[Form of Subsidiary Guarantee]
DELTA FUNDING CORPORATION
DF SPECIAL HOLDINGS
FIDELITY MORTGAGE, INC.
FIDELITY MORTGAGE (FLORIDA), INC.
SUBSIDIARY GUARANTEE
For value received, each of Delta Funding Corporation, a Delaware
corporation, DF Special Holdings Corporation, a New York corporation, Fidelity
Mortgage, Inc., a Delaware corporation, and Fidelity Morgage (Florida), Inc., a
Delaware corporation (each a "Subsidiary Guarantor," and together, the
"Subsidiary Guarantors"), hereby, jointly and severally with the other
Subsidiary Guarantors, fully and unconditionally guarantees to each Holder of
Notes authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of the
Indenture, the Notes or the Obligations of the Company to the Holders or the
Trustee under the Notes or under the Indenture, that: (a) the principal of, and
premium, if any, and interest on the Notes shall be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and interest
on overdue principal of interest on the Note, if any, if lawful and all other
Obligations of the Company to the Holders or the Trustee under the Indenture or
under the Notes shall be promptly paid in full or performed, all in accordance
with the terms thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other Obligations, the same will be promptly
paid in full when due in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed, for whatever reason, the Subsidiary Guarantors
will be jointly and severally obligated to pay the same immediately.
The Obligations of the Subsidiary Guarantors to the Holders and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee. The terms of
Article 10 of the Indenture are incorporated herein by reference.
No director, officer, employee, incorporator or stockholder, as such,
past, present or future, of the Subsidiary Guarantor shall have any personal
liability under this Subsidiary Guarantee by reason of his or its status as such
director, officer, employee, incorporator or stockholder.
This is a continuing Subsidiary Guarantee and shall remain in full
force and effect and shall be binding upon each Subsidiary Guarantor and its
respective successors and assigns to the extent set forth in the Indenture until
full and final payment of all of the Company' Obligations under the Notes and
the Indenture and shall inure to the benefit of the successors and assigns of
the Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder of or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This a
Subsidiary Guarantee of payment and not a guarantee of collection.
In certain circumstances more fully described in the Indenture, any
Subsidiary Guarantor may be released from its liability under this Subsidiary
Guarantee, and any such release will be effective whether or not noted hereon.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
For purposes hereof, each Subsidiary Guarantor's liability will be that
amount from time to time equal to the aggregate liability of such Subsidiary
Guarantor hereunder, but shall be limited to the lesser of (i) the aggregate
amount of the Obligations of the Company under the Notes and the Indenture and
(ii) the amount, if any, which would not have (A) rendered such Subsidiary
Guarantor "insolvent" (as such term is defined in the federal Bankruptcy Law and
in the Debtor and Creditor Law of the State of New York) or (B) left it with
unreasonably small capital at the time its Subsidiary Guarantee of the Notes was
entered into, after giving effect to the incurrence of existing Indebtedness
immediately prior to such time; provided that, it shall be a presumption in any
lawsuit or other proceeding in which such Subsidiary Guarantor is a party that
the amount guaranteed pursuant to its Subsidiary Guarantee is the amount set
forth in clause (i) above unless any creditor, or representative of creditors of
such Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of
such Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of such Subsidiary Guarantor is limited to the amount set forth in
clause (ii). The Indenture provides that, in making any determination as to the
solvency or sufficiency of capital of a Subsidiary Guarantor in accordance with
the previous sentence, the right of such Subsidiary Guarantor to contribution
from other Subsidiary Guarantors and any other rights such Subsidiary Guarantor
may have, contractual or otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
SIGNATURES
DATED AS OF JULY __, 1997 DELTA FUNDING CORPORATION
BY:
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NAME:
TITLE:
DATED AS OF JULY __, 1997 DF SPECIAL HOLDINGS CORPORATION
BY:
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NAME:
TITLE:
DATED AS OF JULY __, 1997 FIDELITY MORTGAGE, INC.
BY:
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NAME:
TITLE:
DATED AS OF JULY __, 1997 FIDELITY MORTGAGE (FLORIDA), INC.
BY:
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NAME:
TITLE:
