DELTA FINANCIAL CORP
EXHIBITS - 10K2001
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<TYPE>EX-10
<SEQUENCE>3
<FILENAME>exh10.txt
<DESCRIPTION>EXHIBITS - 10K2001
<TEXT>
EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT


      AGREEMENT  made as of the 27th day of February,  2002 by and between DELTA
FINANCIAL  CORPORATION,  a Delaware  corporation (the  "Corporation"),  and Hugh
Miller (the "Executive").

                              W I T N E S S E T H:
     In  consideration  of  the   representations,   warranties  and  conditions
contained herein, the parties hereto agree as follows:


     1. POSITION AND RESPONSIBILITIES

     1.1. The Executive shall serve in an executive  capacity as Chief Executive
Officer and  President of the  Corporation.  The  Executive  shall  perform such
functions and undertake such responsibilities as are customarily associated with
such  capacity.  The  Executive  shall  hold such  directorships  and  executive
officerships in the Corporation and any subsidiary to which,  from time to time,
he may be elected or appointed during the term of this Agreement.

     1.2.  The  Executive  shall  devote  his full time and best  efforts to the
business and affairs of the Corporation and to the promotion of its interests.

     1.3. The principal executive offices of the Corporation shall be maintained
in Long  Island,  New York and the  Executive  shall not be required to relocate
outside of Long Island, New York without his consent.

     2. TERM OF EMPLOYMENT

     2.1. The term of employment  shall be five years,  commencing with the date
hereof, unless sooner terminated as provided in this Agreement. The initial term
of employment and any extension thereof is herein referred to as the "Term."

     2.2.  Notwithstanding the provisions of Section 2.1 hereof, the Corporation
shall have the right,  on written  notice to the  Executive,  to  terminate  the
Executive's employment for Reasonable Cause, such termination to be effective as
of the  date on  which  notice  is  given  or as of such  later  date  otherwise
specified in the notice.

     2.3. For purposes of this Agreement, the term "Reasonable Cause" shall mean
any of the following actions by the Executive: (a) failure to comply with any of
the material  terms of this  Agreement,  which shall not be cured within 30 days
after the Executive's receipt of written notice from the Board of Directors; (b)
engagement in gross  misconduct  injurious to the Corporation or an affiliate of
the  Corporation,  which shall not be cured within 30 days after the Executive's
receipt of written  notice from the Board of Directors;  (c) knowing and willful
neglect or refusal to attend to the material duties  reasonably  assigned to him
by the Board of  Directors,  which  shall not be cured  within 30 days after the
Executive's  receipt  of  written  notice  from  the  Board  of  Directors;  (d)
intentional  misappropriation  of property of the Corporation or an affiliate of
the  Corporation to the Executive's own use; (e) the commission by the Executive
of an act  of  embezzlement;  (f)  Executive's  conviction  for a  felony  or if
criminal  penalties are imposed on Executive  relating to any individual  income
taxes due and owing by Executive;  or (g)  Executive's  engaging in any activity
which would  constitute  a material  conflict of interest  with the  Corporation
which shall not be cured within 30 days after the Executive's receipt of written
notice from the Board of Directors.  If the provisions  contained in subsections
(a),  (b),  (c) or (g) above cannot be cured within 30 days due to the nature of
the breach,  the cure period shall then be extended  for a reasonable  period of
time; provided, however, the Executive undertakes and continues in good faith to
cure the same.

                                       2

     2.4. No later than six months prior to the end of the Term, the Corporation
and the Executive shall meet to discuss the terms and conditions of an extension
of the  Term.  If the  Term of  this  Agreement  shall  not be  extended  by the
Corporation  for at least one year under fair and reasonable  terms,  having due
regard for industry employment  practices relating to executives of corporations
of the size  and  character  of the  Corporation,  then  (unless  waived  by the
Executive pursuant to clause (c) of Section 5.2 hereof),  at the end of the Term
the  Corporation  shall pay as  severance  pay to the  Executive  (1) his annual
salary at the rate in effect as of the termination,  plus (2) an amount equal to
the average of his annual  bonuses over the last five years.  All such  payments
shall  be  made  within   fifteen  days  of  such   termination.   In  addition,
notwithstanding  any waiver of  severance  pay under  clause (c) of Section  5.2
hereof,  for a period of one year following such  termination,  the  Corporation
shall provide the Executive all benefits  (including medical coverage) which may
be in  effect  at such  time  which  are  generally  available  to other  senior
executives of the Corporation or its  subsidiaries.  The Executive shall only be
entitled  to  such  health  benefits  as long as he is in  compliance  with  the
provisions  of  Section  5 below,  to the  extent  applicable.  Health  benefits
otherwise  receivable  by the  Executive  pursuant to this  Section 2.4 shall be
reduced  to  the  extent  comparable  benefits  are  actually  available  to the
Executive during such period from a subsequent Employer.

     2.5. If the Executive's employment with the Corporation shall be terminated
(a) by the Corporation other than pursuant to Sections 2.2, 4.1 or 4.2 hereof or
(b) by the Executive for Good Reason (as defined  herein),  then the Corporation
shall pay to the  Executive  as  severance an amount equal to the product of (1)
the lesser of (A) the remaining Term in years plus 1,  multiplied by 100% or (B)
299%,  multiplied by (2) the last five years'  average  annual  compensation  as
calculated in accordance with Section 280G of the Internal Revenue Code of

                                       3

1986, as amended (the "Code").  All such payments  shall be made within  fifteen
days of such  termination.  In addition,  for the balance of the Term  following
such  termination  (or for a period of one year following such  termination,  if
greater),  the Corporation  shall provide the Executive all benefits  (including
medical  coverage)  which  may be in effect  at such  time  which are  generally
available to other senior  executives of the  Corporation  or its  subsidiaries;
provided, however that the Executive shall only be entitled to such payments and
benefits as long as he is in compliance  with the provisions of Section 5 below,
to the extent applicable.  Health benefits otherwise receivable by the Executive
pursuant to this Section 2.5 shall be reduced to the extent comparable  benefits
are  actually  available to the  Executive  during such period from a subsequent
Employer.  The Executive  shall have the right for a period of 30 days after the
occurrence of a Good Reason event to terminate this Agreement for Good Reason.

     2.6.  For purposes of this  Section,  "Good  Reason"  shall mean any of the
following, which occurs subsequent to the date of this Agreement:

     (i)  the  Corporation   materially   changes  the  Executive's  duties  and
responsibilities  to a level materially below those normally associated with the
position held by the Executive on the date hereof.

     (ii) a reduction by the Corporation of the Executive's  base salary as then
in effect, without the Executive's written consent, or the Corporation's failure
to increase the Executive's base salary at least annually as provided by Section
3.1(a).

     (iii) a   relocation  or an  actual  change  in the  Executive's  place  of
employment outside of Long Island, New York without Executive's prior consent.

                                       4

     (iv) prior to a Change in Control,  failure of the  Corporation to continue
to maintain the same medical  benefit  plans  covering the Executive as are made
available to other senior executives of the Corporation.

     (v)  any  material  breach  by the  Corporation  of any  provision  of this
Agreement  which shall not be cured within 30 days after the Board of Directors'
receipt of written notice from the Executive;

     (vi) any  failure  by the  Corporation  to obtain  the  assumption  of this
Agreement by any successor  entity.

3.  COMPENSATION

     3.1. (a) The  Corporation  shall pay or cause Delta Funding  Corporation to
pay to the Executive for the services to be rendered by the Executive  hereunder
a salary at the rate of $350,000 per annum. The salary shall be payable in equal
installments in accordance with the Corporation's normal payroll practices. Such
salary  will be  reviewed  at least  annually  and shall be  increased  (but not
decreased)  by the  Board of  Directors  of the  Corporation  in such  amount as
determined in its sole discretion,  provided, however, that the salary each year
shall be  increased  by no less than 5% percent  over the annual  salary then in
effect for the prior year.

          (b) In addition,  at the discretion of the  Compensation  Committee of
the Board of Directors (the "Compensation  Committee"),  after  consideration of
the Corporation's  actual performance  relative to its financial and operational
objectives for any particular period,  and the performance of the Executive,  as
well as such other factors deemed  appropriate by the Compensation  Committee in
its discretion,  the Corporation may also pay the Executive an annual bonus with
respect to each fiscal year of the Corporation.  Such Bonus, if any, may be paid
in cash, in shares of Delta Financial Corporation's Common Stock, par value $.01
per share

                                       5

(the "Common  Stock") or in any  combination of cash and shares of Common Stock,
as determined in the discretion of the  Compensation  Committee.  Nothing herein
contained  shall,  however,  obligate the Corporation to pay any annual bonus to
the  Executive,  it being  understood  that any such bonus  shall be in the sole
discretion of the  Compensation  Committee and that the amount thereof,  if any,
may vary depending upon actual  performance of the Corporation and the Executive
as determined in the discretion of the Board.

          (c)  In  addition  to the  Bonus  described  in  Section  3.1(b),  the
Corporation  may  pay  the  Executive  at the  Board  of  Directors'  discretion
additional  cash  bonuses.  Nothing  set  forth in this  Section  3.1(c)  shall,
however,  obligate the  Corporation  to pay any bonus  described in this Section
3.1(c) to the Executive, it being understood that any such bonus shall be in the
sole discretion of the Board of Directors and that the amount  thereof,  if any,
may vary depending upon actual  performance of the Corporation and the Executive
as determined in the discretion of the Board.

          (d) On the date of this  Agreement,  the  Executive  shall be  granted
non-qualified stock options pursuant to Delta Financial Corporation's 1996 Stock
Option Plan (the "1996 Option Plan") to purchase the following  shares of Common
Stock, at the following prices per share: (i) fifty thousand  (50,000) shares at
an amount  equal to the greater of $1.00 per share or the  closing  price of the
Common Stock on the Over the Counter  Bulletin  Board on the date  hereof,  (ii)
fifty  thousand  (50,000)  shares at an amount equal to the greater of $1.50 per
share or the closing price of the Common Stock on the Over the Counter  Bulletin
Board on the date  hereof,  (iii) fifty  thousand  (50,000)  shares at an amount
equal to the greater of $2.00 per share or the closing price of the Common Stock
on the Over the Counter  Bulletin Board on the date hereof,  (iv) fifty thousand
(50,000)  shares at an  amount  equal to the  greater  of $2.50 per share or

                                       6

the closing price of the Common Stock on the Over the Counter  Bulletin Board on
the date hereof,  and (v) fifty thousand  (50,000)  shares at an amount equal to
the greater of $3.00 per share or the closing  price of the Common  Stock on the
Over the Counter Bulletin Board on the date hereof. All of the foregoing options
shall vest 20% per year and have a term of seven years.

     3.2.  The  Executive  shall be  entitled  to  participate  in, and  receive
benefits from, any insurance, medical, disability, bonus, incentive compensation
(including  additional  grants  of non-  qualified  stock  options  under any of
Delta's Stock Option Plans, as determined by the  Corporation) or other employee
benefit plan, if any are adopted, of the Corporation or any subsidiary which may
be in effect at any time during the course of his employment by the  Corporation
and  which  shall  be  generally  available  to the  Executive  on terms no less
favorable   than  to  other  senior   executives  of  the   Corporation  or  its
subsidiaries.  The  Corporation  agrees to reimburse  Executive  for all medical
costs and  expenses  incurred by him which are not covered by the  Corporation's
group medical  plans,  up to an aggregate  maximum amount of $100,000 per annum,
upon submission of appropriate and itemized documentation.

     3.3. The Corporation  agrees to pay the Executive a car allowance of $1,000
per month.

     3.4. The  Corporation  agrees to reimburse the Executive for all reasonable
and necessary  business expenses incurred by him on behalf of the Corporation in
the course of his duties  hereunder  upon the  presentation  by the Executive of
appropriate vouchers therefor.

     3.5. The Executive  will be entitled each year of this  Agreement to a paid
vacation  of five  weeks,  no more than half of which can be carried  forward to
future years.

     3.6. The  Corporation  agrees to obtain life insurance for the Executive in
an amount of at least  $1,000,000,  with the Executive to have right to name the
beneficiar(ies)

                                       7

thereof. Upon termination of this Agreement,  the Executive shall have the right
to cause the  Corporation to assign such life insurance  policy to the Executive
or his designee at no cost to the Executive, except that Executive shall pay the
Corporation an amount equal to the cash surrender  value of the policy,  if any,
and  Executive  shall be  responsible  for any  premiums  due thereon  after the
balance of the Term of this Agreement.

     3.7.  Upon  termination  of this  Agreement  for  Cause  or due to death or
incapacity of the  Executive (as defined in Section 4.1),  the Executive (or his
estate) shall be entitled to all unpaid compensation  (including pro-rata Bonus)
and benefits accrued to the date of termination.

     3.8. The Executive shall not be required to mitigate  damages or the amount
of any payment  provided to him under this Agreement by seeking other employment
or otherwise.

     3.9. If the Executive's employment with the Corporation shall be terminated
by the  Corporation  due to death or  incapacity of the Executive (as defined in
Section 4.1),  then,  effective upon the date of termination,  all stock options
and restricted stock held by the Executive  beneficially (in trust or otherwise)
and/or  of  record,  including,   without  limitation,  all  stock  options  and
restricted  stock  held in trust for the  benefit  of the  Executive  in any Key
Employee  Share Option  Plan,  or similar  plan,  as may be  established  at the
Corporation's discretion,  shall vest and become immediately exercisable (and in
the case of stock  options,  shall remain  exercisable  by the  Executive or his
estate for one year following such termination).

                                       8

     4. INCAPACITY; DEATH

     4.1. If, during the period of employment  hereunder,  because of illness or
other incapacity, the Executive shall fail for a period of 120 consecutive days,
or for shorter  periods  aggregating  more than 120 days during any twelve month
period, to render the services contemplated hereunder, then the Corporation,  at
its option, may terminate the term of employment  hereunder,  upon not less than
30 days written notice from the  Corporation to the Executive,  effective on the
30th  day  after  giving  of  such  notice;  PROVIDED,  HOWEVER,  that  no  such
termination will be effective if prior to the 30th day after giving such notice,
the  Executive's  illness or incapacity  shall have  terminated  and he shall be
physically and mentally able to perform the services required hereunder.

     4.2. In the event of the death of the Executive during the term hereof, the
employment hereunder shall terminate on the date of death of the Executive.

     4.3. The  Corporation  (or its designee) shall have the right to obtain for
its benefit an appropriate  life insurance  policy on the life of the Executive,
naming the Corporation (or its designee) as the beneficiary. If requested by the
Corporation, the Executive agrees to cooperate with the Corporation in obtaining
such policy.

     4.4.  In the  event  the  employment  of  Executive  is  terminated  by the
Corporation  as the  result of the death or  incapacity  of the  Executive,  the
Corporation  agrees to make a payment to the Executive (or his estate) within 15
days of such termination equal to the Executive's  annual salary in effect as of
the date of such  termination,  plus the average of his annual  bonuses over the
last five years, less the amount of employer-paid  disability insurance received
by Executive  under his benefit plan. In addition,  if  termination  occurs as a
result of Executive's  incapacity,  the  Corporation  will continue to pay for a
period of time equal to the remaining Term of this

                                       9

Agreement the premiums on the  $1,000,000 of life insurance  policies  presently
maintained by the Corporation on Executive's life for the benefit of Executive's
designated beneficiary.

     5. OTHER ACTIVITIES DURING EMPLOYMENT; NON-COMPETITION; SOLICITATION.

     5.1. The Executive shall not during the Term of this Agreement undertake or
engage in other  employment,  occupation  or  business  enterprise.  Subject  to
compliance  with the provisions of this  Agreement,  the Executive may engage in
reasonable  activities  with respect to personal  investments  of the Executive.

     5.2. During the Term of this Agreement,  and for a period of one year after
the Executive  leaves the employ of the  Corporation,  in the event that (a) the
Corporation  terminates the Executive's employment with the Corporation pursuant
to Sections 2.2 or 4.1, (b) the Executive  terminates  his  employment  with the
Corporation for any reason other than Good Reason  following a Change in Control
or (c) the Executive  does not agree to extend the Term of this  Agreement  upon
the expiration thereof after the Corporation shall have offered the Executive an
extension  of Term of this  Agreement  pursuant to Section 2.4 hereof under fair
and  reasonable  terms,  having  due regard for  industry  employment  practices
relating  to  executives  of  corporations  of the  size  and  character  of the
Corporation  (unless,  in the case of this clause (c), the  Executive in writing
irrevocably waives and relinquishes all right to the severance payment described
in Section 2.4 hereof), then:

          5.2.1  Neither  the  Executive  nor  any  entity  in  which  he may be
interested as a partner,  trustee,  director,  officer,  employee,  shareholder,
option  holder,  lender of money,  guarantor  or  consultant,  shall be  engaged
directly or indirectly  in any business  engaged in by the  Corporation,  or any
subsidiary, in any area where the Corporation, or any subsidiary,  conducts such
business at any time during this Agreement; provided however, that the foregoing
shall not

                                       10

be deemed to prevent the Executive from investing in securities if such class of
securities in which the investment is so made is listed on a national securities
exchange  or is  issued  by a  company  registered  under  Section  12(g) of the
Securities  Exchange Act of 1934  ("Exchange  Act"),  so long as such investment
holdings do not, in the aggregate,  constitute  more than 5% of the voting stock
of any company's securities; and

          5.2.2 The  Executive  shall not  solicit (or assist or  encourage  the
solicitation  of) any employee of the Corporation or any of its  subsidiaries or
affiliates to work for Executive or for any business,  firm corporation or other
entity in which the Executive, directly or indirectly, in any capacity described
in Section 5.2 hereof,  participates  or engages (or expects to  participate  or
engage) or has (or expects to have) a financial interest or management position.

     5.3. The Executive shall not at any time during this Agreement or after the
termination hereof directly or indirectly divulge, furnish, use, publish or make
accessible to any person or entity any Confidential  Information (as hereinafter
defined).  Any records of Confidential  Information prepared by the Executive or
which come into Executive's  possession during this Agreement are and remain the
property of the Corporation and upon  termination of Executive's  employment all
such  records  and copies  thereof  shall be either left with or returned to the
Corporation.

     5.4 The term "Confidential Information" shall mean information disclosed to
the Executive or known, learned,  created or observed by him as a consequence of
or  through  his  employment  by the  Corporation,  not  generally  known in the
relevant trade or industry,  about the Corporation's or any of its subsidiaries'
or affiliates'  business activities,  services and processes,  including but not
limited to information concerning advertising, sales promotion, publicity, sales

                                       11

data, research, finances, accounting, methods, processes, business plans, broker
or correspondent  lists and records and potential broker or correspondent  lists
and records.

     6. CHANGE IN CONTROL.

     6.1. For  purposes  hereof,  a "Change in Control"  shall be deemed to have
occurred if (a) during any period of 12 months, individuals who at the beginning
of such period  constitute the Board of Directors of the  Corporation  cease for
any  reason to  constitute  a  majority  thereof  unless  the  election,  or the
nomination  for the  election  by the  Corporation's  stockholders  of each  new
director  was  approved by a vote of at least a majority of the  directors  then
still in office who were directors at the beginning of the period,  (b) a person
or group of  persons  acting in  concert  (as  defined  in Section 13 (a) of the
Exchange Act), other than one or more members of the Miller Family  (hereinafter
defined),  acquires beneficial ownership,  within the meaning of Rule 13 (d) (3)
of the Rules and  Regulations  of the  United  States  Securities  and  Exchange
Commission  promulgated  pursuant  to the  Exchange  Act,  of a number of voting
shares of the Corporation  which  constitutes  50% or more of the  Corporation's
outstanding  voting  shares,  (c) the  Corporation  is merged,  consolidated  or
reorganized  into or with another  corporation or another legal entity and, as a
result of such merger,  consolidation  or  reorganization,  less than 50% of the
combined voting power of the then-outstanding  securities of such corporation or
entity  immediately  after  such  transaction  is held in the  aggregate  by the
holders  of the  combined  voting  power of the  securities  of the  Corporation
entitled to vote  generally  in the  election of  directors  of the  Corporation
immediately  prior  to such  transaction,  or (d) the  Corporation  undergoes  a
liquidation or dissolution or, in one or more  transactions  occurring  within a
consecutive 12-month period, a sale of all or substantially all of the assets of
the Corporation.  No merger,  consolidation or corporate reorganization in which
the owners of the combined voting

                                       12

power of the Corporation's then outstanding  voting securities  entitled to vote
generally prior to said combination,  own 50% or more of the resulting  entity's
outstanding  voting  securities  shall,  by itself,  be  considered  a Change in
Control.

          6.1.1. For purposes of this Agreement,  the term "Miller Family" shall
mean Hugh Miller,  Marc E. Miller,  Sidney  Miller and Lee Miller,  any of their
respective spouses or lineal descendants,  or any trust the beneficial interests
of which are held by such persons.

     6.2.  If,  upon a Change  in  Control,  as  defined  under  Section  6, the
Executive's employment with the Corporation is terminated by the Corporation, or
the Executive terminates his employment with the Corporation for Good Reason (as
defined in Section  2.6),  in each case within a  twenty-four  (24) month period
following  a Change in Control  (each a "Change in  Control  Termination"),  the
Executive shall be entitled to the following severance compensation and benefits
in lieu of any payments which would otherwise be payable under Section 2.5;


          (a) within 15 days of the date of the  Change in  Control  Termination
(the  "Change in  Control  Termination  Date"),  the  Corporation  shall pay the
Executive all amounts of earned or accrued  compensation through the Executive's
termination date, including reasonable business expenses;

          (b)  within 15 days of the  Change in Control  Termination  Date,  the
Corporation  shall pay the  Executive  as  severance  and in lieu of any further
compensation for periods subsequent to the Change in Control Termination Date an
amount equal to the product of (1) 299%,  multiplied by (2) the last five years'
average annual compensation as calculated in accordance with Section 280G of the
Code; and

                                       13

          (c) the Corporation  shall continue on behalf of the Executive and his
dependents and beneficiaries the life insurance,  disability,  medical,  dental,
prescription  drug and  hospitalization  coverages and benefits  provided to the
Executive  immediately  prior to the Change in Control  Termination  Date or, if
greater, the coverages and benefits generally provided at any time thereafter by
the  Corporation to its senior officers for the remaining Term of this Agreement
following the Change in Control  Termination  Date.  Health  benefits  otherwise
receivable by the Executive pursuant to this Section 6.2 shall be reduced to the
extent comparable  benefits are actually  available to the Executive during such
period from a subsequent Employer.

     6.3.  Executive shall not be required to mitigate the amount of any payment
provided for in this Section 6 by seeking employment or otherwise.

     6.4 Upon the  occurrence  of a Change in  Control,  all stock  options  and
restricted  stock held by the  Executive  beneficially  (in trust or  otherwise)
and/or  of  record,  including,   without  limitation,  all  stock  options  and
restricted  stock  held in trust for the  benefit  of the  Executive  in any Key
Employee  Share Option  Plan,  or similar  plan,  as may be  established  at the
Corporation's  discretion,  shall vest and become immediately exercisable on the
date of the Change in Control  (and in the case of stock  options,  shall remain
exercisable by the Executive  until the  termination  date stated in the related
stock option certificates).

     6.5. In the event that any payment or benefit received or to be received by
Executive  in  connection  with a Change in  Control of the  Corporation  or the
termination of  Executive's  employment  (whether  pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Corporation,  any
person whose actions result in a Change in Control or any person affiliated with
the corporation or such person) (collectively the "Total

                                       14

Payments")  would not be deductible (in whole or in part) as a result of Section
280G of the Code, by the  Corporation,  an affiliate or other person making such
payment or providing such benefit,  the payments or benefits shall be so reduced
until no portion of the Total  Payments is not  deductible.  Executive  shall be
entitled to elect which payments or benefits  shall be so reduced.  For purposes
of this  limitation,  (1) no  portion  of the  Total  Payments  the  receipt  or
enjoyment of which the Executive shall have effectively  waived in writing prior
to the date of payment shall be taken into account,  (2) no portion of the Total
Payments  shall be  taken  into  account  which in the  opinion  of tax  counsel
selected by the  Corporation and acceptable to the Executive does not constitute
a  "parachute  payment"  within the meaning of Section 280G (b) (2) of the Code,
and (3) the value of any noncash benefit or deferred payment or benefit included
in the Total  Payments  shall be  determined  by the  Corporation's  independent
auditors in accordance  with the principles of Section 280(d) (3) and (4) of the
Code.

     7. ASSIGNMENT. The Corporation shall require any successor or assign to all
or  substantially  all the assets of the  Corporation  (whether  by merger or by
acquisition  of  stock,  assets  or  otherwise)  prior  to  consummation  of any
transaction therewith,  to expressly assume and agree to perform in writing this
Agreement in the same manner and to the same extent that the  Corporation  would
be required to perform it if no such  succession or assignment  had taken place.
This  Agreement  shall  inure  to  the  benefit  of  and  be  binding  upon  the
Corporation,  its successors and assigns,  and upon the Executive and his heirs,
executors, administrators and legal representatives. This Agreement shall not be
assignable by the Executive.

     8. NO THIRD PARTY BENEFICIARIES.  This Agreement does not create, and shall
not be construed as creating,  any rights  enforceable by any person not a party
to this Agreement, except as provided in Section 7 hereof.

                                       15

     9.  HEADINGS.  The  headings  of  the  sections  hereof  are  inserted  for
convenience  only and shall not be deemed to  constitute  a part  hereof  nor to
affect the meaning thereof.

     10. INTERPRETATION.  In case any one or more of the provisions contained in
this  Agreement  shall,  for  any  reason,  be held to be  invalid,  illegal  or
unenforceable in any respect,  such invalidity,  illegality or  unenforceability
shall not affect any other  provisions  of this  Agreement,  and this  Agreement
shall be construed as if such invalid,  illegal or  unenforceable  provision had
never been contained  herein.  If,  moreover,  any one or more of the provisions
contained in this Agreement shall for any reason be held by a court of competent
jurisdiction to be unenforceable because it is excessively broad as to duration,
geographical  scope,  activity or subject, it shall be construed by limiting and
reducing  it,  so as  to be  enforceable  to  the  extent  compatible  with  the
applicable law as it shall then appear.

     11. NOTICES. All notices under this Agreement shall be in writing and shall
be deemed to have been given at the time when mailed by  registered or certified
mail,  addressed to the address below stated party to which notice is given,  or
to such  changed  address as such  party may have  fixed by notice  given as set
forth herein:

                     To the Corporation:

            Delta Financial Corporation
            1000 Woodbury Road
            Suite 200
            Woodbury, New York 11797
            Attn: General Counsel

                  And

            To the Executive:

            Hugh Miller
            14 Eagle Chase

                                       16

            Woodbury, NY 11797

provided,  however, that any notice of change of address shall be effective only
upon receipt.

     12.  WAIVERS.  If either party should waive any breach of any  provision of
this  Agreement,  he or it shall  not  thereby  be  deemed  to have  waived  any
preceding  or  succeeding  breach  of the same or any  other  provision  of this
Agreement.

     13. COMPLETE AGREEMENT;  AMENDMENTS.  The foregoing is the entire agreement
of the parties with respect to the subject matter hereof and may not be amended,
supplemented,  canceled or discharged except by written  instrument  executed by
both parties hereto.

     14. EQUITABLE  REMEDIES.   The  Executive  acknowledges  that  he has  been
employed  for his  unique  talents  and  that  his  leaving  the  employ  of the
Corporation  would seriously hamper the business of the Corporation and that the
Corporation will suffer irreparable damage if any provisions of Section 5 hereof
are not  performed  strictly in  accordance  with their  terms or are  otherwise
breached.  The Executive hereby  expressly agrees that the Corporation  shall be
entitled  as a matter  of right to  injunctive  or other  equitable  relief,  in
addition  to all  other  remedies  permitted  by law,  to  prevent  a breach  or
violation  by the  Executive  and to secure  enforcement  of the  provisions  of
Section 5. Resort to such  equitable  relief,  however,  shall not  constitute a
waiver or any other rights or remedies, which the Corporation may have.

     15. GOVERNING  LAW.   This  Agreement is to be governed by and construed in
accordance   with   the laws  of the State of New York, without giving effect to
principles of conflicts of law.

                               [Signature Page Immediately Follows]


                                       17
<PAGE>


              IN  WITNESS  WHEREOF,   the  parties  hereto  have  executed  this
Agreement as the date first above written.

                                          DELTA FINANCIAL CORPORATION
                                          By: /S/ RICHARD BLASS
                                              --------------------------
                                          Name: Richard Blass
                                          Title: Executive Vice President


                                          /S/ HUGH MILLER
                                          ------------------------------
                                          HUGH MILLER


                                       18
<PAGE>

EXHIBIT 10.4
                              EMPLOYMENT AGREEMENT


     AGREEMENT  made as of the 24th day of September,  2001 by and between DELTA
FINANCIAL CORPORATION,  a Delaware corporation (the "Corporation"),  and Randall
F. Michaels (the "Executive").

                              W I T N E S S E T H:
     In  consideration  of  the   representations,   warranties  and  conditions
contained herein, the parties hereto agree as follows:

     1. POSITION AND RESPONSIBILITIES

     1.1. The Executive  shall serve in an executive  capacity as Executive Vice
President of the  Corporation.  The Executive  shall perform such  functions and
undertake  such  responsibilities  as  are  customarily   associated  with  such
capacity. The Executive shall hold such directorships and executive officerships
in the  Corporation  and any  subsidiary to which,  from time to time, he may be
elected or appointed during the term of this Agreement.

     1.2.  The  Executive  shall  devote  his full time and best  efforts to the
business and affairs of the Corporation and to the promotion of its interests.

     2. TERM OF EMPLOYMENT

     2.1 The term of  employment  shall be two years,  commencing  with the date
hereof, unless sooner terminated as provided in this Agreement. The initial term
of employment and any extension thereof is herein referred to as the "Term."

     2.2.  Notwithstanding the provisions of Section 2.1 hereof, the Corporation
shall have the right,  on written  notice to the  Executive,  to  terminate  the
Executive's employment for Reasonable Cause, such termination to be effective as
of the  date on  which  notice  is  given  or as of such  later  date  otherwise
specified in the notice.

     2.3. For purposes of this Agreement, the term "Reasonable Cause" shall mean
any of the following actions by the Executive: (a) failure to comply with any of
the  material  terms of this  Agreement;  (b)  engagement  in  gross  misconduct
injurious to the Corporation or an affiliate of the Corporation; (c) knowing and
willful neglect or refusal to attend to the material duties reasonably  assigned
to him by the  Board of  Directors  or the  President  of the  Corporation;  (d)
intentional  misappropriation  of property of the Corporation or an affiliate of
the  Corporation to the Executive's own use; (e) the commission by the Executive
of an act  of  embezzlement;  (f)  Executive's  conviction  for a  felony  or if
criminal  penalties are imposed on Executive  relating to any individual  income
taxes due and owing by Executive;  or (g)  Executive's  engaging in any activity
which would  constitute a material  conflict of interest with the Corporation or
an affiliate of the Corporation.

     2.4. If the Executive's employment with the Corporation shall be terminated
by the Corporation other than pursuant to Sections 2.2, 4.1 or 4.2 hereof,  then
the  Corporation  shall pay to the  Executive:  (a) if such  termination  occurs
within the first  (1st) year of the Term of this  Agreement,  the sum of (i) one
(1) year's salary,  less withholding and payroll taxes and (ii) twelve times the
average commissions per month earned by the Executive pursuant to this Agreement
over the six calendar months immediately preceding the date of termination, less
withholding and payroll taxes, or (b) if such termination occurs after the first
year of the Term of this Agreement, an amount equal to the sum of (i) the lesser
of six month's salary and the total salary due over the remaining  Term, in each
case  less  withholding  and  payroll  taxes  and (ii)  six  times  the  average
commissions  per month earned by the Executive  pursuant to this  Agreement

                                       2

over the six calendar months immediately preceding the date of termination, less
withholding  and payroll taxes.  Any payments made under clause (a)(i) or (b)(i)
of this  Section  2.4 shall be based upon the  Executive's  salary as it existed
immediately  prior to such  termination,  and any  payments  made  under  clause
(a)(i),  (b)(i),  (b)(i) or (b)(ii) of this  Section  2.4 shall be paid in equal
installments  over the six  months  following  any such  termination;  provided,
however that the Executive  shall only be entitled to such payments under either
clause (a) or clause (b) of this Section 2.4 as long as he is in compliance with
the provisions of Section 5 below.

     3. COMPENSATION

     3.1 (a) The Corporation shall pay or cause Delta Funding Corporation to pay
to the Executive  for the services to be rendered by the  Executive  hereunder a
salary at the rate of $200,000  per annum.  The salary shall be payable in equal
installments in accordance with the Corporation's normal payroll practices. Such
salary  will be  reviewed  at least  annually  and shall be  increased  (but not
decreased)  by the  Board of  Directors  of the  Corporation  in such  amount as
determined in its sole discretion.

          (b) In  addition  to  the  salary,  the  Corporation  will  pay to the
Executive  commissions  and  bonuses  as  agreed  to by the  Executive  and  the
Corporation in writing from time to time.

          (c) In addition,  the Corporation may also pay the Executive an annual
bonus with respect to each fiscal year of the Corporation, either on an "ad hoc"
basis or pursuant to a bonus plan or  arrangement  as may be  established at the
Corporation's  discretion  for Executive  Vice  Presidents of this  Corporation.
Nothing herein  contained  shall,  however,  obligate the Corporation to pay any
annual bonus to the Executive,  it being understood that any such bonus shall be
in the sole discretion of the Board of Directors and that the amount thereof,

                                       3

if any, may vary depending upon actual  performance of the  Corporation  and the
Executive as determined in the discretion of the Board.

          (d) On the date hereof, the Executive shall be granted a non-qualified
option pursuant to the terms of Delta Financial  Corporation's 1996 Stock Option
Plan to purchase 100,000 shares of Delta Financial Corporation Common Stock, par
value $.01 per share  (the  "Common  Stock")  at a price per share  equal to the
greater  of $0.50  and the  closing  price of the  Common  Stock on the Over the
Counter  Bulletin Board on September 24, 2001, which option shall have a term of
five years and shall vest 20% per year.

     3.2.  The  Executive  shall be  entitled  to  participate  in, and  receive
benefits from, any insurance, medical, disability, bonus, incentive compensation
(including  grants of non-  qualified  stock  options  under  Delta's 1996 Stock
Option Plan, as determined by the  Corporation) or other employee  benefit plan,
if any are adopted,  of the Corporation or any subsidiary which may be in effect
at any time during the course of his  employment  by the  Corporation  and which
shall be generally available to the Executive on terms no less favorable than to
other senior executives of the Corporation or its subsidiaries.

     3.3. Upon the  occurrence of a Change in Control (as defined  herein),  all
stock options held by the Executive  beneficially (in trust or otherwise) and/or
of record  shall  vest and  become  immediately  exercisable  on the date of the
Change of  Control.  For  purposes  of this  Section  3.3,  the term  "Change of
Control"  shall be deemed to have  occurred if (i) any "person" (as such term is
used in Section 13 (d) and 14 (d) (2) of the  Securities  Exchange Act of 1934),
becomes the  beneficial  owner,  directly or  indirectly,  of  securities of the
Corporation  representing  50% or  more  of the  combined  voting  power  of the
Corporation's then outstanding securities,  (ii) during any period of 12 months,
individuals  who at the  beginning  of  such  period  constitute  the

                                       4

Board of  Directors  of the  Corporation  cease for any reason to  constitute  a
majority thereof unless the election,  or the nomination for the election by the
Corporation's  stockholders  of each new  director  was approved by a vote of at
least a majority of the directors then still in office who were directors at the
beginning  of the  period or (iii) a person  (as  defined  in clause  (i) above)
acquires (or,  during the 12-month  period ending on the date of the most recent
acquisition  by  such  person  or  group  or  persons,   has  acquired)  all  or
substantially all of the Corporation's assets.

     3.4. The  Corporation  agrees to reimburse the Executive for all reasonable
and necessary  business expenses incurred by him on behalf of the Corporation in
the course of his duties  hereunder  upon the  presentation  by the Executive of
appropriate vouchers therefor.

     3.5. The Executive  will be entitled each year of this  Agreement to a paid
vacation of four weeks.

     3.6. Upon  termination of this Agreement for Reasonable Cause or due to the
death or incapacity of the Executive (as defined in Section 4.1),  the Executive
shall be entitled to all  compensation and benefits accrued and unpaid up to the
date of termination.

     3.7. The Executive shall not be required to mitigate  damages or the amount
of any payment  provided to him under this Agreement by seeking other employment
or otherwise.

     3.8. Nothing  contained herein shall prohibit the Board of Directors of the
Corporation, in its sole discretion, from increasing the compensation payable to
the  Executive  pursuant  to  this  Agreement  and/or  making  available  to the
Executive other benefits in addition to those to which the Executive is entitled
hereunder.

     4. INCAPACITY; DEATH

     4.1 If,  during the period of employment  hereunder,  because of illness or
other incapacity,  the Executive shall fail for a period of 90 consecutive days,
or for shorter  periods

                                       5

aggregating  more than 90 days  during any twelve  month  period,  to render the
services  contemplated  hereunder,  then the  Corporation,  at its  option,  may
terminate the term of employment  hereunder,  upon not less than 30 days written
notice from the  Corporation to the  Executive,  effective on the 30th day after
giving of such  notice;  PROVIDED,  HOWEVER,  that no such  termination  will be
effective  if prior to the 30th day after giving such  notice,  the  Executive's
illness or  incapacity  shall have  terminated  and he shall be  physically  and
mentally able to perform the services required hereunder and shall be performing
such services.

     4.2 In the event of the death of the Executive during the term hereof,  the
employment hereunder shall terminate on the date of death of the Executive.

     4.3. The  Corporation  (or its designee) shall have the right to obtain for
its benefit an appropriate  life insurance  policy on the life of the Executive,
naming the Corporation (or its designee) as the beneficiary. If requested by the
Corporation, the Executive agrees to cooperate with the Corporation in obtaining
such policy.

     4.4.  In the  event  the  employment  of  Executive  is  terminated  by the
Corporation  as the  result of the death or  incapacity  of the  Executive,  the
Corporation  agrees to continue to pay the  Executive (or his estate) one year's
salary at his then rate of salary,  less  withholding  and payroll  taxes,  plus
twelve times the average  commissions per month earned by the Executive pursuant
to the Commission  Agreement over the six calendar months immediately  preceding
the date of termination,  less  withholding and payroll taxes. Any payments made
under this Section 4.4 shall be paid in equal  installments over a period of one
year after such termination.

                                       6

     5. OTHER ACTIVITIES DURING EMPLOYMENT; NON-COMPETITION; SOLICITATION.

     5.1. The Executive shall not during the term of this Agreement undertake or
engage in other  employment,  occupation  or  business  enterprise.  Subject  to
compliance  with the provisions of this  Agreement,  the Executive may engage in
reasonable activities with respect to personal investments of the Executive.

     5.2  During  the  Term of this  Agreement,  and for the  Restricted  Period
(hereinafter  defined), if any, neither the Executive nor any entity in which he
may  be  interested  as  a  partner,  trustee,   director,   officer,  employee,
shareholder,  option holder, lender of money, guarantor or consultant,  shall be
engaged  directly or indirectly in any business engaged in by the Corporation in
any area where the Corporation, or any subsidiary, conducts such business at any
time during this Agreement;  provided  however,  that the foregoing shall not be
deemed to prevent the  Executive  from  investing in securities if such class of
securities in which the investment is so made is listed on a national securities
exchange  or is  issued  by a  company  registered  under  Section  12(g) of the
Securities  Exchange Act of 1934, so long as such investment holdings do not, in
the  aggregate,  constitute  more than 5% of the voting  stock of any  company's
securities. For purposes of this Section 5.2, the term "Restricted Period" shall
mean  : (i) in  the  event  that  the  Corporation  terminates  the  Executive's
employment with the  Corporation  pursuant to Section 4.1 at any time during the
Term of this  Agreement,  or the Executive  terminates his  employment  with the
Corporation for any reason,  a period of one year after the Executive leaves the
employ of the Corporation.  The Restricted  Period shall not be in effect if the
Executive's employment is terminated pursuant to Section 2.2 or 2.4 hereof.

     5.3. During his employment with the Corporation, and, in the event that the
Executive  terminates his employment  with the Corporation for any reason during
the Term of

                                       7

this Agreement,  for a period of one year after Executive leaves the
Corporation's  employ,  the Executive will not at any time solicit (or assist or
encourage the  solicitation  of) any employee of the  Corporation  or any of its
subsidiaries  or  affiliates  to work for  Executive or for any  business,  firm
corporation or other entity in which the Executive,  directly or indirectly,  in
any  capacity  described  in Section  5.2  hereof,  participates  or engages (or
expects  to  participate  or engage)  or has (or  expects  to have) a  financial
interest or management position.  This Section 5.3 shall not be in effect if the
Corporation terminates Executive's employment for any reason.

     5.4. The Executive shall not at any time during this Agreement or after the
termination hereof directly or indirectly divulge, furnish, use, publish or make
accessible to any person or entity any Confidential  Information (as hereinafter
defined).  Any records of Confidential  Information prepared by the Executive or
which come into Executive's  possession during this Agreement are and remain the
property of the Corporation and upon  termination of Executive's  employment all
such  records  and copies  thereof  shall be either left with or returned to the
Corporation.

     5.5. The term "Confidential  Information" shall mean information  disclosed
to the Executive or known, learned,  created or observed by him as a consequence
of or through his  employment by the  Corporation,  not  generally  known in the
relevant trade or industry,  about the Corporation's or any of its subsidiaries'
or affiliates'  business activities,  services and processes,  including but not
limited to information concerning advertising, sales promotion, publicity, sales
data, research, finances, accounting, methods, processes, business plans, broker
or correspondent  lists and records and potential broker or correspondent  lists
and records.

     6. ASSIGNMENT. The Corporation shall require any successor or assign to all
or  substantially  all the assets of the  Corporation  (whether  by merger or by
acquisition  of  stock,

                                       8

assets or otherwise)  prior to  consummation of any  transaction  therewith,  to
expressly  assume and agree to perform in  writing  this  Agreement  in the same
manner and to the same extent that the Corporation  would be required to perform
it if no such  succession or assignment had taken place.  This  Agreement  shall
inure to the benefit of and be binding upon the Corporation,  its successors and
assigns,  and upon the Executive and his heirs,  executors,  administrators  and
legal representatives. This Agreement shall not be assignable by the Executive.

     7. NO THIRD PARTY BENEFICIARIES.  This Agreement does not create, and shall
not be construed as creating,  any rights  enforceable by any person not a party
to this Agreement, except as provided in Section 7 hereof.

     8.  HEADINGS.  The  headings  of  the  sections  hereof  are  inserted  for
convenience  only and shall not be deemed to  constitute  a part  hereof  nor to
affect the meaning thereof.

     9.  INTERPRETATION.  In case any one or more of the provisions contained in
this  Agreement  shall,  for  any  reason,  be held to be  invalid,  illegal  or
unenforceable in any respect,  such invalidity,  illegality or  unenforceability
shall not affect any other  provisions  of this  Agreement,  and this  Agreement
shall be construed as if such invalid,  illegal or  unenforceable  provision had
never been contained  herein.  If,  moreover,  any one or more of the provisions
contained in this Agreement shall for any reason be held by a court of competent
jurisdiction to be unenforceable because it is excessively broad as to duration,
geographical  scope,  activity or subject, it shall be construed by limiting and
reducing  it,  so as  to be  enforceable  to  the  extent  compatible  with  the
applicable law as it shall then appear.

     10. NOTICES. All notices under this Agreement shall be in writing and shall
be deemed to have been given at the time when mailed by  registered or certified
mail,  addressed to

                                       9

the address  below  stated  party to which  notice is given,  or to such changed
address as such party may have fixed by notice:

            To the Corporation:
            Delta Financial Corporation
            1000 Woodbury Road
            Suite 200
            Woodbury, New York 11797
            Attn: President

                  And

            To the Executive:

            Randall F. Michaels
            114 Asharoken Road
            Northport, NY 11768

provided,  however, that any notice of change of address shall be effective only
upon receipt.

     11.  WAIVERS.  If either party should waive any breach of any  provision of
this  Agreement,  he or it shall  not  thereby  be  deemed  to have  waived  any
preceding  or  succeeding  breach  of the same or any  other  provision  of this
Agreement.

     12. COMPLETE AGREEMENT;  AMENDMENTS.  The foregoing is the entire agreement
of the parties with respect to the subject matter hereof and may not be amended,
supplemented,  canceled or discharged except by written  instrument  executed by
both parties hereto.

     13.  EQUITABLE  REMEDIES.  The  Executive  acknowledges  that  he has  been
employed  for his  unique  talents  and  that  his  leaving  the  employ  of the
Corporation  would seriously hamper the business of the Corporation and that the
Corporation will suffer irreparable damage if any provisions of Section 5 hereof
are not  performed  strictly in  accordance  with their  terms or are  otherwise
breached.  The Executive hereby  expressly agrees that the Corporation

                                       10

shall be entitled to seek injunctive or other equitable  relief,  in addition to
all other  remedies  permitted  by law, to prevent a breach or  violation by the
Executive and to secure  enforcement  of the  provisions of Section 5. Resort to
such  equitable  relief,  however,  shall not  constitute  a waiver or any other
rights or remedies, which the Corporation may have.

     14.  GOVERNING  LAW.  This  Agreement is to be governed by and construed in
accordance  with the laws of the State of New  York,  without  giving  effect to
principles  of conflicts  of law.

     IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as the
date first above written.

                                          DELTA FINANCIAL CORPORATION

                                          By:/S/ HUGH MILLER
                                             --------------------------
                                          Name: Hugh Miller
                                          Title:   President and CEO



                                          /S/ RANDALL F. MICHAELS
                                          ------------------------
                                          RANDALL F. MICHAELS



                                       11
<PAGE>
EXHIBIT 10.5
                              EMPLOYMENT AGREEMENT


      AGREEMENT  made as of the 27th day of February,  2002 by and between DELTA
FINANCIAL CORPORATION,  a Delaware corporation (the "Corporation"),  and Richard
Blass (the "Executive").
                              W I T N E S S E T H:
     In  consideration  of  the   representations,   warranties  and  conditions
contained herein, the parties hereto agree as follows:

     1. POSITION AND RESPONSIBILITIES

     1.1. The Executive shall serve in an executive  capacity as Chief Financial
Officer and Executive Vice  President of the  Corporation.  The Executive  shall
perform such functions and undertake such  responsibilities  as are  customarily
associated with such capacity.  The Executive shall hold such  directorships and
executive officerships in the Corporation and any subsidiary to which, from time
to time, he may be elected or appointed during the term of this Agreement.

     1.2.  The  Executive  shall  devote  his full time and best  efforts to the
business and affairs of the Corporation and to the promotion of its interests.

     1.3. The principal executive offices of the Corporation shall be maintained
in Long  Island,  New York and the  Executive  shall not be required to relocate
outside of Long Island, New York without his consent.

     2. TERM OF EMPLOYMENT

     2.1 The term of employment  shall be three years,  commencing with the date
hereof, unless sooner terminated as provided in this Agreement. The initial term
of employment and any extension thereof is herein referred to as the "Term."

     2.2.  Notwithstanding the provisions of Section 2.1 hereof, the Corporation
shall have the right,  on written  notice to the  Executive,  to  terminate  the
Executive's employment for Reasonable Cause, such termination to be effective as
of the  date on  which  notice  is  given  or as of such  later  date  otherwise
specified in the notice.

     2.3. For purposes of this Agreement, the term "Reasonable Cause" shall mean
any of the following actions by the Executive: (a) failure to comply with any of
the material  terms of this  Agreement,  which shall not be cured within 30 days
after the Executive's receipt of written notice from the Board of Directors; (b)
engagement in gross  misconduct  injurious to the Corporation or an affiliate of
the  Corporation,  which shall not be cured within 30 days after the Executive's
receipt of written  notice from the Board of Directors;  (c) knowing and willful
neglect or refusal to attend to the material duties  reasonably  assigned to him
by the Board of  Directors,  which  shall not be cured  within 30 days after the
Executive's  receipt  of  written  notice  from  the  Board  of  Directors;  (d)
intentional  misappropriation  of property of the Corporation or an affiliate of
the  Corporation to the Executive's own use; (e) the commission by the Executive
of an act  of  embezzlement;  (f)  Executive's  conviction  for a  felony  or if
criminal  penalties are imposed on Executive  relating to any individual  income
taxes due and owing by Executive;  or (g)  Executive's  engaging in any activity
which would  constitute  a material  conflict of interest  with the  Corporation
which shall not be cured within 30 days after the Executive's receipt of written
notice from the Board of Directors.  If the provisions  contained in subsections
(a),  (b),  (c) or (g) above cannot be cured within 30 days due to the nature of
the breach,  the cure period shall then be extended  for a reasonable  period of
time; provided, however, the Executive undertakes and continues in good faith to
cure the same.

                                       2

     2.4. If the Executive's employment with the Corporation shall be terminated
(a) by the Corporation other than pursuant to Sections 2.2, 4.1 or 4.2 hereof or
(b) by the Executive for Good Reason (as defined  herein),  then the Corporation
shall pay to the  Executive  as  severance an amount equal to the product of (1)
the lesser of (A) the remaining Term in years plus 1,  multiplied by 100% or (B)
299%,  multiplied by (2) the last five years'  average  annual  compensation  as
calculated in accordance with Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code").  All such payments shall be made within fifteen days of
such  termination.  In  addition,  for the  balance of the Term  following  such
termination  (or  for a  period  of one  year  following  such  termination,  if
greater),  the Corporation  shall provide the Executive all benefits  (including
medical  coverage)  which  may be in effect  at such  time  which are  generally
available to other senior  executives of the  Corporation  or its  subsidiaries;
provided, however that the Executive shall only be entitled to such payments and
benefits as long as he is in compliance  with the provisions of Section 5 below,
to the extent applicable.  Health benefits otherwise receivable by the Executive
pursuant to this Section 2.5 shall be reduced to the extent comparable  benefits
are  actually  available to the  Executive  during such period from a subsequent
Employer.  The Executive  shall have the right for a period of 30 days after the
occurrence of a Good Reason event to terminate this Agreement for Good Reason.

     2.5.  For purposes of this  Section,  "Good  Reason"  shall mean any of the
following, which occurs subsequent to the date of this Agreement:

     (i)  the  Corporation   materially   changes  the  Executive's  duties  and
responsibilities  to a level materially below those normally associated with the
position held by the Executive on the date hereof;

                                       3

     (ii) a reduction by the Corporation of the Executive's  base salary as then
in effect, without the Executive's written consent;

     (iii)  a  relocation  or an  actual  change  in the  Executive's  place  of
employment outside of Long Island, New York without Executive's prior consent;

     (iv) prior to a Change in Control,  failure of the  Corporation to continue
to maintain the same medical  benefit  plans  covering the Executive as are made
available to other senior executives of the Corporation;

     (v)  any  material  breach  by the  Corporation  of any  provision  of this
Agreement  which shall not be cured within 30 days after the Board of Directors'
receipt of written notice from the Executive;

     (vi) any  failure  by the  Corporation  to obtain  the  assumption  of this
Agreement by any successor entity.

     2.6 If  Executive's  employment  with the  Corporation  shall be terminated
prior to July 1, 2003 (a) by the Corporation  pursuant to Section 2.2 hereof, or
(b) by the Executive  other than for Good Reason,  Executive  shall  immediately
reimburse the  Corporation One Hundred Fifty Thousand  ($150,000.00)  dollars of
the sign-up bonus paid under Section  3.1(e) of his prior  employment  agreement
with the Corporation, dated July 1, 1999. Should the Executive fail to make such
reimbursement within 15 days of his termination,  the Corporation may offset the
$150,000.00  due to it against any  severance  payments that may be owing to the
Executive pursuant to Section 2.4.

     3. COMPENSATION

     3.1 (a) The Corporation shall pay or cause Delta Funding Corporation to pay
to the Executive  for the services to be rendered by the  Executive  hereunder a
salary at the rate of

                                       4

$300,000  per annum.  The  salary  shall be  payable  in equal  installments  in
accordance with the Corporation's normal payroll practices.  Such salary will be
reviewed at least  annually and shall be increased  (but not  decreased)  by the
Board of Directors of the  Corporation  in such amount as determined in its sole
discretion.

          (b) In addition,  at the discretion of the  Compensation  Committee of
the Board of Directors (the "Compensation  Committee"),  after  consideration of
the Corporation's  actual performance  relative to its financial and operational
objectives for any particular period,  and the performance of the Executive,  as
well as such other factors deemed  appropriate by the Compensation  Committee in
its discretion,  the Corporation may also pay the Executive an annual bonus with
respect to each fiscal year of the Corporation.  Such Bonus, if any, may be paid
in cash, in shares of Delta Financial Corporation's Common Stock, par value $.01
per share  (the  "Common  Stock")  or in any  combination  of cash and shares of
Common Stock,  as determined in the  discretion of the  Compensation  Committee.
Nothing herein  contained  shall,  however,  obligate the Corporation to pay any
annual bonus to the Executive,  it being understood that any such bonus shall be
in the sole  discretion  of the  Compensation  Committee  and  that  the  amount
thereof,  if any, may vary depending upon actual  performance of the Corporation
and the Executive as determined in the discretion of the Board.

          (c)  In  addition  to the  Bonus  described  in  Section  3.1(b),  the
Corporation  may  pay  the  Executive  at the  Board  of  Directors'  discretion
additional  cash  bonuses.  Nothing  set  forth in this  Section  3.1(c)  shall,
however,  obligate the  Corporation  to pay any bonus  described in this Section
3.1(c) to the Executive, it being understood that any such bonus shall be in the
sole discretion of the Board of Directors and that the amount  thereof,  if any,
may vary depending

                                       5

upon actual  performance of the  Corporation  and the Executive as determined in
the discretion of the Board.

          (d) On the date of this  Agreement,  the  Executive  shall be  granted
non-qualified stock options pursuant to Delta Financial Corporation's 1996 Stock
Option Plan (the "1996 Option Plan") to purchase 100,000 shares of Common Stock,
at a price per share equal to the per share closing price of the Common Stock on
the Over the Counter  Bulletin Board on the date hereof.  The foregoing  options
shall vest 20% per year and have a term of seven years.

     3.2.  The  Executive  shall be  entitled  to  participate  in, and  receive
benefits from, any insurance, medical, disability, bonus, incentive compensation
(including  additional  grants  of non-  qualified  stock  options  under any of
Delta's Stock Option Plans, as determined by the  Corporation) or other employee
benefit plan, if any are adopted, of the Corporation or any subsidiary which may
be in effect at any time during the course of his employment by the  Corporation
and  which  shall  be  generally  available  to the  Executive  on terms no less
favorable   than  to  other  senior   executives  of  the   Corporation  or  its
subsidiaries.  The  Corporation  agrees to reimburse  Executive  for all medical
costs and  expenses  incurred by him which are not covered by the  Corporation's
group medical  plans,  up to an aggregate  maximum amount of $100,000 per annum,
upon submission of appropriate and itemized documentation.

     3.3. The Corporation  agrees to pay the Executive a car allowance of $1,000
per month.

     3.4. The  Corporation  agrees to reimburse the Executive for all reasonable
and necessary  business expenses incurred by him on behalf of the Corporation in
the course of his duties  hereunder  upon the  presentation  by the Executive of
appropriate vouchers therefor.

                                       6

     3.5. The Executive  will be entitled each year of this  Agreement to a paid
vacation  of four  weeks,  no more than half of which can be carried  forward to
future years.

     3.6.  Upon  termination  of this  Agreement  for  Cause  or due to death or
incapacity of the  Executive (as defined in Section 4.1),  the Executive (or his
estate) shall be entitled to all unpaid compensation  (including pro-rata Bonus)
and benefits accrued to the date of termination.

     3.7. The Executive shall not be required to mitigate  damages or the amount
of any payment  provided to him under this Agreement by seeking other employment
or otherwise.

     3.8. If the Executive's employment with the Corporation shall be terminated
by the  Corporation  due to death or  incapacity of the Executive (as defined in
Section 4.1),  then,  effective upon the date of termination,  all stock options
and restricted stock held by the Executive  beneficially (in trust or otherwise)
and/or  of  record,  including,   without  limitation,  all  stock  options  and
restricted  stock  held in trust for the  benefit  of the  Executive  in any Key
Employee  Share Option  Plan,  or similar  plan,  as may be  established  at the
Corporation's discretion,  shall vest and become immediately exercisable (and in
the case of stock  options,  shall remain  exercisable  by the  Executive or his
estate for one year following such termination).

                                       7

     4. INCAPACITY; DEATH

     4.1 If,  during the period of employment  hereunder,  because of illness or
other incapacity, the Executive shall fail for a period of 120 consecutive days,
or for shorter  periods  aggregating  more than 120 days during any twelve month
period, to render the services contemplated hereunder, then the Corporation,  at
its option, may terminate the term of employment  hereunder,  upon not less than
30 days written notice from the  Corporation to the Executive,  effective on the
30th  day  after  giving  of  such  notice;  PROVIDED,  HOWEVER,  that  no  such
termination will be effective if prior to the 30th day after giving such notice,
the  Executive's  illness or incapacity  shall have  terminated  and he shall be
physically and mentally able to perform the services required hereunder.

     4.2 In the event of the death of the Executive during the term hereof,  the
employment hereunder shall terminate on the date of death of the Executive.

     4.3. The  Corporation  (or its designee) shall have the right to obtain for
its benefit an appropriate  life insurance  policy on the life of the Executive,
naming the Corporation (or its designee) as the beneficiary. If requested by the
Corporation, the Executive agrees to cooperate with the Corporation in obtaining
such policy.

     4.4.  In the  event  the  employment  of  Executive  is  terminated  by the
Corporation  as the  result of the death or  incapacity  of the  Executive,  the
Corporation  agrees to make a payment to the Executive (or his estate) within 15
days of such termination equal to the Executive's  annual salary in effect as of
the date of such termination.

     5. OTHER ACTIVITIES DURING EMPLOYMENT; NON-COMPETITION; SOLICITATION.

     5.1. The Executive shall not during the Term of this Agreement undertake or
engage in other  employment,  occupation  or  business  enterprise.  Subject  to
compliance  with the

                                       8

provisions of this Agreement,  the Executive may engage in reasonable activities
with respect to personal investments of the Executive.

     5.2 During the Term of this  Agreement,  and for a period of one year after
the Executive  leaves the employ of the  Corporation,  in the event that (a) the
Corporation  terminates the Executive's employment with the Corporation pursuant
to Sections 2.2 or 4.1, or (b) the Executive  terminates his employment with the
Corporation for any reason other than Good Reason following a Change in Control,
then:
          5.2.1  Neither  the  Executive  nor  any  entity  in  which  he may be
interested as a partner,  trustee,  director,  officer,  employee,  shareholder,
option  holder,  lender of money,  guarantor  or  consultant,  shall be  engaged
directly or indirectly  in any business  engaged in by the  Corporation,  or any
subsidiary, in any area where the Corporation, or any subsidiary,  conducts such
business at any time during this Agreement; provided however, that the foregoing
shall not be deemed to prevent the  Executive  from  investing in  securities if
such  class of  securities  in which  the  investment  is so made is listed on a
national  securities exchange or is issued by a company registered under Section
12(g) of the Securities  Exchange Act of 1934 ("Exchange  Act"), so long as such
investment  holdings do not, in the  aggregate,  constitute  more than 5% of the
voting stock of any company's securities; and

          5.2.2 The  Executive  shall not  solicit (or assist or  encourage  the
solicitation  of) any employee of the Corporation or any of its  subsidiaries or
affiliates to work for Executive or for any business,  firm corporation or other
entity in which the Executive, directly or indirectly, in any capacity described
in Section 5.2 hereof,  participates  or engages (or expects to  participate  or
engage) or has (or expects to have) a financial interest or management position.

                                       9

     5.3. The Executive shall not at any time during this Agreement or after the
termination hereof directly or indirectly divulge, furnish, use, publish or make
accessible to any person or entity any Confidential  Information (as hereinafter
defined).  Any records of Confidential  Information prepared by the Executive or
which come into Executive's  possession during this Agreement are and remain the
property of the Corporation and upon  termination of Executive's  employment all
such  records  and copies  thereof  shall be either left with or returned to the
Corporation.

     5.4 The term "Confidential Information" shall mean information disclosed to
the Executive or known, learned,  created or observed by him as a consequence of
or  through  his  employment  by the  Corporation,  not  generally  known in the
relevant trade or industry,  about the Corporation's or any of its subsidiaries'
or affiliates'  business activities,  services and processes,  including but not
limited to information concerning advertising, sales promotion, publicity, sales
data, research, finances, accounting, methods, processes, business plans, broker
or correspondent  lists and records and potential broker or correspondent  lists
and records.

     6. CHANGE IN CONTROL.

     6.1 For  purposes  hereof,  a "Change in  Control"  shall be deemed to have
occurred if (a) during any period of 12 months, individuals who at the beginning
of such period  constitute the Board of Directors of the  Corporation  cease for
any  reason to  constitute  a  majority  thereof  unless  the  election,  or the
nomination  for the  election  by the  Corporation's  stockholders  of each  new
director  was  approved by a vote of at least a majority of the  directors  then
still in office who were directors at the beginning of the period,  (b) a person
or group of  persons  acting in  concert  (as  defined  in Section 13 (a) of the
Exchange Act), other than one or more members of the Miller Family  (hereinafter
defined),  acquires beneficial ownership,  within the meaning of

                                       10

Rule 13 (d) (3) of the Rules and Regulations of the United States Securities and
Exchange  Commission  promulgated  pursuant to the Exchange  Act, of a number of
voting  shares  of  the  Corporation  which  constitutes  50%  or  more  of  the
Corporation's   outstanding  voting  shares,  (c)  the  Corporation  is  merged,
consolidated  or reorganized  into or with another  corporation or another legal
entity and, as a result of such merger,  consolidation or  reorganization,  less
than 50% of the combined voting power of the then-outstanding securities of such
corporation  or  entity  immediately  after  such  transaction  is  held  in the
aggregate by the holders of the combined  voting power of the  securities of the
Corporation  entitled to vote  generally  in the  election of  directors  of the
Corporation  immediately  prior  to such  transaction,  or (d)  the  Corporation
undergoes a liquidation or dissolution or, in one or more transactions occurring
within a consecutive  12-month period, a sale of all or substantially all of the
assets of the Corporation. No merger,  consolidation or corporate reorganization
in which the  owners of the  combined  voting  power of the  Corporation's  then
outstanding  voting  securities   entitled  to  vote  generally  prior  to  said
combination,  own 50% or  more  of the  resulting  entity's  outstanding  voting
securities shall, by itself, be considered a Change in Control.

          6.1.1 For purposes of this  Agreement,  the term "Miller Family" shall
mean Hugh Miller,  Marc E. Miller,  Sidney  Miller and Lee Miller,  any of their
respective spouses or lineal descendants,  or any trust the beneficial interests
of which are held by such persons.

     6.2.  If,  upon a Change  in  Control,  as  defined  under  Section  6, the
Executive's employment with the Corporation is terminated by the Corporation, or
the Executive terminates his employment with the Corporation for Good Reason (as
defined in Section  2.6),  in each case within a  twenty-four  (24) month period
following  a Change in Control  (each a "Change in

                                       11

Control  Termination"),  the  Executive  shall  be  entitled  to  the  following
severance  compensation  and  benefits  in  lieu  of any  payments  which  would
otherwise be payable under Section 2.5;

          (a) within 15 days of the date of the  Change in  Control  Termination
(the  "Change in  Control  Termination  Date"),  the  Corporation  shall pay the
Executive all amounts of earned or accrued  compensation through the Executive's
termination date, including reasonable business expenses;

          (b)  within 15 days of the  Change in Control  Termination  Date,  the
Corporation  shall pay the  Executive  as  severance  and in lieu of any further
compensation for periods subsequent to the Change in Control Termination Date an
amount equal to the product of (1) 299%,  multiplied by (2) the last five years'
average annual compensation as calculated in accordance with Section 280G of the
Code; and
          (c) the Corporation  shall continue on behalf of the Executive and his
dependents and beneficiaries the life insurance,  disability,  medical,  dental,
prescription  drug and  hospitalization  coverages and benefits  provided to the
Executive  immediately  prior to the Change in Control  Termination  Date or, if
greater, the coverages and benefits generally provided at any time thereafter by
the  Corporation to its senior officers for the remaining Term of this Agreement
following the Change in Control  Termination  Date.  Health  benefits  otherwise
receivable by the Executive pursuant to this Section 6.2 shall be reduced to the
extent comparable  benefits are actually  available to the Executive during such
period from a subsequent Employer.

     6.3.  Executive shall not be required to mitigate the amount of any payment
provided for in this Section 6 by seeking employment or otherwise.

                                       12

     6.4 Upon the  occurrence  of a Change in  Control,  all stock  options  and
restricted  stock held by the  Executive  beneficially  (in trust or  otherwise)
and/or  of  record,  including,   without  limitation,  all  stock  options  and
restricted  stock  held in trust for the  benefit  of the  Executive  in any Key
Employee  Share Option  Plan,  or similar  plan,  as may be  established  at the
Corporation's  discretion,  shall vest and become immediately exercisable on the
date of the Change in Control  (and in the case of stock  options,  shall remain
exercisable by the Executive  until the  termination  date stated in the related
stock option certificates).

     6.5. In the event that any payment or benefit received or to be received by
Executive  in  connection  with a Change in  Control of the  Corporation  or the
termination of  Executive's  employment  (whether  pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Corporation,  any
person whose actions result in a Change in Control or any person affiliated with
the corporation or such person) (collectively the "Total Payments") would not be
deductible (in whole or in part) as a result of Section 280G of the Code, by the
Corporation,  an affiliate or other person making such payment or providing such
benefit,  the payments or benefits  shall be so reduced  until no portion of the
Total  Payments is not  deductible.  Executive  shall be entitled to elect which
payments or benefits shall be so reduced.  For purposes of this limitation,  (1)
no portion of the Total Payments the receipt or enjoyment of which the Executive
shall have  effectively  waived in writing prior to the date of payment shall be
taken into  account,  (2) no portion of the Total  Payments  shall be taken into
account  which in the opinion of tax counsel  selected  by the  Corporation  and
acceptable to the Executive does not constitute a "parachute payment" within the
meaning of Section  280G (b) (2) of the Code,  and (3) the value of any  noncash
benefit or deferred  payment or benefit  included in the Total

                                       13

Payments  shall be  determined  by the  Corporation's  independent  auditors  in
accordance with the principles of Section 280(d) (3) and (4) of the Code.

     7. ASSIGNMENT. The Corporation shall require any successor or assign to all
or  substantially  all the assets of the  Corporation  (whether  by merger or by
acquisition  of  stock,  assets  or  otherwise)  prior  to  consummation  of any
transaction therewith,  to expressly assume and agree to perform in writing this
Agreement in the same manner and to the same extent that the  Corporation  would
be required to perform it if no such  succession or assignment  had taken place.
This  Agreement  shall  inure  to  the  benefit  of  and  be  binding  upon  the
Corporation,  its successors and assigns,  and upon the Executive and his heirs,
executors, administrators and legal representatives. This Agreement shall not be
assignable by the Executive.

     8. NO THIRD PARTY BENEFICIARIES.  This Agreement does not create, and shall
not be construed as creating,  any rights  enforceable by any person not a party
to this Agreement, except as provided in Section 7 hereof.

     9.  HEADINGS.  The  headings  of  the  sections  hereof  are  inserted  for
convenience  only and shall not be deemed to  constitute  a part  hereof  nor to
affect the meaning thereof.

     10. INTERPRETATION.  In case any one or more of the provisions contained in
this  Agreement  shall,  for  any  reason,  be held to be  invalid,  illegal  or
unenforceable in any respect,  such invalidity,  illegality or  unenforceability
shall not affect any other  provisions  of this  Agreement,  and this  Agreement
shall be construed as if such invalid,  illegal or  unenforceable  provision had
never been contained  herein.  If,  moreover,  any one or more of the provisions
contained in this Agreement shall for any reason be held by a court of competent
jurisdiction to be unenforceable because it is excessively broad as to duration,
geographical  scope,  activity or

                                       14

subject,  it shall  be  construed  by  limiting  and  reducing  it,  so as to be
enforceable  to the extent  compatible  with the applicable law as it shall then
appear.

     11. NOTICES. All notices under this Agreement shall be in writing and shall
be deemed to have been given at the time when mailed by  registered or certified
mail,  addressed to the address below stated party to which notice is given,  or
to such  changed  address as such  party may have  fixed by notice  given as set
forth herein:
                    To the Corporation:
            Delta Financial Corporation
            1000 Woodbury Road
            Suite 200
            Woodbury, New York 11797
            Attn: General Counsel

                  And

            To the Executive:

            Richard Blass
            22 Wharton Place
            Melville, NY 11747

provided,  however, that any notice of change of address shall be effective only
upon receipt.

     12.  WAIVERS.  If either party should waive any breach of any  provision of
this  Agreement,  he or it shall  not  thereby  be  deemed  to have  waived  any
preceding  or  succeeding  breach  of the same or any  other  provision  of this
Agreement.

     13. COMPLETE AGREEMENT;  AMENDMENTS.  The foregoing is the entire agreement
of the parties with respect to the subject matter hereof and may not be amended,
supplemented,  canceled or discharged except by written  instrument  executed by
both parties  hereto.  This  Agreement  shall  supercede and replace any and all
prior  agreements  between the parties,  including that certain  agreement dated
July 1, 1999, as amended.

                                       15

     14.  EQUITABLE  REMEDIES.  The  Executive  acknowledges  that  he has  been
employed  for his  unique  talents  and  that  his  leaving  the  employ  of the
Corporation  would seriously hamper the business of the Corporation and that the
Corporation will suffer irreparable damage if any provisions of Section 5 hereof
are not  performed  strictly in  accordance  with their  terms or are  otherwise
breached.  The Executive hereby  expressly agrees that the Corporation  shall be
entitled  as a matter  of right to  injunctive  or other  equitable  relief,  in
addition  to all  other  remedies  permitted  by law,  to  prevent  a breach  or
violation  by the  Executive  and to secure  enforcement  of the  provisions  of
Section 5. Resort to such  equitable  relief,  however,  shall not  constitute a
waiver or any other rights or remedies, which the Corporation may have.

     15.  GOVERNING  LAW.  This  Agreement is to be governed by and construed in
accordance  with the laws of the State of New  York,  without  giving  effect to
principles of conflicts of law.

     IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as the
date first above written.
                                          DELTA FINANCIAL CORPORATION
                                          By:/S/ HUGH MILLER
                                             ---------------------------
                                          Name: Hugh Miller
                                          Title:   President


                                          RICHARD BLASS
                                          ------------------------------
                                          RICHARD BLASS


                                       16
<PAGE>

EXHIBIT 10.10



                            NINTH AMENDMENT TO LEASE


      THIS  AGREEMENT  made the 16th day of February,  2001,  by and between THE
TILLES INVESTMENT  COMPANY,  having offices at 7600 Jericho Turnpike,  Woodbury,
New York 11797,  hereinafter  referred to as the  "LANDLORD"  and DELTA  FUNDING
CORPORATION,  having  offices at 1000 Woodbury Road,  Woodbury,  New York 11797,
hereinafter referred to as the "TENANT".

                                   WITNESSETH

      WHEREAS,  the parties have heretofore on or about the 1st day of November,
1993,  entered into a certain Agreement of Lease, which was amended the 20th day
January,  1994, the 23rd day of March, 1994, the 8th day of December,  1995 (3rd
Amendment), the 8th day of December, 1995 (4th Amendment), the 4th day of March,
1996, the 28th day of August,  1997,  the 29th day of October,  1997 and the 2nd
day of  April,  1998,  for  certain  premises  located  at 1000  Woodbury  Road,
Woodbury, New York and

      NOW, THEREFORE, in consideration of One Dollar and other good and valuable
consideration,  each in hand paid to the other,  the  receipt  whereof is hereby
acknowledged  and in further  consideration  of the mutual  covenants  contained
herein, it is agreed as follows:

      FIRST:  Commencing  November 1, 2000,  the TENANT has  surrendered  11,800
square feet on the third (3rd) floor as noted in the Floor Plan attached  hereto
as Exhibit "A",  making  TENANT'S  total square footage on the third (3rd) floor
46,637 square feet.

      SECOND:  Commencing  November 1, 2000,  the TENANT has  surrendered  3,530
square feet on the second (2nd) floor as noted in the Floor Plan attached hereto
as Exhibit "B",  making  TENANT'S total square footage on the second (2nd) floor
33,925 square feet.

      THIRD:  Commencing November 1, 2000, the TENANT has surrendered all square
footage on the fourth floor in 1000 Woodbury Road, Woodbury, New York 11797.

      FOURTH:  In addition to all payments of Annual  Basic Rent and  additional
rent as set forth in the Lease,  TENANT  agrees to pay  LANDLORD,  as an item of
additional  rent,  the  sum  of  $233,524.42  in  nineteen  (19)  equal  monthly
installments  of 12,290.76  commencing on February 1, 2001 through  September 1,
2002. This represents all monies due from TENANT through October 31, 2000.

      FIFTH:  Commencing  the 1st day of  November,  2000,  TENANT  shall occupy
80,562  square feet on the second (2nd) and third (3rd) floors of said  building
and shall pay an Annual Basic Rent in equal monthly installments, based upon the
following schedule:

TERM                    ANNUAL BASIC RENT        MONTHLY BASIC RENT
----                    -----------------        ------------------
11/01/00 - 03/31/01          $1,812,645.00            $151,053.75
04/01/01 - 03/31/02          $1,876,631.36            $156,385.94
04/01/02 - 03/31/03          $1,942,876.44            $161,906.37
04/01/03 - 03/31/04          $2,011,459.97            $167,621.66
04/01/04 - 03/01/05          $2,081,861.06            $173,488.42
04/01/05 - 03/01/06          $2,155,350.75            $179,612.56
04/01/06 - 03/01/07          $2,231,434.63            $185,952.88
04/01/07 - 03/01/08          $2,310,204.27            $192,517.02

This rent schedule amends and supersedes all previous  schedules as set forth in
the Lease as amended.

     SIXTH: Section "Third" of the Eighth Amendment to Lease shall be changed to
read as follows: " . . . rentable area of the Demised Premises (i.e., 80,562 sq.
ft.) . . . form a part (i.e., 230,000 sq. ft.), i.e., 35.02%."

                                       2

     SEVENTH: Section "Fourth" of the Eighth Amendment to Lease shall be changed
to read as follows: " . . . TENANT'S Energy Base = $153,067.80 . . ."

     EIGHTH:  Section "Fifth" of the Eighth  Amendment to Lease shall be changed
to read as follows:  ". . . pay the sum of $153,067.80 per year in equal monthly
installments of $12,755.65 in advance . . ."

     NINTH:  The foregoing  provisions are intended to modify said lease only in
the foregoing respects and such modifications and the terms hereof as herein set
forth  are to be  strictly  construed.  It is  further  agreed  that,  except as
hereinabove provided,  all of the terms,  covenants and conditions of said lease
dated the 1st day of November,  1993, and amended the 20th day of January, 1994,
the 23rd day of March, 1994, the 8th day of December, 1995 (3rd Amendment),  the
8th day of December, 1995 (4th Amendment),  the 4th day of March, 1996, the 28th
day of August,  1997,  the 29th day of  October,  1997 and the 2nd day of April,
1998,  shall continue to remain in full force and effect as therein  written and
shall be read and construed together with this instrument.

     IN WITNESS  WHEREOF,  the parties  hereto have hereunto set their hands and
seals the day and year first above written.

                                    THE TILLES INVESTMENT COMPANY


                                    BY: /S/ ROGER TILLES
                                        --------------------------------



                                    DELTA FUNDING CORPORATION


                                    BY: /S/ MARC E. MILLER, SVP
                                        --------------------------------


                                       3
<PAGE>


EXHIBIT 10.12

                           DELTA FINANCIAL CORPORATION
                             2001 STOCK OPTION PLAN

     1.  PURPOSE.  The  purpose of this  Stock  Option  Plan is to  advance  the
interests of the  Corporation by encouraging  and enabling the  acquisition of a
larger  personal  proprietary  interest  in the  Corporation  by  employees  and
directors of, and consultants to, the  Corporation,  and its  Subsidiaries  upon
whose judgment and keen interest the  Corporation  is largely  dependent for the
successful conduct of its operations and by providing such employees,  directors
and consultants  with incentives to put forth maximum efforts for the success of
the  Corporation's  business.  It is  anticipated  that the  acquisition of such
proprietary  interest in the  Corporation and such incentives will stimulate the
efforts  of  such  employees,   directors  and  consultants  on  behalf  of  the
Corporation and its  Subsidiaries and strengthen their desire to remain with the
Corporation and its  Subsidiaries.  It is also expected that such incentives and
the  opportunity  to  acquire  such  a  proprietary  interest  will  enable  the
Corporation and its Subsidiaries to attract desirable personnel.

     2.  DEFINITIONS.  When used in this  Plan,  unless  the  context  otherwise
requires:


     (a) "Board of  Directors"  or "Board"  shall mean the Board of Directors of
the Corporation, as constituted at any time.

     (b)  "Chairman of the Board" shall mean the person who at the time shall be
Chairman of the Board of Directors.

     (c) "Code" shall mean the Internal Revenue Code of 1986, as amended.

     (d) "Committee"shall mean the Committee hereinafter described in Section 3.

     (e)  "Corporation"  shall  mean  Delta  Financial  Corporation,  a Delaware
corporation.

     (f) "Eligible  Persons" shall mean those persons described in Section 4 who
are potential recipients of Options.

     (g) "Fair Market Value" on a specified date shall mean the closing price at
which a Share is traded on the  stock  exchange,  if any,  on which  Shares  are
primarily  traded,  but if no Shares were traded on such date,  then on the last
previous  date  on  which  a  Share  was so  traded,  or,  if the  above  is not
applicable,  the value of a Share as  established by the Committee for such date
using any reasonable method of valuation.

     (h) "Options" shall mean the Stock Options granted pursuant to this Plan.

     (i)  "Plan"  shall  mean this 2001  Stock  Option  Plan of Delta  Financial
Corporation,  as adopted by the Board of Directors  on April 26,  2001,  as such
Plan from time to time may be amended.

     (j)  "President"  shall  mean  the  person  who at the  time  shall  be the
President of the Corporation.

     (k) "Share" shall mean a share of common stock of the Corporation.

     (l)  "Subsidiary"  shall mean any  corporation  50% or more of whose  stock
having  general  voting  power  is  owned  by  the  Corporation,  or by  another
Subsidiary, as herein defined, of the Corporation.

     3. COMMITTEE.  The Plan shall be  administered by a Committee  appointed by
the Board of  Directors  which  shall  consist of two or more  directors  of the
Corporation,  each of whom shall be a "Non-Employee Director" within the meaning
of Rule  16b-3  under the  Securities  Exchange  Act of 1934,  as  amended  (the
"Exchange Act"), and an "outside  director" within the meaning of Section 162(m)
of the Code and the regulations promulgated thereunder.

     4.  PARTICIPANTS.  All employees and directors of, and  consultants to, the
Corporation or a Subsidiary,  as determined by the Committee,  shall be eligible
to receive Options under the Plan. The parties to whom Options are granted under
this  Plan,  and the  number of Shares  subject  to each such  Option,  shall be
determined by the Committee in its sole  discretion,  subject,  however,  to the
terms and  conditions  of this Plan.  Employees  to whom  Options may be granted
include employees who are also directors of the Corporation, or a Subsidiary.

     5. SHARES.  Subject to the  provisions of Section 14 hereof,  the Committee
may grant Options with respect to an aggregate of up to 1.5 million Shares,  all
of which Shares may be either Shares held in treasury or authorized but unissued
Shares. The maximum number of Shares which may be the subject of Options granted
to any  individual  during the  duration  of the Plan shall not exceed 1 million
Shares. If the Shares that would be issued or transferred pursuant to any Option
are not issued or transferred and cease to be issuable or  transferable  for any
reason,  the number of Shares  subject to such  Option will no longer be charged
against  the  limitation  provided  for herein and may again be made  subject to
Options;  provided,  however,  that with  respect to any  Option  granted to any
Eligible Person who is a "covered  employee" as defined in Section 162(m) of the
Code and the  regulations  promulgated  thereunder that is canceled or repriced,
the number of Shares  subject to such Option shall continue to count against the
maximum  number of Shares  which may be the  subject of Options  granted to such
Eligible  Person  and such  maximum  number of  Shares  shall be  determined  in
accordance  with  Section  162(m)  of the Code and the  regulations  promulgated
thereunder.

     6.  GRANT OF  OPTIONS.  The  number of any  Options  to be  granted  to any
Eligible Person shall be determined by the Committee in its sole discretion.  At
the time an  Option is  granted,  the  Committee  may,  in its sole  discretion,
designate  whether such Option (a) is to be  considered  as an  incentive  stock
option  within  the  meaning  of  Section  422 of the Code,  or (b) is not to be
treated as an incentive  stock option for purposes of this Plan and the Code. No
Option  which is  intended  to qualify as an  incentive  stock  option  shall be
granted under this Plan to any individual who, at the time of such grant, is not
an employee of the Corporation or a Subsidiary.

                                       2

     Notwithstanding  any other  provision of this Plan to the contrary,  to the
extent that the aggregate Fair Market Value (determined as of the date an Option
is granted) of the Shares with respect to which Options which are  designated as
(or  deemed to be)  incentive  stock  options  granted to an  employee  (and any
incentive stock options granted to such employee under any other incentive stock
option plan  maintained  by the  Corporation  or any  Subsidiary  that meets the
requirements  of  Section  422 of the  Code)  first  become  exercisable  in any
calendar year exceeds  $100,000,  such Options shall be treated as Options which
are not incentive stock options. Options with respect to which no designation is
made by the  Committee  shall be deemed to be  options  which are not  incentive
stock options. This paragraph shall be applied by taking Options into account in
the order in which they are granted.

     Nothing  herein  contained  shall be  construed to prohibit the issuance of
Options at different times to the same person.

     The  form  of an  Option  shall  be  determined  from  time  to time by the
Committee.  A  certificate  of Option signed by the Chairman of the Board or the
President or a Vice President of the  Corporation,  attested by the Treasurer or
an  Assistant  Treasurer,   or  Secretary  or  an  Assistant  Secretary  of  the
Corporation and bearing the seal of the Corporation  affixed  thereto,  shall be
issued to each person to whom an Option is granted.  The  certificate  of Option
for an Option  shall be  legended  to  indicate  whether or not the Option is an
incentive stock option.

     7. PURCHASE  PRICE.  The purchase price per Share for the Shares  purchased
pursuant to the  exercise of an Option  shall be fixed by the  Committee  at the
time of grant of the Option;  provided,  however,  that the  purchase  price per
Share for the Shares to be  purchased  pursuant to the  exercise of an incentive
stock  option  shall not in any event be less than 100% of the Fair Market Value
of a Share on the date of grant of the Option.

     8. DURATION OF OPTIONS.  The duration of each Option shall be determined by
the Committee at the time of grant; provided,  however, that the duration of any
Option  shall not be more than ten years  from the date upon which the Option is
granted.

     9. TEN PERCENT  STOCKHOLDERS.  Notwithstanding  any other provision of this
Plan to the  contrary,  no Option  which is intended to qualify as an  incentive
stock option may be granted under this Plan to any employee who, at the time the
Option is  granted,  owns  Shares  possessing  more than 10 percent of the total
combined  voting  power  or value of all  classes  of stock of the  Corporation,
unless the exercise  price under such Option is at least 110% of the Fair Market
Value of a Share on the date such  Option is granted  and the  duration  of such
Option is no more than five years.

     10.  EXERCISE OF OPTIONS.  Except as otherwise  provided  herein,  Options,
after the grant  thereof,  shall be  exercisable  by the holder at such rate and
times as may be fixed by the Committee at the time of grant, provided,  however,
that no Options may be exercised in part or in full prior to the approval of the
Plan by a majority vote of the  stockholders  of the  Corporation as provided in
Section 19.

     Notwithstanding the foregoing, all or any part of any remaining unexercised
Options  granted  to  any  person  may,  after  approval  of  the  plan  by  the
stockholders  of the

                                       3

Corporation   as  provided  in  Section  19,  be  exercised  in  the   following
circumstances  (but in no event after the expiration of the term of the Option):
(a) if,  while the  holder  is  employed  by, or  serving  as a  director  of or
consultant to, the Corporation or a Subsidiary, there occurs a Change in Control
and the  holder's  option  provides  for  such  acceleration,  or (b)  upon  the
occurrence of such special  circumstance or event as in the opinion of the Board
of Directors merits special consideration;  provided,  however, that in the case
of an Option held by a member of the Board,  such member shall  abstain from any
determination  hereunder to accelerate the  exercisability of such Option unless
the acceleration  applies to all Options then outstanding.  For purposes of this
Plan, a "Change in Control" shall be deemed to have occurred if (i) any "person"
or group of "persons" (as the term "person" is used in Sections  13(d) and 14(d)
of  the  Exchange  Act)  ("Person"),   acquires  (or  has  acquired  during  the
twelve-month  period ending on the date of the most recent  acquisition  by such
Person) direct or indirect beneficial ownership of securities of the Corporation
representing 50% or more of the combined voting power of the Corporation's  then
outstanding  securities  (ii) a Person  acquires  (or has  acquired  during  the
twelve-month  period ending on the date of the most recent  acquisition  by such
Person) all or substantially  all of the  Corporation's  assets, or (iii) during
any  period  of 12  months,  individuals  who at the  beginning  of such  period
constitute  the Board of  Directors of the  Corporation  cease for any reason to
constitute a majority  thereof  unless the election,  or the  nomination for the
election by the Corporation's  stockholders of each new director was approved by
a vote of at least a  majority  of the  directors  then still in office who were
directors at the beginning of the period.  Notwithstanding  the  foregoing,  for
purposes of clause (i), a Change in Control will not be deemed to have  occurred
if the power to control  (directly or indirectly) the management and policies of
the  Corporation is not transferred  from a Person to another  Person;  and, for
purposes of clause  (ii), a Change in Control will not be deemed to occur if the
assets of the Corporation are transferred:  (A) to a shareholder in exchange for
his  stock,  (B)  to an  entity  in  which  the  Corporation  has  (directly  or
indirectly) 50% ownership,  or (C) to a Person that has (directly or indirectly)
at least 50% ownership of the Corporation with respect to its stock outstanding,
or to any entity in which such Person  possesses  (directly or  indirectly)  50%
ownership.

     An Option  shall be  exercised  by the  delivery  of a written  notice duly
signed by the holder thereof to such effect ("Exercise  Notice"),  together with
the Option  certificate  and the full  purchase  price of the  Shares  purchased
pursuant to the  exercise of the Option,  to the  President or an officer of the
Corporation  appointed by the  President  for the purpose of receiving the same.
Payment of the full purchase price shall be made as follows: in cash or by check
payable to the order of the  Corporation;  by  delivery  to the  Corporation  of
Shares  which shall be valued at their Fair Market Value on the date of exercise
of the Option (provided,  that a holder may not use any Shares unless the holder
has beneficially owned such Shares for at least six months); by a combination of
the methods of payment previously described;  or by such other method of payment
as the Committee in its discretion may permit.

     Within a reasonable  time after the exercise of an Option,  the Corporation
shall cause to be delivered to the person  entitled  thereto,  a certificate for
the Shares purchased pursuant to the exercise of the Option. If the Option shall
have been  exercised  with respect to less than all of the Shares subject to the
Option,  the Corporation shall also cause to be delivered to the person entitled
thereto a new Option  certificate in replacement of the certificate  surrendered
at the time of the exercise of the Option,  indicating the number of Shares with

                                       4

respect to which the Option  remains  available  for  exercise,  or the original
Option  certificate  shall be endorsed  to give  effect to the partial  exercise
thereof.

     Notwithstanding any other provision of the Plan or of any Option, no Option
granted pursuant to the Plan may be exercised at any time when the Option or the
granting  or  exercise  thereof  violates  any  law  or  governmental  order  or
regulation.

     11.   CONSIDERATION   FOR  OPTIONS.   The  Corporation  shall  obtain  such
consideration  for the grant of an Option as the Committee in its discretion may
determine.

     12. NON-TRANSFERABILITY OF OPTIONS. Options and all other rights thereunder
shall be  non-transferable or non-assignable by the holder thereof except to the
extent  that the estate of a deceased  holder of an Option may be  permitted  to
exercise  them.  Options may be  exercised  or  surrendered  during the holder's
lifetime only by the holder thereof.

     13. TERMINATION OF EMPLOYMENT OR SERVICE. All or any part of any Option, to
the extent  unexercised,  shall  terminate  immediately,  upon the  cessation or
termination  for any reason of the holder's  employment by, or service with, the
Corporation,  the Parent or any  Subsidiary,  except that the holder  shall have
until the end of the thirtieth day following the cessation of his  employment or
service with the Corporation or its Subsidiaries, and no longer, to exercise any
unexercised  Option  that he  could  have  exercised  on the day on  which  such
employment  or  service  terminated;   provided,  that  such  exercise  must  be
accomplished prior to the expiration of the term of such Option. Notwithstanding
the  foregoing,  if the  cessation of employment or service is due to disability
(to an  extent  and in a  manner  as  shall be  determined  in each  case by the
Committee in its sole discretion) or to death, the holder or the  representative
of the estate of a deceased  holder shall have the privilege of  exercising  any
unexercised  Options  which the holder could have  exercised at the time of such
disability  or death or which the Board  determines  to  accelerate  pursuant to
Section 10; provided,  however, that such exercise must be accomplished prior to
the  expiration  of the term of such Option and within one year of the  holder's
disability or death, as the case may be.  Notwithstanding any other provision of
the  Plan,   the  Board  of  Directors   may  in  its   discretion   extend  the
post-termination  exercise period with respect to any individual  Option, but in
no event  beyond the  expiration  of the original  term of such  Option.  If the
employment  or  service  of any holder of an Option  with the  Corporation  or a
Subsidiary shall be terminated  because of the holder's  violation of the duties
of such  employment  or service with the  Corporation  or a Subsidiary as he may
from time to time have, the existence of which  violation shall be determined by
the Committee in its sole discretion (which determination by the Committee shall
be  conclusive)  all   unexercised   Options  of  such  holder  shall  terminate
immediately upon such termination of the holder's employment or service with the
Corporation and all  Subsidiaries,  and a holder of Options whose  employment or
service with the Corporation and any  Subsidiaries is so terminated,  shall have
no right after such termination to exercise any unexercised Option he might have
exercised  prior  to the  termination  of his  employment  or  service  with the
Corporation and Subsidiaries.

     14. ADJUSTMENT  PROVISION.  If prior to the complete exercise of any Option
there  shall be  declared  and paid a stock  dividend  upon the Shares or if the
Shares  shall be split up,  converted,  exchanged,  reclassified,  or in any way
substituted for, then the Option,  to the extent that it has not been exercised,
shall entitle the holder thereof upon the future  exercise of

                                       5

the  Option to such  number  and kind of  securities  or cash or other  property
subject to the terms of the Option to which he would have been  entitled  had he
actually  owned the Shares subject to the  unexercised  portion of the Option at
the  time  of the  occurrence  of such  stock  dividend,  split-up,  conversion,
exchange,  reclassification  or substitution,  and the aggregate  purchase price
upon the future  exercise of the Option  shall be the same as if the  originally
optioned Shares were being purchased thereunder.

     Any  fractional  shares or  securities  issuable  upon the  exercise of the
Option as a result of such  adjustment  shall be  payable in cash based upon the
Fair Market Value of such shares or securities at the time of such exercise.  If
any such event should occur,  the number of Shares with respect to which Options
remain to be issued, or with respect to which Options may be reissued,  shall be
adjusted in a similar manner.

     Notwithstanding  any  other  provision  of  the  Plan,  in the  event  of a
recapitalization,    merger,   consolidation,   rights   offering,   separation,
reorganization or liquidation, or any other change in the corporate structure or
outstanding  shares,  the Committee may make such  equitable  adjustments to the
number  of  Shares  and  the  class  of  shares  available  hereunder  or to any
outstanding  Options  as it  shall  deem  appropriate  to  prevent  dilution  or
enlargement of rights.

     15.  ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES ACT. The Corporation
may  postpone  the  issuance  and  delivery  of Shares  pursuant to the grant or
exercise of any Option until (a) the  admission of such Shares to listing on any
stock  exchange on which  Shares of the  Corporation  of the same class are then
listed,  and (b) the completion of such  registration or other  qualification of
such  Shares  under  any  State  or  Federal  law,  rule  or  regulation  as the
Corporation  shall  determine  to be necessary  or  advisable.  Any holder of an
Option shall make such  representations  and furnish such information as may, in
the  opinion  of  counsel  for the  Corporation,  be  appropriate  to permit the
Corporation, in the light of the then existence or non-existence with respect to
such Shares of an effective  Registration  Statement under the Securities Act of
1933, as from time to time amended (the  "Securities  Act"), to issue the Shares
in compliance  with the provisions of the Securities Act or any comparable  act.
The  Corporation  shall have the right,  in its sole  discretion,  to legend any
Shares which may be issued  pursuant to the grant or exercise of any Option,  or
may issue stop transfer orders in respect thereof.

     16. INCOME TAX WITHHOLDING.  If the  Corporation,  or a Subsidiary shall be
required to withhold  any amounts by reason of any  Federal,  State or local tax
rules or  regulations  in  respect of the  issuance  of Shares  pursuant  to the
exercise of any Option,  the Corporation or the Subsidiary  shall be entitled to
deduct and withhold such amounts from any cash payments to be made to the holder
of such Option. In any event, the holder shall make available to the Corporation
or Subsidiary,  promptly when requested by the  Corporation or such  Subsidiary,
sufficient  funds  to  meet  the  requirements  of  such  withholding;  and  the
Corporation or Subsidiary  shall be entitled to take and authorize such steps as
it may  deem  advisable  in order  to have  such  funds  made  available  to the
Corporation  or Subsidiary  out of any funds or property due or to become due to
the holder of such Option.

     17.  ADMINISTRATION  AND  AMENDMENT  OF THE  PLAN.  Except  as  hereinafter
provided,  the Board of Directors or the  Committee  may at any time withdraw or
from time to time amend the Plan as it relates to, and the terms and  conditions
of,  any Option  not  theretofore

                                       6

granted,  and the Board of Directors or the  Committee,  with the consent of the
affected  holder of an  Option,  may at any time  withdraw  or from time to time
amend  the  Plan as it  relates  to,  and  the  terms  and  conditions  of,  any
outstanding Option. Notwithstanding the foregoing, any amendment by the Board of
Directors or the Committee  which would  increase the number of Shares  issuable
under the Plan or to any  individual  or change  the class of  Eligible  Persons
shall be subject to the approval of the stockholders of the Corporation.

     Determinations  of the  Committee as to any  question  which may arise with
respect to the interpretation of the provisions of the Plan and Options shall be
final.  The Committee may authorize and establish  such rules,  regulations  and
revisions  thereof not  inconsistent  with the provisions of the Plan, as it may
deem  advisable  to make the Plan and  Options  effective  or provide  for their
administration,  and may take  such  other  action  with  regard to the Plan and
Options as it shall deem desirable to effectuate their purpose.

     The Plan is intended to comply with Rule l6b-3 under the Exchange  Act. Any
provision  inconsistent with such Rule shall be inoperative and shall not affect
the validity of the Plan.

     18. NO RIGHT OF EMPLOYMENT OR SERVICE.  Nothing  contained  herein or in an
Option shall be construed to confer on any employee,  consultant or director any
right to be  continued  in the  employ  or  service  of the  Corporation  or any
Subsidiary or derogate from any right of the  Corporation  and any Subsidiary to
retire,  request the  resignation of or discharge or otherwise cease its service
arrangement with any employee,  consultant or director (without or with pay), at
any time, with or without cause.

     19.  EFFECTIVE DATE OF THE PLAN. This Plan is conditioned upon its approval
at any special or annual meeting of the  stockholders of the Corporation  before
April 26,  2002 by the vote of the  holders  of a  majority  of the stock of the
Corporation voting on approval of the Plan at such meeting in person or by proxy
(including  abstentions  to the extent  abstentions  are counted as voting under
applicable  State law);  except  that this Plan is adopted  and  approved by the
Board of Directors effective April 26, 2001 to permit the grant of Options prior
to the approval of the Plan by the stockholders of the Corporation as aforesaid.
In the  event  that  this  Plan  is not  approved  by  the  stockholders  of the
Corporation as aforesaid,  this Plan and any Options granted  hereunder shall be
void and of no force or effect.

     20. FINAL  ISSUANCE  DATE.  No Option shall be granted under the Plan on or
after April 26, 2011.


                                       7

</TEXT>
</DOCUMENT>
