INVESTOR RIGHTS AGREEMENT

INVESTOR RIGHTS AGREEMENT

-------------------------

Investor Rights Agreement, dated as of August 13, 2007 (this

"Agreement"), by and between Delta Financial Corporation, a Delaware corporation

(the "Company"), and AG Delta Holdings, LLC, a Delaware limited liability

company (the "Purchaser").

W I T N E S S E T H :

WHEREAS, the Company is issuing (the "Issuance") warrants (the

"Warrants") to purchase up to Ten Million (10,000,000) shares of the Company's

common stock, par value $0.01 per share (the "Common Stock") (each such share

underlying a Warrant, a "Warrant Share"), as set forth in a Warrant Acquisition

Agreement entered into by and between the Company and the Purchaser (the

"Warrant Acquisition Agreement");

WHEREAS, it is a condition precedent to the consummation of the

transactions contemplated by the Warrant Acquisition Agreement that the Company

provide for the rights set forth in this Agreement; and

WHEREAS, certain terms used in this Agreement are defined in Section 6

hereof.

NOW, THEREFORE, in consideration of the foregoing premises and the

mutual covenants and agreements hereinafter contained, and for other good and

valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, intending to be legally bound, the parties hereto hereby agree as

follows:

1. REGISTRATION RIGHTS.

1.1 DEMAND REGISTRATION.

(a) Subject to the conditions of this Section 1.1, if the

Company shall receive at any time a written request from the Holders (the

"Initiating Holders") relating to Registrable Securities with an aggregate price

(calculated based upon the Market Price of the Registrable Securities on the

date of such request) to the public of no less than $5,000,000 that the Company

file a registration statement under the Securities Act covering such Registrable

Securities, then the Company shall, within five days of the receipt thereof,

give written notice of such request to all Holders, and subject to the

limitations of this Section 1.1, use its best efforts to effect, as soon as

practicable, the registration under the Securities Act of all Registrable

Securities that the Holders request to be registered in a written request

received by the Company within 20 days of the mailing of the Company's notice

pursuant to this Section 1.1(a).

(b) If the Initiating Holders intend to distribute the

Registrable Securities covered by their request by means of an underwriting,

they shall so advise the Company as a part of their request made pursuant to

this Section 1.1 and the Company shall include such information in the written

notice referred to in this Section 1.1(a). In such event, the right of any

Holder to include its Registrable Securities in such registration shall be

conditioned upon such Holder's participation in such underwriting and the

inclusion of such Holder's Registrable

<PAGE>

Securities in the underwriting (unless otherwise mutually agreed by a majority

in interest of the Initiating Holders and such Holder) to the extent provided

herein. All Holders proposing to distribute their securities through such

underwriting shall enter into an underwriting agreement in customary form with

the underwriter or underwriters selected for such underwriting by the Company

(which underwriter or underwriters shall be reasonably acceptable to a majority

in interest of the Initiating Holders). Notwithstanding any other provision of

this Section 1.1, if the underwriter advises the Company that marketing factors

require a limitation of the number of securities underwritten (including

Registrable Securities), then the Company shall so advise all Holders whose

Registrable Securities would otherwise be underwritten pursuant hereto, and the

number of shares that may be included in the underwriting shall be allocated to

such Holders on a pro rata basis (as nearly as practicable) based on the number

of Registrable Securities held by all such Holders (including the Initiating

Holders), PROVIDED that no Registrable Securities shall be excluded unless and

until all other securities of the Company have been excluded. Any Registrable

Securities excluded or withdrawn from such underwriting shall be withdrawn from

the registration.

(c) In addition, the Company shall not be required to effect a

registration pursuant to this Section 1.1:

(i) More than one (1) time;

(ii) during the period starting with the date of the

filing of, and ending on a date 180 days following the effective date

of, a Company-initiated registration subject to Section 1.3, PROVIDED

that the Company is actively employing in good faith all reasonable

best efforts to cause such registration statement to become effective;

(iii) if the Initiating Holders propose to dispose of

Registrable Securities that may be registered on Form S-3 pursuant to

Section 1.2; or

(iv) if the Company shall furnish to Holders

requesting a registration pursuant to this Section 1.1, a certificate

signed by the Company's Chief Executive Officer or Chairman of the

Board of Directors stating that in the good faith judgment of the Board

of Directors of the Company, it would (i) be materially detrimental to

the Company and its shareholders for such registration to be effected

at such time, (ii) require the disclosure of a material transaction or

other matter and such disclosure would be materially disadvantageous to

the Company, or (iii) adversely effect a material financing,

acquisition, disposition of assets or stock, merger or other comparable

transaction; in which event the Company shall have the right to defer

such filing for a period of not more than 60 days after receipt of the

request of the Initiating Holders, PROVIDED that such right to delay a

request shall be exercised by the Company not more than once in any

12-month period and PROVIDED FURTHER, that the Company shall not

register any other of its shares during such twelve 12-month period.

(d) No registration initiated by the request of Holders

hereunder will count as a registration under Section 1.1 and Section 1.2 in the

event that such registration is withdrawn

2

<PAGE>

by the Holders because of material adverse information relating to the business,

operations, assets, condition (financial or other) or prospects of the Company,

(ii) if the effect of any cut-back pursuant to Section 1.1(b) is to reduce the

number of shares requested by the Holders to be included in the registration

below 90%, or (iii) if the related registration statement filed with the SEC is

not declared effective or is declared effective but is subject to a stop order

or is withdrawn by the Company before at least 90% of the securities so

registered are sold.

1.2 FORM S-3 REGISTRATION. If the Company is eligible to use

Form S-3 under the Securities Act (or any similar successor form) and shall

receive from a Holder (collectively, the "S-3 Initiating Holders") a written

request or requests that the Company effect a registration on such Form S-3,

including without limitation, pursuant to Rule 415 of the Securities Act with

respect to all or part of the Registrable Securities owned by the S-3 Initiating

Holders (PROVIDED, THAT the S-3 Initiating Holders registering Registrable

Securities in such registration (together with all other Holders to be included

in such registration) propose to sell their Registrable Securities at an

aggregate price (calculated based upon the Market Price of the Registrable

Securities on the date of such request) to the public of no less than

$5,000,000), the Company shall (i) promptly give written notice of the proposed

registration to all other Holders; and (ii) as soon as practicable, use

reasonable best efforts to file and effect such registration and all such

qualifications and compliances as would permit or facilitate the sale and

distribution of all or such portion of the Registrable Securities as are

specified in such request, together with all or such portion of the Registrable

Securities of any other Holder in the group of Holders joining in such request

as is specified in a written request given within ten (10) days after the

Holder's receipt of such written notice from the Company. No registration

requested by any S-3 Initiating Holders pursuant to this Section 1.2 shall be

deemed a registration pursuant to Section 1.1.

1.3 PIGGYBACK REGISTRATIONS.

(a) RIGHT TO PIGGYBACK. Whenever the Company proposes to

register any of its securities under the Securities Act (other than pursuant to

a registration pursuant to Section 1.2 or a registration on Form S-4 or S-8 or

any successor or similar forms) and the registration form to be used may be used

for the registration of Registrable Securities, whether or not for sale for its

own account, the Company will give prompt written notice (but in no event less

than fifteen (15) days before the anticipated filing date) to all Holders, and

such notice shall describe the proposed registration and distribution and offer

to all Holders the opportunity to register the number of Registrable Securities

as each such Holder may request. The Company will include in such registration

all Registrable Securities with respect to which the Company has received

written requests for inclusion therein within five (5) business days after the

Holders' receipt of the Company's notice (a "Piggyback Registration").

(b) REASONABLE EFFORTS. The Company shall use all reasonable

best efforts to cause the managing underwriter or underwriters of a proposed

underwritten offering to permit the Registrable Securities requested to be

included in a Piggyback Registration to be included on the same terms and

conditions as any similar securities of the Company or any other security holder

included therein and to permit the sale or other disposition of such Registrable

Securities in accordance with the intended method of distribution thereof.

3

<PAGE>

(c) WITHDRAWAL. Any Holder shall have the right to withdraw

its request for inclusion of its Registrable Securities in any Registration

Statement pursuant to this Section 1.3 by giving written notice to the Company

of its request to withdraw; PROVIDED, that in the event of such withdrawal

(other than pursuant to Section 1.3(e) hereof), the Company shall not be

required to reimburse such Holder for the fees and expenses referred to in

Section 1.7 hereof incurred by or on behalf of such Holder prior to such

withdrawal, unless such withdrawal was due to a material adverse change to the

Company. The Company may withdraw a Piggyback Registration at any time prior to

the time it becomes effective.

(d) PRIORITY IN REGISTRATIONS. If a Piggyback Registration is

an underwritten primary registration on behalf of the Company, and the managing

underwriters advise the Company in writing (with a copy to each party hereto

requesting registration of Registrable Securities) that in their opinion the

number of Registrable Securities requested to be included on a secondary basis

in such registration exceeds the number which can be sold in such offering

without materially and adversely affecting the marketability of such primary or

secondary offering (the "Company Offering Quantity"), then the Company will

include in such registration securities in the following priority:

(i) First, the Company will include the securities

the Company proposes to sell.

(ii) Second, the Company will include all Registrable

Securities requested to be included by any Holder, and if the number of

such Holders' securities requested to be included exceeds the Company

Offering Quantity, then the Company shall include only each such

requesting Holders' pro rata share of the shares available for

registration by the Purchaser, based on the amount of securities held

by such Holder, on an as converted basis.

(iii) Third, the Company will include other

securities of the Company proposed to be included in the registration.

(e) CUTBACK. If, as a result of the pro ration provisions of

this Section 1.3, any Holder shall not be entitled to include all Registrable

Securities in a Piggyback Registration that such Holders have requested to be

included, such Holder may elect to withdraw his request to include Registrable

Securities in such registration but the Company shall be required to reimburse

such Holder for the fees and expenses referred to in Section 1.7 hereof incurred

by such Holder prior to such withdrawal.

(f) LIMITATION. The Company shall not be required to effect a

registration pursuant to this Section 1.3 if the registration is filed after the

date hereof (the "Closing Date") to register the shares of Common Stock issuable

upon the exercise of convertible notes of the Company to be initially issued to

Pabrai Investment Fund 3 Ltd., Pabrai Investment Fund II, L.P., Pabrai

Investment Fund IV, L.P., Dalal Street, LLC, and The Dakshana Foundation

(collectively, the "PIF Investors").

4

<PAGE>

1.4 HOLDBACK AGREEMENTS.

(a) To the extent not inconsistent with applicable law, in

connection with a public offering of securities of the Company, upon the request

of the Company or the underwriter, in the case of an underwritten public

offering, the underwriters managing such underwritten offering of the Company's

securities, each Holder who owns at least 5% of the outstanding capital stock of

the Company on an "as-converted" basis or is an officer or director of the

Company will not effect any public sale or distribution (other than those

included in the registration) of any securities of the Company, or any

securities, options or rights convertible into or exchangeable or exercisable

for such securities during the seven (7) days prior to and the ninety (90) day

period beginning on such effective date, unless (in the case of an underwritten

public offering) the managing underwriters otherwise agree to a shorter period

of time. Notwithstanding the foregoing, no Holder shall be required to enter

into any such "lock up" agreement unless and until all of the Company's

executive officers and directors execute substantially similar "lock up"

agreements. Neither the Company nor the underwriter shall amend, terminate or

waive a "lock up" agreement unless each "lock up" agreement with a Holder is

also amended or waived in a similar manner or terminated, as the case may be.

(b) The Company shall have the right at any time to require

that the Holders suspend further open market offers and sales of Registrable

Securities pursuant to a Registration Statement filed hereunder whenever in the

reasonable judgment of the Company after consultation with counsel there is or

may be in existence a Changing Event (as defined in Section 1.5(e)). The Company

will give the Holders notice of any such suspension and will use all reasonable

best efforts to minimize the length of such suspension.

1.5 REGISTRATION PROCEDURES. Whenever any Registrable

Securities are required to be registered pursuant to this Agreement, the Company

will use reasonable best efforts to effect the registration and the sale of such

Registrable Securities in accordance with the intended methods of disposition

thereof, and pursuant thereto the Company will as expeditiously as possible:

(a) prepare and file with the SEC on any form, if not so

otherwise provided for, for which the Company qualifies, as soon as practicable

after the end of the period within which requests for registration may be given

to the Company, a Registration Statement with respect to the offer and sale of

such Registrable Securities and thereafter use reasonable best efforts to cause

such Registration Statement to become effective and remain effective until the

completion of the distribution contemplated thereby or the required time period

under this Agreement, whichever is shorter (and before filing such Registration

Statement, the Company will furnish to the counsel selected by the Holders of a

majority of the Registrable Securities initiating such Registration Statement

copies of all such documents proposed to be filed); PROVIDED, HOWEVER, that the

Company may postpone for not more than sixty (60) calendar days the filing or

effectiveness of any registration statement required pursuant to this Agreement

if the Board of Directors, in its good faith judgment, determines that such

registration could reasonably be expected to have a material adverse effect on

the Company and its shareholders for any reason including, but not limited to,

any proposal or plan by the Company to engage in any

5

<PAGE>

acquisition or sale of assets (other than in the ordinary course of business) or

any merger, consolidation, tender offer or similar transaction then under

consideration (in which event, the applicable Holders shall be entitled to

withdraw such request, and if such request is withdrawn such registration will

not count as a registration statement pursuant to this Agreement) by delivering

written notice to the applicable Holders who requested inclusion of Registrable

Securities in such Registration Statement of its determination to postpone such

Registration Statement; PROVIDED, FURTHER, THAT (i) the Company shall not

disclose any information that could be deemed material non-public information to

any Holder included in a Registration Statement that is subject to such

postponement, (ii) in no event may the Company postpone a filing requested

hereunder more than once in any twelve (12) month period; PROVIDED, THAT any two

postponements must be at least three (3) months apart; PROVIDED, FURTHER, THAT

the Company shall delay the effectiveness of any such registration statement if

the SEC rules and regulations prohibit the Company from declaring a Registration

Statement effective because its financial statements are stale at a time when

its fiscal year has ended or it has made an acquisition reportable under Item

1.01 of Form 8-K or any other similar situation until the earliest time in which

the SEC would allow the Company to declare a Registration Statement effective

(provided that the Company shall use its reasonable best efforts to cure any

such situation as soon as possible so that the Registration Statement can be

made effective at the earliest possible time);

(b) prepare and file with the SEC such amendments and

supplements to such Registration Statement and the prospectus used in connection

therewith as may be necessary to keep such Registration Statement effective for

a period provided for in the applicable Section above, or if not so provided,

for a period of twelve (12) months (for a registration pursuant to Rule 415 of

the Securities Act) or, if such Registration Statement relates to an

underwritten offering, such period as in the opinion of counsel for the

underwriters a prospectus is required by law to be delivered in connection with

sales of Registrable Securities by an underwriter or dealer or such shorter

period as will terminate when all of the securities covered by such Registration

Statement have been disposed of in accordance with the intended methods of

disposition by the seller or sellers thereof set forth in such Registration

Statement (but in any event not before the expiration of any longer period

required under the Securities Act), and to comply with the provisions of the

Securities Act with respect to the disposition of all securities covered by such

Registration Statement until such time as all of such securities have been

disposed of in accordance with the intended methods of disposition by the seller

or sellers thereof set forth in such Registration Statement. In the event the

Company shall give any notice pursuant to Section 1.4(b), the applicable time

period mentioned in this Section 1.5(b) during which a Registration Statement is

to remain effective shall be extended by the number of days during the period

from and including the date of the giving of such notice pursuant to Section

1.4(b) to and including the date when each seller of a Registrable Security

covered by such Registration Statement shall have received the copies of the

supplemented or amended prospectus contemplated by Section 1.5(e);

(c) furnish to each seller of Registrable Securities, prior to

filing a Registration Statement, such number of copies of such Registration

Statement, each amendment and supplement thereto, any preliminary prospectus,

any issuer free writing prospectus and the prospectus included in such

Registration Statement (each in conformity with the requirements of

6

<PAGE>

the Securities Act) and such other documents as such seller may reasonably

request in order to facilitate the disposition of the Registrable Securities

owned by such seller;

(d) register or qualify such Registrable Securities under such

other securities or blue sky laws of such jurisdictions as any seller reasonably

requests and do any and all other acts and things which may be reasonably

necessary or advisable to enable such seller to consummate the disposition in

such jurisdictions of the Registrable Securities owned by such seller and to

keep each such registration or qualification (or exemption therefrom) effective

during the period which the Registration Statement is required to be kept

effective (PROVIDED, that the Company will not be required to (i) qualify

generally to do business in any jurisdiction where it would not otherwise be

required to qualify but for this subparagraph, (ii) subject itself to taxation

in any such jurisdiction or (iii) consent to general service of process in any

such jurisdiction);

(e) notify each seller of such Registrable Securities, at any

time when a prospectus relating thereto is required to be delivered under the

Securities Act, of the happening of any event (a "Changing Event") as a result

of which, the prospectus included in such Registration Statement contains an

untrue statement of a material fact or omits any fact necessary to make the

statements therein not misleading in the light of the circumstances under which

they were made, and, at the request of any such seller, the Company will as soon

as possible prepare and furnish to such seller (a "Correction Event") a

reasonable number of copies of a supplement or amendment to such prospectus so

that, as thereafter delivered to the purchasers of such Registrable Securities,

such prospectus will not contain an untrue statement of a material fact or omit

to state any fact necessary to make the statements therein not misleading in the

light of the circumstances under which they were made;

(f) cause all such Registrable Securities to be listed on each

securities exchange on which similar securities issued by the Company are then

listed;

(g) provide a transfer agent and registrar for all such

Registrable Securities not later than the effective date of such Registration

Statement;

(h) enter into such customary agreements (including

underwriting agreements in customary form with any underwriter, if any is

selected by the Company) and take all such other actions as the Holders of a

majority of the Registrable Securities being sold or the underwriters, if any,

reasonably request in order to expedite or facilitate the disposition of such

Registrable Securities, including causing its officers to participate in "road

shows" and other information meetings organized by an underwriter, if any,

provided that any underwriter shall have been selected by the Company;

(i) make available for inspection by any seller of Registrable

Securities, any underwriter participating in any disposition pursuant to such

Registration Statement and any attorney, accountant or other agent retained by

any such seller or underwriter, all financial and other records, pertinent

corporate documents and properties of the Company, and cause the Company's

employees and independent accountants to supply all information reasonably

7

<PAGE>

requested by any such seller, underwriter, attorney, accountant or agent in

connection with such Registration Statement;

(j) permit any Holders to modify any information contained in

a Registration Statement or prospectus or any amendments or supplements thereto

pertaining to such Holders, and the Company shall use its reasonable best

efforts to comply with such request; PROVIDED, HOWEVER, that the Company shall

not have any obligation to so modify any information if the Company reasonably

believes that so doing would cause the Registration Statement or prospectus or

any amendments or supplements thereto to contain an untrue statement of a

material fact or omit to state any material fact required to be stated therein

or necessary to make the statements therein not misleading;

(k) before filing a Registration Statement or prospectus or

any amendments or supplements thereto, the Company shall provide counsel

selected by the Holders owning a majority of the Registrable Securities being

registered in such registration ("Holders' Counsel") and any other Inspector (as

defined below) with an adequate and appropriate opportunity to review and

comment on such Registration Statement and each prospectus included therein (and

each amendment or supplement thereto) to be filed with the SEC, subject to such

documents being under the Company's control, and the Company shall notify the

Holders' Counsel and each seller of Registrable Securities of any stop order

issued or threatened by the SEC;

(l) otherwise comply with all applicable rules and regulations

of the SEC, and make available to its security holders, as soon as reasonably

practicable, an earnings statement covering the period of at least twelve months

beginning with the first day of the Company's first full calendar quarter after

the effective date of the Registration Statement, which earnings statement shall

satisfy the provisions of Section 11(a) of the Securities Act and Rule 158

thereunder;

(m) in the event of the issuance of any stop order suspending

the effectiveness of a Registration Statement, or of any order suspending or

preventing the use of any related prospectus or suspending the qualification of

any securities included in such Registration Statement for sale in any

jurisdiction, the Company will use its reasonable best efforts promptly to

obtain the withdrawal of such order;

(n) subject to execution and delivery of mutually satisfactory

confidentiality agreements, make available at reasonable times for inspection by

any seller of Registrable Securities, any managing underwriter participating in

any disposition of such Registrable Securities pursuant to a Registration

Statement, Holders' Counsel and any attorney, accountant or other agent retained

by any managing underwriter (each, an "Inspector" and collectively, the

"Inspectors"), during normal business hours of Company at Company's corporate

office and without unreasonable disruption of Company's business or unreasonable

expense to Company and solely for the purpose of due diligence with respect to

the registration statement, non-confidential, legally disclosable, financial and

other records and pertinent corporate documents of the Company and its

subsidiaries (collectively, the "Records") as shall be reasonably necessary to

enable them to exercise their due diligence responsibility, and cause the

Company's

8

<PAGE>

and its subsidiaries' officers, directors and employees, and the independent

public accountants of the Company, to make available for inspection, at such

parties' offices during their respective normal business hours and without

unreasonable disruption of their business or unreasonable expense to Company and

solely for the purpose of due diligence with respect to a registration statement

covering Registrable Securities pursuant to this Agreement all information

reasonably requested by any such Inspector in connection with such Registration

Statement;

(o) subject to execution and delivery of mutually satisfactory

confidentiality agreements, keep Holders' Counsel advised as to the initiation

and progress of any registration hereunder including, but not limited to,

providing Holders' Counsel with all correspondence with the SEC;

(p) cooperate with each seller of Registrable Securities and

each underwriter participating in the disposition of such Registrable Securities

and their respective counsel in connection with any filings required to be made

with the NASD; and

(q) take all other steps reasonably necessary to effect the

registration of the Registrable Securities contemplated hereby.

1.6 CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS PURSUANT TO

THIS AGREEMENT. By executing and delivering this Agreement, each Holder

represents and warrants that the information concerning, and representations and

warranties by, such Holder, including information concerning the securities of

the Company held, beneficially or of recor