interest on the
          outstanding Class B Note Balance to the date of payment thereof,
          ratably to each Class B Noteholder, without preference or priority of
          any kind;

          SIXTH, to the payment of all accrued and unpaid interest on the
          outstanding Class C Note Balance to the date of payment thereof,
          ratably to each Class C Noteholder, without preference or priority of
          any kind;

          SEVENTH, to the payment of all accrued and unpaid interest on the
          outstanding Class D Note Balance to the date of payment thereof,
          ratably to each Class D Noteholder, without preference or priority of
          any kind;

          EIGHTH, to the payment of all accrued and unpaid interest on the
          outstanding Class E Note Balance to the date of payment thereof,
          ratably to each Class E Noteholder, without preference or priority of
          any kind;

          NINTH, to the payment of the outstanding Class A-1 Note Balance, and
          any other amounts due to the Class A-1 Noteholders, ratably, without
          preference or priority of any kind,

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<PAGE>

          until the Class A-1 Note Balance has been reduced to zero, then to the
          payment of the outstanding Class A-2 Note Balance, and any other
          amounts due to the Class A-2 Noteholders, ratably, without preference
          or priority of any kind, until the Class A-2 Note Balance has been
          reduced to zero, then to the payment of the outstanding Class A-3 Note
          Balance, and any other amounts due to the Class A-3 Noteholders,
          ratably, without preference or priority of any kind, until the Class
          A-3 Note Balance has been reduced to zero, then to the payment of the
          outstanding Class A-4 Note Balance, and any other amounts due to the
          Class A-4 Noteholders, ratably, without preference or priority of any
          kind, until the Class A-4 Note Balance has been reduced to zero
          (PROVIDED that a Subordination Deficiency Event has not occurred and
          is continuing, in which case the outstanding Class A-3 Note Balance
          and the Class A-4 Note Balance shall be paid PRO RATA in accordance
          with their respective outstanding Note Balances);

          TENTH, to the payment of the outstanding Class B Note Balance, and any
          other amounts due to the Class B Noteholders ratably, without
          preference or priority of any kind;

          ELEVENTH, to the payment of the outstanding Class C Note Balance, and
          any other amounts due to the Class C Noteholders ratably, without
          preference or priority of any kind;

          TWELFTH, to the payment of the outstanding Class D Note Balance, and
          any other amounts due to the Class D Noteholders ratably, without
          preference or priority of any kind;

          THIRTEENTH, to the payment of the outstanding Class E Note Balance,
          and any other amounts due to the Class E Noteholders ratably, without
          preference or priority of any kind;

          FOURTEENTH, to the payment of all accrued and unpaid interest on
          outstanding Class F Instruments, if any, to the date of payment
          thereof, ratably to each Holder of the Class F Instruments without
          preference or priority of any kind;

          FIFTEENTH, to the payment of the outstanding principal balance of the
          Class F Instruments, if any, and any other amounts due to the Holders
          of any Class F Instruments ratably, without preference or priority of
          any kind;

          SIXTEENTH, in the event that DVI is the Servicer, to the payment of
          all unreimbursed Servicing Fees due to the Servicer; and

          SEVENTEENTH, to the payment of the remainder, if any, to, or at the
          order of, the Issuer.

          SECTION 6.07 LIMITATION ON SUITS.

          The holder of any Note shall not have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

               (i) such Noteholder has previously given written notice to the
     Trustee of a continuing Indenture Event of Default;

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<PAGE>

               (ii) the Noteholders evidencing not less than 25% of the Voting
     Rights shall have made written request to the Trustee to institute
     proceedings in respect of such Indenture Event of Default in its own name
     as Trustee hereunder;

               (iii) such Noteholder or Noteholders have offered to the Trustee
     adequate indemnity against the costs, expenses and liabilities to be
     incurred in compliance with such request;

               (iv) the Trustee for 30 days after its receipt of such notice,
     request and offer of indemnity has failed to institute any such proceeding;
     and

               (v) so long as any of the Notes remain outstanding, no direction
     inconsistent with such written request has been given to the Trustee during
     such 30-day period by Noteholders evidencing not less than 662/3% of the
     Voting Rights;

it being understood and intended that no one or more Noteholder shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Amended and Restated Indenture to affect, disturb, or prejudice the rights
of any other Noteholder, or to obtain or to seek to obtain priority or
preference over any other Noteholder or to enforce any right under this Amended
and Restated Indenture, except in the manner herein provided. It is further
understood and intended that so long as any portion of the Notes remains
outstanding, the Servicer shall not have any right to institute any proceeding,
judicial or otherwise, with respect to this Amended and Restated Indenture
(other than for the enforcement of Sections 3.04(b) and 4.04) or for the
appointment of a receiver or trustee, or for any other remedy hereunder.

          SECTION 6.08 UNCONDITIONAL RIGHT OF NOTEHOLDERS TO RECEIVE PAYMENT.

          Notwithstanding any other provision in this Amended and Restated
Indenture, other than the provisions hereof establishing priorities of payment
or limiting the right to recover amounts due on the Notes to recoveries from the
Trust Property, the holder of any Note shall have the absolute and unconditional
right to receive payment of the principal of and interest on such Note as such
principal and interest becomes due on the Payment Dates for such payments,
including the Stated Maturity Date for the applicable Class, and to institute
suit for the enforcement of any such payment, and such rights shall not be
impaired without the consent of such Noteholder.

          SECTION 6.09 RESTORATION OF RIGHTS AND REMEDIES.

          If the Trustee or any Noteholder has instituted any proceeding to
enforce any right or remedy under this Amended and Restated Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Noteholder, then and in every
such case, subject to any determination in such proceeding, the Issuer, the
Trustee and the Noteholders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Noteholders shall continue as though no such proceeding had been
instituted.

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<PAGE>

          SECTION 6.10. RIGHTS AND REMEDIES CUMULATIVE.

          Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost, or stolen Notes in the last paragraph of
Section 2.05, no right or remedy herein conferred upon or reserved to the
Trustee or to the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

          SECTION 6.11 DELAY OR OMISSION NOT WAIVER.

          No delay or omission of the Trustee or of any holder of any Note to
exercise any right or remedy accruing upon any Indenture Event of Default shall
impair any such right or remedy or constitute a waiver of any such Indenture
Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Noteholders, as the case may be.

          SECTION 6.12 CONTROL BY NOTEHOLDERS.

          Except as may otherwise be provided in this Amended and Restated
Indenture, until such time as the conditions specified in Section 11.01 have
been satisfied in full, Noteholders evidencing not less than 662/3% of the
Voting Rights shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee. Notwithstanding the foregoing:

               (i) no such direction shall be in conflict with any rule of law
     or with this Amended and Restated Indenture;

               (ii) the Trustee shall not be required to follow any such
     direction which the Trustee believes may be unduly prejudicial to the
     rights of another Noteholder not joining in such direction or which the
     Trustee believes might result in any personal liability on the part of the
     Trustee for which the Trustee is not indemnified to its reasonable
     satisfaction; and

               (iii) the Trustee may take any other action deemed proper by the
     Trustee which is not inconsistent with any such direction; PROVIDED that
     the Trustee shall give notice of any such action to each Noteholder.

          SECTION 6.13 WAIVER OF DEFAULTS AND EVENTS OF DEFAULT.

          (a) Subject to the provisions of Sections 6.08 and 9.01, Noteholders
evidencing more than 50% of the Voting Rights, may, by one or more instruments
in writing, waive an existing Default or Indenture Event of Default hereunder
and its consequences, except a continuing Indenture Event of Default:

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<PAGE>

               (i) in respect of the payment of the principal of or interest on
     any outstanding Note (which may only be waived by the holder of such Note),
     or

               (ii) in respect of a covenant or provision hereof which under
     Article IX cannot be modified or amended without the consent of the holder
     of each outstanding Note affected (which only may be waived by the holders
     of all outstanding Notes affected).

          (b) A copy of each waiver pursuant to Section 6.13(a) shall be
furnished by the Issuer to the Trustee. Upon any such waiver, such Indenture
Event of Default shall cease to exist and shall be deemed to have been cured,
for every purpose of this Amended and Restated Indenture; but no such waiver
shall extend to any subsequent or other Indenture Event of Default or impair any
right consequent thereon.

          SECTION 6.14 WAIVER OF STAY OR EXTENSION LAWS.

          The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Amended and Restated Indenture; and the Issuer (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.

          SECTION 6.15 SALE OF TRUST PROPERTY.

          (a) The power to effect any sale of any portion of the Trust Property
pursuant to Section 6.03 shall not be exhausted by any one or more sales as to
any portion of the Trust Property remaining unsold, but shall continue
unimpaired until the entire Trust Property shall have been sold or all amounts
payable on the Notes shall have been paid. The Trustee may from time to time,
upon directions in accordance with Section 6.12, postpone any public sale by
public announcement made at the time and place of such sale.

          (b) To the extent permitted by applicable law, the Trustee shall not
in any private sale sell the Trust Property, or any portion thereof, unless
either (i) until such time as the conditions specified in Section 11.01(a) have
been satisfied in full, Noteholders evidencing not less than 662/3% of the
Voting Rights consent to or direct the Trustee to make such sale; or (ii) the
proceeds of such sale would be not less than the sum of all amounts due to the
Trustee hereunder and the entire unpaid principal amount of all Class A Notes,
Class B Notes, Class C Notes, Class D Notes and Class E Notes then outstanding
and interest due or to become due thereon in accordance with Section 6.06 on the
Payment Date next succeeding the date of such sale.

          (c) In connection with a sale of all or any portion of the Trust
Property:

               (i) any one or more Noteholders or the Trustee may bid for and
     purchase the property offered for sale, and upon compliance with the terms
     of sale may hold, retain, and possess and dispose of such property, without
     further accountability, and any Noteholder may,

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<PAGE>

     in paying the purchase money therefor, deliver in lieu of cash any
     outstanding Notes or claims for interest thereon for credit in the amount
     that shall, upon distribution of the net proceeds of such sale, be payable
     thereon, and such Notes, in case the amounts so payable thereon shall be
     less than the amount due thereon, shall be returned to the Noteholders
     after being appropriately stamped to show such partial payment;

               (ii) the Trustee shall execute and deliver an appropriate
     instrument of conveyance transferring its interest in any portion of the
     Trust Property in connection with a sale thereof;

               (iii) the Trustee is hereby irrevocably appointed the agent and
     attorney-in-fact of the Issuer to transfer and convey its interest in any
     portion of the Trust Property in connection with a sale thereof, and to
     take all action necessary to effect such sale; and

               (iv) no purchaser or transferee at such a sale shall be bound to
     ascertain the Trustee's authority, inquire into the satisfaction of any
     conditions precedent or see to the application of any moneys.

          (d) The method, manner, time, place and terms of any sale of all or
any portion of the Trust Property shall be commercially reasonable.

          (e) The provisions of this Section 6.15 shall not be construed to
restrict the ability of the Trustee to exercise any rights and powers against
the Issuer or the Trust Property that are vested in the Trustee by this Amended
and Restated Indenture, including, without limitation, the power of the Trustee
to proceed against the collateral subject to the lien of this Amended and
Restated Indenture and to institute judicial proceedings for the collection of
any deficiency remaining thereafter.

          SECTION 6.16 UNDERTAKING FOR COSTS.

          In any suit for the enforcement of any right or remedy under this
Amended and Restated Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court may in its discretion require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.16 does not apply to a suit by the Trustee, a suit by a
Noteholder pursuant to Sections 6.07 and 6.08, or a suit by any Noteholder or
group of Noteholders of more than 10% in principal amount of all Class A Notes,
Class B Notes, Class C Notes, Class D Notes and Class E Notes then outstanding.

                                   ARTICLE VII

                                   THE TRUSTEE

          SECTION 7.01 CERTAIN DUTIES AND RESPONSIBILITIES.

          (a) Except during the continuance of an Indenture Event of Default:

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<PAGE>

               (i) the Trustee undertakes to perform only those duties that are
     specifically set forth in this Amended and Restated Indenture and no others
     and no covenants or duties shall be implied herein in connection with the
     Trustee; and

               (ii) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon certificates, statements, opinions,
     reports or documents furnished to the Trustee and conforming to the
     requirements of this Amended and Restated Indenture. The Trustee, however,
     shall examine the same to determine whether or not they conform to the
     requirements of this Amended and Restated Indenture.

          (b) If an Indenture Event of Default has occurred and is continuing,
the Trustee shall exercise its rights and powers vested in it by this Amended
and Restated Indenture and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.

          (c) No provision of this Amended and Restated Indenture shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, EXCEPT that:

               (i) this subsection shall not be construed to limit the effect of
     subsection (a) of this Section 7.01;

               (ii) the Trustee shall not be liable for any error in judgment
     made in good faith by a Responsible Officer, unless it is proved that the
     Trustee was negligent in ascertaining the pertinent facts;

               (iii) the Trustee shall not be liable with respect to any action
     taken or omitted to be taken by it in good faith in accordance with the
     directions received by it pursuant to Section 6.12 or 6.13; and

               (iv) no provision of this Amended and Restated Indenture shall
     require the Trustee to expend or risk its own funds or otherwise incur any
     personal financial liability in the performance of any of its duties
     hereunder, or in the exercise of any of its rights or powers, if it shall
     have reasonable grounds for believing that repayment of such funds or
     indemnity reasonably satisfactory to it against such risk or liability is
     not assured to it.

          (d) Whether or not therein expressly so provided, every provision of
this Amended and Restated Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.

          SECTION 7.02 NOTICE OF DEFAULTS OR EVENTS OF DEFAULT.

          Within five Business Days after a Responsible Officer receives written
notice or is otherwise notified of the occurrence of any Default or Indenture
Event of Default hereunder or Servicer Event of Default under the Amended and
Restated Contribution and Servicing Agreement, the Trustee

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<PAGE>

shall transmit by certified mail return receipt requested, hand delivery or
overnight courier, to all Noteholders, as their names and addresses appear in
the Note Register, the Issuer, the Servicer, the Rating Agencies and the
Contributor notice of such Default, Indenture Event of Default or Servicer Event
of Default hereunder known to the Trustee, unless such Default, Indenture Event
of Default or Servicer Event of Default shall have been cured or waived.

          SECTION 7.03 CERTAIN RIGHTS OF TRUSTEE.

          Subject to the provisions of Section 7.01:

               (i) the Trustee may rely conclusively and shall be protected in
     acting or refraining from acting upon any resolution, certificate,
     statement, instrument, opinion, report, notice, request, direction,
     consent, order, note, debenture, other evidence of indebtedness or other
     paper or document believed by it to be genuine and to have been signed or
     presented by the proper party or parties;

               (ii) any request or direction of the Issuer mentioned herein
     shall be sufficiently evidenced by an Issuer Request or Issuer Order and
     any action of the Issuer may be sufficiently evidenced by an Issuer Order;

               (iii) whenever in the administration of this Amended and Restated
     Indenture the Trustee shall deem it desirable that a matter be proved or
     established prior to taking, suffering or omitting any action hereunder,
     the Trustee (unless other evidence be herein specifically prescribed) may,
     in the absence of bad faith on its part, rely upon an Officer's
     Certificate;

               (iv) the Trustee may consult with counsel as to legal matters and
     the advice or opinion of any such counsel selected by the Trustee with due
     care shall be full and complete authorization and protection in respect of
     any action taken, suffered or omitted by it hereunder in good faith and in
     reliance thereon;

               (v) the Trustee shall be under no obligation to exercise any of
     the rights or powers vested in it by this Amended and Restated Indenture at
     the request or direction of any of the Noteholders pursuant to this Amended
     and Restated Indenture, unless such Noteholders shall have offered to the
     Trustee security or indemnity reasonably satisfactory to it against the
     costs, expenses and liabilities which might be incurred by it in compliance
     with such request or direction;

               (vi) prior to the occurrence of an Indenture Event of Default and
     after the curing or waiving of all Indenture Events of Default, the Trustee
     shall not be bound to make any investigation into the facts or matters
     stated in any resolution, certificate, statement, instrument, opinion,
     report, notice, request, direction, consent, order, note, debenture, other
     evidence of indebtedness, or other paper or document, other than to examine
     such documents to determine whether they conform as to form to the
     requirements of this Amended and Restated Indenture, unless requested in
     writing to do so by the Noteholders evidencing more than 50% of the Voting
     Rights; PROVIDED that, if the payment within a reasonable time to the
     Trustee of the costs, expenses or liabilities likely to be incurred by it
     in the making of such investigation is, in the opinion of

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<PAGE>

     the Trustee, not reasonably assured to the Trustee by the security afforded
     to it by the terms of this Amended and Restated Indenture, the Trustee may
     require indemnity reasonably satisfactory to it against such expenses or
     liabilities as a condition to proceeding; the reasonable expenses of every
     such examination shall be paid by the Issuer or, if paid by the Trustee or
     any predecessor trustee, shall be promptly repaid by the Issuer upon
     demand; and

               (vii) the Trustee may execute any of the trusts or powers
     hereunder or perform any duties hereunder either directly or by or through
     agents, custodians, nominees or attorneys and the Trustee shall not be
     responsible for any misconduct or negligence on the part of any agent,
     custodian, nominee or attorney appointed with due care by it hereunder.

          SECTION 7.04 TRUSTEE'S DISCLAIMER.

          The Trustee makes no representation as to the validity or adequacy of
this Amended and Restated Indenture (except as against itself), the SCTA, the
Amended and Restated Contribution and Servicing Agreement, or the Notes and it
shall not be responsible for any statement in the Notes other than its
certificate of authentication or in any document used in the sale of the Notes.
The Trustee shall have no responsibility for, or duty, or liability in
connection with performance by the Servicer, and shall have no obligation to
monitor the performance of the Servicer. The Trustee shall not be accountable
for the use or application by the Issuer of the Notes or the proceeds thereof.

          SECTION 7.05 MONEY HELD IN TRUST.

          Money and investments held by the Trustee or other paying agent shall
be held in trust in one or more Eligible Deposit Accounts as required hereunder.
The Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with Issuer.

          SECTION 7.06 COMPENSATION, REIMBURSEMENT, ETC.

          (a) Pursuant to the Amended and Restated Contribution and Servicing
Agreement, the Servicer has agreed:

               (i) to pay to the Trustee from time to time such compensation for
     all services rendered by it hereunder as the Servicer and the Trustee have
     agreed in writing prior to the Closing Date (which compensation shall not
     be limited by any provision of law in regard to the compensation of a
     trustee of an express trust), such payment to be made independent of the
     other payment obligations of the Servicer hereunder; PROVIDED that, if a
     Servicer Event of Default has occurred and is continuing under Section
     10.01 of the Amended and Restated Contribution and Servicing Agreement and
     the Servicer is no longer DVI, then the Trustee shall be compensated, for
     all services rendered by it hereunder, on each Payment Date and from
     Available Funds on deposit in the Collection Account, an amount equal to
     the sum of the Servicing Fee and the Trustee Fee, such fees to be paid PARI
     PASSU;

               (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

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     the Trustee in accordance with any provision of this Amended and Restated
     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
     on the Closing Date; and

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

          (b) The Trustee hereby acknowledges and agrees that if the Servicer
fails to pay the amounts set forth in Section 7.06(a) of this Amended and
Restated Indenture, the Trustee will continue to perform its obligations under
this Amended and Restated Indenture, regardless of the Servicer's failure to pay
such amounts, until the appointment of a successor Trustee reasonably
satisfactory to the Noteholders in accordance with Section 7.08 of this Amended
and Restated Indenture; PROVIDED, HOWEVER, that in such event, the Trustee shall
withhold amounts otherwise payable to it pursuant to Section 7.06(a) hereof from
amounts payable to the Servicer pursuant to Section 3.04(b)(i).

          SECTION 7.07 ELIGIBILITY; DISQUALIFICATION.

          The Trustee hereunder (a) shall at all times be a national banking
association organized and doing business under the laws of the United States of
America or any state thereof authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $100,000,000 or
shall be a member of a bank holding system, the aggregate combined capital and
surplus of which is at least $100,000,000, PROVIDED that unless the Trustee is
U.S. Bank Trust National Association, the Trustee, or the bank holding company
system of which the Trustee is a member must have a long-term unsecured debt
rating of at least "A" from the Rating Agencies; PROVIDED, FURTHER, that if the
Trustee is U.S. Bank Trust National Association, the Trustee, or the bank
holding company system of which the Trustee is a member, shall have a long-term
unsecured debt rating of at least "Baa3" from Moody's or "BBB" from Fitch, Inc.
or a short-term unsecured rating of "Prime-3" from "Moody's" or "F1" from Fitch,
Inc., and (b) shall be subject to supervision or examination by Federal or state
authority and, in the case of any successor Trustee subject to regulations
regarding fiduciary funds on deposit substantially similar to 12 CFR ss.
9.10(b). If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section 7.07, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 7.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 7.08.

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          SECTION 7.08 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

          (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by a successor Trustee reasonably satisfactory to
Noteholders evidencing more than 50% of the Voting Rights under Section 7.09.

          (b) Subject to Section 7.08(a) the Trustee may resign at any time by
giving written notice thereof to the Issuer and by mailing notice of resignation
by first-class mail, postage prepaid, to the Rating Agencies and the Noteholders
at their addresses appearing on the Note Register.

          (c) The Trustee may be removed at any time by written notice from
Noteholders evidencing more than 50% of the Voting Rights delivered to the
Trustee and the Issuer. The Issuer, with the consent of Noteholders evidencing
more than 50% of the Voting Rights, may remove the Trustee if:

               (i) the Trustee fails to comply with Section 7.07;

               (ii) the Trustee is adjudged bankrupt or insolvent;

               (iii) a receiver or other public officer takes charge of the
     Trustee or its property; or

               (iv) the Trustee becomes incapable of acting.

          (d) If the Trustee shall resign, be removed, or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Issuer, with the consent of Noteholders evidencing more than 50% of the Voting
Rights by an act of the Issuer, shall promptly appoint a successor Trustee.

          (e) If no successor Trustee shall have been so appointed by the Issuer
as hereinabove provided and accepted appointment in the manner hereinafter
provided within 30 days after any such resignation or removal, existence of
incapability, or occurrence of such vacancy, the Trustee or any Noteholder may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

          (f) The Issuer shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to all Noteholders,
as their names and addresses appear in the Note Register and to the Rating
Agencies. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.

          (g) A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.

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<PAGE>

          SECTION 7.09 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

          (a) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; PROVIDED that on request of
the Issuer or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Issuer shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.

          (b) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article and no reduction in the then current ratings, if any, on the
Notes has occurred as a result of such appointment.

          SECTION 7.10. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.

          Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder; PROVIDED such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Notes shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion,
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Notes so authenticated with the same effect as if such successor
Trustee had itself authenticated such Notes.

          SECTION 7.11 CO-TRUSTEES AND SEPARATE TRUSTEES.

          (a) At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction in which any of the Trust Property may at the
time be located, the Issuer and the Trustee shall have power to appoint, and,
upon the written request of the Trustee or the Noteholders evidencing more than
50% of the Voting Rights, the Issuer shall for such purpose join with the
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to appoint one or more Persons approved by the
Trustee either to act as co-trustee, jointly with the Trustee, of all or any
part of such Trust Property, or to act as separate trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 7.11. If the Issuer does not join in such
appointment within fifteen days after the receipt by it of a request so to do,
or in case an Indenture Event of Default has occurred and is continuing, the
Trustee alone shall have power to make such appointment.

          (b) Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property,

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<PAGE>

title, right, or power, any and all such instruments shall, on request, be
executed, acknowledged and delivered by the Issuer.

          (c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms:

               (i) The Notes shall be authenticated and delivered and all
     rights, powers, duties, and obligations hereunder in respect of the custody
     of securities, cash and other personal property held by, or required to be
     deposited or pledged with, the Trustee hereunder, shall be exercised solely
     by the Trustee.

               (ii) The rights, powers, duties, and obligations hereby conferred
     or imposed upon the Trustee in respect of any property covered by such
     appointment shall be conferred or imposed upon and exercised or performed
     by the Trustee or by the Trustee and such co-trustee or separate trustee
     jointly, as shall be provided in the instrument appointing such co-trustee
     or separate trustee, except to the extent that, under any law of any
     jurisdiction in which any particular act is to be performed, the Trustee
     shall be incompetent or unqualified to perform such act, in which event
     such rights, powers, duties and obligations shall be exercised and
     performed by such co-trustee or separate trustee.

               (iii) The Trustee at any time, by an instrument in writing
     executed by it, with the concurrence of the Issuer evidenced by an Issuer
     Order, may accept the resignation of or remove any co-trustee or separate
     trustee appointed under this Section 7.11, and, in case an Indenture Event
     of Default has occurred and is continuing, the Trustee shall have power to
     accept the resignation of, or remove, any such co-trustee or separate
     trustee without the concurrence of the Issuer. Upon the written request of
     the Trustee, the Issuer shall join with the Trustee in the execution,
     delivery and performance of all instruments and agreements necessary or
     proper to effectuate such resignation or removal. A successor to any
     co-trustee or separate trustee so resigned or removed may be appointed in
     the manner provided in this Section 7.11.

               (iv) No co-trustee or separate trustee hereunder shall be
     personally liable by reason of any act or omission of the Trustee or any
     other such trustee hereunder and the Trustee shall not be personally liable
     by reason of any act or omission of any co-trustee or other such separate
     trustee hereunder selected and supervised by the Trustee with due care or
     appointed in accordance with directions to the Trustee pursuant to Section
     6.12.

               (v) Any Act of Noteholders delivered to the Trustee shall be
     deemed to have been delivered to each such co-trustee and separate trustee.

          SECTION 7.12 TRUSTEE TO HOLD CONTRACTS.

          On or prior to the Closing Date, the Contributor, on behalf of the
Issuer, shall deliver to the Trustee (or its designee) the sole original,
manually executed counterpart of each Contract (or, if the original Contract is
in the form of a schedule or supplement to a master lease, all original
counterparts of such schedule or supplement previously in the possession of the
Contributor or the Issuer together with a true and correct copy of such master
lease) that constitutes "chattel paper" or an

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<PAGE>

"instrument," as such terms are defined in the UCC. The Trustee (or its
designee) shall hold such documents until such time as such Contract is released
from the lien of this Amended and Restated Indenture pursuant to the provisions
hereof.

          SECTION 7.13 FINANCING STATEMENTS.

          The Trustee shall execute such UCC financing statements and
continuation statements as shall have been prepared by the Servicer and as shall
be necessary and shall furnish the Servicer with such limited powers of attorney
or other documents necessary or appropriate to enable the Servicer to fulfill
its obligations under Section 4 of the Amended and Restated Contribution and
Servicing Agreement and to carry out its servicing and administration duties
under the Amended and Restated Contribution and Servicing Agreement.

          SECTION 7.14 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

          (a) On and after the time the Servicer receives a notice of
termination pursuant to Section 10.02 of the Amended and Restated Contribution
and Servicing Agreement, the Trustee (subject to subsection (b) hereof) shall be
the successor in all respects to the Servicer in its capacity as servicer under
the Amended and Restated Contribution and Servicing 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 indemnify) relating
thereto placed on the Servicer by the terms and provisions thereof (but not the
obligations of the Contributor contained therein which shall survive any such
termination as provided in Section 10.02 thereof) and shall be entitled to
receive from the Issuer the Servicing Fee and other servicing compensation
provided for in Section 4.04 of the Amended and Restated Contribution and
Servicing Agreement; 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 a similar type of contracts and
the financing of medical diagnostic imaging equipment, as the successor Servicer
under the Amended and Restated Contribution and Servicing Agreement, to assume
all of the rights and obligations of the Servicer thereunder, including, without
limitation, the Servicer's right thereunder to receive the Servicing Fee (but
not the obligations of the Contributor contained therein) 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 thereunder. Pending
appointment of a successor Servicer under the Amended and Restated Contribution
and Servicing Agreement, 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 the Amended and Restated Contribution and Servicing 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 of the Amended and Restated Contribution and Servicing Agreement.

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<PAGE>

          SECTION 7.15 REPORTS BY TRUSTEE TO HOLDERS.

          If required by the TIA, within 60 days after each Payment Date
beginning with December 12, 2000, the Trustee shall mail to each Noteholder a
brief report dated as of such Payment Date that complies with TIA Section
313(a).

          SECTION 7.16 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.

          The Trustee is subject to and shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b).

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<PAGE>

                                  ARTICLE VIII

                                    COVENANTS

          SECTION 8.01 PAYMENT OF PRINCIPAL AND INTEREST.

          The Issuer will duly and punctually pay the principal of and interest
on the Notes in accordance with the terms of the Notes and this Amended and
Restated Indenture. An installment of interest shall be considered paid on the
date it is due if the Trustee holds on that date money designated for and
sufficient to pay the installment.

          SECTION 8.02 MAINTENANCE OF OFFICE OR AGENCY; CHIEF EXECUTIVE OFFICE.

          (a) The Issuer will maintain in the Commonwealth of Pennsylvania an
office or agency where notices and demands to or upon the Issuer in respect of
the Notes and this Amended and Restated Indenture may be served.

          (b) The chief executive office of the Issuer, and the office at which
the Issuer maintains its records with respect to the Contracts, the Equipment,
and the transactions contemplated hereby, is located in Jamison, Pennsylvania.
The Issuer will not change the location of such office without giving the
Trustee and each Noteholder at least 60 days' prior written notice thereof.

          SECTION 8.03 MONEY FOR PAYMENTS TO NOTEHOLDERS TO BE HELD IN TRUST.

          (a) All payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Collection Account pursuant
to Section 3.04(b) or Section 6.06 shall be made on behalf of the Issuer by the
Trustee, and no amounts so withdrawn from the Collection Account for payments of
Notes shall be paid over to the Issuer under any circumstances except as
provided in this Section 8.03.

          (b) In making payments hereunder, the Trustee will:

               (i) allocate all sums received for payment to the Noteholders on
     each Payment Date in accordance with the terms of this Amended and Restated
     Indenture;

               (ii) hold all sums held by it for the payment of amounts due with
     respect to the Notes in trust for the benefit of the Persons entitled
     thereto until such sums shall be paid to such Persons or otherwise disposed
     of as herein provided and pay such sums to such Persons as herein provided;
     and

               (iii) comply with all requirements of the Internal Revenue Code
     of 1986, as amended (or any successor statutes), and all regulations
     thereunder, with respect to the withholding from any payments made by it on
     any Notes of any applicable withholding taxes imposed thereon and with
     respect to any applicable reporting requirements in connection therewith,
     in each case, consistent with the treatment of the Notes as indebtedness.

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<PAGE>

          (c) Except as required by applicable law, any money held by the
Trustee in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for two years after such amount has become due and payable
to the Noteholder shall be discharged from such trust and, subject to applicable
escheat laws, paid to the Issuer upon request; and such Noteholder shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof, and all liability of the Trustee with respect to such trust
money shall thereupon cease.

          SECTION 8.04 ISSUER EXISTENCE; ETC.

          (a) The Issuer will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence as a Delaware limited
liability company and the rights, licenses and franchises of the Issuer, and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of the Amended and Restated Indenture, the Notes, or any of the
Contracts.

          (b) The Issuer shall at all times observe and comply in all material
respects with (i) its limited liability company operating agreement as in effect
on the date hereof, (ii) all laws, regulations and court orders applicable to
it, (iii) all requirements of law in the declaration and payment of any
distributions on its Units, and (iv) all requisite and appropriate formalities
(including, without limitation, obtaining the consent of the Managing Member as
its sole beneficial owner to authorize Issuer action as required, and as
otherwise required by law) in the management of its business and affairs and the
conduct of the transactions contemplated hereby, by the SCTA and by the Amended
and Restated Contribution and Servicing Agreement. The SCTA limits the Issuer's
activities to the purchases of assets, issuance of securities, and activities
incidental thereto. No Affiliate of the Issuer pays the expenses of the Issuer
except as contemplated in the Transaction Documents, and no Affiliate of the
Issuer guarantees any obligation of the Issuer. Other than the purchase,
contribution, substitution or sale of assets, the Issuer has no intercorporate
transactions with DVI.

          (c) The Issuer will, at all times: (i) maintain (A) financial books
and records separate from those of any other Person and (B) minutes of its
meetings and other proceedings of its member(s); (ii) continuously maintain the
resolutions, agreements and other instruments underlying the transactions
contemplated hereby, by the SCTA and by the Amended and Restated Contribution
and Servicing Agreement, as official records of the Issuer; (iii) act solely in
its name to maintain an arm's-length relationship with the Contributor and its
Affiliates; (iv) pay all of its operating expenses and liabilities from its own
funds; (v) maintain an office and telephone number separate from that of the
Contributor, the Managing Member and the Transferor, (vi) maintain its assets
separately from the assets of the Contributor and (vii) characterize the
Contributor, the Managing Member and the Transferor as separate entities in any
report, tax return, financial statement, other accounting or business
transaction.

          (d) The Issuer shall conduct its business solely in its own name so as
to not mislead others as to the identity of the trust with which those others
are concerned, and particularly will avoid the appearance of conducting business
on behalf of the Contributor or any of its Affiliates or that the assets of the
Issuer are available to pay the creditors of the Contributor or any of its
Affiliates. Without limiting the generality of the foregoing, all oral and
written communications, including, without limitation, letters, invoices,
purchase orders, contracts, statements and loan applications, will be made
solely in the name of the Issuer.

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<PAGE>

          (e) The Issuer will be operated so as not to be substantively
consolidated for bankruptcy purposes with the Contributor.

          (f) Reserved.

          (g) The Issuer will not amend its limited liability company operating
agreement without the prior consent of Noteholders evidencing more than 50% of
the Voting Rights.

          (h) The Issuer shall also comply with the other applicable provisions
of TIA Section 314.

          SECTION 8.05 PROTECTION OF TRUST PROPERTY; FURTHER ASSURANCES.

          The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such UCC financing statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:

               (i) Grant more effectively all or any portion of the Trust
     Property;

               (ii) maintain or preserve the lien of this Amended and Restated
     Indenture or carry out more effectively the purposes hereof;

               (iii) publish notice of, or protect the validity of, any Grant or
     assignment made or to be made by this Amended and Restated Indenture and
     perfect the security interest contemplated hereby in favor of the Trustee
     in the Contracts and any security interest in the related Equipment;

               (iv) enforce or cause the Servicer to enforce any of the
     Contracts; or

               (v) preserve and defend title to any Contract (including the
     right to receive all payments due or to become due thereunder subsequent to
     the applicable Cut-Off Date), the security interest of the Trustee in the
     Equipment, or other property included in the Trust Property and preserve
     and defend the rights of the Trustee and the Noteholders in such Contract
     (including the right to receive all payments due or to become due
     thereunder subsequent to the applicable Cut-Off Date), Equipment and other
     property against the claims of all persons and parties.

The Issuer, upon the Issuer's failure to do so, hereby designates the Trustee
its agent and attorney-in-fact to execute any UCC financing statement,
continuation statement or other document or instrument required pursuant to this
Section 8.05; PROVIDED, HOWEVER, that such designation shall not be deemed to
create a duty in the Trustee to monitor the compliance of the Issuer with the
foregoing covenants, and PROVIDED FURTHER that the duty of the Trustee to
execute any instrument required pursuant to this Section 8.05 shall arise only
if a Responsible Officer of the Trustee has actual knowledge of any failure of
the Issuer to comply with the provisions of this Section 8.05.

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<PAGE>

          SECTION 8.06 COMPLIANCE CERTIFICATES.

          The Issuer will deliver to the Trustee and the Rating Agencies, within
90 days after the end of each fiscal year, an Officer's Certificate of the
Managing Member, as sole owner of the beneficial interests of the Issuer,
stating, in addition to the statements required by Section 1.18, as to each
signer thereof, that

               (i) a review of the activities of the Issuer during such year and
     of performance under this Amended and Restated Indenture has been made
     under such officers' supervision,

               (ii) to the best of such officers' knowledge, based on such
     review, (a) the Issuer has fulfilled all of its obligations under this
     Amended and Restated Indenture throughout such year and (b) the Servicer
     has fulfilled all of the Servicer's obligations under the Amended and
     Restated Contribution and Servicing Agreement, and

               (iii) whether the officer knows of any Defaults by the Issuer
     under this Amended and Restated Indenture throughout such year or, if there
     has been a Default in the fulfillment of any such obligation, specifying
     each such Default known to him and the nature and status thereof and the
     nature of the action taken with respect thereto.

          SECTION 8.07 PERFORMANCE OF OBLIGATIONS; AMENDED AND RESTATED
CONTRIBUTION AND SERVICING AGREEMENT.

          (a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Amended and Restated Indenture, any
Supplement, the Notes, its limited liability company operating agreement, the
Note Purchase Agreement, the Underwriting Agreements and any other applicable
Transaction Documents.

          (b) The Issuer will clearly mark its books and records to reflect each
assignment and transfer of a Contract and the security interest in the Equipment
subject thereto from the Transferor.

          (c) If the Managing Member, as sole member of the Issuer, shall have
actual knowledge of the occurrence of a default under either the Amended and
Restated Contribution and Servicing Agreement or the SCTA, the Issuer shall
promptly notify the Trustee and the Noteholders thereof, and shall specify in
such notice the action, if any, the Issuer is taking in respect of such default.
Unless consented to by Noteholders evidencing more than 50% of the Voting
Rights, the Issuer may not waive any default under or amend the Amended and
Restated Contribution and Servicing Agreement.

          (d) The Issuer shall, and shall cause the Contributor to, update any
information required to be provided pursuant to Rule 144A(d) (4) of the
Securities Act to subsequent purchasers of the Class E Notes to prevent such
information from becoming materially false and materially misleading in a manner
adverse to any Noteholder.

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          SECTION 8.08 NEGATIVE COVENANTS.

          The Issuer will not:

               (i) sell, transfer, exchange or otherwise dispose of any portion
     of the Trust Property except as expressly permitted by this Amended and
     Restated Indenture or any Supplement; PROVIDED THAT nothing contained
     herein shall prohibit the transfer by the Issuer of amounts payable to the
     Issuer pursuant to Section 3.04(b);

               (ii) claim any credit on, or make any deduction from, the
     principal of, or interest on, any of the Notes by reason of the payment of
     any taxes levied or assessed upon any portion of the Trust Property;

               (iii) seek dissolution or liquidation in whole or in part or
     reorganization of its business or affairs;

               (iv) (A) permit the validity or effectiveness of this Amended and
     Restated Indenture or any Grant hereby to be impaired, or permit the lien
     of this Amended and Restated Indenture to be amended, hypothecated,
     subordinated, terminated or discharged, or permit any Person to be released
     from any covenants or obligations under this Amended and Restated
     Indenture, except as may be expressly permitted hereby, (B) permit any
     lien, charge, security interest, mortgage or other encumbrance to be
     created on or to extend to or otherwise arise upon or burden the Trust
     Property or any part thereof or any interest therein or the proceeds
     thereof other than the lien of this Amended and Restated Indenture and the
     rights of Obligors, or (C) permit the lien of this Amended and Restated
     Indenture not to constitute a valid first priority perfected security
     interest in the Contracts and a valid security interest in the Equipment;

               (v) engage in any business or activity in violation of the
     provisions contained in its limited liability company operating agreement;

               (vi) at any time insist upon, plead, or in any manner whatsoever
     claim or take the benefit or advantage of, any stay or extension law or
     other law that would prohibit or forgive the Issuer from paying all or any
     portion of the principal of or interest on the Notes as contemplated herein
     or in the Notes, wherever enacted, now or at any time hereafter in force,
     or that may affect the covenants or the performance of this Amended and
     Restated Indenture; and (to the extent that it may lawfully do so) the
     Issuer hereby expressly waives all benefit or advantage of any such law,
     and covenants that it will not hinder, delay or impede the execution of any
     power herein granted to the Trustee, but will suffer and permit the
     execution of every such power as though no such law had been enacted;

               (vii) merge or consolidate with any other Person unless (i) the
     entity surviving such merger or consolidation is a Person organized under
     the laws of the United States or any jurisdiction thereof, (ii) the
     surviving entity, if not the Issuer, shall execute and deliver to 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
     Issuer hereunder, and (y) an opinion of counsel to the effect that such
     Person is a Person of the type described in the preceding clause (i), has

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     effectively assumed the obligations of the Issuer hereunder, that all
     conditions precedent provided for in this Amended and Restated Indenture
     relating to such transaction have been complied with, that in the opinion
     of such counsel, 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 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
     Issuer shall deliver to the Trustee a letter from each Rating Agency to the
     effect that such transaction will not, in and of itself, result in a
     downgrading of the rating 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. The
     Issuer and any surviving entity, if not the Issuer, will keep all of its
     material assets within the United States at all times. The Issuer will not
     make any material change in its business;

               (viii) take any action or permit any action to be taken by others
     which would release any Person from any of such Person's covenants or
     obligations under any Contract or any other instrument included in the
     Trust Property other than any such release occasioned by the early
     termination of a Contract after receipt of the Prepayment Amount, or which
     would result in the amendment, hypothecation, subordination, termination,
     or discharge of, or impair the validity or effectiveness of, any Contract
     or such other instrument, except as expressly provided in this Amended and
     Restated Indenture or the Amended and Restated Contribution and Servicing
     Agreement; or

               (ix) issue any other securities (other than the Notes and the
     Class F Instruments) unless it shall have received from the Rating Agencies
     a written confirmation that the issuance of such securities will not result
     in a Ratings Effect with respect to any class of Notes.

          SECTION 8.09 INFORMATION AS TO THE ISSUER.

          The Issuer shall file with the Trustee and the Rating Agencies:

          (a) within 15 days after filing with the Commission, copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may by rules and
regulations prescribe) which the Managing Member (as settlor of the Issuer) is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act.

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

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

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

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<PAGE>

               (ii) any pending or proposed court or administrative proceeding

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

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

          SECTION 8.10. PAYMENT OF TAXES AND OTHER CLAIMS.

          The Issuer will pay or discharge or cause to be paid or discharged,
before any penalty accrues from the failure to so pay or discharge, (1) all
taxes, assessments and governmental charges levied or imposed upon the Issuer or
upon the income, profits or property (including any property that is part of the
Trust Property) of the Issuer and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Issuer; PROVIDED, HOWEVER, that the Issuer shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim the amount, applicability or validity of which is being contested in good
faith by appropriate proceedings and for which adequate provision has been made
or where the failure to effect such payment or discharge is not adverse in any
material respect to the Noteholders.

          SECTION 8.11 INDEMNIFICATION.

          The Issuer agrees to indemnify and hold harmless the Trustee (which
shall include its directors, officers, employees and agents) and each Noteholder
(each an "INDEMNIFIED PARTY") against any and all liabilities, losses, damages,
penalties, costs and expenses (including the fees and expenses of counsel and
the costs of defense and legal fees and expenses) which may be incurred or
suffered by such Indemnified Party without negligence, bad faith or willful
misconduct on its part as a result of claims, actions, suits or judgments
asserted or imposed against it and arising out of the transactions contemplated
hereby, by the SCTA or by the Amended and Restated Contribution and Servicing
Agreement, 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 Issuer's possession or under its control, 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, except to the extent otherwise provided
in Section 6.06, all amounts payable pursuant to this Section 8.11 shall be
fully subordinated to amounts payable under the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes and the Class E Notes to the extent
that any amounts otherwise due and payable under the terms of this Amended and
Restated Indenture have not been fully paid. In every circumstance where the
Issuer has agreed to indemnify or hold harmless the Noteholders for legal fees,
counsel fees and related costs and expenses, it is understood and agreed, and
the Noteholders by their acceptance of their respective Notes agree, that such
indemnification and holding harmless is limited to the reasonable fees, related
costs and expenses of the Noteholders Counsel only. The provisions of this
Section 8.11 shall survive the termination of this Amended and Restated
Indenture.

                                       63

<PAGE>

          SECTION 8.12 CONTRACT FILES TO TRUSTEE.

          On or prior to the Closing Date or each Substitute Date, as
applicable, the Contributor, on behalf of the Issuer, shall deliver to the
Trustee the original counterpart of each Contract that constitutes "chattel
paper" or an "instrument," as such terms are defined in the UCC.

          SECTION 8.13 PAYMENT ADVICES.

          Each payment by the Issuer 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.

                                       64

<PAGE>

                                   ARTICLE IX

           AMENDMENTS AND SUPPLEMENTAL AMENDED AND RESTATED INDENTURES

          SECTION 9.01 AMENDMENTS AND SUPPLEMENTAL INDENTURES.

          This Amended and Restated Indenture or the Notes may be amended from
time to time by the parties hereto, without the consent of any of the
Noteholders, (i) 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 Amended
and Restated Indenture or the Notes which shall not be materially inconsistent
with the provisions of this Amended and Restated Indenture or the Notes,
PROVIDED THAT such action shall not adversely affect in any respect the
interests of any Noteholder or (ii) to make any change to comply with the TIA or
any amendment thereto, or to comply with any requirement of the Commission in
connection with the qualification of the Amended and Restated Indenture under
the TIA.

          This Amended and Restated Indenture or the Notes may also be amended
from time to time by the parties hereto with the consent of the Holders of Notes
evidencing more than 662/3% of the Voting Rights (and with prior written notice
to the Rating Agency) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Amended and Restated
Indenture or the Notes or of modifying in any manner the rights of the Holders
of Notes; PROVIDED, HOWEVER, that no amendment to this Amended and Restated
Indenture or any supplemental indenture may (i) cause a reduction in the then
current ratings, if any, of the Notes, (ii) increase or reduce in any manner the
amount of, or accelerate or delay the timing of collections of payments on the
related Contracts or distributions that are required to be made for the benefit
of such Noteholders, (iii) reduce the aforesaid percentage of the Notes of such
series which is required to consent to any such amendment or waiver, or (iv)
release any of the Trust Property from the lien hereof (except as otherwise
permitted herein) or modify Section 2.06, 3.04, 6.06, 6.08, 6.13 or 9.01,
without the consent of each affected Noteholder. The Issuer shall furnish to the
Rating Agencies copies of all amendments to and supplements to this Amended and
Restated Indenture.

          It shall not be necessary for the consent of the Noteholders under
this Section 9.01 to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance
thereof.

          SECTION 9.02 EXECUTION OF AMENDMENTS AND SUPPLEMENTAL INDENTURES.

          In executing any amendment to this Amended and Restated Indenture, the
Notes or any supplemental indenture pursuant to Section 9.01 of this Amended and
Restated Indenture, the Trustee shall be entitled to receive, and (subject to
Section 7.01) shall be fully protected in relying upon (i) an Officer's
Certificate stating that all conditions precedent for entering into such
amendment or supplemental indenture as set forth in the Amended and Restated
Indenture have been met and (ii) an Opinion of Counsel stating that the
execution of such amendment to this Amended and Restated Indenture, the Note, or
any supplemental indenture is authorized or permitted by this Amended and
Restated Indenture. The Trustee may, but shall not be obligated to, enter into
any supplemental indenture which affects

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<PAGE>

the Trustee's own rights, duties, protections, or immunities under this Amended
and Restated Indenture or otherwise.

          SECTION 9.03 EFFECT OF AMENDMENTS AND SUPPLEMENTAL INDENTURES.

          Upon the execution of any amendment to this Amended and Restated
Indenture, the Notes or any supplemental indenture under this Article, this
Amended and Restated Indenture, the Notes or any supplemental indenture shall be
modified in accordance therewith, and such amendment or supplemental indenture
shall form a part of this Amended and Restated Indenture, the Notes or any
supplemental indenture for all purposes, and every Noteholder of Notes
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

          SECTION 9.04 REFERENCE IN NOTES TO AMENDMENTS AND SUPPLEMENTAL
INDENTURES.

          Notes authenticated and delivered after the execution of any amendment
to this Amended and Restated Indenture or any supplemental indenture pursuant to
this Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such amendment or
supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Trustee and the Issuer, to any such
amendment or supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for outstanding
Notes.

          SECTION 9.05 COMPLIANCE WITH TRUST INDENTURE ACT.

          The Issuer hereby covenants and agrees that every amendment or
supplement to this Amended and Restated Indenture or the Notes shall comply with
the TIA as then in effect.

          SECTION 9.06 REVOCATION AND EFFECT OF CONSENTS.

          Subject to this Amended and Restated Indenture, each amendment, waiver
or instrument evidencing other action shall become effective in accordance with
its terms. Until an amendment, waiver or other action becomes effective, a
consent to it by a Noteholder is a continuing consent by the Noteholder even if
notation of the consent is not made on any Note.

          The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then those Persons who were
Noteholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Noteholders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.

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<PAGE>

                                    ARTICLE X

                               REDEMPTION OF NOTES

          SECTION 10.01 OPTIONAL REDEMPTION; ELECTION TO REDEEM.

          (a) The Notes may be redeemed in part by the Issuer at the Partial
Redemption Price on any Payment Date on which the outstanding Pool B Aggregate
Discounted Contract Balance is less than 20% of the outstanding Pool B Aggregate
Discounted Contract Balance as of the Closing Date. The Notes may be redeemed by
the Issuer, in whole but not in part, at the Redemption Price on any Payment
Date on which the Pool A Aggregate Discounted Contract Balance is less than 10%
of the Pool A Aggregate Discounted Contract Balance as of the Closing Date and
the Pool B Aggregate Discounted Contract Balance is less than 20% of the Pool B
Aggregate Discounted Contract Balance as of the Closing Date. The Issuer, by an
Authorized Officer of the Managing Member, shall set the Redemption Date and the
Redemption Record Date and give notice thereof to the Trustee. Notice of
redemption or partial redemption having been given as provided in the Amended
and Restated Indenture, the Notes shall, on the applicable Redemption Date,
become due and payable at the Redemption Price or Partial Redemption Price, as
applicable. The respective Noteholders shall be paid the Redemption Price or
Partial Redemption Price, as applicable, by the Trustee to the extent of
Available Funds on deposit in the Collection Account, and upon presentation and
surrender of the Notes on behalf of the Issuer; PROVIDED, HOWEVER, that
installments of principal and interest which are due on or prior to the
Redemption Date shall be payable to the respective Noteholders registered as
such on the relevant Record Dates or Redemption Record Dates, as applicable,
according to their terms.

          (b) The Issuer, by order of an Authorized Officer of the Managing
Member, shall set the Redemption Date and the Redemption Record Date and give
notice thereof to the Trustee pursuant to Section 10.02.

          SECTION 10.02 NOTICE TO TRUSTEE.

          In the case of any redemption or partial redemption pursuant to
Section 10.01, the Issuer shall, at least 20 days prior to the Redemption,
notify the Trustee and the Rating Agencies of such Redemption Date and the
principal amount of Notes to be redeemed in part. The notice shall be
accompanied by an Officer's Certificate stating that the redemption or partial
redemption complies with the provisions of this Amended and Restated Indenture.

          SECTION 10.03 NOTICE OF REDEMPTION OR PARTIAL REDEMPTION BY THE
ISSUER.

          Notice of redemption or partial redemption pursuant to Section 10.01
shall be given by first class mail, postage prepaid, mailed at least 15 days but
not more than 60 days prior to the applicable Redemption Date, to each holder of
a Note, at its address in the Note Register.

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<PAGE>

          All notices of redemption or partial redemption shall state:

               (1)  the Redemption Date;

               (2)  the Redemption Price or Partial Redemption Price, as
                    applicable;

               (3)  that on the Redemption Date, the Redemption Price or Partial
                    Redemption Price, as applicable, will become due and payable
                    upon each such Note, and that interest on the redeemed
                    portion of such Note shall cease to accrue if payment is
                    made on such date;

               (4)  the private placement number or CUSIP number, if any, of the
                    Notes;

               (5)  Corporate Trust Office where Notes are to be surrendered for
                    payment of the Redemption Price; and

               (6)  the Redemption Record Date.

          Notice of redemption or partial redemption, as applicable, of Notes
shall be given by the Issuer, by order of an Authorized Officer of the
Transferor, or, at the request of such Authorized Officer of the Managing
Member, by the Trustee in the name and at the expense of the Issuer. Failure to
give notice of redemption or partial redemption, as applicable, or any defect
therein, to any holder of a Note shall not impair or affect the validity of the
redemption or partial redemption, as applicable, of any other Note. If a private
placement number or CUSIP number is listed in such notice or printed on the
Note, the notice may state that no representation is made as to the correctness
or accuracy of such private placement number or CUSIP number.

          SECTION 10.04 DEPOSIT OF THE REDEMPTION PRICE OR PARTIAL REDEMPTION
PRICE.

          On or before the Business Day immediately preceding any Redemption
Date, the Issuer shall deposit with the Trustee an amount of monies sufficient
to pay the Redemption Price or Partial Redemption Price, as applicable, of all
Notes outstanding on such Redemption Date (less any portion of such payment to
be made from monies in the Collection Account).

          SECTION 10.05 NOTES PAYABLE ON REDEMPTION DATE.

          (a) Notice of redemption in full having been given as provided in
Section 10.03, the Notes shall, on the applicable Redemption Date, become due
and payable at the Redemption Price and on such Redemption Date (unless the
Issuer shall default in the payment of the Redemption Price) such Notes shall
cease to bear interest. The Noteholders shall be paid the Redemption Price by
the Trustee on behalf of the Issuer; PROVIDED, HOWEVER, that installments of
principal and interest which are due on or prior to the Redemption Date shall be
payable to the Noteholders registered as such on the relevant Record Dates
according to their terms and the provisions of Section 2.07. If the Holders of
any Note called for redemption in full shall not be so paid upon surrender, the
principal and interest shall, until paid, bear interest from the Redemption Date
at the related Note Rate.

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<PAGE>

          (b) Notice of partial redemption having been given as provided in
Section 10.03, that portion of the Notes shall, on the applicable Redemption
Date, become due and payable at the Partial Redemption Price and on such
Redemption Date (unless the Issuer shall default in the payment of the
Redemption Price) such Notes shall continue to bear interest only on the
principal balances remaining outstanding. The Noteholders shall be paid the
Partial Redemption Price by the Trustee on behalf of the Issuer; PROVIDED,
HOWEVER, that installments of principal and interest which are due on or prior
to the Redemption Date shall be payable to the Noteholders registered as such on
the relevant Record Dates according to their terms and the provisions of Section
2.07. If the holders of any Note called for partial redemption shall not be so
paid, the principal and interest shall, until paid, bear interest from the
Redemption Date at the related Note Rate.

                                      69

<PAGE>

                                   ARTICLE XI

                           SATISFACTION AND DISCHARGE

          SECTION 11.01 SATISFACTION AND DISCHARGE OF AMENDED AND RESTATED
INDENTURE.

          (a) This Amended and Restated Indenture shall cease to be of further
effect (except as to any surviving rights herein expressly provided for), and
the Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments and certifications acknowledging satisfaction and discharge of this
Amended and Restated Indenture, when:

               (i) either:

                    (A) all Notes theretofore authenticated and delivered (other
          than (x) Notes which have been destroyed, lost, or stolen and which
          have been replaced or paid as provided in Section 2.05 and (y) Notes
          for whose payment money has theretofore been deposited in trust or
          segregated and held in trust by the Issuer and thereafter repaid to
          the Issuer or discharged from such trust, as provided in Section
          8.03(c)) have been irrevocably paid and delivered to the Trustee for
          cancellation; or

                    (B) the final installments of principal on all such Notes
          not theretofore delivered to the Trustee for cancellation:

                         (1) have become due and payable, or

                         (2) will become due and payable at their Stated
               Maturity Date within one year,

          and the Issuer has deposited or caused to be deposited with the
          Trustee as trust funds in trust for the purpose an amount sufficient
          to pay and discharge the entire indebtedness on such Notes not
          theretofore delivered to the Trustee for cancellation, for principal
          and interest to the date of such deposit (in the case of Notes which
          have become due and payable) or to the Stated Maturity Date thereof;

               (ii) the Issuer has paid or caused to be paid all other sums
     payable hereunder by the Issuer for the benefit of the Noteholders; and

               (iii) the Issuer has delivered to the Trustee an Officer's
     Certificate of the Managing Member stating that all conditions precedent
     herein provided for relating to the satisfaction and discharge of this
     Amended and Restated Indenture have been complied with.

At such time, the Trustee shall deliver to the Issuer or, upon Issuer Order, its
assignee, all cash, securities and other property held by it as part of the
Trust Property other than funds deposited with the Trustee pursuant to Section
11.01(a)(i)(B) for the payment and discharge of the Notes and a certificate from
a Responsible Officer certifying the satisfaction and discharge of this Amended
and Restated Indenture.

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<PAGE>

          (b) Notwithstanding the satisfaction and discharge of this Amended and
Restated Indenture, the obligations of the Issuer under Sections 7.06 and 8.11,
and, if money shall have been deposited with the Trustee pursuant to Section
11.01(a)(i)(B), the obligations of the Trustee under Section 11.02 and Section
8.03(c) shall survive.

          SECTION 11.02 APPLICATION OF TRUST MONEY.

          Subject to the provisions of Section 8.03(c), all money deposited with
the Trustee pursuant to Sections 11.01 and 8.03 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this Amended
and Restated Indenture, to the payment to the Persons entitled thereto of the
principal and interest for whose payment such money has been deposited with the
Trustee.

          SECTION 11.03 REINSTATEMENT.

          If the Trustee is unable to apply any money in accordance with Section
11.01 by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuer's obligations under this Amended and
Restated Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 11.01 until such time as the Trustee is
permitted to apply all such money in accordance with Section 11.01.

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<PAGE>

                                                  AMENDED AND RESTATED INDENTURE
                                                       DATED AS OF APRIL 1, 2000

          IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Indenture to be duly executed, all as of the day and year first above
written.

                                     DVI RECEIVABLES XII, L.L.C.

                                     By:  DVI Receivables Corp. VIII,
                                              its Managing Member

                                     By:__________________________________
                                     Name: Lisa J. Cruikshank
                                     Title: Vice President

                                     U.S. BANK TRUST NATIONAL ASSOCIATION,
                                     as Trustee

                                     By:__________________________________
                                     Name: Eve D. Kaplan
                                     Title: Vice President

<PAGE>

                                   SCHEDULE 1

                                CONTRACT SCHEDULE

                                   [See Tab 4]

<PAGE>

                                   EXHIBIT A-1
                        TO AMENDED AND RESTATED INDENTURE
                        ---------------------------------

                            [FORM OF CLASS A-1 NOTES]

     NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.

     NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.

     BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS A-1 NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS A-1 NOTES WILL NOT GIVE RISE TO A
PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.

No. 1                                               Principal Amount $39,975,000
Due: November 12, 2001                              CUSIP No. 23334YAA2

               6.7094% ASSET-BACKED NOTE, SERIES 2000-2, CLASS A-1

                                      A-1-1

<PAGE>

     DVI RECEIVABLES XII, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of THIRTY- NINE MILLION NINE HUNDRED
SEVENTY-FIVE THOUSAND AND 00/100 DOLLARS ($39,975,000.00) in monthly
installments equal to the sum of (i) the Class A-1 Monthly Principal, (ii) the
Class A-1 Overdue Principal and (iii) any other principal that may be due hereon
pursuant to the Amended and Restated Indenture during an Amortization Event
together with (i) the Class A-1 Monthly Interest and (ii) the Class A-1 Overdue
Interest due thereon on the twelfth day of each month (or if such date is not a
Business Day, the next succeeding Business Day, commencing December 12, 2000
(each, a "PAYMENT DATE"), and not later than November 12, 2001, all remaining
principal and interest (computed on the basis of a 360-day year of actual number
of days elapsed) are due and payable in their entirety as set forth in the
Amended and Restated Indenture.

          Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, by wire transfer of immediately available funds to the
account and number specified in the Note Register on such Record Date for such
Person or, if no such account or number is so specified, then by check mailed to
such Person's address as it appears in the Note Register on such Record Date.
The holder hereof shall surrender this Note at the principal Corporate Trust
Office of the Trustee for the final installment of principal of this Note.

          This Note is one of a duly authorized issue of Class A-1 Notes of the
Issuer designated as its 6.7094% Asset-Backed Notes, Series 2000-2, Class A-1
with aggregate principal amount of $39,975,000.00 and to be issued under an
Amended and Restated Indenture, dated as of April 1, 2000 (herein called the
"AMENDED AND RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust
National Association, as trustee (herein called the "TRUSTEE", which term
includes any successor trustee under the Amended and Restated Indenture), to
which Amended and Restated Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties, and immunities thereunder of the Issuer, the Trustee, and the
holders of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
tranche and any other Note of the same tranche by reason of difference in time
of issuance or otherwise, and also secures the payment of certain other amounts
and certain other obligations as set forth in the Amended and Restated
Indenture. This Note is issued under and is subject to the terms, provisions and
conditions of the Amended and Restated Indenture, to which Amended and Restated
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.

          Each Class A-1 Noteholder by acceptance of its Class A-1 Note (and any
Person which is a beneficial owner of any interest in a Class A-1 Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class A-1 Notes (or beneficial interest therein) for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness. Each Class A-1 Noteholder agrees that it
will cause any Person acquiring an interest in a Class A-1 Note through it to
acknowledge the Class A-1 Notes' characterization as indebtedness and to treat
the Class A-1 Notes as indebtedness for such tax purposes.

                                      A-1-2

<PAGE>

          Each prospective initial Noteholder acquiring Class A-1 Notes, each
prospective transferee acquiring a Class A-1 Note, and each prospective owner
(or transferee thereof) of a beneficial interest in a Class A-1 Note (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class A-1 Note on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with the assets of a Plan; or (2) the acquisition and holding of the Class A-1
Note will not give rise to a prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption is unavailable.

          If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Class A-1 Note is
registrable in the Note Register, upon surrender of this Class A-1 Note for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Amended and Restated Indenture, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-1 Notes, of authorized
denominations and for the same original aggregate principal amount, will be
issued to the designated transferee or transferees.

          The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.

          The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

          Prior to due presentment of this Class A-1 Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Class A-1 Note be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.

          This Class A-1 Note and the Amended and Restated Indenture may be
amended or supplemented as set forth in the Amended and Restated Indenture.

                                      A-1-3

<PAGE>

          By accepting this Class A-1 Note, the holder hereof irrevocably
appoints the Trustee under the Amended and Restated Indenture as the special
attorney-in-fact for the holder vested with full power on behalf of the holder
to effect and enforce the rights of such holder and the provisions of the
Amended and Restated Indenture for the benefit of the holder. The preceding
provision in no way shall limit the right of the holder hereof to demand payment
hereunder or bring an action to enforce payment hereof.

          All capitalized terms used in this Class A-1 Note which are defined in
the Amended and Restated Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture, this Class A-1 Note
and the Amended and Restated Indenture 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.

          Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Class A-1 Note shall not be entitled to
any benefit under the Amended and Restated Indenture or be valid or obligatory
for any purpose.

          This Class A-1 Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.

                            [Signature page follows]

                                      A-1-4

<PAGE>

          IN WITNESS WHEREOF, DVI RECEIVABLES XII, L.L.C. has caused this
instrument to be duly executed.

                                          DVI RECEIVABLES XII, L.L.C.

                                          By:  DVI Receivables Corp. VIII,
                                                   its Managing Member

                                          By:__________________________________
                                          Name:
                                          Title:

Dated:________________________

This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION,
 as Trustee

By:__________________________________
         Authorized Signatory

                                      A-1-5

<PAGE>

                                   EXHIBIT A-2
                        TO AMENDED AND RESTATED INDENTURE
                        ---------------------------------

                            [FORM OF CLASS A-2 NOTES]

     NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.

     NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.

     BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS A-2 NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS A-2 NOTES WILL NOT GIVE RISE TO A
PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.

No. 1                                            Principal Amount $41,000,000.00
Due: January 12, 2003                            CUSIP No.  23334YAB0

               6.759% ASSET-BACKED NOTE, SERIES 2000-2, CLASS A-2

                                      A-2-1

<PAGE>

          DVI RECEIVABLES XII, L.L.C., a limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of FORTY-ONE MILLION AND 00/100 DOLLARS
($41,000,000.00) in monthly installments equal to the sum of (i) the Class A-2
Monthly Principal, (ii) the Class A-2 Overdue Principal and (iii) any other
principal that may be due hereon pursuant to the Amended and Restated Indenture
during an Amortization Event together with (i) the Class A-2 Monthly Interest
and (ii) the Class A-2 Overdue Interest due thereon on the twelfth day of each
month (or if such date is not a Business Day, the next succeeding Business Day,
commencing December 12, 2000 (each, a "PAYMENT DATE"), and not later than
January 12, 2003, all remaining principal and interest (computed on the basis of
a 360-day year of twelve 30-day months) are due and payable in their entirety as
set forth in the Amended and Restated Indenture.

          Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, by wire transfer of immediately available funds to the
account and number specified in the Note Register on such Record Date for such
Person or, if no such account or number is so specified, then by check mailed to
such Person's address as it appears in the Note Register on such Record Date.
The holder hereof shall surrender this Note at the principal Corporate Trust
Office of the Trustee for the final installment of principal of this Note.

          This Note is one of a duly authorized issue of Class A-2 Notes of the
Issuer designated as its 6.759% Asset-Backed Notes, Series 2000-2, Class A-2
with aggregate principal amount of $41,000,000.00 and to be issued under an
Amended and Restated Indenture, dated as of April 1, 2000 (herein called the
"AMENDED AND RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust
National Association, as trustee (herein called the "TRUSTEE", which term
includes any successor trustee under the Amended and Restated Indenture), to
which Amended and Restated Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties, and immunities thereunder of the Issuer, the Trustee, and the
holders of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
tranche and any other Note of the same tranche by reason of difference in time
of issuance or otherwise, and also secures the payment of certain other amounts
and certain other obligations as set forth in the Amended and Restated
Indenture. This Note is issued under and is subject to the terms, provisions and
conditions of the Amended and Restated Indenture, to which Amended and Restated
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.

          Each Class A-2 Noteholder by acceptance of its Class A-2 Note (and any
Person which is a beneficial owner of any interest in a Class A-2 Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class A-2 Notes (or beneficial interest therein) for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness. Each Class A-2 Noteholder agrees that it
will cause any Person acquiring an interest in a Class A-2 Note through it to
acknowledge the Class A-2 Notes' characterization as indebtedness and to treat
the Class A-2 Notes as indebtedness for such tax purposes.

                                      A-2-2

<PAGE>

          Each prospective initial Noteholder acquiring Class A-2 Notes, each
prospective transferee acquiring a Class A-2 Note, and each prospective owner
(or transferee thereof) of a beneficial interest in a Class A-2 Note (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class A-2 Notes on
behalf of, as investment manager of, as named fiduciary of or with the assets of
a Plan; or (2) the acquisition and holding of the Class A-2 Notes will not give
rise to a nonexempt prohibited transaction under Section 406(a) of ERISA or
Section 4975 of the Code for which a statutory or administrative exemption is
unavailable.

          If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Class A-2 Note is
registrable in the Note Register, upon surrender of this Class A-2 Note for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Amended and Restated Indenture, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-2 Notes, of authorized
denominations and for the same original aggregate principal amount, will be
issued to the designated transferee or transferees.

          The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.

          The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

          Prior to due presentment of this Class A-2 Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Class A-2 Note be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.

          This Class A-2 Note and the Amended and Restated Indenture may be
amended or supplemented as set forth in the Amended and Restated Indenture.

                                      A-2-3

<PAGE>

          By accepting this Class A-2 Note, the holder hereof irrevocably
appoints the Trustee under the Amended and Restated Indenture as the special
attorney-in-fact for the holder vested with full power on behalf of the holder
to effect and enforce the rights of such holder and the provisions of the
Amended and Restated Indenture for the benefit of the holder. The preceding
provision in no way shall limit the right of the holder hereof to demand payment
hereunder or bring an action to enforce payment hereof.

          All capitalized terms used in this Class A-2 Note which are defined in
the Amended and Restated Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture, this Class A-2 Note
and the Amended and Restated Indenture 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.

          Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Class A-2 Note shall not be entitled to
any benefit under the Amended and Restated Indenture or be valid or obligatory
for any purpose.

          This Class A-2 Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.

                            [Signature page follows]

                                      A-2-4

<PAGE>

          IN WITNESS WHEREOF, DVI RECEIVABLES XII, L.L.C. has caused this
instrument to be duly executed.

                                          DVI RECEIVABLES XII, L.L.C.

                                          By:  DVI Receivables Corp. VIII,
                                                   its Managing Member

                                          By:_______________________________
                                          Name:
                                          Title:

Dated:________________________

This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee

By:__________________________________
         Authorized Signatory

                                      A-2-5

<PAGE>

                                   EXHIBIT A-3
                        TO AMENDED AND RESTATED INDENTURE
                        ---------------------------------

                            [FORM OF CLASS A-3 NOTES]

     NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.

     NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.

     BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS A-3 NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS A-3 NOTES WILL NOT GIVE RISE TO A
PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.

No. 1                                            Principal Amount $74,000,000.00
Due: July 12, 2004                               CUSIP No. 23334YAC8

                                      A-3-1

<PAGE>

               6.808% ASSET-BACKED NOTE, SERIES 2000-2, CLASS A-3

     DVI RECEIVABLES XII, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of SEVENTY- FOUR MILLION AND 00/100
DOLLARS ($74,000,000.00) in monthly installments equal to the sum of (i) the
Class A-3 Monthly Principal, (ii) the Class A-3 Overdue Principal and (iii) any
other principal that may be due hereon pursuant to the Amended and Restated
Indenture during an Amortization Event together with (i) the Class A-3 Monthly
Interest and (ii) the Class A-3 Overdue Interest due thereon on the twelfth day
of each month or if such date is not a Business Day, the next succeeding
Business Day, commencing December 12, 2000 (each, a "PAYMENT DATE"), and not
later than July 12, 2004, all remaining principal and interest (computed on the
basis of a 360-day year of twelve 30-day months) are due and payable in their
entirety as set forth in the Amended and Restated Indenture.

          Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, by wire transfer of immediately available funds to the
account and number specified in the Note Register on such Record Date for such
Person or, if no such account or number is so specified, then by check mailed to
such Person's address as it appears in the Note Register on such Record Date.
The holder hereof shall surrender this Note at the principal Corporate Trust
Office of the Trustee for the final installment of principal of this Note.

          This Note is one of a duly authorized issue of Class A-3 Notes of the
Issuer designated as its 6.808% Asset-Backed Notes, Series 2000-2, Class A-3
with aggregate principal amount of $74,000,000 and to be issued under an Amended
and Restated Indenture, dated as of April 1, 2000 (herein called the "AMENDED
AND RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "TRUSTEE", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
tranche and any other Note of the same tranche by reason of difference in time
of issuance or otherwise, and also secures the payment of certain other amounts
and certain other obligations as set forth in the Amended and Restated
Indenture. This Note is issued under and is subject to the terms, provisions and
conditions of the Amended and Restated Indenture, to which Amended and Restated
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.

          Each Class A-3 Noteholder by acceptance of its Class A-3 Note (and any
Person which is a beneficial owner of any interest in a Class A-3 Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class A-3 Notes (or beneficial interest therein) for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness. Each Class A-3 Noteholder agrees that it
will cause any Person acquiring an interest

                                      A-3-2

<PAGE>

in a Class A-3 Note through it to acknowledge the Class A-3 Notes'
characterization as indebtedness and to treat the Class A-3 Notes as
indebtedness for such tax purposes.

          Each prospective initial Noteholder acquiring Class A-3 Notes, each
prospective transferee acquiring a Class A-3 Note, and each prospective owner
(or transferee thereof) of a beneficial interest in a Class A-3 Note (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class A-3 Note on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with the assets of a Plan; or (2) the acquisition and holding of the Class A-3
Note will not give rise to a prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption is unavailable.

          If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Class A-3 Note is
registrable in the Note Register, upon surrender of this Class A-3 Note for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Amended and Restated Indenture, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-3 Notes, of authorized
denominations and for the same original aggregate principal amount, will be
issued to the designated transferee or transferees.

          The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.

          The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

          Prior to due presentment of this Class A-3 Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Class A-3 Note be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.

                                      A-3-3

<PAGE>

          This Class A-3 Note and the Amended and Restated Indenture may be
amended or supplemented as set forth in the Amended and Restated Indenture.

          By accepting this Class A-3 Note, the holder hereof irrevocably
appoints the Trustee under the Amended and Restated Indenture as the special
attorney-in-fact for the holder vested with full power on behalf of the holder
to effect and enforce the rights of such holder and the provisions of the
Amended and Restated Indenture for the benefit of the holder. The preceding
provision in no way shall limit the right of the holder hereof to demand payment
hereunder or bring an action to enforce payment hereof.

          All capitalized terms used in this Class A-3 Note which are defined in
the Amended and Restated Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture, this Class A-3 Note
and the Amended and Restated Indenture 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.

          Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Class A-3 Note shall not be entitled to
any benefit under the Amended and Restated Indenture or be valid or obligatory
for any purpose.

          This Class A-3 Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.

          [Signature page follows]

                                      A-3-4

<PAGE>

          IN WITNESS WHEREOF, DVI RECEIVABLES XII, L.L.C. has caused this
instrument to be duly executed.

                                          DVI RECEIVABLES XII, L.L.C.

                                          By:  DVI Receivables Corp. VIII,
                                                   its Managing Member

                                          By:_______________________________
                                          Name:
                                          Title:

Dated:________________________

This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee

By:__________________________________
         Authorized Signatory

                                      A-3-5

<PAGE>

                                   EXHIBIT A-4
                        TO AMENDED AND RESTATED INDENTURE
                        ---------------------------------

                            [FORM OF CLASS A-4 NOTES]

     NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.

     NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.

     BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS A-4 NOTES ON BEHALF OF, AS INVESTMENT MANAGER OR, AS NAMED
FIDUCIARY OF OR WITH THE ASSETS OF A PLAN; OR (2) THE ACQUISITION AND HOLDING OF
THE CLASS A-4 NOTES WILL NOT GIVE RISE TO A PROHIBITED TRANSACTION UNDER SECTION
406(a) OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH A STATUTORY OR
ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.

No. 1                                            Principal Amount $85,804,000.00
Due: November 12, 2008                           CUSIP No. 23334YAD6

                                      A-4-1

<PAGE>

               7.115% ASSET-BACKED NOTE, SERIES 2000-2, CLASS A-4

     DVI RECEIVABLES XII, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of EIGHTY- FIVE MILLION EIGHT HUNDRED FOUR
THOUSAND AND 00/100 DOLLARS ($85,804,000.00) in monthly installments equal to
the sum of (i) the Class A-4 Monthly Principal, (ii) the Class A-4 Overdue
Principal and (iii) any other principal that may be due hereon pursuant to the
Amended and Restated Indenture during an Amortization Event together with (i)
the Class A-4 Monthly Interest and (ii) the Class A-4 Overdue Interest due
thereon on the twelfth day of each month or if such date is not a Business Day,
the next succeeding Business Day, commencing December 12, 2000 (each, a "PAYMENT
DATE"), and not later than November 12, 2008, all remaining principal and
interest (computed on the basis of a 360-day year of twelve 30-day months) are
due and payable in their entirety as set forth in the Amended and Restated
Indenture.

          Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, by wire transfer of immediately available funds to the
account and number specified in the Note Register on such Record Date for such
Person or, if no such account or number is so specified, then by check mailed to
such Person's address as it appears in the Note Register on such Record Date.
The holder hereof shall surrender this Note at the principal Corporate Trust
Office of the Trustee for the final installment of principal of this Note.

          This Note is one of a duly authorized issue of Class A-4 Notes of the
Issuer designated as its 7.115% Asset-Backed Notes, Series 2000-2, Class A-4
with aggregate principal amount of $85,804,000.00 and to be issued under an
Amended and Restated Indenture, dated as of April 1, 2000 (herein called the
"AMENDED AND RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust
National Association, as trustee (herein called the "TRUSTEE", which term
includes any successor trustee under the Amended and Restated Indenture), to
which Amended and Restated Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties, and immunities thereunder of the Issuer, the Trustee, and the
holders of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
tranche and any other Note of the same tranche by reason of difference in time
of issuance or otherwise, and also secures the payment of certain other amounts
and certain other obligations as set forth in the Amended and Restated
Indenture. This Note is issued under and is subject to the terms, provisions and
conditions of the Amended and Restated Indenture, to which Amended and Restated
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.

          Each Class A-4 Noteholder by acceptance of its Class A-4 Note (and any
Person which is a beneficial owner of any interest in a Class A-4 Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class A-4 Notes (or beneficial interest therein) for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness. Each Class A-4 Noteholder agrees that it
will cause any Person acquiring an interest

                                      A-4-2

<PAGE>

in a Class A-4 Note through it to acknowledge the Class A-4 Notes'
characterization as indebtedness and to treat the Class A-4 Notes as
indebtedness for such tax purposes.

          Each prospective initial Noteholder acquiring Class A-4 Notes, each
prospective transferee acquiring a Class A-4 Note, and each prospective owner
(or transferee thereof) of a beneficial interest in a Class A-4 Note (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class A-4 Notes on
behalf of, as investment manager of, as named fiduciary of or with the assets of
a Plan; or (2) the acquisition and holding of the Class A-4 Notes will not give
rise to a prohibited transaction under Section 406(a) of ERISA or Section 4975
of the Code for which a statutory or administrative exemption is unavailable.

          If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Class A-4 Note is
registrable in the Note Register, upon surrender of this Class A-4 Note for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Amended and Restated Indenture, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-4 Notes, of authorized
denominations and for the same original aggregate principal amount, will be
issued to the designated transferee or transferees.

          The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.

          The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

          Prior to due presentment of this Class A-4 Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Class A-4 Note be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.

                                      A-4-3

<PAGE>

          This Class A-4 Note and the Amended and Restated Indenture may be
amended or supplemented as set forth in the Amended and Restated Indenture.

          By accepting this Class A-4 Note, the holder hereof irrevocably
appoints the Trustee under the Amended and Restated Indenture as the special
attorney-in-fact for the holder vested with full power on behalf of the holder
to effect and enforce the rights of such holder and the provisions of the
Amended and Restated Indenture for the benefit of the holder. The preceding
provision in no way shall limit the right of the holder hereof to demand payment
hereunder or bring an action to enforce payment hereof.

          All capitalized terms used in this Class A-4 Note which are defined in
the Amended and Restated Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture, this Class A-4 Note
and the Amended and Restated Indenture 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.

          Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Class A-4 Note shall not be entitled to
any benefit under the Amended and Restated Indenture or be valid or obligatory
for any purpose.

          This Class A-4 Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.

          [Signature page follows]

                                      A-4-4

<PAGE>

          IN WITNESS WHEREOF, DVI RECEIVABLES XII, L.L.C. has caused this
instrument to be duly executed.

                                          DVI RECEIVABLES XII, L.L.C.

                                          By:  DVI Receivables Corp. VIII,
                                                   its Managing Member

                                          By:_______________________________
                                          Name:
                                          Title:

Dated:______________________

This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee

By:__________________________________
         Authorized Signatory
Name:
Title:

                                      A-4-5

<PAGE>

                                    EXHIBIT B
                        TO AMENDED AND RESTATED INDENTURE
                        ---------------------------------

                             [FORM OF CLASS B NOTES]

     NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.

     NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.

     BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS B NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS B NOTES WILL NOT GIVE RISE TO A PROHIBITED
TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.

No. 1                                            Principal Amount $4,104,000.00
Due: November 12, 2008                           CUSIP No. 23334YAE4

                                       B-1

<PAGE>

                7.063% ASSET-BACKED NOTE, SERIES 2000-2, CLASS B

          DVI RECEIVABLES XII, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of FOUR MILLION ONE HUNDRED FOUR THOUSAND
AND 00/100 DOLLARS ($4,104,000.00) in monthly installments equal to the sum of
(i) the Class B Monthly Principal, (ii) the Class B Overdue Principal and (iii)
any other principal that may be due hereon pursuant to the Amended and Restated
Indenture during an Amortization Event together with (i) the Class B Monthly
Interest and (ii) the Class B Overdue Interest due thereon on the twelfth day of
each month (or if such date is not a Business Day, the next succeeding Business
Day, commencing December 12, 2000 (each, a "PAYMENT DATE"), and not later than
November 12, 2008, all remaining principal and interest (computed on the basis
of a 360-day year of twelve 30-day months) are due and payable in their entirety
as set forth in the Amended and Restated Indenture.

          Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, by wire transfer of immediately available funds to the
account and number specified in the Note Register on such Record Date for such
Person or, if no such account or number is so specified, then by check mailed to
such Person's address as it appears in the Note Register on such Record Date.
The holder hereof shall surrender this Note at the principal Corporate Trust
Office of the Trustee for the final installment of principal of this Note.

          This Note is one of a duly authorized issue of Class B Notes of the
Issuer designated as its 7.063% Asset-Backed Notes, Series 2000-2, Class B with
aggregate principal amount of $4,104,000.00 and to be issued under an Amended
and Restated Indenture, dated as of April 1, 2000 (herein called the "AMENDED
AND RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "TRUSTEE", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
class and any other Note of the same class by reason of difference in time of
issuance or otherwise, and also secures the payment of certain other amounts and
certain other obligations as set forth in the Amended and Restated Indenture.
This Note is issued under and is subject to the terms, provisions and conditions
of the Amended and Restated Indenture, to which Amended and Restated Indenture
the Holder of this Note by virtue of the acceptance hereof assents and by which
such Holder is bound.

          Each Class B Noteholder by acceptance of its Class B Note (and any
Person which is a beneficial owner of any interest in a Class B Note, by virtue
of such Persons' acquisition of a beneficial interest therein) agrees to treat
the Class B Notes (or beneficial interest therein) for purposes of federal,
state and local income or franchise taxes and any other tax imposed on or
measured by income, as indebtedness. Each Class B Noteholder agrees that it will
cause any Person acquiring an interest in

                                       B-2

<PAGE>

a Class B Note through it to acknowledge the Class B Notes' characterization as
indebtedness and to agree to comply with the Amended and Restated Indenture as
to treatment of the Class B Notes as indebtedness for such tax purpose.

          Each prospective initial Noteholder acquiring Class B Notes, each
prospective transferee acquiring the Class B Notes, and each prospective owner
(or transferee thereof) of a beneficial interest in Class B Notes (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class B Notes on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with the assets of a Plan; or (2) the acquisition and holding of the Class B
Notes will not give rise to a prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption is unavailable.

          If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Amended and Restated Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
original aggregate principal amount, will be issued to the designated transferee
or transferees.

          The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.

          The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

          Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                       B-3

<PAGE>

          This Note and the Amended and Restated Indenture may be amended or
supplemented as set forth in the Amended and Restated Indenture.

          By accepting this Note, the holder hereof irrevocably appoints the
Trustee under the Amended and Restated Indenture as the special attorney-in-fact
for the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Amended and Restated
Indenture for the benefit of the holder. The preceding provision in no way shall
limit the right of the holder hereof to demand payment hereunder or bring an
action to enforce payment hereof.

          All capitalized terms used in this Note which are defined in the
Amended and Restated Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture, this Note and the
Amended and Restated Indenture 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.

          Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Amended and Restated Indenture or be valid or obligatory for any
purpose.

          This Class B Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.

                            [Signature page follows]

                                       B-4

<PAGE>

          IN WITNESS WHEREOF, DVI RECEIVABLES XII, L.L.C. has caused this
instrument to be duly executed.

                                          DVI RECEIVABLES XII, L.L.C.

                                          By:  DVI Receivables Corp. VIII,
                                                   its Managing Member

                                          By:_______________________________
                                          Name:
                                          Title:

Dated:______________________

This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee

By:__________________________________
         Authorized Signatory

                                       B-5

<PAGE>

                                    EXHIBIT C
                        TO AMENDED AND RESTATED INDENTURE
                        ---------------------------------

                             [FORM OF CLASS C NOTES]

     NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.

     NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.

     BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS C NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS C NOTES WILL NOT GIVE RISE TO A PROHIBITED
TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.

No. 1                                            Principal Amount $8,208,000.00
Due: November 12, 2008                           CUSIP No. 23334YAF1

                                       C-1

<PAGE>

                7.208% ASSET-BACKED NOTE, SERIES 2000-2, CLASS C

          DVI RECEIVABLES XII, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of EIGHT MILLION TWO HUNDRED EIGHT
THOUSAND AND 00/100 DOLLARS ($8,208,000.00) in monthly installments equal to the
sum of (i) the Class C Monthly Principal, (ii) the Class C Overdue Principal and
(iii) any other principal that may be due hereon pursuant to the Amended and
Restated Indenture during an Amortization Event together with (i) the Class C
Monthly Interest and (ii) the Class C Overdue Interest due thereon on the
twelfth day of each month (or if such date is not a Business Day, the next
succeeding Business Day, commencing December 12, 2000 (each, a "PAYMENT DATE"),
and not later than November 12, 2008, all remaining principal and interest
(computed on the basis of a 360-day year of twelve 30-day months) are due and
payable in their entirety as set forth in the Amended and Restated Indenture.

          Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, by wire transfer of immediately available funds to the
account and number specified in the Note Register on such Record Date for such
Person or, if no such account or number is so specified, then by check mailed to
such Person's address as it appears in the Note Register on such Record Date.
The holder hereof shall surrender this Note at the principal Corporate Trust
Office of the Trustee for the final installment of principal of this Note.

          This Note is one of a duly authorized issue of Class C Notes of the
Issuer designated as its 7.208% Asset-Backed Notes, Series 2000-2, Class C with
aggregate principal amount of $8,208,000.00 and to be issued under an Amended
and Restated Indenture, dated as of April 1, 2000 (herein called the "AMENDED
AND RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "TRUSTEE", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
class and any other Note of the same class by reason of difference in time of
issuance or otherwise, and also secures the payment of certain other amounts and
certain other obligations as set forth in the Amended and Restated Indenture.
This Note is issued under and is subject to the terms, provisions and conditions
of the Amended and Restated Indenture, to which Amended and Restated Indenture
the Holder of this Note by virtue of the acceptance hereof assents and by which
such Holder is bound.

          Each Class C Noteholder by acceptance of its Class C Note (and any
Person which is a beneficial owner of any interest in a Class C Note, by virtue
of such Persons' acquisition of a beneficial interest therein) agrees to treat
the Class C Notes (or beneficial interest therein) for purposes of federal,
state and local income or franchise taxes and any other tax imposed on or
measured by income, as indebtedness. Each Class C Noteholder agrees that it will
cause any Person acquiring an interest in

                                       C-2

<PAGE>

a Class C Note through it to acknowledge the Class C Notes' characterization as
indebtedness and to agree to comply with the Amended and Restated Indenture as
to treatment of the Class C Notes as indebtedness for such tax purpose.

          Each prospective initial Noteholder acquiring Class C Notes, each
prospective transferee acquiring the Class C Notes, and each prospective owner
(or transferee thereof) of a beneficial interest in Class C Notes (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class C Notes on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with the assets of a Plan; or (2) the acquisition and holding of the Class C
Notes will not give rise to a prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption is unavailable.

          If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Amended and Restated Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
original aggregate principal amount, will be issued to the designated transferee
or transferees.

          The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.

          The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

          Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                       C-3

<PAGE>

          This Note and the Amended and Restated Indenture may be amended or
supplemented as set forth in the Amended and Restated Indenture.

          By accepting this Note, the holder hereof irrevocably appoints the
Trustee under the Amended and Restated Indenture as the special attorney-in-fact
for the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Amended and Restated
Indenture for the benefit of the holder. The preceding provision in no way shall
limit the right of the holder hereof to demand payment hereunder or bring an
action to enforce payment hereof.

          All capitalized terms used in this Note which are defined in the
Amended and Restated Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture, this Note and the
Amended and Restated Indenture 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.

          Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Amended and Restated Indenture or be valid or obligatory for any
purpose.

          This Class C Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.

                            [Signature page follows]

                                       C-4

<PAGE>

          IN WITNESS WHEREOF, DVI RECEIVABLES XII, L.L.C. has caused this
instrument to be duly executed.

                                          DVI RECEIVABLES XII, L.L.C.

                                          By:  DVI Receivables Corp. VIII,
                                                   its Managing Member

                                          By:_______________________________
                                          Name:
                                          Title:

Dated:_________________________

This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee

By:__________________________________
         Authorized Signatory

                                       C-5

<PAGE>

                                    EXHIBIT D
                        TO AMENDED AND RESTATED INDENTURE
                        ---------------------------------

                             [FORM OF CLASS D NOTES]

     NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.

     NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.

     BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS D NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS D NOTES WILL NOT GIVE RISE TO A PROHIBITED
TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.

No. 1                                             Principal Amount $5,472,000.00
Due: November 12, 2008                            CUSIP No. 23334YAG9

                                       D-1

<PAGE>

                7.693% ASSET-BACKED NOTE, SERIES 2000-2, CLASS D

          DVI RECEIVABLES XII, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of FIVE MILLION FOUR HUNDRED SEVENTY-TWO
THOUSAND AND 00/100 DOLLARS ($5,472,000.00) in monthly installments equal to the
sum of (i) the Class D Monthly Principal, (ii) the Class D Overdue Principal and
(iii) any other principal that may be due hereon pursuant to the Amended and
Restated Indenture during an Amortization Event together with (i) the Class D
Monthly Interest and (ii) the Class D Overdue Interest due thereon on the
twelfth day of each month (or if such date is not a Business Day, the next
succeeding Business Day, commencing December 12, 2000 (each, a "PAYMENT DATE"),
and not later than November 12, 2008, all remaining principal and interest
(computed on the basis of a 360-day year of twelve 30-day months) are due and
payable in their entirety as set forth in the Amended and Restated Indenture.

          Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, by wire transfer of immediately available funds to the
account and number specified in the Note Register on such Record Date for such
Person or, if no such account or number is so specified, then by check mailed to
such Person's address as it appears in the Note Register on such Record Date.
The holder hereof shall surrender this Note at the principal Corporate Trust
Office of the Trustee for the final installment of principal of this Note.

          This Note is one of a duly authorized issue of Class D Notes of the
Issuer designated as its 7.693% Asset-Backed Notes, Series 2000-2, Class D with
aggregate principal amount of $5,472,000.00 and to be issued under an Amended
and Restated Indenture dated as of April 1, 2000 (herein called the "AMENDED AND
RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "TRUSTEE", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
class and any other Note of the same class by reason of difference in time of
issuance or otherwise, and also secures the payment of certain other amounts and
certain other obligations as set forth in the Amended and Restated Indenture.
This Note is issued under and is subject to the terms, provisions and conditions
of the Amended and Restated Indenture, to which Amended and Restated Indenture
the Holder of this Note by virtue of the acceptance hereof assents and by which
such Holder is bound.

          Each Class D Noteholder by acceptance of its Class D Note (and any
Person which is a beneficial owner of any interest in a Class D Note, by virtue
of such Persons' acquisition of a beneficial interest therein) agrees to treat
the Class D Notes (or beneficial interest therein) for purposes of federal,
state and local income or franchise taxes and any other tax imposed on or
measured by income, as indebtedness. Each Class D Noteholder agrees that it will
cause any Person acquiring an interest in

                                       D-2

<PAGE>

a Class D Note through it to acknowledge the Class D Notes' characterization as
indebtedness and to agree to comply with the Amended and Restated Indenture as
to treatment of the Class D Notes as indebtedness for such tax purpose.

          Each prospective initial Noteholder acquiring Class D Notes, each
prospective transferee acquiring the Notes, and each prospective owner (or
transferee thereof) of a beneficial interest in Class D Notes (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Notes on behalf
of, as investment manager of, as named fiduciary of, as trustee of, or with the
assets of a Plan; or (2) the acquisition and holding of the Class D Notes will
not give rise to a prohibited transaction under Section 406(a) of ERISA or
Section 4975 of the Code for which a statutory or administrative exemption is
unavailable.

          If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Amended and Restated Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
original aggregate principal amount, will be issued to the designated transferee
or transferees.

          The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.

          The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

          Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                       D-3

<PAGE>

          This Note and the Amended and Restated Indenture may be amended or
supplemented as set forth in the Amended and Restated Indenture.

          By accepting this Note, the holder hereof irrevocably appoints the
Trustee under the Amended and Restated Indenture as the special attorney-in-fact
for the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Amended and Restated
Indenture for the benefit of the holder. The preceding provision in no way shall
limit the right of the holder hereof to demand payment hereunder or bring an
action to enforce payment hereof.

          All capitalized terms used in this Note which are defined in the
Amended and Restated Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture, this Note and the
Amended and Restated Indenture 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.

          Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Amended and Restated Indenture or be valid or obligatory for any
purpose.

          This Class D Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.

                            [Signature page follows]

                                       D-4

<PAGE>

          IN WITNESS WHEREOF, DVI RECEIVABLES XII, L.L.C. has caused this
instrument to be duly executed.

                                          DVI RECEIVABLES XII, L.L.C.

                                          By:  DVI Receivables Corp. VIII,
                                                   its Managing Member

                                          By:_______________________________
                                          Name:
                                          Title:

Dated:

This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee

By:__________________________________
         Authorized Signatory

                                       D-5

<PAGE>

                                    EXHIBIT E
                        TO AMENDED AND RESTATED INDENTURE
                        ---------------------------------

                             [FORM OF CLASS E NOTES]

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.

     THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAW OF ANY STATE. ANY RESALE,
TRANSFER OR OTHER DISPOSITION OF THIS NOTE WITHOUT SUCH REGISTRATION OR
QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH
REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION
2.04 OF THE AMENDED AND RESTATED INDENTURE REFERRED TO HEREIN.

     BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS E NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS E NOTES WILL NOT GIVE RISE TO A PROHIBITED
TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.

THIS CLASS E NOTE MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED
UNLESS (i) SUCH TRANSFEREE IS A "UNITED STATES PERSON" AS DEFINED IN SECTION
7701(a)(30) OF THE CODE; (ii) (A) SUCH TRANSFEREE IS NOT A GRANTOR TRUST,
PARTNERSHIP OR S CORPORATION FOR UNITED STATES FEDERAL INCOME TAX PURPOSES OR
(B) SUCH TRANSFEREE IS A GRANTOR TRUST, PARTNERSHIP OR S CORPORATION FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES, BUT AFTER GIVING EFFECT TO SUCH TRANSFER OF
CLASS E NOTES TO SUCH TRANSFEREE,

                                       E-1

<PAGE>

SUBSTANTIALLY ALL OF THE VALUE OF THE INTEREST OF AN OWNER OF THE TRANSFEREE IN
THE TRANSFEREE WILL NOT BE ATTRIBUTABLE TO THE PASS-THROUGH ENTITY'S OWNERSHIP
INTEREST IN SECURITIES ISSUED BY THE ISSUER OTHER THAN THE CLASS A, CLASS B AND
CLASS C NOTES AND (ii) FOR THE PURPOSES OF SECTION 7704 OF THE CODE AND THE
TREASURY REGULATIONS PROMULGATED THEREUNDER, AFTER SUCH TRANSFER THE ISSUER
WOULD NOT BE TREATED AS HAVING MORE THAN 100 PARTNERS.

No. 1                                             Principal Amount $6,840,000.00
Due: November 12, 2008                            CUSIP No. 23334YAH7

                10.267% ASSET-BACKED NOTE, SERIES 2000-2, CLASS E

          DVI RECEIVABLES XII, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of SIX MILLION EIGHT HUNDRED FORTY
THOUSAND AND 00/100 DOLLARS ($6,840,000.00) in monthly installments equal to the
sum of (i) the Class E Monthly Principal, (ii) the Class E Overdue Principal and
(iii) any other principal that may be due hereon pursuant to the Amended and
Restated Indenture during an Amortization Event together with (i) the Class E
Monthly Interest and (ii) the Class E Overdue Interest due thereon on the
twelfth day of each month (or if such date is not a Business Day, the next
succeeding Business Day, commencing December 12, 2000 (each, a "PAYMENT DATE"),
and not later than November 12, 2008, all remaining principal and interest
(computed on the basis of a 360-day year of twelve 30-day months) are due and
payable in their entirety as set forth in the Amended and Restated Indenture.

          THE RIGHTS TO RECEIVE PAYMENTS WITH RESPECT TO THIS CLASS E NOTE ARE
SUBORDINATE TO THE PRIOR PAYMENT IN FULL ON EACH PAYMENT DATE OF CERTAIN AMOUNTS
DUE AND PAYABLE ON THE CLASS A NOTES, THE CLASS B NOTES, THE CLASS C NOTES AND
THE CLASS D NOTES AS PROVIDED IN THE AMENDED AND RESTATED INDENTURE.

          Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date or Redemption Date, as applicable, for such
Payment Date, which shall be the last Business Day of the month preceding the
month in which the Payment Date occurs (or in the case of the initial Payment
Date, the Closing Date), by wire transfer of immediately available funds to the
account and number specified in the Note Register on such Record Date for such
Person or, if no such account or number is so specified, then by check mailed to
such Person's address as it appears in the Note Register on such Record Date.
The holder hereof shall surrender this Note at the principal Corporate Trust
Office of the Trustee for the final installment of principal of this Note.

          This Note is one of a duly authorized issue of Class E Notes of the
Issuer designated as its 10.267% Asset-Backed Notes, Series 2000-2, Class E with
aggregate principal amount of

                                       E-2

<PAGE>

$6,840,000.00 and to be issued under an Amended and Restated Indenture dated as
of April 1, 2000 (herein called the "AMENDED AND RESTATED INDENTURE"), between
the Issuer and U.S. Bank Trust National Association, as trustee (herein called
the "TRUSTEE", which term includes any successor trustee under the Amended and
Restated Indenture), to which Amended and Restated Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, and immunities thereunder of the Issuer,
the Trustee, and the holders of the Notes and of the terms upon which the Notes
are, and are to be, authenticated and delivered. The Trust Property secures the
Notes equally and ratably without prejudice, priority, or distinction between
any Note of the same class and any other Note of the same class by reason of
difference in time of issuance or otherwise, and also secures the payment of
certain other amounts and certain other obligations as set forth in the Amended
and Restated Indenture. This Note is issued under and is subject to the terms,
provisions and conditions of the Amended and Restated Indenture, to which
Amended and Restated Indenture the Holder of this Note by virtue of the
acceptance hereof assents and by which such Holder is bound.

          The Issuer, the Trustee and each Class E Noteholder by acceptance of
its Class E Note (and any Person that is a beneficial owner of any interest in a
Class E Note, by virtue of such Person's acquisition of a beneficial interest
therein) agrees to treat the Class E Notes for purposes of federal, state and
local income or franchise taxes (and any other tax imposed on or measured by
income) as indebtedness. Each Class E Noteholder agrees that it will cause any
Person acquiring an interest in a Class E Note through it to acknowledge the
Class E Notes' characterization as indebtedness and to agree to comply with this
Amended and Restated Indenture as to treatment of the Class E Notes as
indebtedness for such tax purposes.

          Each prospective initial Noteholder acquiring Notes, each prospective
transferee acquiring the Class E Notes, and each prospective owner (or
transferee thereof) of a beneficial interest in Class E Notes (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class E Notes on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with the assets of a Plan; or (2) the acquisition and holding of the Class E
Notes will not give rise to a prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption is unavailable.

          If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Amended and Restated Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
original aggregate principal amount, will be issued to the designated transferee
or transferees.

                                       E-3

<PAGE>

          The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.

          The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

          Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.

          This Note and the Amended and Restated Indenture may be amended or
supplemented as set forth in the Amended and Restated Indenture.

          By accepting this Note, the holder hereof irrevocably appoints the
Trustee under the Amended and Restated Indenture as the special attorney-in-fact
for the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Amended and Restated
Indenture for the benefit of the holder. The preceding provision in no way shall
limit the right of the holder hereof to demand payment hereunder or bring an
action to enforce payment hereof.

          All capitalized terms used in this Note which are defined in the
Amended and Restated Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Amended and Restated Indenture.

          As provided in the Amended and Restated Indenture, this Note and the
Amended and Restated Indenture 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.

          Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Amended and Restated Indenture or be valid or obligatory for any
purpose.

          This Class E Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be

                                       E-4

<PAGE>

provided to any Noteholder, at its expense, upon a written request to the
Trustee, U.S. Bank Trust National Association, 180 Fifth Street, St. Paul,
Minnesota 55101, Attention: Structured Finance.

                            [Signature page follows]

                                       E-5

<PAGE>

          IN WITNESS WHEREOF, DVI RECEIVABLES XII, L.L.C. has caused this
instrument to be duly executed.

                                          DVI RECEIVABLES XII, L.L.C.

                                          By:  DVI Receivables Corp. VIII,
                                                   its Managing Member

                                          By:_______________________________
                                          Name:
                                          Title:

Dated:______________________

This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee

By:__________________________________
         Authorized Signatory

                                       E-6

<PAGE>

                                    EXHIBIT F
                        TO AMENDED AND RESTATED INDENTURE
                        ---------------------------------

               [FORM OF CLASS F INSTRUMENT TO BE PROVIDED WITH ANY
          SUPPLEMENT PURSUANT TO WHICH CLASS F INSTRUMENTS ARE ISSUED]

                                       F-1

<PAGE>

                                    EXHIBIT G
                        TO AMENDED AND RESTATED INDENTURE
                        ---------------------------------

                                INVESTMENT LETTER
                                -----------------

                                                  _______________, 200_

DVI Receivables XII, L.L.C.
2500 York Road
Jamison, Pennsylvania  18929

U.S. Bank Trust National Association
180 Fifth Street
St. Paul, Minnesota  55101

                  Re:  $         % Asset-Backed Notes, Series 2000-2, Class
                       CUSIP Number
                       ----------------------------------------------------

Ladies and Gentlemen:

          ___________________________ (the "SELLER") intends to transfer
$_____________ in aggregate principal amount of the captioned Notes to
_____________________ (the "PURCHASER").

          1. In connection with such transfer, and in accordance with Section
2.04 of the Amended and Restated Indenture, dated as of April 1, 2000 (the
"AMENDED AND RESTATED INDENTURE"; all capitalized terms used herein without
definition shall have the meanings ascribed to such terms in the Amended and
Restated Indenture), between DVI Receivables XII, L.L.C. (the "ISSUER") and U.S.
Bank Trust National Association, not in its individual capacity but solely as
Trustee (the "TRUSTEE"), pursuant to which the Notes were issued, the Seller
hereby certifies to you the following facts: Neither the Seller nor anyone
acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Notes, any interest in the Notes or any other similar security
to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Notes, any interest in the Notes or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action
which would constitute a distribution of the Notes under the Securities Act of
1933, as amended (the "1933 ACT"), or under state securities laws, or which
would render the disposition of the Notes a violation of Section 5 of the 1933
Act or applicable state securities laws or require registration pursuant
thereto.

          2. The Purchaser warrants and represents to, and covenants with, the
Trustee pursuant to Section 2.04 of the Amended and Restated Indenture that:

                                       G-1

<PAGE>

          (a) The Purchaser agrees to be bound, as Noteholder, by all of the
     terms, covenants and conditions of the Amended and Restated Indenture and
     the Notes, and from and after the date hereof, the Purchaser assumes for
     the benefit of each of the Trustee and the Seller all of the Seller's
     obligations as Noteholder thereunder;

          (b) The Purchaser understands that the Notes have not been and may
     never be registered under the 1933 Act or the securities laws of any state;

          (c) The Purchaser is acquiring the Notes for investment for its own
     account or the account of another qualified institutional buyer (within the
     meaning of Rule 144A under the 1933 Act) only and not for any other person
     or with a view to the distribution thereof in violation of applicable
     securities laws;

          (d) The Purchaser considers itself a substantial, sophisticated
     institutional investor having such knowledge and experience in financial
     and business matters that it is capable of evaluating the merits and risks
     of investment in the Notes;

          (e) The Purchaser has been furnished with all information regarding
     the Notes that it has requested from the Seller or the Trustee and has been
     afforded the opportunity to ask all questions it reasonably desires to ask
     of the Seller (and all such questions have been answered to the Purchaser's
     satisfaction);

          (f) Neither the Purchaser nor anyone acting on its behalf has offered,
     transferred, pledged, sold or otherwise disposed of the Notes, any interest
     in the Notes or any other similar security to, or solicited any offer to
     buy or accept a transfer, pledge or other disposition of the Notes, any
     interest in the Notes or any other similar security from, or otherwise
     approached or negotiated with respect to the Notes, any interest in the
     Notes or any other similar security with, any person in any manner, or made
     any general solicitation by means of general advertising or in any other
     manner, or taken any other action which would constitute a distribution of
     the Notes under the 1933 Act or applicable state securities laws or which
     would render the disposition of the Notes a violation of Section 5 of the
     1933 Act or applicable state securities laws or require registration
     pursuant thereto, nor will it act, nor has it authorized or will it
     authorize any person to act, in such manner with respect to the Notes; and

          (g) The Purchaser will strictly comply with the Amended and Restated
     Indenture as to treatment of the Class ___ Notes as indebtedness of the
     Seller for purposes of federal, state and local income or franchise taxes
     and any other tax imposed on or measured by income.

          3. The Purchaser represents and warrants to the Issuer, the Trustee,
the Servicer and any successor Servicer that either (1) it is not a plan within
the meaning of Section 3(3) of ERISA or Section 4975 of the Code ("Plan") and is
not directly or indirectly acquiring this Note on behalf of, as investment
manager of, as named fiduciary of, as trustee of, or with the assets of a Plan;
or (2) the acquisition and holding of this Note will not give rise to a
prohibited transaction under Section 406(a) of ERISA or section 4975 of the Code
for which a statutory or administrative exemption is unavailable.

                                       G-2

<PAGE>

          4. The Purchaser understands and agrees with the Seller that the
Seller is transferring the Notes pursuant to the exemption from registration
under the 1933 Act provided by Rule 144A thereunder ("RULE 144A") and the
Purchaser hereby represents and warrants to the Seller and the Trustee that the
Purchaser is a "qualified institutional buyer" as defined in Rule 144A.

          The Purchaser acknowledges that it is familiar with Rule 144A and
understand that you are and will continue to rely on the statements made herein.

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

          IN WITNESS WHEREOF, the parties have caused this Investment Letter to
be executed by their duly authorized officers as of the date first above
written.

___________________________________       ______________________________________
Seller                                    Purchaser

By:_______________________________        By:__________________________________

Its:______________________________        Its:__________________________________

Taxpayer Identification                      Taxpayer Identification
No.______________________                    No.________________________

                                       G-3

<PAGE>

                                    EXHIBIT H

                                   [Reserved.]

                                       H-1

<PAGE>

                                    EXHIBIT I

                                 TAX CERTIFICATE

                         [With respect to Class E Notes]

     The undersigned hereby certifies and represents as follows to the parties
listed in the Amended and Restated Indenture to which this certification relates
with respect to the Class E Notes described therein:

          This Tax Certificate ("CERTIFICATE") is delivered in connection with
the acquisition of, transfer to or possession by the undersigned, whether as
beneficial owner (the "BENEFICIAL OWNER"), or nominee on behalf of the
beneficial owner of the above-described Class E Notes.

          Each Holder must complete Part I, Part II (if the holder is a
nominee), Part III, Part IV and in all cases sign and otherwise complete this
certificate. Each Holder shall submit with this certificate an IRS Form W-9 (or
any such successor form) to such Holder.

Part I

          1.   _______________ (Name of beneficial owner) is not a foreign
               corporation, foreign partnership, foreign trust or foreign estate
               (as those terms are defined in the Code and Treasury
               Regulations);

          2.   The beneficial owner's office address and place of incorporation
               (if applicable) is _______________; and

          3.   The beneficial owner's U.S. employer identification number is
               _______________.

Part II - Nominees

          If the undersigned is the nominee for the Beneficial Owner, the
undersigned certifies that this certificate has been made in reliance upon
information contained in:

          ____  an IRS Form W-9

          ____  a form such as this or substantially similar

provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trustee at least thirty (30) days prior to the date that
the form relied upon becomes obsolete, and (ii) in connection with a change in
beneficial owners, the undersigned agrees to submit a new Tax Certificate to the
Trustee promptly after such change.

                                       I-1

<PAGE>

Part III - Declaration
          The undersigned, as the Beneficial Owner or a nominee thereof, agrees
to notify the Trustee within sixty (60) days of the date that the Beneficial
Owner becomes a foreign person. The undersigned understands that this
certificate may be disclosed to the Internal Revenue Service by the Trustee and
any false statement contained therein could be punishable by fines, imprisonment
or both.

Part IV - Representation

          The undersigned hereby represents, warrants and agrees that it :

          (1)  (a) is purchasing the Class E Note for its own account and is the
sole beneficial owner of such Note;

               (b) either (i) is not, for federal income tax purposes, a
partnership, trust, estate or "S Corporation" (as defined in the Code) (each a
"PASS-THROUGH ENTITY") or (ii) is for federal income tax purposes, a
Pass-through Entity, but after giving effect to our purchase of such Note less
than 50 percent of the aggregate value of our assets would consist of Class E
Notes; and

               (c) such Note has not been transferred through an "established
securities market" within the meaning of Section 7704(b) of the Code;

          (2) if it is a Pass-through Entity, it covenants that the portion of
its assets consisting of Class E Notes will remain below 50 percent at all
times; and

          (3) if it resells or transfers any of the Class E Notes, it will
obtain from each subsequent purchaser or transferee a letter containing the same
representations and agreements as set forth herein.

     The undersigned understands and agrees that no initial or subsequent sale
or other transfer of a Class E Note may be made unless such sale or transfer (i)
is accompanied by delivery of a tax statement in the form of this letter, (ii)
is made to a "United States Person" as defined in Section 7701(a)(30) of the
code, as certified in such tax statement, and (iii) will not cause the Issuer to
be treated as a publicly traded partnership for United States federal income tax
purposes. Any attempted transfer, assignment, conveyance, participation or
subdivision in contravention of the preceding restrictions, as reasonably
determined by the Trustee, shall be void AB INITIO and the purported transferor,
seller or subdivider of such Class E Note shall continue to be treated as the
Holder of such Note for all purposes of the Amended and Restated Indenture.

          IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized officer as of the date first above written.

                                          __________________________________
                                          Purchaser

                                          By:_______________________________
                                          Its:______________________________

                                       I-2

<PAGE>

================================================================================

                           DVI RECEIVABLES XII, L.L.C.
                                     ISSUER

                                       AND

                      U.S. BANK TRUST NATIONAL ASSOCIATION,
                                     TRUSTEE

                         AMENDED AND RESTATED INDENTURE

                            Dated as of April 1, 2000

 $265,403,000 in aggregate principal amount of Asset-Backed Notes consisting of:

        $39,975,000 6.7094% ASSET BACKED NOTES, SERIES 2000-2, CLASS A-1

         $41,000,000 6.759% ASSET BACKED NOTES, SERIES 2000-2, CLASS A-2

         $74,000,000 6.808% ASSET BACKED NOTES, SERIES 2000-2, CLASS A-3

         $85,804,000 7.115% ASSET BACKED NOTES, SERIES 2000-2, CLASS A-4

          $4,104,000 7.063% ASSET BACKED NOTES, SERIES 2000-2, CLASS B

          $8,208,000 7.208% ASSET BACKED NOTES, SERIES 2000-2, CLASS C

          $5,472,000 7.693% ASSET BACKED NOTES, SERIES 2000-2, CLASS D

         $6,840,000 10.267%% ASSET BACKED NOTES, SERIES 2000-2, CLASS E

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

RECITALS OF THE ISSUER ........................................................1
GRANTING CLAUSE ...............................................................2

                                    ARTICLE I

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

SECTION 1.01    Definitions....................................................3
SECTION 1.02    Compliance Certificates........................................3
SECTION 1.03    Form of Documents Delivered to Trustee.........................3
SECTION 1.04    Acts of Noteholders, etc.......................................4
SECTION 1.05    Notices........................................................5
SECTION 1.06    Notice to Noteholders; Waiver..................................6
SECTION 1.07    Table of Contents, Headings, etc...............................6
SECTION 1.08    Successors and Assigns.........................................6
SECTION 1.09    Severability Clause............................................6
SECTION 1.10    Benefits of Amended and Restated Indenture.....................7
SECTION 1.11    Governing Law..................................................7
SECTION 1.12    Legal Holidays.................................................7
SECTION 1.13    Execution in Counterparts......................................7
SECTION 1.14    Inspection.....................................................7
SECTION 1.15    Survival of Representations and Warranties.....................8
SECTION 1.16    Incorporation by Reference to Trust Indenture Act..............8
SECTION 1.17    Communications by Noteholders with Other Noteholders...........8
SECTION 1.18    Statements Required in Officer's Certificate...................8
SECTION 1.19    When Treasury Securities are Disregarded.......................8
SECTION 1.20    Rules by Trustee...............................................9
SECTION 1.21    No Adverse Interpretation of Other Agreements..................9
SECTION 1.22    No Recourse Against Others.....................................9
SECTION 1.23    Independence of Covenants......................................9
SECTION 1.24    Consent to Jurisdiction........................................9
SECTION 1.25    No Bankruptcy Petition........................................10
SECTION 1.26    Voting Rights of Class F Instruments..........................10
SECTION 1.27    Indebtedness Treatment........................................10

                                       ii

<PAGE>

                                                                            Page

                                   ARTICLE II

                                    THE NOTES

SECTION 2.01    General Provisions............................................11
SECTION 2.02    Global Notes..................................................12
SECTION 2.03    Execution, Authentication, Delivery and Dating................15
SECTION 2.04    Registration, Transfer and Exchange...........................16
SECTION 2.05    Mutilated, Destroyed, Lost and Stolen Notes...................18
SECTION 2.06    Delivery of Class F Instruments...............................18
SECTION 2.07    Payment of Interest and Principal; Rights Preserved...........20
SECTION 2.08    Persons Deemed Owners.........................................20
SECTION 2.09    Cancellation..................................................20
SECTION 2.10.   Noteholder Lists; Communications to Noteholders...............20
SECTION 2.11.   ERISA Deemed Representations..................................21

                                   ARTICLE III

                   ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
                       AND APPLICATION OF MONEYS; REPORTS

SECTION 3.01    Accounts; Investments by Trustee..............................22
SECTION 3.02    Reserved......................................................24
SECTION 3.03    Collection of Moneys..........................................24
SECTION 3.04    Collection Account............................................25
SECTION 3.05    Class A Distribution Sub-Account; Class B Distribution
                Sub-Account; Class C Distribution Sub-Account; Class D
                Distribution Sub-Account; Class E Distribution Sub-Account;
                Class F Distribution Sub-Account..............................29
SECTION 3.06    Reserved......................................................31
SECTION 3.07    Reserved......................................................31
SECTION 3.08    Reserve Account...............................................31
SECTION 3.09    Reports; Notices of Certain Payments..........................32
SECTION 3.10.   Trustee May Rely on Certain Information from Contributor
                and Servicer..................................................32

                                   ARTICLE IV

                             CONTRACTS AND EQUIPMENT

SECTION 4.01    Representations and Warranties of the Issuer..................34
SECTION 4.02    Purchase upon Breach; Amended and Restated
                Contribution and Servicing Agreement..........................34

                                       iii

<PAGE>

                                                                            Page

SECTION 4.03    Release of Contracts and Equipment Following Substitution
                or Purchase...................................................35
SECTION 4.04    Release of Contracts and Equipment Upon Final
                Contract Payment..............................................35
SECTION 4.05    Execution of Documents........................................36

                                    ARTICLE V

                 SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER

SECTION 5.01    Servicer Events of Default....................................37
SECTION 5.02    Substitute Servicer...........................................37
SECTION 5.03    Notification to Noteholders and Rating Agencies...............37

                                   ARTICLE VI

                           EVENTS OF DEFAULT; REMEDIES

SECTION 6.01    Events of Default.............................................38
SECTION 6.02    Acceleration of Maturity; Rescission and Annulment............39
SECTION 6.03    Other Remedies................................................40
SECTION 6.04    Trustee May File Proofs of Claim..............................40
SECTION 6.05    Trustee May Enforce Claims Without Possession of Notes........41
SECTION 6.06    Application of Money Collected................................42
SECTION 6.07    Limitation on Suits...........................................43
SECTION 6.08    Unconditional Right of Noteholders to Receive Payment.........44
SECTION 6.09    Restoration of Rights and Remedies............................44
SECTION 6.10.   Rights and Remedies Cumulative................................45
SECTION 6.11    Delay or Omission Not Waiver..................................45
SECTION 6.12    Control by Noteholders........................................45
SECTION 6.13    Waiver of Defaults and Events of Default......................45
SECTION 6.14    Waiver of Stay or Extension Laws..............................46
SECTION 6.15    Sale of Trust Property........................................46
SECTION 6.16    Undertaking for Costs.........................................47

                                   ARTICLE VII

                                   THE TRUSTEE

SECTION 7.01    Certain Duties and Responsibilities...........................47
SECTION 7.02    Notice of Defaults or Events of Default.......................48
SECTION 7.03    Certain Rights of Trustee.....................................49
SECTION 7.04    Trustee's Disclaimer..........................................50
SECTION 7.05    Money Held in Trust...........................................50

                                       iv

<PAGE>

                                                                            Page

SECTION 7.06    Compensation, Reimbursement, etc..............................50
SECTION 7.07    Eligibility; Disqualification.................................51
SECTION 7.08    Resignation and Removal; Appointment of Successor.............51
SECTION 7.09    Acceptance of Appointment by Successor........................52
SECTION 7.10.   Merger, Conversion, Consolidation or Succession to Business...53
SECTION 7.11    Co-trustees and Separate Trustees.............................53
SECTION 7.12    Trustee to Hold Contracts.....................................54
SECTION 7.13    Financing Statements..........................................55
SECTION 7.14    Trustee to Act; Appointment of Successor......................55
SECTION 7.15    Reports by Trustee to Holders.................................55
SECTION 7.16    Preferential Collection of Claims Against Issuer..............56

                                  ARTICLE VIII

                                    COVENANTS

SECTION 8.01    Payment of Principal and Interest.............................57
SECTION 8.02    Maintenance of Office or Agency; Chief Executive Office.......57
SECTION 8.03    Money for Payments to Noteholders to Be Held in Trust.........57
SECTION 8.04    Issuer Existence; etc.........................................58
SECTION 8.05    Protection of Trust Property; Further Assurances..............59
SECTION 8.06    Compliance Certificates.......................................60
SECTION 8.07    Performance of Obligations; Amended and Restated
                Contribution and Servicing Agreement..........................60
SECTION 8.08    Negative Covenants............................................61
SECTION 8.09    Information as to the Issuer..................................62
SECTION 8.10.   Payment of Taxes and Other Claims.............................63
SECTION 8.11    Indemnification...............................................63
SECTION 8.12    Contract Files to Trustee.....................................64
SECTION 8.13    Payment Advices...............................................64

                                   ARTICLE IX

           AMENDMENTS AND SUPPLEMENTAL AMENDED AND RESTATED INDENTURES

SECTION 9.01    Amendments and Supplemental Indentures........................65
SECTION 9.02    Execution of Amendments and Supplemental Indentures...........65
SECTION 9.03    Effect of Amendments and Supplemental Indentures..............66
SECTION 9.04    Reference in Notes to Amendments and Supplemental Indentures..66
SECTION 9.05    Compliance with Trust Indenture Act...........................66
SECTION 9.06    Revocation and Effect of Consents.............................66

                                                         v

<PAGE>

                                                                            Page

                                    ARTICLE X

                               REDEMPTION OF NOTES

SECTION 10.01   Optional Redemption; Election to Redeem.......................67
SECTION 10.02   Notice to Trustee.............................................67
SECTION 10.03   Notice of Redemption or Partial Redemption by the Issuer......67
SECTION 10.04   Deposit of the Redemption Price or Partial Redemption Price...68
SECTION 10.05   Notes Payable on Redemption Date..............................68

                                   ARTICLE XI

                           SATISFACTION AND DISCHARGE

SECTION 11.01   Satisfaction and Discharge of Amended and Restated Indenture..70
SECTION 11.02   Application of Trust Money....................................71
SECTION 11.03   Reinstatement.................................................71

                                       vi

<PAGE>

SCHEDULES

Schedule 1    -    Contract Schedule

EXHIBITS

Exhibit A-1   -    Form of Class A-1 Note
Exhibit A-2   -    Form of Class A-2 Note
Exhibit A-3   -    Form of Class A-3 Note
Exhibit A-4   -    Form of Class A-4 Note
Exhibit B     -    Form of Class B Note
Exhibit C     -    Form of Class C Note
Exhibit D     -    Form of Class D Note
Exhibit E     -    Form of Class E Note
Exhibit F     -    Form of Class F Instrument
Exhibit G     -    Investment Letter
Exhibit H     -    Reserved
Exhibit I     -    Tax Certificate

APPENDICES

Appendix I    -    Defined Terms

                                       vii

<PAGE>

                                   APPENDIX I
                                   ----------

                  The following definition of terms used in the Amended and
Restated Contribution and Servicing Agreement, the Amended and Restated
Indenture, the Amended and Restated Subsequent Contract Transfer Agreement, any
Note Purchase Agreement and the Underwriting Agreement (each such agreement as
defined herein), unless the context otherwise requires, shall have the following
meanings and such meanings shall be equally applicable to both the singular and
plural forms of such terms:

                  ACT: means, with respect to any Noteholder, as defined in
Section 1.04(a) of the Amended and Restated Indenture.

                  AFFILIATE: means, of any specified Person, any other Person
(i) which directly or indirectly controls, or whose directors or officers
directly or indirectly control, or is controlled by, or is under common control
with, such specified Person, (ii) which beneficially owns or holds, or whose
directors or officers beneficially own or hold, 5% or more of any class of the
voting stock (or, in the case of an entity that is not a corporation, 5% of the
equity interest) of such specified Person, or (iii) 5% or more of the voting
stock (or, in the case of an entity that is not a corporation, 5% of the equity
interest) of which is owned or held by such specified Person. The term "control"
as used in the preceding sentence means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract, or
otherwise.

                  AGGREGATE DISCOUNTED CONTRACT BALANCE: means, with respect to
any date of determination, the sum of the Discounted Contract Balances of all
Contracts.

                  AGGREGATE NOTE BALANCE: means the sum of (i) the Note Balance
for the Class A Notes, (ii) the Note Balance for the Class B Notes, (iii) the
Note Balance for the Class C Notes, (iv) the Note Balance for the Class D Notes,
(v) the Note Balance for the Class E Notes and (iv) the Note Balance for the
Class F Instrument, if any.

                  AMENDED AND RESTATED CONTRIBUTION AND SERVICING AGREEMENT:
means the Amended and Restated Contribution and Servicing Agreement dated as of
April 1, 2000 between the Transferor and the Contributor, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the provisions hereof and thereof.

                  AMENDED AND RESTATED INDENTURE: means the Amended and Restated
Indenture between the Issuer and the Trustee dated as of April 1, 2000 and as
from time to time may be supplemented, amended or otherwise modified pursuant to
the applicable provisions thereof.

                  AMENDED AND RESTATED SUBSEQUENT CONTRACT TRANSFER AGREEMENT:
means the Subsequent Contract Agreement, dated as of April 1, 2000, by and
between the Issuer and the Transferor.

<PAGE>

                  AMORTIZATION EVENT: means the occurrence of any one of the
following events:

                                    (i) The entry by a court having jurisdiction
                  in the premises of (A) a decree or order for relief in respect
                  of DVI, Inc. 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 DVI, Inc. a bankrupt or insolvent, or approving as
                  properly filed a petition servicing reorganization,
                  arrangement, adjustment, or composition of or in respect of
                  DVI, Inc. under any applicable federal or state law, or
                  appointing a custodian, receiver, liquidator, assignee,
                  trustee, sequestrator, or other similar official of DVI, Inc.
                  or of any substantial part of its property, or ordering the
                  winding up or liquidation of its affairs, 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; or

                                    (ii) The commencement by DVI, Inc. 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 it to the entry of a
                  decree or order for relief in respect of DVI, Inc. 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 it, or the filing by it of a
                  petition or answer or consent seeking reorganization or relief
                  under any applicable federal or state law, or the consent by
                  it 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 DVI,
                  Inc. or of any substantial part of its property, or the making
                  by it of an assignment for the benefit of creditors, or DVI,
                  Inc.'s failure to pay its debts generally as they become due,
                  or the taking of corporate action by DVI, Inc. in furtherance
                  of any such action; or

                                    (iii) On and as of any Determination Date,
                  (x) the quotient of (1) the sum of the Discounted Contract
                  Balances of all Contracts listed as more than 90 days
                  delinquent as of the last day of the three immediately
                  preceding calendar months, divided by (2) three exceeds (y)
                  the product of (1) 0.08 and (2) the quotient of (A) the sum of
                  the Aggregate Discounted Contract Balance as of the last day
                  of the three immediately preceding Collection Periods, divided
                  by (B) three; or

                                    (iv) As of any Determination Date, the sum
                  of Discounted Contract Balances of all Contracts that have
                  been classified as Defaulted Contracts since the Closing Date
                  (such Discounted Contract Balances to be determined
                  immediately prior to the classification as a Defaulted
                  Contract) exceeds the product of (1) 0.06 and (2) the
                  Aggregate Discounted Contract Balance on the Closing Date.

                  AUTHORIZED OFFICER: means, with respect to any matter, any
officer of or other Person representing the Issuer, the Transferor, the
Contributor, the Servicer, the Trustee, any Noteholder or any Instrumentholder,
as the case may be, who is authorized to act for that party.

                                        2

<PAGE>

                  AVAILABLE FUNDS: means, with respect to each Payment Date, the
excess of (i) all amounts on deposit in the Collection Account on the second
Business Day preceding such Payment Date over (ii) any portion thereof
representing Contract Payments due, or voluntary prepayments deposited therein,
subsequent to the end of the related Collection Period.

                  AVAILABLE RESERVE ACCOUNT FUNDS: has the meaning set forth in
Section 3.04(c) of the Amended and Restated Indenture.

                  BALLOON PAYMENT: means, with respect to any Contract, a final
Contract Payment that is significantly larger than the other scheduled payments
related to such Contract.

                  BOOK-ENTRY CUSTODIAN: means, the Person appointed pursuant to
the terms of the Amended and Restated Indenture to act in accordance with a
certain Letter of Representations agreement such Person has with DTC, in which
DTC delegates its duties to maintain the Book-Entry Notes to such Person and
authorizes such Person to perform such duties.

                  BOOK-ENTRY NOTE(S): means each Note for so long as such Note
is registered in the name of its depository or its nominee in accordance with
the terms and conditions of the Amended and Restated Indenture.

                  BROKER AGREEMENT RIGHTS: means any rights held by DVI under
any purchase or assignment agreement by and between DVI and a third party broker
or originator relating to the purchase by DVI of any lease or loan originated by
such third party.

                  BUSINESS DAY: means any day other than a Saturday, a Sunday or
a day on which banking institutions in New York City or in the city in which the
Corporate Trust Office is located are authorized or required by law or executive
order to close.

                  CAPITAL STOCK: means the Transferor's common stock, $1.00 par
value.

                  CLASS A DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Amended and Restated Indenture.

                  CLASS A MONTHLY INTEREST: means, for any Payment Date, the sum
of the Class A-1 Monthly Interest, the Class A-2 Monthly Interest, the Class A-3
Monthly Interest and the Class A-4 Monthly Interest.

                  CLASS A MONTHLY PRINCIPAL: means for any Payment Date the sum
of the Class A-1 Monthly Principal, the Class A-2 Monthly Principal, the Class
A-3 Monthly Principal and the Class A-4 Monthly Principal due or payable on that
Payment Date.

                  CLASS A NOTE BALANCE: means, as of the Closing Date,
$240,779,000 and thereafter shall equal the Class A Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A Notes.

                                        3

<PAGE>

                  CLASS A NOTEHOLDER: means, at any time, any Person in whose
name a Class A Note is registered in the Note Register.

                  CLASS A NOTES: means any Class A-1 Note, Class A-2 Note, Class
A-3 Note or Class A-4 Note described in Article II of, and authorized by, and
authenticated and delivered under, the Amended and Restated Indenture.

                  CLASS A OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class A Noteholders on all prior Payment Dates.

                  CLASS A OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A Monthly Principal due on
the Class A Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class A Noteholders on all prior Payment Dates.

                  CLASS A PERCENTAGE: means a fraction the numerator of which is
the Class A Note Balance on the closing date and the denominator of which is the
Initial Aggregate Discounted Contract Balance.

                  CLASS A-1 MONTHLY INTEREST: means, for any Payment Date
(except the Initial Payment Date), the product of (i) the fraction of which the
numerator is the actual number of days elapsed during the related month and the
denominator of which is 360 days and (ii) the Class A-1 Note Rate and (iii) the
Class A-1 Note Balance on the immediately preceding Payment Date (or, with
respect to the Initial Payment Date, the Closing Date) after giving effect to
all principal payments on the Class A-1 Notes on such Payment Date. The Class
A-1 Monthly Interest, with respect to each Payment Date, shall accrue from and
including the prior Payment Date to but excluding such Payment Date, and with
respect to the Initial Payment Date, shall accrue from and including the Closing
Date to but excluding such Initial Payment Date.

                  CLASS A-1 MONTHLY PRINCIPAL: means (A) with respect to each
Payment Date other than the Class A-1 Stated Maturity Date, until the Class A-1
Note Balance has been reduced to zero, an amount equal to the product of (a) the
Class A Percentage and (b) Monthly Principal; PROVIDED, HOWEVER, that in no
event shall the Class A-1 Monthly Principal due on any Payment Date exceed the
Class A-1 Note Balance as of such Payment Date and (B) on the Class A-1 Stated
Maturity Date, the entire amount of the then-Outstanding Note Balance.

                  CLASS A-1 NOTE BALANCE: means, as of the Closing Date,
$39,975,000 and thereafter shall equal the Class A-1 Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A-1 Notes.

                  CLASS A-1 NOTE RATE: means six and 7094/10000 percent
(6.7094%) per annum based upon the actual number of days elapsed.

                  CLASS A-1 NOTEHOLDER: means, at any time, any Person in whose
name a Class A-1 Note is registered in the Note Register.

                                        4

<PAGE>

                  CLASS A-1 NOTES: means any Class A-1 Notes described in
Article II of, and authorized by, and authenticated and delivered under, the
Amended and Restated Indenture.

                  CLASS A-1 OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A-1 Monthly Interest
payable on all prior Payment Dates over (b) the aggregate amount of interest
actually paid to the Class A-1 Noteholders on all prior Payment Dates.

                  CLASS A-1 OVERDUE PRINCIPAL: means, as of any Payment Date,
the excess, if any, of (a) the aggregate amount of Class A-1 Monthly Principal
due on the Class A-1 Notes on all prior Payment Dates over (b) the aggregate
amount of principal actually paid to the Class A-1 Noteholders on all prior
Payment Dates.

                  CLASS A-1 STATED MATURITY DATE: means the Payment Date
occurring on November 12, 2001.

                  CLASS A-2 MONTHLY INTEREST: means, for any Payment Date
(except the Initial Payment Date), the product of (i) one-twelfth, (ii) the
Class A-2 Note Rate and (iii) the Class A-2 Note Balance on the immediately
preceding Payment Date (or, in the case of the Initial Payment Date, the Closing
Date) after giving effect to all principal payments on the Class A-2 Notes on
such Payment Date. The Class A-2 Monthly Interest shall be calculated on a
twelve month year of thirty days in each month, except for the Initial Payment
Date, for which interest shall accrue from the Closing Date to but excluding
such Initial Payment Date.

                  CLASS A-2 MONTHLY PRINCIPAL: means (A) prior to the Payment
Date upon which the Class A-1 Note Balance is paid in full, zero, (B) on each
Payment Date after the Class A-1 Note Balance has been reduced to zero and until
the Class A-2 Note Balance has been reduced to zero, the product of (x) the
Class A Percentage and (y) Monthly Principal; PROVIDED HOWEVER, that in no case
shall the Class A-2 Monthly Principal due on any Payment Date exceed the Class
A-2 Note Balance, and (C) on the Class A-2 Stated Maturity Date, the entire
amount of the then outstanding Class A-2 Note Balance.

                  CLASS A-2 NOTE BALANCE: means, as of the Closing Date,
$41,000,000 and thereafter shall equal the Class A-2 Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A-2 Notes.

                  CLASS A-2 NOTE RATE: means six and 759/1000 percent (6.759%)
per annum based upon thirty days elapsed each month in a twelve-month year.

                  CLASS A-2 NOTEHOLDER: means, at any time, any Person in whose
name a Class A-2 Note is registered in the Note Register.

                  CLASS A-2 NOTES: means any Class A-2 Notes described in
Article II of, and authorized by, and authenticated and delivered under, the
Amended and Restated Indenture.

                                        5

<PAGE>

                  CLASS A-2 OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A-2 Monthly Interest
payable on all prior Payment Dates over (b) the aggregate amount of interest
actually paid to the Class A-2 Noteholders on all prior Payment Dates.

                  CLASS A-2 OVERDUE PRINCIPAL: means, as of any Payment Date,
the excess, if any, of (a) the aggregate amount of Class A-2 Monthly Principal
due on the Class A-2 Notes on all prior Payment Dates over (b) the aggregate
amount of principal actually paid to the Class A-2 Noteholders on all prior
Payment Dates.

                  CLASS A-2 STATED MATURITY DATE: means the Payment Date
occurring on January 12, 2003.

                  CLASS A-3 MONTHLY INTEREST: means, for any Payment Date
(except the Initial Payment Date), the product of (i) one-twelfth, (ii) the
Class A-3 Note Rate and (iii) the Class A-3 Note Balance on the immediately
preceding Payment Date (or, in the case of the Initial Payment Date, the Closing
Date) after giving effect to all principal payments on the Class A-3 Notes on
such Payment Date. The Class A-3 Monthly Interest shall be calculated based upon
a twelve month year of thirty days in each month, except for the Initial Payment
Date, for which interest shall accrue from the Closing Date to but excluding
such Initial Payment Date.

                  CLASS A-3 MONTHLY PRINCIPAL: means (A) prior to the Payment
Date upon which the Class A-2 Note Balance is paid in full, zero, (B) on each
Payment Date after the Class A-2 Note Balance has been reduced to zero and until
the Class A-3 Note Balance has been reduced to zero, the product of (x) the
Class A Percentage and (y) Monthly Principal; PROVIDED HOWEVER, that in no case
shall the Class A-3 Monthly Principal due on any Payment Date exceed the Class
A-3 Note Balance, and (C) on the Class A-3 Stated Maturity Date, the entire
amount of the then outstanding Class A-3 Note Balance.

                  CLASS A-3 NOTE BALANCE: means, as of the Closing Date,
$74,000,000 and thereafter shall equal the Class A-3 Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A-3 Notes.

                  CLASS A-3 NOTE RATE: means six and 808/1000 percent (6.808%)
per annum based upon thirty days elapsed each month in a twelve-month year.

                  CLASS A-3 NOTEHOLDER: means, at any time, any Person in whose
name a Class A-3 Note is registered in the Note Register.

                  CLASS A-3 NOTES: means any Class A-3 Notes described in
Article II of, and authorized by, and authenticated and delivered under, the
Amended and Restated Indenture.

                  CLASS A-3 OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A-3 Monthly Interest
payable on all prior Payment Dates over (b) the aggregate amount of interest
actually paid to the Class A-3 Noteholders on all prior Payment Dates.

                                        6

<PAGE>

                  CLASS A-3 OVERDUE PRINCIPAL: means, as of any Payment Date,
the excess, if any, of (a) the aggregate amount of Class A-3 Monthly Principal
due on the Class A-3 Notes on all prior Payment Dates over (b) the aggregate
amount of principal actually paid to the Class A-3 Noteholders on all prior
Payment Dates.

                  CLASS A-3 STATED MATURITY DATE: means the Payment Date
occurring on July 14, 2004.

                  CLASS A-4 MONTHLY INTEREST: means, for any Payment Date
(except the Initial Payment Date), the product of (i) one-twelfth, (ii) the
Class A-4 Note Rate and (iii) the Class A-4 Note Balance on the immediately
preceding Payment Date (or, in the case of the Initial Payment Date, the Closing
Date) after giving effect to all principal payments on the Class A-4 Notes on
such Payment Date. The Class A-4 Monthly Interest shall be calculated based upon
a twelve month year of thirty days in each month, except for the Initial Payment
Date, for which interest shall accrue from the Closing Date to but excluding
such Initial Payment Date.

                  CLASS A-4 MONTHLY PRINCIPAL: means (A) prior to the Payment
Date upon which the Class A-3 Note Balance is paid in full, zero, (B) on each
Payment Date after the Class A-3 Note Balance has been reduced to zero and until
the Class A-4 Note Balance has been reduced to zero, the product of (x) the
Class A Percentage and (y) Monthly Principal; PROVIDED HOWEVER, that in no case
shall the Class A-4 Monthly Principal due on any Payment Date exceed the Class
A-4 Note Balance, and (C) on the Class A-4 Stated Maturity Date, the entire
amount of the then outstanding Class A-4 Note Balance.

                  CLASS A-4 NOTE BALANCE: means, as of the Closing Date,
$85,804,000 and thereafter shall equal the Class A-4 Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A-4 Notes.

                  CLASS A-4 NOTE RATE: means seven and 115/1000 percent (
7.115%) per annum based upon thirty days elapsed each month in a twelve-month
year.

                  CLASS A-4 NOTEHOLDER: means, at any time, any Person in whose
name a Class A-4 Note is registered in the Note Register.

                  CLASS A-4 NOTES: means any Class A-4 Notes described in
Article II of, and authorized by, and authenticated and delivered under, the
Amended and Restated Indenture.

                  CLASS A-4 OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A-4 Monthly Interest
payable on all prior Payment Dates over (b) the aggregate amount of interest
actually paid to the Class A-4 Noteholders on all prior Payment Dates.

                  CLASS A-4 OVERDUE PRINCIPAL: means, as of any Payment Date,
the excess, if any, of (a) the aggregate amount of Class A-4 Monthly Principal
due on the Class A-4 Notes on all prior Payment Dates over (b) the aggregate
amount of principal actually paid to the Class A-4 Noteholders on all prior
Payment Dates.

                                        7

<PAGE>

                  CLASS A-4 STATED MATURITY DATE: means the Payment Date
occurring on November 12, 2008.

                  CLASS B DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Amended and Restated Indenture.

                  CLASS B MONTHLY INTEREST: means, for any Payment Date (except
the Initial Payment Date), the product of (i) one-twelfth, (ii) the Class B Note
Rate and (iii) the Class B Note Balance on the immediately preceding Payment
Date (or, in the case of the Initial Payment Date, the Closing Date) after
giving effect to all principal payments on the Class B Notes on such Payment
Date. The Class B Monthly Interest shall be calculated based upon a twelve month
year of thirty days in each month, except for the Initial Payment Date, for
which interest shall accrue from the Closing Date to but excluding such Initial
Payment Date.

                  CLASS B MONTHLY PRINCIPAL: means (A) on any Payment Date other
than the Class B Stated Maturity Date, the product of (x) the Class B Percentage
and (y) Monthly Principal, and (B) on the Class B Stated Maturity Date, the
entire amount of the then outstanding Class B Note Balance.

                  CLASS B NOTE BALANCE: means, as of the Closing Date,
$4,104,000 and thereafter shall equal the Class B Note Balance as of the Closing
Date reduced by all principal payments on the Class B Notes.

                  CLASS B NOTE RATE: means seven and 63/1000 percent (7.063%)
per annum based upon thirty days elapsed each month in a twelve-month year.

                  CLASS B NOTEHOLDER: means, at any time, any Person in whose
name a Class B Note is registered in the Note Register.

                  CLASS B NOTES: means any Class B Notes described in Article II
of, and authorized by, and authenticated and delivered under, the Amended and
Restated Indenture.

                  CLASS B OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class B Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class B Noteholders on all prior Payment Dates.

                  CLASS B OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class B Monthly Principal due on
the Class B Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class B Noteholders on all prior Payment Dates.

                  CLASS B PERCENTAGE: means a fraction the numerator of which is
the Class B Note Balance on the closing date and the denominator of which is the
Initial Aggregate Discounted Contract Balance.

                                        8

<PAGE>

                  CLASS B STATED MATURITY DATE: means the Payment Date occurring
on November 12, 2008.

                  CLASS C DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Amended and Restated Indenture.

                  CLASS C MONTHLY INTEREST: means, for any Payment Date (except
the Initial Payment Date), the product of (i) one-twelfth, (ii) the Class C Note
Rate and (iii) the Class C Note Balance on the immediately preceding Payment
Date (or, in the case of the Initial Payment Date, the Closing Date) after
giving effect to all principal payments on the Class C Note on such Payment
Date. The Class C Monthly Interest shall be calculated based upon a twelve month
year of thirty days in each month, except for the Initial Payment Date, for
which interest shall accrue from the Closing Date to but excluding such Initial
Payment Date.

                  CLASS C MONTHLY PRINCIPAL: means, (A) on any Payment Date
other than the Class C Stated Maturity Date, an amount equal to the product of
(x) the Class C Percentage and (y) the Monthly Principal and (B) on the Class C
Stated Maturity Date, the entire amount of the then outstanding Class C Note
Balance.

                  CLASS C NOTEHOLDER: means, at any time, any Person in whose
name a Class C Note is registered in the Note Register.

                  CLASS C NOTE BALANCE: means, as of the Closing Date,
$8,208,000 and thereafter shall equal the Class C Note Balance as of the Closing
Date reduced by all principal payments on the Class C Notes.

                  CLASS C NOTE RATE: means seven and 208/1000 percent (7.208%)
per annum based upon thirty days elapsed each month in a twelve-month year.

                  CLASS C NOTES: means any Class C Notes described in Article II
of, and authorized by, and authenticated and delivered under, the Amended and
Restated Indenture.

                  CLASS C OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class C Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class C Noteholders on all prior Payment Dates.

                  CLASS C OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class C Monthly Principal due on
the Class C Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class C Noteholders on all prior Payment Dates.

                  CLASS C PERCENTAGE: means a fraction the numerator of which is
the Class C Note Balance on the closing date and the denominator of which is the
Initial Aggregate Discounted Contract Balance.

                                        9

<PAGE>

                  CLASS C STATED MATURITY DATE: means the Payment Date occurring
on November 12, 2008.

                  CLASS D DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Amended and Restated Indenture.

                  CLASS D MONTHLY INTEREST: means, for any Payment Date (except
the Initial Payment Date), the product of (i) one-twelfth, (ii) the Class D Note
Rate and (iii) the Class D Note Balance on the immediately preceding Payment
Date (or, in the case of the Initial Payment Date, the Closing Date) after
giving effect to all principal payments on the Class D Notes on such Payment
Date. The Class D Monthly Interest shall be calculated based upon a twelve month
year of thirty days in each month, except for the Initial Payment Date, for
which interest shall accrue from the Closing Date to but excluding such Initial
Payment Date.

                  CLASS D MONTHLY PRINCIPAL: means (A) on any Payment Date other
than the Class D Stated Maturity Date, the product of (x) the Class D Percentage
and (y) Monthly Principal, and (B) on the Class D Stated Maturity Date, the
entire amount of the then outstanding Class D Note Balance.

                  CLASS D NOTE BALANCE: means, as of the Closing Date,
$5,472,000 and thereafter shall equal the Class D Note Balance as of the Closing
Date reduced by all principal payments on the Class D Notes.

                  CLASS D NOTE RATE: means seven and 693/1000 percent (7.693%)
per annum based upon thirty days elapsed each month in a twelve-month year.

                  CLASS D NOTEHOLDER: means at any time, any Person in whose
name a Class D Note is registered in the Note Register.

                  CLASS D NOTES: means any Class D Notes described in Article II
of, and authorized by, and authenticated and delivered under, the Amended and
Restated Indenture.

                  CLASS D OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class D Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class D Noteholders on all prior Payment Dates.

                  CLASS D OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class D Monthly Principal due on
the Class D Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class D Noteholders on all prior Payment Dates.

                  CLASS D PERCENTAGE: means a fraction the numerator of which is
the Class D Note Balance on the closing date and the denominator of which is the
Initial Aggregate Discounted Contract Balance.

                                       10

<PAGE>

                  CLASS D STATED MATURITY DATE: means the Payment Date occurring
on November 12, 2008.

                  CLASS E DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Amended and Restated Indenture.

                  CLASS E MONTHLY INTEREST: means, for any Payment Date (except
the Initial Payment Date), the product of (i) one-twelfth, (ii) the Class E Note
Rate and (iii) the Class E Note Balance on the immediately preceding Payment
Date (or, in the case of the Initial Payment Date, the Closing Date) after
giving effect to all principal payments on the Class E Note on such Payment
Date. The Class E Monthly Interest shall be calculated based upon a twelve month
year of thirty days in each month, except for the Initial Payment Date, for
which interest shall accrue from the Closing Date to but excluding such Initial
Payment Date.

                  CLASS E MONTHLY PRINCIPAL: means, (A) on any Payment Date
other than the Class E Stated Maturity Date, an amount equal to the product of
(x) the Class E Percentage and (y) the Monthly Principal and (B) on the Class E
Stated Maturity Date, the entire amount of the then outstanding Class E Note
Balance.

                  CLASS E NOTEHOLDER: means at any time, any Person in whose
name a Class E Note is registered in the Note Register.

                  CLASS E NOTE BALANCE: means, as of the Closing Date,
$6,840,000 and thereafter shall equal the Class E Note Balance as of the Closing
Date reduced by all principal payments on the Class E Notes.

                  CLASS E NOTE RATE: means ten and 267/1000 percent ( 10.267%)
per annum based upon thirty days elapsed each month in a twelve-month year.

                  CLASS E NOTES: means any Class E Notes described in Article II
of, and authorized by, and authenticated and delivered under, the Amended and
Restated Indenture.

                  CLASS E OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class E Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class E Noteholders on all prior Payment Dates.

                  CLASS E OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class E Monthly Principal due on
the Class E Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class E Noteholders on all prior Payment Dates.

                  CLASS E PERCENTAGE: means a fraction the numerator of which is
the Class E Note Balance on the closing date and the denominator of which is the
Initial Aggregate Discounted Contract Balance.

                                       11

<PAGE>

                  CLASS E STATED MATURITY DATE: means the Payment Date occurring
on November 12, 2008.

                  CLASS F DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name that may be established and maintained by the Trustee
pursuant to Section 3.01 of the Amended and Restated Indenture.

                  CLASS F INSTRUMENTS: means any Class F Instruments described
in Article II of the Amended and Restated Indenture, that may be issued from
time to time under the Amended and Restated Indenture and the related
Supplement.

                  CLASS F INSTRUMENTHOLDER: means at any time, any Person in
whose name a Class F Instrument is registered in the Note Register.

                  CLOSING DATE:  means November 16, 2000.

                  CODE:  means the Internal Revenue Code of 1986, as amended.

                  COLLECTION ACCOUNT: means the account or accounts by that name
established and maintained by the Trustee pursuant to Section 3.01 of the
Amended and Restated Indenture.

                  COLLECTION PERIOD: means, with respect to each Payment Date
related thereto, the calendar month immediately preceding such Payment Date.

                  COMMISSION:  means the Securities and Exchange Commission.

                  COMPANY ASSETS: means (i) the Contributed Property related to
the Contracts set forth on each Subsequent Contract Transfer Form other than,
and notwithstanding any other provision to the contrary, any and all ownership
interests of the Company in Equipment, with respect to which the Company shall
instead grant to the Issuer a first priority perfected security interest
therein, (ii) all of the Company's rights and privileges, but none of its
obligations, under the Amended and Restated Contribution and Servicing Agreement
and each Substitute Contract Transfer Form and (iii) all payments, income and
proceeds of the foregoing or relating thereto.

                  CONTRACT: means each separate noncancelable Finance Lease,
Fair Market Value Lease, Leveraged Lease Loan, Lease Receivable Purchase or
Secured Equipment Note acquired from time to time by the Transferor from the
Contributor, directly or indirectly, pursuant to the Amended and Restated
Contribution and Servicing Agreement. The term shall include any Contract
transferred to the Transferor on the Closing Date or, directly or indirectly,
any Substitution Date in connection with any substitution in accordance with the
Amended and Restated Contribution and Servicing Agreement, respectively, but
excluding any Unrelated Property.

                  CONTRACT FILE: means the following documents or instruments
with respect to each Contract:

                                       12

<PAGE>

                         (i) The executed original counterpart of the Contract
         that constitutes "chattel paper" or an "instrument" for purposes of
         Section 9-105(1)(b) and 9-305 of the UCC;

                         (ii) Documents evidencing or related to any insurance
         policy with respect to the related Equipment;

                         (iii) A copy of each delivery and acceptance
         certificate with respect to each Contract that is a lease or a copy of
         each original invoice for the related Equipment and the receipt of
         delivery related thereto with respect to each Contract that is a loan;

                         (iv) A copy of the financing statement filed with
         respect to the related Equipment with evidence of proper recording;

                         (v) A copy of any related agreement with the vendor,
         dealer or manufacturer of the Equipment or with any Person from whom
         DVI acquired the Contract and rights in the related Equipment (if
         applicable); and

                         (vi) Copies of such documents that the Servicer or its
         Affiliates keep on file indicating that the Equipment is subject to the
         interest of the Trustee, in accordance with their customary procedures
         relating to the individual Contract, Obligor or Equipment.

                  CONTRACT PAYMENT: means any payment which the Obligor is
required to make pursuant to a Contract after, with respect to the Initial
Contracts, the Cut-off Date, other than (i) certain amounts included in such
payments for which the Contributor is not the ultimate beneficiary thereof,
including, but not limited to, property taxes, sales taxes, manufacturer's
maintenance costs, insurance premiums and supplies and transaction costs and
(ii) Purchase Option Payments.

                  CONTRACT SCHEDULE: means the schedule of Contracts attached to
the Amended and Restated Contribution and Servicing Agreement and the Amended
and Restated Indenture and as amended from time to time, setting forth the
following information as to each Contract: (i) the Contract Number, (ii) the
Original Equipment Cost, if available, (iii) the Discounted Contract Balance as
of the Cut-off Date, (iv) the Obligor, (v) the State of location of the related
Equipment, (vi) the commencement date and original term of each Contract, (vii)
the remaining term and amount of the Contract Payments for each original
Contract as of the Cut-off Date, (viii) the type of related Equipment, (ix) the
related cash flow schedule, (x) the type of Contract and (xi) the applicable
Pool on such Contracts. The Contract Schedule shall be deemed supplemented and
amended to incorporate therein any Substitute Contracts.

                  CONTRACT TRANSFER DATE: means any date on or prior to the
Closing Date that, pursuant to the Amended and Restated Contribution and
Servicing Agreement, the Contributor may transfer a Contract to the Transferor.

                  CONTRIBUTED PROPERTY: means all of the Contributor's right,
title and interest in and to (a) all Contracts, including those listed on the
Contract Schedule delivered by the Contributor to the Transferor and all
Substitute Contracts (including its interest in the proceeds of such Contracts

                                       13

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and including the assignment of the security interest of the Obligor of a
Leveraged Lease Loan in the equipment lease that is subject thereto), including
all payments received on or with respect to such Contracts after the Cut-off
Date but excluding the Retained Interest and any Broker Agreement Rights
relating to such Contracts, (b) any documents in the Contract Files relating to
the Contracts listed on the Contract Schedule delivered by the Contributor to
the Transferor, (c) Insurance Policies and Insurance Proceeds relating to the
Contracts (or the related Equipment) listed on the Contract Schedule delivered
by the Contributor to the Transferor, (d) the Equipment (which shall be either a
first priority perfected security interest in Equipment (other than with respect
to Equipment relating to a Secured Equipment Note or Finance Lease and for which
the Original Equipment Cost is less than $25,000) or, with respect to DVI Fair
Market Value Leases, an ownership interest in the Equipment) and any collateral,
including, without limitation, any credit enhancement (other than accounts
receivable of an Obligor), which relates specifically to a Contract and (e) all
payments, income and proceeds of the foregoing or relating thereto.

                  CONTRIBUTION DATE: means, with respect to the Initial
Contracts, the Closing Date, and, with respect to any Substitute Contract, the
related Substitution Date.

                  CONTRIBUTOR: means DVI Financial Services Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors.

                  CORPORATE TRUST OFFICE: means the principal corporate trust
office of the Trustee located on the Closing Date at 180 Fifth Street, St. Paul,
Minnesota 55101, or at such other address as the Trustee may designate from time
to time by notice to the Noteholders and the Transferor.

                  CUT-OFF DATE: means for each Initial Contract, October 31,
2000; and as to any Substitute Contract, the last day of the month prior to the
month in which such Substitute Contract is substituted.

                  DEFAULT: means any occurrence that is, or with notice or the
lapse of time or both would become, an Indenture Event of Default.

                  DEFAULTED CONTRACT: means any Contract with respect to which
under the Amended and Restated Contribution and Servicing Agreement, (i) any
Contract Payment (or portion thereof) is delinquent for more than 180 days as of
the last day of the calendar month, (ii) the Servicer has declined to make a
Servicer Advance with respect to any delinquent amounts in accordance with the
Amended and Restated Contribution and Servicing Agreement on the grounds that
such advance would be a Nonrecoverable Advance, (iii) any Contract has been
rejected by or on behalf of the Obligor in a bankruptcy proceeding or (iv) the
Lessor with respect to any Leveraged Lease Loan has rejected the related lease
in a bankruptcy proceeding. For purposes of clause (i), the delinquency of a
Contract Payment shall be measured based on the Contract Payments required to be
made during the term of such Contract as of the date that such Contract became
part of the Trust Property without giving effect to any modifications, (except
those modifications permitted pursuant to Section 4.02 of the Amended and
Restated Contribution and Servicing Agreement) waivers or extensions
subsequently granted by the Servicer.

                                       14

<PAGE>

                  DEFINITIVE NOTE: a Note issued in definitive form pursuant to
the terms and conditions of Article Two of the Amended and Restated Indenture.

                  DELINQUENCY CONDITION: shall be deemed to exist on and as of
any Determination Date if (x) the quotient of (1) the sum of the Discounted
Contract Balances of all Contracts listed as more than 90 days delinquent as of
the last day of the three immediately preceding calendar months, divided by (2)
three exceeds (y) the product of (1) 0.06 and (2) the quotient of (A) the sum of
the Aggregate Discounted Contract Balance as of the last day of the three
immediately preceding Collection Periods, divided by (B) three.

                  DELINQUENT CONTRACT: means, as of any Determination Date, any
Contract (other than a Contract which became a Defaulted Contract prior to such
Determination Date) with respect to which the Obligor has not paid all Contract
Payments due as of the end of the immediately preceding Collection Period. The
delinquency of a Contract Payment shall be measured based on the Contract
Payments required to be made during the term of such Contract as of the date
such Contract became part of the Trust Property without giving effect to any
modifications, waivers or extensions subsequently granted by the Servicer.

                  DEPOSITARY: means The Depository Trust Company until a
successor depositary shall have become such pursuant to the applicable
provisions of the Amended and Restated Indenture, and thereafter "Depositary"
shall mean or include each Person who is then a Depositary thereunder. For
purposes of the Amended and Restated Indenture, unless otherwise specified
pursuant to Section 2.02 thereof, any successor Depositary shall, at the time of
its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Exchange Act, and any other applicable statute or
regulation.

                  DEPOSITARY PARTICIPANT: means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Depositary
effects book-entry transfers and pledges of securities deposited with the
Depositary.

                  DEPOSITED AVAILABLE FUNDS: has the meaning set forth in
Section 3.04(c) of the Amended and Restated Indenture.

                  DETERMINATION DATE: means, with respect to any Payment Date,
the third Business Day immediately preceding each Payment Date.

                  DISCOUNT RATE: means 7.660% per annum.

                  DISCOUNTED CONTRACT BALANCE: means, with respect to any
Contract, on any date of determination, an amount equal to the sum of (a) the
present value of each remaining Contract Payment to become due under a Contract
before the last day of the month prior to the month of the Stated Maturity Date,
discounted monthly from the last day of the Collection Period in which such
Contract Payment is to become due at a rate equal to one-twelfth (or with
respect to the period from the Closing Date to but excluding the Initial Payment
Date, a fraction, the numerator of which is equal to the number of days from the
Closing Date to but excluding the Initial Payment Date, and the denominator of
which is equal to 360) of the Discount Rate and (b) one hundred percent (100%)

                                       15

<PAGE>

of the unpaid balance, as of such date of determination of Contract Payments due
with respect to such Contract which were not the subject of a Servicer Advance;
PROVIDED, HOWEVER, that, except for purposes of computing the Repurchase Amount
or for computing the Discounted Contract Balance of a Predecessor Contract, (x)
on the date a Contract becomes a Defaulted Contract, the Discounted Contract
Balance for such Contract will be zero and (y) any Purchase Option Payments
shall not be included in the Discounted Contract Balance. For purposes of
calculating the Discounted Contract Balance of a Contract, any Contract Payment
for which the Contributor received on or prior to the Cut-off Date a security
deposit or an advance payment shall be deemed to be zero.

                  DISTRIBUTION ACCOUNT: means the account or accounts by that
name established and maintained by Trustee pursuant to Section 3.01 of the
Amended and Restated Indenture.

                  DVI: means DVI Financial Services Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors.

                  DVI FAIR MARKET VALUE LEASE: means a Fair Market Value Lease
originated by DVI.

                  DVI GROUP: means, as of any relevant date, the affiliated
group within the meaning of section 1504 of the Code of which DVI, Inc., or any
successor thereto, is the common parent, or of which DVI, the Transferor, the
Managing Member and the Issuer are members, and shall mean any group eligible to
file consolidated or combined returns for state, local or foreign tax purposes
which includes DVI, the Managing Member and the Transferor, regardless of the
identity of the common parent.

                  DVI, INC.: means DVI, Inc., a corporation organized and
existing under the laws of the State of Delaware, and its successors.

                  ELIGIBLE CONTRACT: means any Initial Contract which meets the
Contributor's credit requirements in effect on the Closing Date and satisfies
each of the representations and warranties set forth in Section 2.03 of the
Amended and Restated Contribution and Servicing Agreement and, with respect to
any Substitute Contract, satisfies the requirements of Section 7.01(d) of the
Amended and Restated Contribution and Servicing Agreement on the related
Substitution Date.

                  ELIGIBLE DEPOSIT ACCOUNT: any one or more of the following
accounts:

                        (i) a segregated account with an Eligible Institution;
         or

                        (ii) a segregated trust account with the corporate trust
         department of a depositary institution organized under the laws of the
         United States of America or any one of the states thereof or the
         District of Columbia (or any domestic branch of a foreign bank) subject
         to regulations regarding fiduciary funds on deposit, having corporate
         trust powers and acting as a trustee for funds deposited in such
         account acceptable to the Rating Agencies.

                  ELIGIBLE INSTITUTION: means any one or more of the following
institutions: (i) the corporate trust department of the Trustee, or (ii) a
depositary institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia

                                       16

<PAGE>

acceptable to the Rating Agencies (or any domestic branch of a foreign bank),
which (a)(1) has either (w) a long-term unsecured debt rating acceptable to the
Rating Agencies or (x) a short-term unsecured debt rating or certificate of
deposit rating acceptable to the Rating Agencies or (2) the parent corporation
of which has either (y) a long-term unsecured debt rating acceptable to the
Rating Agencies or (z) a short-term unsecured debt rating or certificate of
deposit rating acceptable to the Rating Agencies and (b) whose deposits are
insured by the Federal Deposit Insurance Corporation.

                  ELIGIBLE INVESTMENTS:  means any and all of the following:

                         (i) direct obligations of, and obligations fully
         guaranteed for timely payment by, the United States of America, the
         Federal Home Loan Mortgage Corporation, the Federal National Mortgage
         Association, the Federal Home Loan Banks or any agency or
         instrumentality of the United States of America which has a rating of
         at least "AAA" by Fitch, Inc. and "Aaa" by Moody's at the time of such
         investment the obligations of which are backed by the full faith and
         credit of the United States of America;

                        (ii) (A) demand and time deposits in, certificates of
         deposit of, banker's acceptances issued by or federal funds sold by any
         depository institution or trust company (including the Trustee or its
         agent acting in their respective commercial capacities) incorporated
         under the laws of the United States of America or any State thereof and
         subject to supervision and examination by federal and/or state
         authorities, so long as at the time of such investment or contractual
         commitment providing for such investment, such depository institution
         or trust company has a long term unsecured debt rating of "A+" by
         Fitch, Inc., and at least "A1" by Moody's, and a short term unsecured
         debt rating in the highest available rating category of each of the
         Rating Agencies and provided that each such investment has an original
         maturity of no more than 365 days, and (B) any other demand or time
         deposit or deposit which is fully insured by the Federal Deposit
         Insurance Corporation;

                       (iii) repurchase obligations with a term not to exceed 30
         days with respect to any security described in clause (i) above and
         entered into with a depository institution or trust company (acting as
         a principal) rated "A" by Fitch, Inc., at least "A1" or higher by
         Moody's or Prime-1 by Moody's and "A" or higher by S&P; PROVIDED,
         HOWEVER, that collateral transferred pursuant to such repurchase
         obligation must (A) be valued weekly at current market price plus
         accrued interest, (B) pursuant to such valuation, equal, at all times,
         105% of the cash transferred by the Trustee in exchange for such
         collateral and (C) be delivered to the Trustee or, if the Trustee is
         supplying the collateral, an agent for the Trustee, in such a manner as
         to accomplish perfection of a security interest in the collateral by
         possession of certificated securities;

                        (iv) securities bearing interest or sold at a discount
         issued by any corporation incorporated under the laws of the United
         States of America or any State thereof which has a long term unsecured
         debt rating in the highest available rating category of each of the
         Rating Agencies at the time of such investment;

                         (v) commercial paper having an original maturity of
         less than 365 days and issued by an institution having a long term
         unsecured debt rating of "A+" by Fitch, Inc.

                                       17

<PAGE>

         or "A1" by Moody's and a short term unsecured debt rating in the
         highest available rating category of each of the Rating Agencies at the
         time of such investment;

                        (vi) a guaranteed investment contract approved in
         writing by each of the Rating Agencies and issued by an insurance
         company or other corporation having a long term unsecured debt rating
         in the highest available rating category of each of the Rating Agencies
         at the time of such investment;

                       (vii) money market funds having ratings in the highest
         available rating category of each of the Rating Agencies at the time of
         such investment; any such money market funds which provide for demand
         withdrawals being conclusively deemed to satisfy any maturity
         requirements for Eligible Investments set forth in the Amended and
         Restated Indenture; and

                      (viii) any investment approved in writing by each of the
         Rating Agencies.

                  EQUIPMENT: means the underlying equipment subject to a
Contract, which is principally medical diagnostic and therapeutic equipment,
together with the income and proceeds thereof.

                  ERISA: means the Employee Retirement Income Security Act of
1974, as amended.

                  EXCHANGE ACT: means the Securities Exchange Act of 1934, as
amended.

                  EXCLUDED AMOUNTS: means any payments received from an Obligor
in connection with any late charges, taxes, fees or other charges imposed by any
Governmental Authority, any indemnity payments made by an Obligor for the
benefit of the originator or vendor under the related Contract or any payments
collected from an Obligor for the benefit of the originator or vendor which
relate to maintenance payments pursuant to the related Contract or maintenance
agreement, as applicable.

                  FAIR MARKET VALUE LEASE: means any Contract in the form of a
lease that contains a purchase option based on either (a) a stated non de
minimis percentage of the original cost of the related Equipment or (b) the fair
market value of the related Equipment at the expiration, or earlier termination,
of the Contract. A Fair Market Value Lease is identified as "FMV" on the
Contract Schedule.

                  FINANCE LEASE: means any Contract in the form of a lease that
contains an end of term purchase option for a nominal amount. A Finance Lease is
identified as "FL" on the Contract Schedule.

                  FITCH, INC.:  means Fitch, Inc. and any successor.

                  GAAP: means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or

                                       18

<PAGE>

in such other statements by such other entity as may be approved by a
significant segment of the accounting profession, which are applicable to the
circumstances as of the date of determination.

                  GLOBAL NOTE: means either a Rule 144A Global Note or a Public
Global Note.

                  GRANT: means to grant, bargain, sell, convey, assign,
transfer, mortgage, pledge, create and perfect a security interest in and right
of set-off against, deposit, set over and confirm.

                  HOLDER OR NOTEHOLDER: means, at any time, any Person in whose
name a Note is registered in the Note Register.

                  INDENTURE EVENT OF DEFAULT: as defined in Section 6.01 of the
Amended and Restated Indenture.

                  INITIAL AGGREGATE DISCOUNTED CONTRACT BALANCE: means an amount
equal to $273,612,728.90.

                  INITIAL CONTRACT: means any Contract acquired by the
Transferor on or prior to the Closing Date as set forth on Schedule 1 of the
Amended and Restated Indenture.

                  INITIAL PAYMENT DATE: means the initial Payment Date pursuant
to the Transaction Documents, which is scheduled (subject to prepayment
provisions of the Amended and Restated Indenture) to be, when used with respect
to interest on any Note, December 12, 2000, and when used with regard to
principal, with respect to the Class A-1 Notes, the Class B Notes, the Class C
Notes, the Class D Notes or the Class E Notes, December 12, 2000, when used with
respect to the Class A-2 Notes, July 12, 2001, when used with respect to the
Class A-3 Notes, March 12, 2002 and when used with respect to the Class A-4
Notes, August 12, 2003.

                  INSURANCE POLICY: means, with respect to an item of Equipment,
any insurance policy required to be maintained by the Obligor pursuant to the
related Contract that covers physical damage to the Equipment.

                  INSURANCE PROCEEDS: means proceeds paid (i) by any insurer
pursuant to any Insurance Policy covering a Contract or (ii) if the Obligor has
self-insured with respect to a Contract, by the Obligor, in either case, net of
reasonable costs of collecting such proceeds not otherwise reimbursed.

                  INSURED EXPENSES: means expenses covered by any Insurance
Policy.

                  ISSUER: means DVI Receivables XII, L.L.C., a Delaware limited
liability company.

                  ISSUER ORDER or ISSUER REQUEST: means a written order or
request delivered to the Trustee and signed in the name of the Issuer by an
Authorized Officer.

                  LEASE RECEIVABLE PURCHASE: means any Contract in the form of a
purchase by DVI from a lessor of lessor's right, title and interest in Contract
Payments related to an underlying

                                       19

<PAGE>

equipment lease and that is secured by the lessor's rights in the related
Equipment. A Lease Receivable Purchase is identified as "LRP" on the Contract
Schedule.

                  LESSOR: means the Person who is the lessor under the equipment
lease related to a Leveraged Lease Loan or Lease Receivable Purchase.

                  LEVERAGED LEASE LOAN: means any Contract in the form of a loan
that is (a) made by the Contributor to a lessor of the related Equipment
pursuant to an underlying noncancelable equipment lease and (b) secured by a
pledge by such lessor to the Contributor of all of its right, title and interest
to such noncancelable equipment lease (including such lessor's right to receive
rental payments from the lessee on such equipment lease) and the related
Equipment. A Leveraged Lease Loan is identified as "LL" on the Contract
Schedule.

                  LOCK-BOX ACCOUNT: means an account designated as such,
established and maintained pursuant to Section 3.01 of the Amended and Restated
Indenture.

                  LOCK-BOX AGREEMENT: means, (i) the agreement dated as of April
21, 2000, by and among the Contributor and First Union National Bank or (ii) the
agreement dated as of October
5,
1994, by and between the Contributor (as assignee of Affiliated Capital
Corporation) and American National Bank, pursuant to which the Lock-Box Account
is established and maintained.

                  LOCK-BOX BANK: means, as of any date, the bank or trust
company at which a Lock- Box Account is established and maintained as of such
date.

                  MANAGING MEMBER: means DVI Receivables Corp. VIII, a Delaware
corporation.

                  MONTHLY INTEREST: means as of any Payment Date, the sum of (i)
the Class A Monthly Interest, (ii) the Class B Monthly Interest, (iii) the Class
C Monthly Interest, (iv) the Class D Monthly Interest and (v) the Class E
Monthly Interest.

                  MONTHLY PRINCIPAL: means, with respect to any Payment Date, an
amount equal to the excess of (a) the Aggregate Discounted Contract Balance at
the close of business on the last day of the second preceding Collection Period
over (b) the Aggregate Discounted Contract Balance at the close of business on
the last day of the immediately preceding Collection Period.

                  MONTHLY SERVICER REPORT: means the report attached as Exhibit
B to the Amended and Restated Contribution and Servicing Agreement.

                  MOODY'S: means Moody's Investors Service, Inc. and any
successor.

                  NONRECOVERABLE ADVANCE: means any Servicer Advance previously
made in respect of a Delinquent Contract by the Servicer pursuant to the terms
of the Amended and Restated Contribution and Servicing Agreement, which in the
good faith judgment of the Servicer and pursuant to an Officer's Certificate,
will not be ultimately recoverable by the Servicer from payments by the related
Obligor or disposition of the related Equipment.

                                       20

<PAGE>

                  NOTE BALANCE: means, as of the Closing Date, $240,779,000 for
the Class A Notes cumulatively (and, with respect to each tranche thereof,
$39,975,000 for the Class A-1 Notes, $41,000,000 for the Class A-2 Notes,
$74,000,000 for the Class A-3 Notes and $85,804,000 for the Class A-4 Notes),
$4,104,000 for the Class B Notes, $8,208,000 for the Class C Notes, $5,472,000
for the Class D Notes and $6,840,000 for the Class E Notes and thereafter shall
equal the Note Balance for such class reduced by all principal payments on such
class of Notes.

                  NOTE OWNER: means, with respect to a Global Note, the Person
who is the owner of such Global Note, as reflected on the books of the
Depositary, or on the books of a Person maintaining an account with the
Depositary (directly as a Depositary Participant or an indirect participant, in
each case in accordance with the rules of the Depositary).

                  NOTE PURCHASE AGREEMENT: means any agreement (other than the
Underwriting Agreement) between the Issuer, the Transferor, the Contributor, the
purchaser(s) specified therein and any other parties specified therein, relating
to the purchase of Notes.

                  NOTE RATE: means the annualized rate of interest on the
relevant class of Notes (Class A-1 Note Rate on the Class A-1 Notes, Class A-2
Note Rate on the Class A-2 Notes, Class A-3 Note Rate on the Class A-3 Notes,
Class A-4 Note Rate on the Class A-4 Notes, Class B Note Rate on the Class B
Notes, Class C Note Rate on the Class C Notes, Class D Note Rate on the Class D
Notes, Class E Note Rate on the Class E Notes and the interest rate set forth in
the Supplement for the Class F Instruments).

                  NOTE REGISTER: as defined in Section 2.04 of the Amended and
Restated Indenture.

                  NOTEHOLDER OR HOLDER: means, at any time, any Person in whose
name a Note is registered in the Note Register.

                  NOTEHOLDER COUNSEL: means the single legal counsel as selected
by Noteholders evidencing more than 50% of the Voting Rights.

                  NOTES: means any of the Class A Notes, Class B Notes, Class C
Notes, Class D Notes or Class E Notes described in Article II of the Amended and
Restated Indenture, and authorized by, and authenticated and delivered under,
the Amended and Restated Indenture or any Supplement.

                  OBLIGOR: means the obligor under any Contract, including any
guarantor.

                  OFFERED NOTES: means the Class A Notes, the Class B Notes, the
Class C Notes, the Class D Notes and the Class E Notes.

                  OFFICER'S CERTIFICATE: means a certificate delivered to the
Trustee and signed by Chairman, the President, a Vice President, the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the relevant
entity.

                  OPINION OF COUNSEL: means a written opinion of counsel, which
shall be reasonably satisfactory in form and substance to the Person to whom it
is to be delivered. Except as otherwise

                                       21

<PAGE>

expressly provided in the Amended and Restated Indenture, such opinion may be
delivered by inside or outside counsel for the Contributor, the Transferor or
the Issuer.

                  ORIGINAL EQUIPMENT COST: means (i) with respect to each
Contract originated by DVI, the vendor's invoice price of the related Equipment
at the time of origination of the related Contract and (ii) with respect to each
Contract acquired by DVI from others, the amount recorded on DVI's records as
paid by DVI to acquire such Contract and the broker's interest in the related
Equipment.

                  OUTSTANDING OR OUTSTANDING: means, when used with reference to
the Notes and as of any particular date, any Note theretofore and thereupon
being authenticated and delivered except:

                           (i) any Note canceled by the Trustee at or before
said date;

                           (ii) any Note, or portion thereof, for payment of
redemption of which monies equal to the principal amount or redemption price
thereof, as the case may be, with interest to the date of maturity or
redemption, shall have theretofore been irrevocably deposited with the Trustee
(whether upon or prior to maturity or the redemption date of such Note);

                           (iii) any Note in lieu of or in substitution for
which another Note shall have been authenticated and delivered; and

                           (iv) any Note owned either by the Transferor or by
the Managing Member or any Affiliate of either the Transferor or the Managing
Member (except that, in determining whether the Trustee shall be protected in
relying upon any request, demand, authorization, direction, notice, consent or
waiver of Noteholders under the Amended and Restated Indenture, only Notes which
the Trustee knows to be so owned shall be disregarded).

                  OVERDUE INTEREST: means, for any Payment Date, the sum of (i)
the Class A Overdue Interest, (ii) the Class B Overdue Interest, (iii) the Class
C Overdue Interest, (iv) the Class D Overdue Interest and (v) the Class E
Overdue Interest.

                  OWNERSHIP INTEREST: means an ownership interest in a Global
Note.

                  PARTIAL PREPAYMENT AMOUNT: means, with respect to the
Collection Period and a Contract for which the Obligor has requested to make a
voluntary partial prepayment and for which no Substitute Contract has been
provided, an amount equal to the excess, if any, of (A) the difference between
(i) the Discounted Contract Balance of such Contract as of the first day of such
Collection Period together with one month of interest thereon at the Discount
Rate and (ii) the Discounted Contract Balance of such Contract as of the first
day of such Collection Period calculated based on the amount of each Contract
Payment payable by the Obligor after giving effect to the reduction of such
Contract Payment which will result from such partial prepayment, minus (B) any
Contract Payments actually received by the Servicer with respect to the prepaid
portion of such Contract for the current Collection Period on or before the date
of such partial prepayment.

                  PARTIAL REDEMPTION PRICE: with respect to any Offered Note,
and as of any date of partial redemption fixed by the Issuer, an amount equal to
the sum of (x) the product of (i) the

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<PAGE>

quotient of (A) the aggregate Discounted Contract Balance of the Contracts in
Pool B as of such date of partial redemption, divided by (B) the Aggregate
Discounted Contract Balance as of such date of partial redemption and (ii) the
outstanding Note Balance of such Offered Note and (y) interest accrued thereon
to, but not including, such Redemption Date at the applicable Note Rate.

                  PAYMENT DATE: means the twelfth day of each month (or if such
date is not a Business Day, the immediately succeeding Business Day), commencing
December 12, 2000.

                  PERSON: means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.

                  PLACEMENT AGENT OR PLACEMENT AGENTS: means each of Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Banc One Capital Markets, Inc.

                  PLAN: means an "employee benefit plan" within the meaning of
Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Code.

                  POOL:  means either Pool A or Pool B.

                  POOL A: means the Contracts identified on the Contract
Schedule as constituting Pool A and the other Trust Property related thereto.

                  POOL A AGGREGATE DISCOUNTED CONTRACT BALANCE: means, with
respect to any date of determination, the sum of the Discounted Contract
Balances of all Contracts in Pool A.

                  POOL A NON-PERFORMING CONTRACT SUBSTITUTION: shall have the
meaning ascribed thereto in Section 7.01(a)(1) of the Amended and Restated
Contribution and Servicing Agreement.

                  POOL A PREPAID CONTRACT SUBSTITUTION: shall have the meaning
ascribed thereto in Section 7.01(a)(2) of the Amended and Restated Contribution
and Servicing Agreement.

                  POOL B: means the Contracts identified on the Contract
Schedule as constituting Pool B and the other Trust Property related thereto.

                  POOL B AGGREGATE DISCOUNTED CONTRACT BALANCE: means, with
respect to any date of determination, the sum of the Discounted Contract
Balances of all Contracts in Pool B.

                  POOL B GENERAL CONTRACT SUBSTITUTION: shall have the meaning
ascribed thereto in Section 7.01(b)(1) of the Amended and Restated Contribution
and Servicing Agreement.

                  POOL B PREPAID CONTRACT SUBSTITUTION: shall have the meaning
ascribed thereto in Section 7.01(b)(2) of the Amended and Restated Contribution
and Servicing Agreement.

                  PREDECESSOR NOTES: means, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the

                                       23

<PAGE>

purpose of this definition, any Note authenticated and delivered under Section
2.05 of the Amended and Restated Indenture in lieu of a lost, destroyed or
stolen Note (or a mutilated Note surrendered to the Trustee) shall be deemed to
evidence the same debt as the lost, destroyed or stolen Note (or a mutilated
Note surrendered to the Trustee).

                  PREDECESSOR CONTRACT: means, with respect to any Substitute
Contract acquired by the Transferor by substitution pursuant to Section 7 of the
Amended and Restated Contribution and Servicing Agreement and by the Issuer by
substitution pursuant to Section 7 of the Amended and Restated Subsequent
Contract Transfer Agreement, the Contract or Contracts for which such Substitute
Contract or any intervening Substitute Contract has been substituted.

                  PREPAYMENT AMOUNT: means, with respect to any Contract, the
sum of (1) the Discounted Contract Balance as of the first day of the Collection
Period preceding such prepayment, together with one month of interest thereon at
the Discount Rate, (2) any unreimbursed Servicer Advances with respect to such
Contract and (3) any Contract Payments due and outstanding under such Contract
that are not the subject of a Servicer Advance.

                  PRINCIPAL TERMS: as defined in Section 2.06(b) of the Amended
and Restated Indenture.

                  PRIORITY PAYMENTS: shall have the meaning ascribed thereto in
Section 3.04(c) of the Amended and Restated Indenture.

                  PROSPECTUS SUPPLEMENT: means the prospectus supplement, dated
November 13, 2000, relating to the Class A Notes, the Class B Notes, the Class C
Notes and the Class D Notes.

                  PUBLIC GLOBAL NOTE: means a Book-Entry Note evidencing all or
part of an issuance of the Class A Notes, Class B Notes, Class C Notes or Class
D Notes to which the provisions of Article II of the Amended and Restated
Indenture shall apply.

                  PURCHASE OPTION PAYMENT: means as specified in each Contract,
any payment made by the Obligor to purchase the Equipment covered thereby,
including any funds received in respect of either (w) an end of term purchase
option for $1, (x) an end of term option to purchase the Equipment at a stated
percentage of the original cost of the Equipment, (y) an option to purchase the
Equipment at the fair market value of the Equipment determined at the end of the
Contract term or (z) an end of term option to extend the term of the lease for
another immediately successive twelve month period upon the expiration of which
the lessee will own the equipment.

                  RATING AGENCIES: means, when used in the singular, any one of,
and, when used in the plural, each of Fitch, Inc. and Moody's.

                  RATINGS EFFECT: means a reduction or withdrawal of a rating on
a class of Notes by a Rating Agency.

                  RECORD DATE: means, with respect to any Payment Date relating
to any Definitive Note, the fifth Business Day immediately preceding such
Payment Date, and, with respect to any

                                       24

<PAGE>

Payment Date relating to any Book-Entry Note, the Business Day immediately
preceding such Payment Date.

                  RECOVERIES: means, with respect to any Contract, any cash sale
proceeds, vendor recourse, payments under personal and other guaranties,
litigation judgments and the present value (calculated at the implicit yield on
each of the Defaulted Contracts) of re-lease rents.

                  REDEMPTION DATE: means, with respect to any redemption or
partial redemption of Notes, a date fixed pursuant to Section 10.01 of the
Amended and Restated Indenture.

                  REDEMPTION PRICE: means, with respect to any Note, and as of
any redemption date fixed by the Issuer, the sum of (x) the outstanding Note
Balance of such Note, and (y) interest accrued thereon to, but not including,
such Redemption Date at the applicable Note Rate.

                  REDEMPTION RECORD DATE: means, with respect to any redemption
of Notes, a date fixed pursuant to Section 10.01 of the Amended and Restated
Indenture.

                  RELATED PERSON: means any Person (whether or not incorporated)
which is under common control with the Contributor within the meaning of Section
414(b) or (c) of the Code, or of Section 4001(b) of ERISA.

                  REPORTABLE EVENT: means any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, a withdrawal from a "Pension
Plan" described in Section 4063 of ERISA, or a cessation of operations described
in Section 4062(3) of ERISA.

                  REPURCHASE AMOUNT: means, with respect to any Contract, the
sum of (1) the Discounted Contract Balance as of the first day of the Collection
Period preceding such repurchase, together with one month of interest thereon at
the Discount Rate and (2) any unreimbursed Servicer Advances with respect to
such Contract.

                  RESERVE ACCOUNT: means the account specified in Section
3.01(a) of the Amended and Restated Indenture.

                  RESERVE ACCOUNT BALANCE: means an amount equal to deposits of
all Reserve Account Deposit Amounts as reduced by (a) all Reserve Account Draws
and (b) all Reserve Account Withdrawals paid to the Transferor, or the Class F
Instrumentholder, if any.

                  RESERVE ACCOUNT DEPOSIT AMOUNT: means, on any Payment Date, an
amount equal to the excess of (A) the Reserve Account Required Amount over (B)
the amount on deposit in the Reserve Account (after giving effect to any Reserve
Account Draws on such Payment Date).

                  RESERVE ACCOUNT DRAW: means, with respect to each Payment
Date, the amount, if any, withdrawn by the Trustee from the Reserve Account for
payment of the Priority Payments pursuant to Section 3.04(c) of the Amended and
Restated Indenture.

                                       25

<PAGE>

                  RESERVE ACCOUNT PROPERTY: means the property set forth in
Section 3.08(a) of the Amended and Restated Indenture.

                  RESERVE ACCOUNT REQUIRED AMOUNT: means, with respect to the
Initial Payment Date, $4,104,190.93 (the "INITIAL RESERVE ACCOUNT REQUIRED
AMOUNT"); and, with respect to each Payment Date thereafter, the lesser of
either (i) the Initial Reserve Account Required Amount or (ii) the sum of (a)
the Class A Note Balance, (b) the Class B Note Balance, (c) the Class C Note
Balance, (d) the Class D Note Balance and (e) the Class E Note Balance;
PROVIDED, HOWEVER, that if a Restricting Event has occurred and is then
continuing, then notwithstanding the foregoing, the Reserve Account Required
Amount shall be equal to the sum of (i) the Reserve Account Required Amount on
the immediately preceding Payment Date (after giving effect to any additions to
or withdrawals from the Reserve Account on such Payment Date) and (ii) all
amounts otherwise payable to the Issuer or the Class F Instrumentholder, if any,
in accordance with Section 3.04(b) of the Amended and Restated Indenture.

                  RESERVE ACCOUNT WITHDRAWAL: means, for each Payment Date, the
amount of such excess, if any, withdrawn from the Reserve Account for payment to
the Issuer or the Class F Instrumentholder pursuant to Section 3.08 of the
Amended and Restated Indenture.

                  RESIDUAL PAYMENT: means any amount received either by the
Servicer or the Trustee as a Purchase Option Payment under a Contract or
proceeds of the sale of an item of Equipment subject to the lien of the Amended
and Restated Indenture or rental payments from the re-leasing of an item of
Equipment subject to the lien of the Amended and Restated Indenture after the
final Contract Payment due and payable under the initial terms of the Contract
to which such item of Equipment is subject is made.

                  RESIDUAL PRINCIPAL BALANCE: means the excess of (x) the
Aggregate Discounted Contract Balance, over (y) the sum of the Class A Note
Balance, the Class B Note Balance, the Class C Note Balance, the Class D Note
Balance and the Class E Note Balance.

                  RESPONSIBLE OFFICER: means, with respect to the Trustee, any
President, Senior Vice President, Vice President, Assistant Vice President,
Trust Officer or Assistant Secretary with direct responsibility for the
administration of the Trustee's obligations and duties under the Amended and
Restated Indenture and with respect to a particular matter, any officer to whom
such matter is referred because of such other officer's knowledge or familiarity
with the particular subject.

                  RESTRICTING EVENT: means the condition that exists on any
Payment Date if any one of the following conditions exists: (i) a Delinquency
Condition exists or (ii) an Indenture Event of Default has occurred and is then
continuing.

                  RETAINED INTEREST: means all right, title and interest of the
Contributor in and to (i) the Contributed Property prior to and including the
Cut-off Date, (ii) each periodic payment, if any, set forth in a Contract in
respect of maintenance, insurance or taxes, and (iii) each Purchase Option
Payment, if any.

                                       26

<PAGE>

                  RULE 144A GLOBAL NOTE: means a Note evidencing all or a part
of an issuance of the Class E Notes, registered in the name of the Depositary or
its nominee, and delivered to the Depositary pursuant to the Depositary's
instruction, in accordance with Section 2.02 of the Amended and Restated
Indenture and bearing the legend prescribed in Section 2.02 of the Amended and
Restated Indenture.

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

                  SCHEDULED TERMINATION DATE: means, with respect to any
Contract, the date upon which such Contract is scheduled to terminate in
accordance with its terms.

                  SECURED EQUIPMENT NOTE: means any Contract in the form of a
loan to the user of the related Equipment secured by such Equipment. A Secured
Equipment Note is identified as "LOAN" on the Contract Schedule.

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

                  SERVICER: means initially, the Contributor and thereafter,
either the Contributor or the then-acting Successor Servicer(s), if any,
appointed pursuant to the terms of the Amended and Restated Contribution and
Servicing Agreement.

                  SERVICER ADVANCE: means an advance made by the Servicer in
accordance with Section 5.01 of the Amended and Restated Contribution and
Servicing Agreement.

                  SERVICER EVENT OF DEFAULT: means as defined in Section 10.01
of the Amended and Restated Contribution and Servicing Agreement.

                  SERVICER ORDER: means a written order or request delivered to
the Trustee and signed in the name of the Servicer by an Authorized Officer.

                  SERVICING FEE: means an amount equal to the product of (i)
one-twelfth (or with respect to the Initial Payment Date, a fraction, the
numerator of which is equal to the number of days from the Closing Date to but
excluding the Initial Payment Date, and the denominator of which is equal to
360), (ii) the Servicing Fee Rate and (iii) the Aggregate Discounted Contract
Balance as of the beginning of the previous Collection Period.

                  SERVICING FEE RATE:  means 0.45%.

                  STATED MATURITY DATE: means, with respect to the Class A-1
Notes, the Class A-1 Stated Maturity Date, with respect to the Class A-2 Notes,
the Class A-2 Stated Maturity Date, with respect to the Class A-3 Notes, the
Class A-3 Stated Maturity Date, with respect to the Class A-4 Notes, the Class
A-4 Stated Maturity Date, with respect to the Class B Notes, the Class B Stated
Maturity Date, with respect to the Class C Notes, the Class C Stated Maturity
Date, with respect to the Class D Notes, the Class D Stated Maturity Date, and
with respect to the Class E Notes, the Class E Stated Maturity Date.

                                       27

<PAGE>

                  SUBORDINATION DEFICIENCY EVENT: means the occurrence of the
Class A Note Balance being greater than the Aggregate Discounted Contract
Balance as of the date of determination.

                  SUBSTITUTE CONTRACT: means an Eligible Contract substituted by
the Contributor pursuant to either Section 5.03 or Section 7.01 of the Amended
and Restated Contribution and Servicing Agreement.

                  SUBSTITUTE CONTRACT TRANSFER FORM: means a Substitute Contract
Transfer Form, substantially in the form of Exhibit A to the Amended and
Restated Subsequent Contract Transfer Agreement.

                  SUBSTITUTION DATE: means any Business Day on which the
Contributor transfers a Substitute Contract to the Transferor (which Substitute
Contract is subsequently transferred by the Transferor to the Issuer and then
pledged by the Issuer to the Trustee).

                  SUCCESSOR SERVICER: means the Trustee or any successor to the
Servicer pursuant to the Amended and Restated Contribution and Servicing
Agreement.

                  SUPPLEMENT: means a supplement to the Amended and Restated
Indenture complying with the terms of the Amended and Restated Indenture.

                  TRANSACTION DOCUMENTS: means collectively, the Amended and
Restated Contribution and Servicing Agreement, the Amended and Restated
Subsequent Contract Transfer Agreement, the Amended and Restated Indenture, the
Underwriting Agreement, any Note Purchase Agreement(s) and any and all
agreements relating to the servicing of the Contracts and the issuance of the
Notes.

                  TRANSFEROR: means DVI Receivables Corp. XII, a corporation
organized and existing under the laws of the State of Delaware and wholly-owned
by DVI, and its permitted successors and assigns.

                  TRANSFEROR ORDER or TRANSFEROR REQUEST: means a written order
or request delivered to the Trustee and signed in the name of the Transferor by
an Authorized Officer.

                  TRUST INDENTURE ACT OR TIA: means the Trust Indenture Act of
1939, as amended from time to time, as in effect on any relevant date.

                  TRUST PROPERTY: means (a) the Company Assets, (b) all moneys
from time to time held by the Trustee pursuant to Section 3.01 of the Amended
and Restated Indenture pending deposit in one of the accounts referred to
therein, (c) all moneys from time to time on deposit in each Lock-Box Account,
Collection Account, the Reserve Account, the Distribution Account, Class A
Distribution Sub-Account, Class B Distribution Sub-Account, Class C Distribution
Sub-Account, Class D Distribution Sub-Account, the Class E Distribution
Sub-Account and Class F Distribution Sub- Account, if any, including all
investments and income from the investment of such moneys, (d) all of the
Issuer's right, title and interest then or thereafter acquired under the Amended
and Restated Contribution and Servicing Agreement, (e) all of the Issuer's
right, title and interest then or thereafter

                                       28

<PAGE>

acquired under the Amended and Restated Subsequent Contract Transfer Agreement
and (f) all income, payments and proceeds of any of the foregoing.

                  TRUST STATUTE: means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. ss.3801 ET. SEQ. -- ---

                  TRUSTEE: means the Person named as the "Trustee" in the first
paragraph of the Amended and Restated Indenture until a successor Person shall
have become the Trustee pursuant to the applicable provisions of the Amended and
Restated Indenture, and thereafter "Trustee" shall mean such successor Person;
PROVIDED, that the provisions of Sections 7.06 and 8.11 of the Amended and
Restated Indenture, as applicable to any Person at any time serving as Trustee
under the Amended and Restated Indenture, shall survive (with respect to any
period prior to the date of such termination) the termination of such Person's
status as Trustee under the Amended and Restated Indenture and the succession of
any other Person to such status.

                  TRUSTEE FEE: means an amount equal to the product of (i)
one-twelfth, (ii) .01% and (iii) the Aggregate Discounted Contract Balance as of
the beginning of the previous Collection Period.

                  UNDERWRITERS: means Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Banc One Capital Markets, Inc.

                  UNDERWRITING AGREEMENT: means the underwriting agreement dated
as of November 9, 2000, by and among Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Banc One Capital Markets, Inc., the Contributor, the Issuer and
the Transferor.

                  UNIFORM COMMERCIAL CODE or UCC: means, with respect to a
particular jurisdiction, the Uniform Commercial Code, as in effect from time to
time in such jurisdiction, or any successor statute thereto.

                  UNITS:  means the membership interests in the Issuer.

                  UNRELATED PROPERTY: means property or rights under a Contract
conveyed or otherwise granted as consideration for DVI's entering into any of
the foregoing agreements, and not as collateral or other credit enhancement for
the performance of the obligations of the related Obligor under such agreement.

                  VOTING RIGHTS: means, for so long as any Notes remain
outstanding, and shall encompass, for so long as any Class A Note, Class B Note,
Class C Note, Class D Note or Class E Note is outstanding, the voting rights as
of the date of determination (i) the votes of Class A-1 Noteholders evidencing
100% of the then-outstanding Class A-1 Note Balance, and, after the Note Balance
of such class equals zero, then (ii) the votes of Class A-2 Noteholders
evidencing 100% of the then-outstanding Class A-2 Note Balance, and, after the
Note Balance of such class equals zero, then (iii) the votes of the Class A-3
Noteholders evidencing 100% of the then-outstanding Class A-3 Note Balance, and,
after the Note Balance of such class equals zero, then (iv) the votes of the
Class A-4 Noteholders evidencing 100% of the then-outstanding Class A-4 Note
Balance, and, after the

                                       29

<PAGE>

Note Balance of such class equals zero, then (v) the votes of Class B
Noteholders evidencing 100% of the then-outstanding Class B Note Balance, and,
after the Note Balance of such class equals zero, then (vi) the votes of the
Class C Noteholders evidencing 100% of the then-outstanding Class C Note
Balance, and, after the Note Balance of such class equals zero, then (vii) the
votes of Class D Noteholders evidencing 100% of the then-outstanding Class D
Note Balance, and, after the Note Balance of such class equals zero, then (viii)
the votes of the Class E Noteholders evidencing 100% of the then-outstanding
Class E Note Balance. When none of the Class A Notes, Class B Notes, Class C
Notes, Class D Notes and Class E Notes is outstanding, 100% of the Voting Rights
shall be exercised by the Holders of the Class F Instrument, if any. When used
in the Transaction Documents, "50% of the Voting Rights" and "662/3% of the
Voting Rights" shall be deemed to refer to fifty and sixty-six and two-thirds
percent, respectively, of each class of Notes then Outstanding and then entitled
to vote as measured by the Outstanding Note Balance of such class on such date
of determination.

                                       30

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