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                                                                    EXHIBIT 10.3


               AMENDMENT #2 TO SECURED CONVERTIBLE NOTE PURCHASE
                                   AGREEMENT

         This Amendment #2 (the "Amendment") to the Secured Convertible Note
Purchase Agreement, as amended (the "Purchase Agreement") between Altiva
Financial Corporation ("Altiva") and Value Partners, Ltd. ("Value Partners")
dated as of August 31, 1999 is entered into as of December 30, 1999.

                                    RECITALS

         WHEREAS, Altiva and Value Partners are parties to the Purchase
Agreement; and

         WHEREAS, the parties wish to increase the principal amount of 12%
Secured Convertible Notes that may be issued pursuant to the Purchase Agreement
by $1,750,000;

                                   AGREEMENT

         NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged Altiva and Value Partners agree as follows,

         1.   The definition of the term "Additional Notes" contained in Section
1.1 of the Purchase Agreement is amended and shall read as follows:
"'Additional Notes' means up to $9,000,000 principal amount of 12% Secured
Convertible Notes due 2006 which may be issued and sold by the Company and
purchased by the Purchaser from time to time pursuant to this Agreement
substantially in the form of Exhibit B hereto, as amended, supplemented or
otherwise modified from time to time."

         2.   Section 6.13 of the Purchase Agreement is hereby amended as
follows:

         "SECTION 6.13 PARTICIPATION INTERESTS. The Company acknowledges and
agrees that (i) immediately following the Closing relating to the Initial Notes
the Purchaser will sell an undivided participation interest in the Initial Note
acquired by it in the amount of $2,000,000 to T. Rowe Price Recovery Fund II,
L.P. ("T. Rowe Price") pursuant to a Participation Agreement of even date
herewith, (ii) immediately following the Closing held on December 13, 1999
relating to $250,000 principal amount of Additional Notes the Purchaser will
sell an undivided participation interest in the Additional Note acquired by it
in the amount of $250,000 to T. Rowe Price pursuant to the first amendment to
the Participation Agreement, (iii) immediately following the Closing held on
December 30, 1999 relating to $1,750,000 principal amount of Additional Notes
the Purchaser will sell an undivided participation interest in the Additional
Note acquired by it in the amount of $750,000 to T. Rowe Price pursuant to a
second amended Participation Agreement and (iv) the Purchaser or any other
registered holder of a Note shall have the right to sell additional
participation interests in the Notes to T. Rowe Price and/or any other third
party (individually a 'Participant' and collectively the 'Participants') on
such terms as it
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may determine in its sole discretion. The Company acknowledges that the
original intent of the parties hereto and T. Rowe Price was for T. Rowe Price
to be a party to this Agreement and an acquirer of a Note or Notes with an
aggregate principal amount of $2,000,000, that the Purchaser entered into this
Agreement on the condition that T. Rowe Price be permitted to purchase a
participation interest in the Notes and that the transaction was restructured
to provide for T. Rowe Price's acquisition of a participation interest in the
Notes in such amount solely because the Company is not eligible under the terms
of certain of the mortgage-related securities included in the collateral
subject to the Security Agreement to pledge an interest in such collateral
directly to T. Rowe Price. Accordingly, the Company covenants and agrees that
(i) the Purchaser or any other registered holder of a Note shall be entitled to
obtain on behalf of an applicable Participant the benefits of this Agreement
and each Related Agreement and (ii) the Company shall take such action as may
be necessary or advisable in order to enable the Purchaser or any other
registered holder of a Note to do the same and shall not at any time insist
upon, plead or in any manner whatsoever claim that a Participant is not
indirectly entitled to a right or benefit available to a registered holder of a
Note under this Agreement or any Related Agreement because it is a Participant
and not such a registered holder. Without in any way limiting the foregoing,
the Company acknowledges and agrees that its obligations under the Registration
Rights Agreement are for the benefit of both the holders of the Notes and
Participants and that any shares of Common Stock acquired by a Participant upon
conversion of a Note or Notes in which such Participant holds a participation
interest shall be subject to the terms of the Registration Rights Agreement
until such shares are no longer 'Transfer Restricted Securities,' as such term
is defined therein."

         3.   Exhibit A to the Purchase Agreement is hereby amended to read as
set forth in Exhibit A hereto.


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         4.   It is understood that the parties are entering into this
Amendment to facilitate the issuance of an additional $1,750,000, principal
amount of Additional Notes. In connection with the Closing related to such
issuance, the parties agree to waive the following provisions:

              (a)   Value Partners hereby waives the conditions to Closing
contained in Section 4.2(c) (as it relates to the opinion of Venable, Baetjer
and Howard, LLP ("Venable") only) and Section 4.2(f) of the Purchase Agreement,
provided that (i) the opinion of Venable and (ii) the consents referred to in
the Section 4.2(f) are obtained within three Business Days after such Closing;

              (b)   The Company hereby waives the requirement to deliver a
certificate specified in the condition to Closing contained in Section 4.3(a)
of the Agreement; and

              (c)   The Company hereby waives the condition to Closing
contained in Section 4.2(b) of the Agreement that Value Partners shall deliver
a dollar amount equal to the principal amount of the Notes to be issued, but
only to the extent that Value Partners, subject to any terms and conditions
contained in this Amendment, (i) shall have delivered $850,000 to the Company
at the Closing related to the December 30, 1999 issuance of Notes and (ii)
shall deliver an additional $850,000 to the Company within three Business Days
after such Closing.

              5.    Recitals; Incorporation.

              (a)   The Company represents and warrants to the Purchaser that
the Recitals to this Amendment are (i) true and accurate and (b) an integral
part of this Amendment.

              (b)   Terms not otherwise defined herein shall have the meaning
set forth in the Purchase Agreement.

              6.    Amendment Effect.

              This Amendment is supplementary to the Purchase Agreement and the
Related Agreements. All of the provisions of the Purchase Agreement and the
Related Agreements, including, without limitation, the right to declare
principal and accrued interest on the Notes due for any cause specified therein
and the validity of all Liens created thereby, shall remain in full force and
effect, except as herein expressly modified. The Purchase Agreement and the
Related Agreements and all rights and powers created thereby and thereunder are
in all respects ratified and confirmed. From and after the date hereof, the
Purchase Agreement shall be deemed to be amended and modified as herein
provided, but, except as so amended and modified, the Purchase Agreement shall
continue in full force and effect and the Purchase Agreement and this Amendment
shall be read, taken and construed as one and the same instrument. On and after
the date


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hereof, the term "the Agreement" as used in all of the Related Agreements and
"this Agreement" as used in the Purchase Agreement shall mean the Purchase
Agreement as amended hereby.

              7.     Representations and Warranties of the Company. This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. To induce the Purchaser to enter
into this Amendment, the Company hereby represents and warrants to the
Purchaser that:

              (i)    The execution and delivery of this Amendment, and the
                     performance by the Company of its obligations under this
                     Amendment, the Purchase Agreement and the Related
                     Agreements, as amended, are within the Company's corporate
                     powers, have been duly authorized by all necessary
                     corporate action, have received all necessary approvals of
                     Governmental Entities and do not and will not contravene
                     or conflict with any provisions of law or the Articles of
                     Incorporation or Bylaws of the Company or any Subsidiary
                     of the Company or of any agreement binding upon the
                     Company or any Subsidiary of the Company;

              (ii)   This Amendment, and each other instrument executed by the
                     Company concurrently herewith, is the legal, valid and
                     binding obligation of the Company, enforceable against the
                     Company in accordance with its terms, except as
                     enforcement thereof may be subject to the effect of
                     applicable bankruptcy, insolvency, reorganization,
                     moratorium or similar laws affecting creditors' rights
                     generally, and to general principles of equity (regardless
                     of whether such enforcement is sought in a proceeding in
                     equity or at law);

              (iii)  Except as Previously Disclosed, all of the
                     representations and warranties of the Company made in the
                     Purchase Agreement and the Related Agreements are true and
                     correct as of the date hereof, except where such
                     representation or warranty specifically relates to an
                     earlier date. The Company hereby expressly remakes and
                     reaffirms each and every representation, warranty and
                     covenant set forth in the Purchase Agreement and the
                     Related Agreements and for the benefit of the Purchaser,
                     as if made on the date herein and fully set forth herein.

              (iv)   Except as otherwise provided herein, no Event of Default
                     or Default under the Notes exists and the Company is in
                     full compliance with all the terms, conditions and
                     provisions of the Purchase Agreement and the Related
                     Agreements.


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              8.     Reimbursement of Expenses. The Company agrees to pay all
reasonable costs and expenses (including, without limitation, attorneys' fees
and expenses) incurred by the Purchaser and T. Rowe Price in connection with
the negotiation, preparation and execution of this Amendment and acknowledges
that such costs and expenses may be deducted from any amount payable by the
Purchaser to the Company in connection with the issuance of Additional Notes.

              9.     Severability. If any provision (in whole or in part) of
this Amendment, the Purchase Agreement or the Related Agreements or the
application thereof to any Person or circumstances is held invalid or
unenforceable, then such provision shall be deemed modified, restricted or
reformulated to the extent and in the manner necessary to render the same valid
and enforceable, or shall be deemed excised from this Amendment, the Purchase
Agreement or the Related Agreement, as applicable, and this Amendment and such
other agreements shall be construed and enforced to the maximum extent
permitted by law, as if such provision had been originally incorporated herein
or therein, as applicable. The parties further agree to seek a lawful
substitute for any provision found to be lawful. If such modification,
restriction or reformulation is not reasonably possible, the remainder of this
Amendment, the Purchase Agreement or the Related Agreements, as applicable, and
the application of such provision to other Persons or circumstances will not be
affected thereby and the provisions of this Amendment, the Purchase Agreement
or the Related Agreements shall be severable in any such instance.

              10.    Waiver of Claims. The Company hereby acknowledges, agrees
and affirms that it possesses no claims, defenses, offsets, recoupment or
counterclaims of any kind or nature against or with respect to the enforcement
of the Purchase Agreement or any Related Agreement or any amendments thereto
(collectively, the "Claims"), nor does the Company now have knowledge of any
facts that would or might give rise to any Claims. If facts now exist which
would or could give rise to any Claim against or with respect to the
enforcement of the Purchase Agreement or any Related Agreement, as amended by
the amendments thereto, the Company hereby unconditionally, irrevocably and
unequivocally waives and fully releases any and all such Claims as if such
Claims were the subject of a lawsuit, adjudicated to final judgment from which
no appeal could be taken and therein dismissed with prejudice.

              11.    Governing Law. THE PARTIES HERETO ACKNOWLEDGE THAT THE
TRANSACTIONS CONTEMPLATED BY THE PURCHASE AGREEMENT AND THE NOTES BEAR A
REASONABLE RELATION TO THE STATE OF MARYLAND IN THAT, INTERALIA, T. ROWE PRICE
HAS ITS PRINCIPAL PLACE OF BUSINESS IN THE STATE OF MARYLAND, PART OF THE
NEGOTIATIONS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY HAS OCCURRED IN
THE STATE OF MARYLAND AND THE CLOSING WILL OCCUR IN SUCH STATE. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF MARYLAND, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.


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              12.    Representation by Counsel. The Company hereby represents
that it has been represented by competent counsel of its choice in the
negotiation and execution of this Amendment, the Purchase Agreement and the
Related Agreements; that it has read and fully understands the terms hereof;
that the Company and its counsel have been afforded an opportunity to review,
negotiate and modify the terms of this Amendment; and that it intends to be
bound hereby.

              13.    Headings. The descriptive headings of the various
provisions of this Amendment, the Purchase Agreement and the Related Agreements
are inserted for convenience of reference only and shall not be deemed to
affect the meaning or construction of any of the provisions hereof. Section
references in the Purchase Agreement shall be deemed to refer to the applicable
Section set forth in this Amendment.

              14.    Counterparts. This Amendment, the Purchase Agreement and
the Related Agreements may be executed in any number of counterparts, and by
the different parties hereto and thereto on the same or separate counterparts,
each of which, when so executed and delivered shall be deemed to be an
original; all the counterparts for each such agreement shall together
constitute one and the same agreement.

              15.    Fax Execution. For purposes of negotiating and finalizing
this Amendment (including any subsequent amendments thereto), any signed
document transmitted by facsimile machine ("FAX") shall be treated in all
manner and respects as an original document. The signature of any party by FAX
shall be considered for these purposes as an original signature. Any such FAX
document shall be considered to have the same binding legal effect as an
original document. The undersigned parties hereby agree that neither shall
raise the use of the FAX or the fact that any signature or document was
transmitted or communicated through the use of a FAX as a defense to the
formation of this Amendment.

              16.    No Third Party Beneficiaries. This Amendment is solely
for the benefit of the Purchaser and its successors and assigns (except as
otherwise expressly provided herein) and nothing contained herein shall be
deemed to confer upon any other Person any right to insist on or to enforce the
performance or observance of any of the obligations contained herein. All
conditions to the obligations of the Purchaser to purchase Additional Notes
hereunder are imposed solely and exclusively for the benefit of the Purchaser
and its successors and assigns and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms and no
other Persons shall under any circumstances be deemed to be a beneficiary of
such conditions.

              17.    Texas Language.

              (a)    THE PURCHASE AGREEMENT, TOGETHER WITH THE RELATED
AGREEMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN


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THE PARTIES THERETO WITH RESPECT TO THE MATTERS COVERED THEREBY AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

              (b)    THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES
HERETO.


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EXECUTED as of the date first above written.



                                  VALUE PARTNERS, LTD.


                                  By: /s/ Timothy G. Ewing
                                     -----------------------------------------
                                     Timothy G. Ewing
                                     Managing Partner of Ewing & Partners,
                                     general partner of Value Partners, Ltd.
                                     Its:   General Partner



                                  ALTIVA FINANCIAL CORPORATION



                                  By: /s/ Edward B. Meyercord
                                     ------------------------------------
                                     Edward B. Meyercord
                                     Chief Executive Officer


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                                                                      EXHIBIT A

                          TO SECURED CONVERTIBLE NOTE
                               PURCHASE AGREEMENT


<TABLE>
<S>                                   <C>
Purchaser of Initial Notes:           Principal Amount of Initial Notes:
Value Partners, LTD
4514 Cole Avenue - Suite 808          $7,000,000
Dallas, Texas 75205
Attn: Mr. Timothy Ewing
(214) 522-2100 (TEL)
(214) 522-2176 (FAX)


Purchaser of Additional Notes:        Principal Amount of Additional Notes and Date of Purchase:
Value Partners, LTD
4514 Cole Avenue - Suite 808          $250,000 (December 13, 1999)
Dallas, Texas 75205
Attn: Mr. Timothy Ewing               $1,750,000 (December 31, 1999)
(214) 522-2100 (W)
(214) 522-2176 (FAX)
</TABLE>


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