SECOND SUPPLEMENTAL INDENTURE


      SECOND SUPPLEMENTAL INDENTURE,  dated as of October 16, 2000, by and among
Delta Financial  Corporation,  a Delaware  corporation (the "Company"),  each of
Delta Funding Corporation,  a New York corporation ("Delta Funding"), DF Special
Holdings Corporation,  a Delaware corporation ("DF Special Holdings"),  Fidelity
Mortgage,  Inc., a Delaware  corporation,  DFC Financial of Canada  Limited,  an
Ontario,  Canada corporation,  DFC Funding of Canada Limited, an Ontario, Canada
corporation,  Continental  Property  Management  Corp.,  a New York  corporation
(collectively, the "Subsidiary Guarantors") and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee"), under the Indenture referred to
below.

      WHEREAS,  the  Company,  the  Subsidiary  Guarantors  and the Trustee have
previously entered into an Indenture dated as of July 23, 1997, as amended, (the
"Indenture")  relating  to the  Company's  9 1/2%  Senior  Notes  Due 2004  (the
"Notes");

      WHEREAS,  Section 9.2 of the  Indenture  provides  that the  Company,  the
Subsidiary  Guarantors  and the Trustee  may,  with the  written  consent of the
holders of at least a majority in  principal  amount of the  outstanding  Notes,
amend or supplement the Indenture as provided herein;

      WHEREAS,  the holders of a majority in principal amount of the outstanding
Notes (the "Consenting  Noteholders") have consented to this Second Supplemental
Indenture  and agreed with the Company to extend the deadline  for  consummating
the Exchange  Offer  contemplated  in the First  Supplemental  Indenture,  dated
August 1, 2000 (the "First Supplemental  Indenture"),  by and among the Company,
the Subsidiary Guarantors and the Trustee; and

      WHEREAS,  all acts and things  prescribed  by law and by the Company's and
the Subsidiary  Guarantors'  Certificates of Incorporation  and By-laws (each as
now in effect)  necessary  to make this  Second  Supplemental  Indenture a valid
instrument legally binding on the Company and the Subsidiary  Guarantors for the
purposes herein expressed, in accordance with its terms, have been duly done and
performed;

      NOW THEREFORE,  in  consideration  of the foregoing and for other good and
valuable  consideration,  the  receipt  of which  is  hereby  acknowledged,  the
Company, the Subsidiary  Guarantors and the Trustee hereby agree for the benefit
of each other and the equal and  ratable  benefit of the holders of the Notes as
follows:

      1.    AMENDMENT OF SECTION 5 OF THE FIRST SUPPLEMENTAL INDENTURE.

      The second  sentence of Section 5 of the First  Supplemental  Indenture is
hereby deleted in its entirety and replaced by the following:

      " If (i) the  definitive  terms of the  Exchange  Offer (as defined in the
Term Sheet) have not been agreed with the Consenting  Noteholders on or prior to
October 24, 2000 or (ii) if the Company does not  consummate  the Exchange Offer
by  exchanging  New Notes (as  defined  in the Term  Sheet)  for Notes  with the
Exchanging Holders on or prior to December 8, 2000, an Event of Default shall be
deemed to have occurred at such time under the Indenture."

      2. AMENDMENT TO ANNEX A OF THE FIRST SUPPLEMENTAL INDENTURE.

      Annex A of the  First  Supplemental  Indenture  is hereby  deleted  in its
entirety and replaced by Annex A attached hereto.

      3. EFFECTIVENESS. This Second Supplemental Indenture shall be effective as
of the date hereof.

      4. CONSTRUCTION.  For all purposes of this Second Supplemental  Indenture,
except as otherwise  herein expressly  provided or unless the context  otherwise
requires: (i) the terms and expressions used herein shall have the same meanings
as corresponding terms and expressions used in the Indenture; and (ii) the words
"herein,"  "hereof" and "hereby" and other words of similar  import used in this
Second Supplemental  Indenture refer to this Second Supplemental  Indenture as a
whole and not to any particular Section hereof.

      5. TRUSTEE ACCEPTANCE.  The Trustee accepts the amendment of the Indenture
effected by this Second  Supplemental  Indenture and agrees to execute the trust
created  by the  Indenture,  as  hereby  amended,  but only  upon the  terms and
conditions set forth in the Indenture,  as hereby  amended,  including the terms
and provisions defining and limiting the liabilities and responsibilities of the
Trustee,  which terms and  provisions  shall in like manner define and limit its
liabilities and  responsibilities in the performance of the trust created by the
Indenture, as hereby amended.  Without limiting the generality of the foregoing,
the Trustee has no  responsibility  for the  correctness of the recitals of fact
herein contained which shall be taken as the statements of the Company and makes
no representations as to the validity,  enforceability  against the Company,  or
sufficiently of this Second Supplemental Indenture.

      6. INDENTURE  RATIFIED.  Except as expressly amended hereby, the Indenture
is in all respects  ratified and  confirmed  and all the terms,  conditions  and
provisions thereof shall remain in full force and effect.

      7. HOLDERS BOUND. This Second Supplemental  Indenture shall form a part of
the  Indenture  for all  purposes,  and every Holder of the Notes  heretofore or
hereafter authenticated and delivered shall be bound hereby.

      8.  SUCCESSORS AND ASSIGNS.  This Second  Supplemental  Indenture shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

      9. COUNTERPARTS. This Second Supplemental Indenture may be executed in any
number of counterparts,  each of which when so executed shall be deemed to be an
original,  and all of such  counterparts  shall together  constitute one and the
same instrument.

      10.  GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE  THIS FIRST  SUPPLEMENTAL  INDENTURE  WITHOUT  REGARD TO
PRINCIPLES OF CONFLICTS OF LAW THEREOF.

      [SIGNATURE BLOCK ON FOLLOWING PAGE]



<PAGE>
      IN WITNESS WHEREOF, the Company, the Subsidiary Guarantors and the Trustee
have caused this Second  Supplemental  Indenture to be signed and executed as of
the day and year first above written.

                                    DELTA FINANCIAL CORPORATION


                                    By:   /S/ MARC MILLER
                                          --------------------------
                                          Name:  Marc Miller
                                          Title: Senior Vice President


                                    DELTA FUNDING CORPORATION

                                    By:   /S/ MARC MILLER
                                          --------------------------
                                          Name:  Marc Miller
                                          Title: Senior Vice President



                                    DF SPECIAL HOLDINGS CORPORATION


                                    By:   /S/ MARC MILLER
                                          --------------------------
                                          Name:  Marc Miller
                                          Title: Vice President


                                    FIDELITY MORTGAGE, INC.


                                    By:   /S/ MARC MILLER
                                          --------------------------
                                          Name:  Marc Miller
                                          Title: Vice President


                                    DFC FINANCIAL OF CANADA LIMITED


                                    By:   /S/ MARC MILLER
                                          --------------------------
                                          Name:  Marc Miller
                                          Title: Vice President

                                    DFC FUNDING OF CANADA LIMITED


                                    By:   /S/ MARC MILLER
                                          --------------------------
                                          Name:  Marc Miller
                                          Title: Vice President


                                    CONTINENTAL PROPERTY MANAGEMENT CORP.


                                    By:   /S/ MARC MILLER
                                          --------------------------
                                          Name:  Marc Miller
                                          Title: Vice President


                                    THE BANK OF NEW YORK, Indenture Trustee


                                    By:   /S/ JULIE SALOVITCH-MILLER
                                          --------------------------
                                          Name:  Julie Salovitch-Miller
                                          Title: Vice President

<PAGE>
                  Delta Financial Corporation and Subsidiaries

                   Term Sheet of Informal Noteholder Committee

               FOR RESTRUCTURING (THE "RESTRUCTURING TERM SHEET")


DEBTORS AND OLD               Delta Financial Corporation ("DELTA HOLDINGS"),
SECURITIES                    and all of its subsidiaries (collectively the
                              "DEBTORS") that are guarantors of the 9 1/2%
                              Senior Notes of Delta Holdings (the "OLD
                              Notes").

OVERVIEW                      Certain holders of Old Notes, consisting of
                              beneficial owners of a majority in principal
                              amount thereof, shall consent to a supplemental
                              indenture (the FIRST SUPPLEMENTAL INDENTURE, as
                              amended by the Second Supplemental Indenture,
                              and collectively the "Supplemental Indenture")
                              that shall permit the Debtors to pledge, or
                              transfer to a special purpose entity, of
                              interest-only and residual certificates
                              ("RESIDUALS") and Servicing Receivables, or
                              rights therein, to initially obtain
                              approximately $16 million of interim financing
                              (the "INTERIM FINANCING") from a warehouse
                              lender (the "Warehouse Lender").  The negative
                              pledge under the Old Notes Indenture shall
                              continue to apply to $150MM of Residuals until
                              the Exchange Offer occurs, and thereafter the
                              terms of the Exchange Offer shall govern.
                              This $150MM shall be Senior Residuals, except
                              if the Company deposits $7.125 million into
                              escrow, simultaneous with such deposit, such
                              $150 MM requirement shall be modified to $112.5
                              MM of Senior Residuals and $42.5 MM of other
                              Residuals. Except for this negative pledge,
                              pending consummation of the Exchange Offer, the
                              Debtors will be permitted to do financings
                              currently permitted under the Old Notes
                              Indenture.

                              The   capitalization   of  the  Debtors  shall  be
                              restructured  (the  "EXCHANGE  OFFER")  through an
                              exchange  offer.  Holders  of Old Notes  tendering
                              into the  exchange  shall  receive  new  notes and
                              warrants.  At  the  time  the  Exchange  Offer  is
                              consummated,  the new notes indenture shall permit
                              one  or  more  financing   transactions  utilizing
                              Residuals  and  Servicing   Receivables  to  raise
                              capital  for  the  company,  subject  to  all  the
                              limitations   herein.  The  Exchange  Offer  shall
                              include  covenant-stripping  amendments to the Old
                              Notes Indenture.

                              It  shall  be  a  default   under  the  Old  Notes
                              Indenture if the  Consenting  Noteholders  and the
                              Debtors have not reached  definitive  agreement on
                              the  terms  of an  exchange  offer  on  or  before
                              October 24, 2000.

New Securities                Each holder of Old Notes who tenders into the
                              Exchange Offer shall receive a PRO RATA share
NEW SENIOR SECURED NOTES      of a new issue of up to $150.0 million
                              aggregate principal amount 9 1/2% Senior Secured
                              Notes (the "NEW NOTES") of Delta Holdings.  SEE
                              TERM SHEET FOR NEW NOTES, ATTACHED HERETO AS
                              ANNEX A.

NEW WARRANTS                  Each holder of Old Notes who tenders into the
                              Exchange Offer shall receive a PRO RATA share
                              of a new issue of warrants (the "WARRANTS") of
                              Delta Holdings for 10% of the currently issued
                              and outstanding common stock of Delta
                              Holdings.  SEE TERM SHEET FOR NEW WARRANTS,
                              ATTACHED HERETO AS ANNEX B.

INTERIM FINANCING CONSENT     The Consenting Noteholders shall agree to
                              permit the Interim Financing (the "INTERIM
                              FINANCING  CONSENT").  The Supplemental  Indenture
                              shall  lift  the  negative   pledge  from  certain
                              Residuals  and all other  applicable  covenants to
                              the  extent  necessary  in  order  to  permit  the
                              Interim Financing.

COUPON PAYMENT                At the time of the Interim Financing Consent
                              the Debtors shall direct the Warehouse Lender
                              to make payments out of the proceeds of the
                              Interim Financing directly to the indenture
                              trustee for the Old Notes to pay the August 1,
                              2000 coupon on the Old Notes.

LOCK-UP AGREEMENT

PARTIES TO LOCK-UP            Certain holders of Old Notes will become party
                              to a Lock-up Agreement with the Debtors (such
                              holders being the "CONSENTING NOTEHOLDERS") at
                              the time definitive documentation for the
                              Exchange Offer is consented to by the
                              Consenting Noteholders.

COMMITTEE ADVISORS            During the Lock-up Period, and until the warm
                              back-up servicer is in place, and thereafter
                              (if applicable) following the occurrence of an
                              Event of Default under either of the Old Notes
                              Indenture (if the Exchange Offer is not
                              consummated) or the New Notes Indenture, the
                              Debtors shall pay the fees and expenses of
                              Ropes & Gray (counsel to the Informal
                              Committee) and Houlihan Lokey Howard & Zukin
                              Capital ("HLH&Z") (financial advisor to the
                              Informal Committee).  All such fees shall be
                              paid under retainer agreements similar in form
                              to the payment agreement between the Company
                              and Ropes & Gray, with retainer amounts for
                              HLH&Z acceptable to the Informal Committee and
                              HLH&Z in their reasonable discretion.

                              The Debtors  shall give the  Informal  Committee's
                              advisors  full  reasonable  access  to all  legal,
                              operational and financial  materials to allow them
                              to monitor the Debtor's operations and status.

COVENANTS OF DEBTORS          The Debtors shall use their best efforts to
DURING LOCK-UP PERIOD         have the Exchange Offer consummated with not
                              less than the  percentage  of holders of Old Notes
                              required under the Old Notes  Indenture  tendering
                              into the  exchange,  so as to be  consummated  not
                              later than December 8, 2000. Failure to consummate
                              by December 8, 2000 shall  constitute  an Event of
                              Default under the Old Notes Indenture,  as amended
                              by the First Supplemental Indenture and the Second
                              Supplemental Indenture.

                              Until  consummation  of the  Exchange  Offer,  the
                              Debtors  shall  not  engage  in  any   transaction
                              outside the ordinary course of business,  or enter
                              into   any   agreement   to   consummate   such  a
                              transaction.

ONGOING COVENANTS OF          During the Lock-up Period and thereafter, the
DEBTORS                       Debtors shall make all preparations to be able
                              to facilitate  the  effectuation  of a transfer of
                              servicing  and  other  matters  necessary  for the
                              bondholders   to   effectively   realize   on  the
                              collateral being pledged should a default occur in
                              the  future.   These  preparations  shall  include
                              implementing a warm-back-up  servicer by March 15,
                              2001, if the Exchange Offer is consummated,  or as
                              quickly as is practicable if the Exchange Offer is
                              not  consummated,   such  servicer  and  servicing
                              agreement  to  be  satisfactory  to  the  Informal
                              Committee.  The  requirements  for a warm  back-up
                              servicer  shall be  extinguished  upon the Debtors
                              achieving   Liquidity   of  $40MM   but  shall  be
                              reinstated   if  Debtors   Liquidity   goes  below
                              $32.5MM.

REPRESENTATIONS OF            Each Consenting Noteholder shall represent and
CONSENTING NOTEHOLDERS        warrant, in favor of the Debtors and the
                              Indenture Trustee, that it is the beneficial owner
                              of a stated amount of Old Notes.

TERMINATION OF LOCK-UP        The passage of December 8, 2000 without
PERIOD AND OBLIGATIONS        consummation of the Exchange Offer.
OF CONSENTING
NOTEHOLDERS

FORM OF DOCUMENTATION         All documentation (including all documentation
                              contemplated by Annexes A and B hereto) to be
                              satisfactory in form and substance to both the
                              Consenting Noteholders and to the Debtors in
                              their respective sole discretion.  The Debtors
                              and their officers and directors shall provide
                              such certificates, representations and
                              warranties as the Consenting Noteholders  shall
                              require.

                                                          AS OF AUGUST 1, 2000

                                                                         ANNEX A


                  Restructuring of Delta Financial Corporation
                                and Subsidiaries

                                 TERM SHEET FOR
            9 1/2% SENIOR SECURED NOTES DUE 2004 (THE "NEW NOTES")1

ISSUER                        Delta Financial  Corporation  ("DELTA  HOLDINGS"),
                              under a trust indenture with an indenture  trustee
                              (the "INDENTURE  TRUSTEE") mutually  acceptable to
                              the Debtors and the Consenting
                              Noteholders.

GUARANTORS                    All   subsidiaries   of  Delta   Holdings,   which
                              currently are  guarantors  of the Old Notes,  plus
                              all     additional     subsidiaries     ("eligible
                              subsidiaries")   which   are   not   contractually
                              prohibited from being a guarantor .

PRINCIPAL AMOUNT              up to $150,000,000

INTEREST                      9 1/2% per annum,  payable semiannually in arrears
                              on  February  1 and August 1 of each year (each an
                              "INTEREST PAYMENT DATE"). Interest shall be deemed
                              to accrue  as of the last  interest  payment  date
                              under the Old Notes.

MATURITY                      August 1, 2004.


-------------------------------
 1 Capitalized  terms  defined  in the  Restructuring  Term  Sheet  and  not
otherwise defined herein are used herein with the meanings so defined.




COLLATERAL                    Perfected first priority liens on all
                              contractual rights to be the servicer (and
                              following exercise of such right, in all rights
                              arising by virtue of the servicing rights), in
                              the warm back-up servicing agreement and upon
                              the stock of all eligible subsidiaries of Delta
                              Holdings.

                              Perfected  first  priority liens on the beneficial
                              interests in one or more (in the discretion of the
                              Consenting  Noteholders)  Delaware business trusts
                              that holds Residuals  received by the Debtors (the
                              "RESIDUALS   COLLATERAL  TRUSTS").   The  Residual
                              Collateral Trusts shall be restricted subsidiaries
                              and wholly  owned  subsidiaries  of Delta  Funding
                              Corporation   and/or   of  DF   Special   Holdings
                              Corporation  and each Residuals  Collateral  Trust
                              shall hold Residuals received by its parent.

                              The Debtors will not be permitted to pledge, sell,
                              lease or  securitize  other  assets  following  an
                              uncured default or Event of Default.

                              Amounts   sufficient  to  meet  the  first  coupon
                              payment  on the New  Notes  shall be  placed  into
                              escrow   (immediately   upon   conclusion  of  the
                              so-called NIMS trade). The Debtors shall use their
                              best efforts to conclude the so-called  NIMs trade
                              as  soon  as   practicable   subject   to   market
                              conditions,  but in no event later than January 1,
                              2001.

                              So long  as the New  Notes  are  outstanding,  the
                              Debtors   shall   cause   all   Residuals   to  be
                              transferred  to  the  Residuals  Collateral  Trust
                              immediately  upon  the  Debtors'   obtaining  such
                              Residuals.   Provided  no  Event  of  Default  has
                              occurred and is  continuing,  the Debtors shall be
                              permitted to  substitute  other  Residuals for the
                              Residuals within the Residuals  Collateral  Trusts
                              provided  the  Residuals   being   deposited  were
                              received by the parent of the respective Residuals
                              Collateral Trust and the Residuals  Coverage Ratio
                              is satisfied  after giving pro forma effect to the
                              substitution.

DESCRIPTION OF                RESIDUALS COVERAGE RATIO  The value of
FINANCIAL COVENANTS           Residuals and cash in the Residuals Collateral
                              Trust  shall not be less than $165  million.  Such
                              minimum  value  shall  increase  on the  following
                              schedule:

                                    on and after September 30, 2001     $170MM
                                    on and after September 30, 2002     $175MM
                                    on and after September 30, 2003     $200MM
                                    on and after September 30, 2004     $210MM

                              The  aggregate  value of Senior  Residuals  in the
                              Residuals  Collateral Trust shall initially be not
                              less than  $150  million,  or in the  event  Delta
                              Holdings has deposited  $7.125 million into escrow
                              for  coupon   payments,   such  amount   shall  be
                              decreased to $112.5 million simultaneous with such
                              deposit.  (The  Residuals  Collateral  Trust shall
                              still be required to maintain  the minimum  values
                              of $165 million,  and  increasing  after  9/30/01,
                              aggregate  value of Residuals and cash,  set forth
                              in the  first  sentence.).  The  value  amount  of
                              Senior Residuals in the Residuals Collateral Trust
                              shall be raised to $150MM on the third anniversary
                              of the  Issue  Date of the New Notes and to $155.0
                              million after the fourth  anniversary of the Issue
                              Date.  Residuals  which were  created  through net
                              interest margin securities  transactions  ("NIMS")
                              shall be deemed to be  Senior  Residuals  when the
                              outstanding   principal   amount   of  all   other
                              securities  issued  in  the  applicable  NIMS  has
                              decreased  to  20%  or  less  of  their  aggregate
                              original  principal amount.  For purposes of these
                              covenants,  the value of Senior Residuals shall be
                              calculated in accordance  with GAAP except using a
                              discount  rate of 12%,  and the value of all other
                              Residuals  shall be calculated in accordance  with
                              GAAP except using a discount rate of 18%.

                              MINIMUM  CASH ON HAND The  Debtors  shall not have
                              less than $10,000,000 of cash and cash equivalents
                              on hand at any time  (including  any money held in
                              escrow),  using  the same  requirements  as in the
                              Debtor's warehouse lines of credit (the "Warehouse
                              Lines") ("Liquidity").

DESCRIPTION OF OTHER          IN GENERAL:  As under the Old Notes Indenture
COVENANTS                     (to the extent not inconsistent with this Term
                              Sheet or the  negotiations  of the  parties)  plus
                              covenants set forth in the loan  documents for the
                              Warehouse Lines.

                              LIMITATIONS  ON LIENS OR RIGHTS TO BE  SERVICER OR
                              SALE OF STOCK OF SUBSIDIARIES:  Prohibited without
                              consent of 51% of the New Notes.

                              RESTRICTIONS   ON   REDEMPTIONS   AND   DIVIDENDS.
                              Prohibited for existing  equity without consent of
                              51% of the New Notes. Dividends and redemptions on
                              new equity of Delta  Holdings  are  limited to the
                              aggregate  amount of investment by the new equity.
                              Certain    additional    restrictions   on   other
                              transfers.

                              TRANSACTIONS  WITH  AFFILIATES  As  customary  for
                              secured bank loans.

                              REPORTING:  Within  90 days  following  the end of
                              each  fiscal  year,  KPMG (or such  other  firm of
                              internationally  recognized accountants as is then
                              retained  by the  Company  to audit its  financial
                              statements)  as  part  of its  annual  audit  will
                              confirm  that  the   methodology  and  assumptions
                              employed by the Debtor in determining the value of
                              the Residuals.

                              BACK-UP SERVICER: By March 15, 2001, Delta Funding
                              will, at its own cost, enter into a "warm" back-up
                              servicing  agreement (the  "Servicing  Agreement")
                              with a nationally recognized servicer,  which will
                              provide  for   mapping  and  monthly   back-up  of
                              information   relating  to  the   mortgage   loans
                              underlying Residuals created after 1996.

                              EVENTS OF DEFAULT  As in the Old Notes  Indenture,
                              breach of  covenants or  conditions  under the New
                              Notes   Indenture,   and  cross   default  to  all
                              Warehouse Lines, and to all collateral  agreements
                              and related agreements.

                              RELIEF FROM STAY.  The Debtors shall consent to
                              relief from the automatic stay in the event of
                              a chapter 11 or chapter 7 filing.

                              COUPON PAYMENT.  The Debtors shall certify 30 days
                              prior to the initial due date  (without  grace) of
                              each  coupon  payment  on the New Notes that funds
                              necessary  to pay the  coupon  payment  have  been
                              placed in escrow on terms  identical  to those for
                              the coupon  required to be escrowed at the time of
                              the Exchange Offer.

CHANGE OF CONTROL PUT         As in the Old Notes Indenture.

REGISTRATION RIGHTS           The New Notes shall not be registered under
                              the  Securities  Exchange Act of 1934. The Debtors
                              shall register the New Notes at the request of 51%
                              of the beneficial holders of the New Notes.

AMENDMENTS                    Majority consent required for all non
                              ministerial amendments; PROVIDED, HOWEVER,
                              consent of each holder shall be required for
                              changes to such holder's rights with respect to
                              (i) interest and principal payments and
                              redemption/call/put provisions, (ii) maturity
                              date, (iii) currency of payment, (iv) place of
                              payment and (v) right to bring suit for
                              interest and principal.

OTHER                         PROVISIONS  Customary  certification,  notice  and
                              reporting  provisions  for  collateral  monitoring
                              under a senior  secured bank  facility,  including
                              quarterly and audited annual reporting.

                              Other  provisions to be  consistent  with terms of
                              Indenture for the Old Notes or as otherwise agreed
                              by the Debtors  and a majority  of the  Consenting
                              Noteholders.


                                                            AS OF AUGUST 1, 2000

                                                                         ANNEX B

                  Restructuring of Delta Financial Corporation
                                and Subsidiaries

                                 TERM SHEET FOR
                           WARRANTS (THE "WARRANTS")2

ISSUER                        Delta Financial Corporation ("Delta Holdings").

NUMBER                        Warrants  exercisable  for common  shares equal to
                              10% of  currently  issued and  outstanding  common
                              shares.

EXERCISE                      PERIOD  The  Warrants  shall  expire  on the  10th
                              anniversary  of their  issuance.  The Warrants (if
                              not previously  exercised)  shall expire and be of
                              no further force or effect upon payment of the New
                              Notes in full.

EXERCISE PRICE                At issuance:  $9.10 per share.

                              If  equity  buy-in  of $15MM or more  prior to the
                              second anniversary of their issuance, the exercise
                              price  is reset  to 110% of the per  share  equity
                              buy-in.

                              After the second  anniversary,  the exercise price
                              is $0.01 per share.

DIVIDENDS                     The  Issuer  shall  provide  prior  notice  to the
                              holders  of   Warrants  of  any  record  date  for
                              dividends.

-----------------------------
           2 Capitalized terms defined in the Restructuring Term Sheet and not
   otherwise defined herein are used herein with the meanings so defined.




MAJOR CORPORATE               Upon any sale or disposition of the company, or
TRANSACTIONS                  change of control, Warrant holders shall have
                              the  right  to  exercise  all  Warrants.   Warrant
                              holders  shall have  tag-along  rights with Miller
                              family  shares  sold  in  any  change  of  control
                              transaction.

ADJUSTMENTS;                  The number of Warrants shall be adjusted in the
ANTIDILUTION                  event of stock-splits, combinations,
                              reclassifications        and       stock-for-stock
                              distributions. In the event of any merger or other
                              such  transaction,  the holders of Warrants  shall
                              receive as part of such transaction  consideration
                              equal  in  amount  and  kind to the  consideration
                              given to holders of common stock of the Issuer.

                              The Warrants shall also have provisions to prevent
                              dilution by below-market-price  issuances of stock
                              or other equity interests.

REGISTRATION RIGHTS           Demand registration rights.

MISCELLANEOUS                 Customary notice rights.

                              Customary rights and remedies, including the right
                              to specific performance.