Document:

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                                                                   EXHIBIT 10.1

                            SECURED CONVERTIBLE NOTE
                               PURCHASE AGREEMENT

                                  BY AND AMONG

                          ALTIVA FINANCIAL CORPORATION

                                      AND

                              VALUE PARTNERS, LTD

                          DATED AS OF AUGUST 31, 1999

        THIS AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE
INTERCREDITOR AND COLLATERAL SUBORDINATION AGREEMENT, DATED AUGUST 31, 1999
(THE "SUBORDINATION AGREEMENT"), AS THE SAME MAY BE AMENDED, MODIFIED OR
OTHERWISE SUPPLEMENTED FROM TIME TO TIME, BY AND AMONG ALTIVA FINANCIAL
CORPORATION, AS BORROWER, GREENWICH CAPITAL MARKETS, INC. AND GREENWICH CAPITAL
FINANCIAL PRODUCTS, INC., PARTIES TO THE SENIOR AGREEMENTS REFERRED TO IN THE
SUBORDINATION AGREEMENT, AND THE HOLDERS FROM TIME TO TIME OF THE OBLIGATIONS
ARISING UNDER THE SUBORDINATION LOAN AGREEMENT REFERRED TO IN THE SUBORDINATION
AGREEMENT.

<PAGE>   2

                               TABLE OF CONTENTS

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<S>      <C>      <C>      <C>                                                                                 <C>
Article I.        Definitions................................................................................     1
         Section 1.1       Definitions.......................................................................     1

Article II.       Purchase and Sale of Notes.................................................................     5
         Section 2.1       Purchase and Sale of Notes........................................................     5
         Section 2.2       Closing...........................................................................     5

Article III.      Representations and Warranties.............................................................     6
         Section 3.1       Representations and Warranties of the Company.....................................     6
         Section 3.2       Representations and Warranties of the Purchaser...................................    14

Article IV.       Conditions Precedent to Closing............................................................    17
         Section 4.1       Conditions to Obligations of the Parties..........................................    17
         Section 4.2       Conditions to Obligations of the Purchaser........................................    17
         Section 4.3       Conditions to Obligations of the Company..........................................    18

Article V.        Covenants..................................................................................    19
         Section 5.1       Shareholder Meeting...............................................................    19
         Section 5.2       Applications......................................................................    20
         Section 5.3       Investigation and Confidentiality.................................................    21
         Section 5.4       Press Releases....................................................................    22
         Section 5.5       No Solicitation...................................................................    22
         Section 5.6       Use of Proceeds...................................................................    22
         Section 5.7       Current Information...............................................................    22
         Section 5.8       Rule 144 and Rule 144A Reporting..................................................    23
         Section 5.9       Stay, Extension and Usury Laws....................................................    23

Article VI.       Miscellaneous..............................................................................    23
         Section 6.1       Survival of Provisions............................................................    23
         Section 6.2       Termination.......................................................................    23
         Section 6.3       Waiver; Amendments................................................................    24
         Section 6.4       Communications....................................................................    24
         Section 6.5       Costs, Expenses and Taxes.........................................................    25
         Section 6.6       Execution in Counterparts.........................................................    25
         Section 6.7       Binding Effect; Assignment........................................................    27
         Section 6.8       Governing Law.....................................................................    26
         Section 6.9       Usury.............................................................................    26
</TABLE>

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<TABLE>
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         <S>               <C>                                                                                 <C>
         Section 6.10      Severability of Provisions........................................................    26
         Section 6.11      Headings and Gender...............................................................    26
         Section 6.12      Integration.......................................................................    27
         Section 6.13      Participation Interests...........................................................    27
         Section 6.14      Knowledge Limitation..............................................................    27

         Exhibit A         Name and Address of the Purchaser
         Exhibit B         Form of Note
         Exhibit C         Form of Pledge and Security Agreement
         Exhibit D         Form of Intercreditor and Collateral Subordination Agreement
         Exhibit E         Form of Registration Rights Agreement
         Exhibit F         Matters to be covered by Opinion of Counsel to the Company
</TABLE>

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<PAGE>   4

                            SECURED CONVERTIBLE NOTE
                               PURCHASE AGREEMENT

         Secured Convertible Note Purchase Agreement, dated as of August 31,
1999 (the "Agreement"), by and among Altiva Financial Corporation, a Delaware
corporation, and the other party named on the signature page hereof.

         In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

         SECTION 1.1   DEFINITIONS. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:

         "Acquisition" means the Company's acquisition of all of the
outstanding capital stock of MCI pursuant to the Stock Purchase Agreement.

         "Affiliate" means, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.

         "Agreement" means this Secured Convertible Note Purchase Agreement, as
amended, supplemented or modified from time to time.

         "Business Day" means any day except a Saturday, Sunday or other day on
which banking institutions in the city of Atlanta, Georgia are authorized by
law to close.

         "Capital Securities" of any Person means Capital Stock of the Person
and Stock Equivalents of the Person.

         "Capital Stock" of any Person means any and all shares or other equity
interest of such Person.

         "Closing" has the meaning set forth in Section 2.2.
<PAGE>   5

         "Closing Date" has the meaning set forth in Section 2.2.

         "Code" means the Internal Revenue Code of 1986, as amended (or any
successor statute in effect from time to time), and the rules and regulations
promulgated thereunder.

         "Commission" means the Securities and Exchange Commission and any
successor thereto.

         "Common Stock" means the Common Stock, par value $.01 per share, of
the Company.

         "Company" means Altiva Financial Corporation, a Delaware corporation,
together with its successors.

         "Company Financial Statements" has the meaning set forth in Section
3.1(i)(i) hereof.

         "Environmental Claim" means any written notice from any governmental
authority or third party alleging potential liability (including without
limitation potential liability for investigating costs, cleanup costs,
governmental response costs, natural resource damages, property damages,
personal injuries or penalties) arising out of, based on, or resulting from the
presence, or release into the environment of any Materials of Environmental
Concern.

         "Environmental Laws" means any law, statute, rule or regulation of any
governmental, judicial, legislative, executive, administrative or regulatory
authority of the United States, or of any state, local or foreign government or
any subdivision thereof or of any governmental body or other regulatory or
administrative agency or commission, domestic or foreign (a "Law"), relating to
pollution or protection of the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata), including without
limitation the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, the Resource Conservation and Recovery Act of 1976, as
amended, and other Laws relating to (i) emissions, discharges or releases of
pollutants, contaminants, chemicals, or industrial toxic or hazardous
substances or wastes (collectively known as "Polluting Substances") or (ii) the
handling, storage, disposal, reclamation, recycling or transportation of
Polluting Substances.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended (or any successor statute in effect from time to time).

         "Escrow Agreement" has the meaning set forth in Article I of the
Security Agreement.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended
and in effect from time to time (or any successor statute in effect from time
to time), and the rules and regulations of the Commission promulgated
thereunder.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public

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<PAGE>   6

Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect on the date of this Agreement.

         "Governmental Entity" means any federal or state court, administrative
agency or commission or other governmental authority or instrumentality.

         "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (or any successor statute in effect from time to time), and
the rules and regulations of the Federal Trade Commission promulgated
thereunder.

         "Intercreditor Agreement" means the Intercreditor and Collateral
Subordination Agreement among the Company, the Purchaser, Greenwich Capital
Markets, Inc. and Greenwich Capital Financial Products, Inc., substantially in
the form of Exhibit D hereto.

         "Lien" means, with respect to any asset, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind in respect of such asset.

         "Material Adverse Effect" means any effect that (i) is material and
adverse to the financial condition, results of operations, business or
prospects of the Company and its Subsidiaries taken as a whole or (ii)
materially impairs the ability of the Company to consummate the transactions
contemplated by any of this Agreement or any Related Agreement.

         "Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products and any other
materials regulated under Environmental Laws.

         "MCI" means The Money Centre, Inc., a North Carolina corporation,
together with its successors.

         "NASD" means National Association of Securities Dealers, Inc.

         "Notes" means $7,000,000 principal amount of 12% Secured Convertible
Notes due 2006 to be issued and sold by the Company and purchased by the
Purchaser pursuant to this Agreement, substantially in the form of Exhibit B
hereto, as amended, supplemented or otherwise modified from time to time.

         "Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or a political subdivision or an agency or instrumentality thereof.

         "Preferred Stock" means the Preferred Stock, par value $.01 per share,
of the Company.

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<PAGE>   7

         "Previously Disclosed" means disclosed in a letter dated the date
hereof delivered from the Company to the Purchaser or from the Purchaser to the
Company, as applicable, specifically referring to the appropriate section of
this Agreement and describing in reasonable detail the matters contained
therein.

         "Purchaser" means the Person (other than the Company) listed on the
signature pages of this Agreement, and its permitted successors and assigns as
provided herein.

         "Real Estate Owned" means the consolidated properties of the Company
acquired by foreclosure on a loan or deed-in-lieu thereof or otherwise included
in the Company's real estate owned for purposes of reporting asset quality of
the Company in its reports filed with the Commission under the Exchange Act.

         "Registration Rights Agreement" means the Registration Rights
Agreement by and among the Company and the Purchaser, substantially in the form
of Exhibit E hereto, as amended, supplemented or otherwise modified from time
to time.

         "Related Agreements" means the Notes, the Security Agreement, the
Escrow Agreement, the Intercreditor Agreement and the Registration Rights
Agreement.

         "Securities" means (i) the Notes and (ii) the Common Stock issuable
upon conversion of the Notes.

         "Securities Act" means the Securities Act of 1933, as amended (or any
successor statute thereto as in effect from time to time), and the rules and
regulations of the Commission promulgated thereunder.

         "Securities Documents" shall mean all reports, offering circulars,
proxy statements, registration statements and all similar documents filed, or
required to be filed, pursuant to the Securities Laws.

         "Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of
1940, as amended; the Trust Indenture Act of 1939, as amended; and the rules
and regulations of the Commission promulgated thereunder.

         "Security Agreement" means the Pledge and Security Agreement by and
among the Company and the Purchaser, in its own right and as agent for the
holders of the Notes, substantially in the form of Exhibit C hereto, as
amended, supplemented or otherwise modified from time to time.

         "State" means each of the states of the United States, the District of
Columbia and the Commonwealth of Puerto Rico.

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<PAGE>   8

         "Stock Equivalents" means, with respect to any Person, options,
warrants, calls, contracts or other rights entered into or issued by such
Person which confer upon the holder thereof the right (whether or not
contingent) to acquire any Capital Stock, voting securities or securities
convertible into or exchangeable for Capital Stock or voting securities of such
Person.

         "Stock Option Plan" means the 1999 Stock Incentive Plan of the Company.

         "Stock Purchase Agreement" means the Stock Purchase Agreement, dated
as of July 7, 1999, by and among the Company and each of the stockholders of
MCI, as in effect as of the date hereof.

         "Subsidiary" means with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more Subsidiaries of such Person (or a combination thereof)
and (ii) any partnership (a) the sole general partner or managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more Subsidiaries of such
Person (or any combination thereof).

         "Taxes" means all taxes, charges, fees, levies or other governmental
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, estimated, severance, stamp,
occupation, property or other taxes, customs, dues, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority
(domestic or foreign).

         "Tax Returns" means all foreign, federal, State and local returns
relating to Taxes.

         "T. Rowe Price" means T. Rowe Price Recovery Fund, II, L.P.

                                   ARTICLE II
                           PURCHASE AND SALE OF NOTES

         SECTION 2.1   PURCHASE AND SALE OF NOTES. Subject to the terms and
conditions herein set forth, the Company agrees that it will issue and sell to
the Purchaser and the Purchaser agrees that it will purchase from the Company
the principal amount of Notes set forth opposite such Purchaser's name on
Exhibit A hereto at a price equal to such principal amount.

         SECTION 2.2   CLOSING. Subject to the satisfaction or waiver of all of
the conditions to the parties' obligations hereunder specified in Article IV of
this Agreement, the purchase and sale of the Notes will take place at a closing
(the "Closing") to be held at the offices of Venable, Baetjer and

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Howard, LLP, in Baltimore, Maryland, at such time and on such day as the
parties hereto mutually agree upon. The date on which the Closing is to occur
is referred to herein as the "Closing Date."

                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         SECTION 3.1   REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
Previously Disclosed, the Company represents and warrants to each of the
Purchasers as follows:

         (a)    Capital Structure. The authorized capital stock of the Company
consists of 400,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock. As of the date hereof, there are (i) 3,656,666 shares of
Common Stock issued and outstanding and no shares of Common Stock are held as
treasury shares and (ii) 62,500 shares of Series A Convertible Preferred Stock
are issued and outstanding and no shares of Preferred Stock are held as
treasury shares. All outstanding shares of Capital Stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable
and none of the outstanding shares of Capital Stock of the Company has been
issued in violation of the preemptive rights of any Person. Except as
contemplated by this Agreement or as Previously Disclosed, there are no Stock
Equivalents authorized, issued or outstanding with respect to the Capital Stock
of the Company as of the date hereof.

         (b)    Organization, Standing and Authority of the Company. The
Company is a corporation duly organized and validly existing under the laws of
Delaware with full corporate power and authority to own or lease all of its
properties and assets and to carry on its business as now conducted and is duly
licensed or qualified to do business and is in good standing in each
jurisdiction in which its ownership or leasing of property or the conduct of
its business requires such licensing or qualification and where the failure to
be so licensed, qualified or in good standing would have a Material Adverse
Effect. The Company has heretofore delivered true and complete copies of the
Certificate of Incorporation and Bylaws of the Company as in effect as of the
date hereof to each Purchaser which has requested the same.

         (c)    Ownership of Subsidiaries. The Company does not own or have the
right to acquire, directly or indirectly, any outstanding Capital Stock or
other voting securities or ownership interests of any corporation, bank,
savings association, partnership, joint venture or other organization. The
outstanding shares of Capital Stock of each Subsidiary of the Company have been
duly authorized and validly issued, are fully paid and nonassessable, and are
directly owned by the Company free and clear of all Liens. No Stock Equivalents
are authorized, issued or outstanding with respect to the Capital Stock of any
Subsidiary of the Company and there are no agreements, understandings or
commitments relating to the right of the Company to vote or to dispose of such
Capital Stock.

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<PAGE>   10

         (d)    Organization, Standing and Authority of Subsidiaries. Each
Subsidiary of the Company (i) is duly organized and validly existing under the
laws of the jurisdiction in which it is organized, (ii) has full corporate
power and authority to own or lease all of its properties and assets and to
carry on its business as now conducted and (iii) is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which its
ownership or leasing of property or the conduct of its business requires such
qualification, except where the failure to be so licensed, qualified or in good
standing would not have a Material Adverse Effect. The Company has heretofore
delivered true and complete copies of the articles of incorporation and bylaws
or equivalent documents of each Subsidiary of the Company as in effect as of
the date hereof to each Purchaser which has requested the same.

         (e)    Authority; Due Execution. The Company has full corporate power
and authority to perform its respective obligations under this Agreement and
each of the Related Agreements, and the execution, delivery and performance by
the Company of this Agreement and each Related Agreement have been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement has been duly executed and delivered by the Company and constitutes,
and each of the Related Agreements, when duly executed and delivered by the
Company, will constitute, a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except (i) rights
to indemnity and contribution under the Registration Rights Agreement may be
limited by applicable law, (ii) enforceability may be limited by bankruptcy,
insolvency, moratorium and similar laws affecting creditors' rights generally
and (iii) rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability.

         (f)    No Conflict. Neither the execution and delivery of this
Agreement and each of the Related Agreements, nor consummation of the
transactions contemplated hereby and thereby, nor compliance by the Company
with any of the provisions hereof or thereof, (i) does or will conflict with or
result in a breach of any provisions of the Certificate of Incorporation or
Bylaws of the Company or the equivalent documents of any Company Subsidiary,
(ii) violate, conflict with or result in a breach of any term, condition or
provision of, or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or give rise to any right
of termination, cancellation or acceleration with respect to, or result in the
creation of any Lien upon any property or asset of the Company or a Company
Subsidiary pursuant to, any material note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which the
Company or a Company Subsidiary is a party, or by which any of their respective
properties or assets may be bound or affected, or (iii) subject to the
compliance referred to in clauses (i) and (ii) of the succeeding sentence,
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Company or a Company Subsidiary. Except for (i) compliance
with applicable federal and State securities laws in connection with this
Agreement and the performance by the Company of its obligations under the
Registration Rights Agreement and (ii) any required compliance by the Company
with applicable federal and State securities laws and/or the HSR Act in
connection with the issuance of shares of Common Stock upon conversion of the
Notes in accordance with their terms, no consent, approval, order or other
authorization of any Governmental Entity or of any third party is required by
or on behalf of the Company or a Subsidiary of the

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Company in connection with the execution, delivery and performance of this
Agreement and each of the Related Agreements. The representations and
warranties contained in this Section 3.1(g), insofar as they relate to federal
and State securities laws requirements, are made in reliance on the
representations and warranties of the Purchaser contained in Section 3.2 of
this Agreement.

         (g)    Status of Securities. The Securities have been authorized by
all necessary corporate action on the part of the Company. When delivered to
the Purchasers at the Closing against payment therefor as provided herein, the
Notes will be duly authorized and validly issued and will not be issued in
violation of the preemptive rights of any Person. Subject to the approvals and
compliance referred to in the second sentence of Section 3.1(f) hereof, shares
of Common Stock issued by the Company upon conversion of the Notes in
accordance with their terms will be duly authorized, validly issued and
non-assessable at the time of issuance and will not be issued in violation of
the preemptive rights of any Person. The representations and warranties
contained in this Section 3.1(g), insofar as they relate to federal and State
securities laws requirements, are made in reliance on the representations and
warranties of the Purchaser contained in Section 3.2 of this Agreement.

         (h)    Securities Reports. The Company has filed all Securities
Documents required to be filed by it under the Securities Laws on a timely
basis or has received a valid extension of such time of filing, and all such
Securities Documents complied in all material respects with the requirements of
the Securities Laws and did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, at the time and in light of the
circumstances under which they were made, not misleading.

         (i)    Financial Statements.

                (i)    The Company has previously delivered to each Purchaser
(x) statements of financial condition of the Company as of August 31, 1998 and
1997 and statements of operations, changes in stockholders' equity and cash
flows of the Company for each of the years ended August 31, 1998, 1997 and
1996, accompanied by the related audit report of Deloitte & Touche LLP, and (y)
an unaudited balance sheet of the Company as of May 31, 1999 and unaudited
statements of operations, changes in shareholders' equity and cash flows of the
Company for the three and nine months ended May 31, 1999 and 1998. The
foregoing financial statements, as well as the financial statements of the
Company included in the Securities Documents to be delivered to the Purchaser
pursuant to Section 5.7 hereof or otherwise required to be delivered to the
Purchaser pursuant to such section (collectively the "Company Financial
Statements"), fairly present or will fairly present, as the case may be, in all
material respects the consolidated financial condition of the Company as of the
respective dates set forth therein, and the consolidated results of operations,
changes in shareholders' equity and cash flows of the Company for the
respective periods or as of the respective dates set forth therein in
accordance with GAAP.

                (ii)   Each of the Company Financial Statements has been or
will be, as the case may be, prepared in accordance with GAAP consistently
applied during the periods involved, except as stated therein. The books and
records of the Company and its Subsidiaries are being maintained

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<PAGE>   12

in material compliance with applicable legal and accounting requirements, and
such books and records accurately reflect in all material respects all dealings
and transactions in respect of the business, assets, liabilities and affairs of
the Company and its Subsidiaries.

                (iii)  Except to the extent (x) reflected, disclosed or
provided for in the Securities Documents filed by the Company prior to the date
hereof and (y) of liabilities incurred since May 31, 1999 in the ordinary
course of business, neither the Company nor any Subsidiary of the Company has
any liabilities, whether absolute, accrued, contingent or otherwise, which has
had or could reasonably be expected to have a Material Adverse Effect.

         (j)    Material Adverse Change. Since May 31, 1999, (i) the Company
and the Subsidiaries of the Company have conducted their respective businesses
in the ordinary and usual course (excluding the incurrence of expenses in
connection with this Agreement and the Stock Purchase Agreement and the
transactions contemplated hereby and thereby) and (ii) no event has occurred or
circumstance arisen that, individually or in the aggregate, has had or could
reasonably be expected to have a Material Adverse Effect.

         (k)    Environmental Matters.

                (i) The Company is in compliance with all Environmental Laws,
except for any violations of any Environmental Law which, individually or in
the aggregate, has not had and could not reasonably be expected to have a
Material Adverse Effect. The Company has not received any communication
alleging that the Company or any Company Subsidiary is not in such compliance
and, to the knowledge of the Company, there are no present circumstances that
would prevent or interfere with the continuation of such compliance.

                (ii) None of the properties owned, leased or operated by the
Company or the any Company Subsidiary has been or is in violation of or liable
under any Environmental Law, except for any such violations or liabilities
which, individually or in the aggregate, has not had and could not reasonably
be expected to have a Material Adverse Effect.

                (iii) To the knowledge of the Company, there are no past or
present actions, activities, circumstances, conditions, events or incidents
that could reasonably form the basis of any Environmental Claim or other claim
or action or governmental investigation that could result in the imposition of
any liability arising under any Environmental Law against the Company or any
Company Subsidiaries or against any Person whose liability for any
Environmental Claim the Company or any Company Subsidiary has or may have
retained or assumed either contractually or by operation of law, except such
as, individually or in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect.

                                       9
<PAGE>   13

         (l)    Tax Matters.

                (i)    The Company and the Company Subsidiaries have timely
filed all Tax Returns required by applicable law to be filed by them
(including, without limitation, estimated tax returns, income tax returns,
information returns and withholding and employment tax returns) and have paid,
or where payment is not required to have been made, have set up an adequate
reserve or accrual for the payment of, all Taxes required to be paid in respect
of the periods covered by such Tax Returns, except in all cases where the
failure to do so, individually or in the aggregate, has not had and could not
reasonably be expected to have a Material Adverse Effect. As of the date
hereof, there is no audit examination, assessed deficiency, deficiency
litigation or refund litigation with respect to any Taxes of the Company or any
Company Subsidiary. All Taxes due with respect to completed and settled
examinations or concluded litigation relating to the Company have been paid in
full or adequate provision has been made for any such Taxes on the Company's
consolidated statement of financial condition in accordance with GAAP. The
Company has not executed an extension or waiver of any statute of limitations
on the assessment or collection of any Tax that is currently in effect.

                (ii)   Neither the Company nor any Company Subsidiary (i) is
a party to any agreement providing for the allocation or sharing of taxes, (ii)
is required to include in income any adjustment pursuant to Section 481(a) of
the Code by reason of a voluntary change in accounting method initiated by the
Company or a Company Subsidiary (nor does the Company have any knowledge that
the Internal Revenue Service has proposed any such adjustment or change of
accounting method) or (iii) has filed a consent pursuant to Section 341(f) of
the Code or agreed to have Section 341(f)(2) of the Code apply.

                (iii)  There has been no "ownership change," as defined under
Section 382 of the Code and regulations thereunder, of the Company since August
31, 1998, and consummation of the transactions contemplated by the Stock
Purchase Agreement, the issuance of the Notes pursuant to this Agreement and,
to the knowledge of the Company, any subsequent conversion of the Notes, will
not result in such an ownership change of the Company.

         (m)    ERISA. The Company is in compliance in all material respects
with all presently applicable provisions of ERISA; to the knowledge of the
Company, no "reportable event" (as defined in ERISA) has occurred with respect
to any "pension plan" (as defined in ERISA) for which the Company would have
any material liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 (whether or not
waived) or 4971 of the Code; and each "pension plan" for which the Company
would have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and to the knowledge of
the Company nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.

                                      10
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         (n)    Litigation. There are no actions, suits, investigations or
legal proceedings instituted, pending or, to the knowledge of the Company,
threatened against the Company or any Company Subsidiary or against any asset,
interest or right of the Company or any Company Subsidiary, or against any
director, officer or employee of any of them that in any such case, if decided
adversely, could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Neither the Company nor any Company
Subsidiary is a party to any order, judgment or decree which has had or could
reasonably be expected to have a Material Adverse Effect.

         (o)    Compliance with Laws. The Company and each Company Subsidiary
has all permits, licenses, certificates of authority, orders and approvals of,
and has made all filings, applications and registrations with, federal, State,
local and foreign governmental or regulatory bodies that are necessary in order
to permit it to carry on its business as it is presently being conducted and
the absence of which could reasonably be expected to have a Material Adverse
Effect; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect; and to the best knowledge of the
Company, no suspension or cancellation of any of the same is threatened.

         (p)    No Default or Violation. Neither the Company nor any Company
Subsidiary currently is in violation of its Certificate of Incorporation or
Bylaws or equivalent documents, or of any applicable federal, State or local
law or ordinance or any order, rule or regulation of any Governmental Entity
(including, without limitation, all securities, safety, health, environmental,
zoning, anti-discrimination, antitrust, and wage and hour laws, ordinances,
orders, rules and regulations), or in default with respect to any order, writ,
injunction or decree of any court, or in default under any order, license,
regulation or demand of any Governmental Entity, any of which violations or
defaults could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, and neither the Company nor any Company
Subsidiary has received any notice or communication from any Governmental
Entity asserting that the Company or any Company Subsidiary is in violation of
any of the foregoing which could reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any Company Subsidiary is subject to
any regulatory or supervisory cease and desist order, agreement, written
directive, memorandum of understanding or written commitment, and none of them
has received any written communication requesting that they enter into any of
the foregoing.

         (q)    Certain Fees. No fees or commissions will be payable by the
Company to brokers, finders, investment bankers or banks pursuant to any
agreement entered into by the Company with respect to the offer and sale of the
Notes or any of the other transactions contemplated hereby, by any Related
Agreement or by the Stock Purchase Agreement.

         (r)    Patents, Trademarks, Etc. The Company and each of its
Subsidiaries owns or possesses all legal rights to use all proprietary rights,
including without limitation all trademarks, trade names, service marks and
copyrights, that are material to the conduct of their existing businesses.
Neither the Company nor any of its Subsidiaries is bound by or a party to any
options, licenses or agreements of any kind with respect to any trademarks,
service marks or trade names which it claims to own. Neither the Company nor
any of its Subsidiaries has received any

                                      11
<PAGE>   15

communications alleging that any of them has violated or would violate any of
the patents, trademarks, service marks, trade names, copyrights or trade
secrets or other proprietary rights of any other Person.

         (s)    Loan Matters

                (i)    Each loan agreement, note or borrowing arrangement,
including without limitation portions of outstanding lines of credit and loan
commitments on the books and records of the Company and its Subsidiaries
(collectively, "Loans") that was made by the Company and to the knowledge of
the Company that was made by any third party was made, and has been serviced in
all material respects in accordance with, the Company's underwriting standards
and the relevant Loan documentation in the ordinary course of business, is
evidenced in all material respects by appropriate and sufficient documentation
and, to the best knowledge of the Company, constitutes the legal, valid and
binding obligation of the obligor named therein, subject to bankruptcy,
insolvency, fraudulent conveyance and other laws of general applicability
relating to or affecting creditor's rights and to general equity principles.

                (ii)   None of the agreements pursuant to which the Company or
any Subsidiary has sold Loans or pools of Loans or participations in Loans or
pools of Loans contain any obligation to repurchase such Loans or interests
therein on account of a payment default by the obligor on any such Loans.
Neither the Company nor any of its Subsidiaries is in default under any such
agreement or has received any notice alleging default.

                (iii)  To the knowledge of the Company, all brokers and other
third parties who originate or have originated Loans have all required licenses
and approvals from all jurisdictions requiring licenses and approvals and have
complied with and are not in violation of any applicable law, regulation,
order, rule, policy or guidelines of any Governmental Entity.

                (iv)   The practices of the Company and its Subsidiaries with
respect to compensation paid to mortgage brokers comply with the policy
statement issued by the Department of Housing and Urban Development in March
1999.

         (t)    Certain Assets. The Company has Previously Disclosed a true and
correct listing of the following assets of the Company and its Subsidiaries as
of May 31, 1999: (i) all non-performing Loans, securities or other assets
(i.e., all assets on which the Company has ceased recognizing interest under
GAAP or as to which any payments of principal or interest are past due 90 or
more days as of such date), (ii) all Loans, securities or other assets as to
which any payments of principal or interest are past due 60 or more days, (iii)
all Loans, securities or other assets not included in the foregoing which have
been classified special mention, substandard, doubtful or loss, or otherwise
classified adversely, by management of the Company or regulatory examiners, and
(iv) each parcel of Real Estate Owned (excepting such parcels as may have been
disposed of in the ordinary course of business subsequent to such date),
including an identification of the amount of reserves which have been
established with respect to each such parcel and its net carrying value.

                                      12
<PAGE>   16

         (u)    Year 2000 Compliance. All computer hardware and software owned,
used or licensed by the Company or any of its Subsidiaries, including but not
limited to system and application programs, files, databases and computer
services, the failure or disfunctionality of which would individually or in the
aggregate have a Material Adverse Effect is Year 2000 Compliant. "Year 2000
Compliant" means that such hardware and software will (i) correctly process
date data from at least January 1, 1900 through December 31, 2000 without error
or interruption due to date, (ii) maintain functionality with respect to the
input, storing, processing or output of records or data containing dates
falling on or after January 1, 2000, and (iii) be interoperable with other Year
2000 compliant hardware or software owned, used or licensed by the Company or
any of its Subsidiaries which may deliver records to, receive records from or
otherwise interact with such hardware or software in the course of processing
records or data.

         (v)    Labor Matters. Neither the Company nor any of its Subsidiaries
is a party to or is bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization, nor
is the Company or any of its Subsidiaries the subject of a proceeding naming
the Company or any Subsidiary as a defendant asserting that the Company or any
such Subsidiary has committed an unfair labor practice (within the meaning of
the National Labor Relations Act) or seeking to compel the Company or any such
Subsidiary to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other material labor dispute or disputes
involving it or any of its Subsidiaries pending, or to the Company's knowledge,
threatened, nor the Company aware of any activity involving its or any of its
Subsidiaries' employees seeking to certify a collective bargaining unit or
engaging in other organizational activity.

         (w)    Insurance. The Company believes that it and each Company
Subsidiary is insured, and during each of the past three calendar years has
been insured, for reasonable amounts with financially sound and reputable
insurance companies against such risks as companies engaged in a similar
business would, in accordance with good business practice, customarily be
insured and has maintained all insurance required by applicable laws and
regulations. All of the policies and bonds maintained by the Company and its
Subsidiaries are in full force and effect and all claims thereunder have been
filed in a due and timely manner and, to the Company's knowledge, no such claim
has been denied.

         (x)    Properties. All real and personal property owned by the Company
or a Company Subsidiary or presently used by any of them in its respective
business is in an adequate condition (ordinary wear and tear excepted) and is
sufficient to carry on its business in the ordinary course of business
consistent with its past practices. The Company has good and marketable title
free and clear of all Liens (other than equities of redemption under applicable
foreclosure laws) to all of the material properties and assets, real and
personal, reflected on the consolidated statement of financial condition of the
Company as of May 31, 1999 included in the Company Financial Statements or
acquired after such date, other than properties sold by the Company in the
ordinary course of business, except (i) Liens for current taxes not yet due or
payable, (ii) pledges to secure deposits and other liens incurred in the
ordinary course of its banking business, (iii) such imperfections of title,
easements and encumbrances, if any, as are not material in character, amount or
extent and (iv) as

                                      13
<PAGE>   17

reflected on the consolidated statement of financial condition of the Company
as of May 31, 1999 included in the Company Financial Statements. All real and
personal property which is material to the Company's business and leased or
licensed by the Company or a Company Subsidiary is held pursuant to leases or
licenses which are valid and enforceable in accordance with their respective
terms.

         (y)   Investment Company Act of 1940. The Company is not, and will not
become upon consummation of the transactions contemplated hereby and by the
Stock Purchase Agreement, an "investment company" or an entity "controlled" by
an "investment company," as such terms are defined in the Investment Company
Act of 1940, as amended.

         (z)   Private Offering. Neither the Company nor any Person acting on
its behalf has taken or will take any action which might subject the offering,
issuance or sale of the Notes to the registration requirements of the
Securities Act or comparable provisions of any applicable State securities
laws.

         (aa)  Exercise of Warrants; Stockholder Approval. After taking into
account the 600,000 shares of Common Stock to be issued in connection with the
Acquisition but without regard to the shares of Common Stock issuable upon
conversion of the Notes, an aggregate of 11,027 shares of Common Stock may be
issued by the Company in connection with the Acquisition and the transactions
contemplated hereby without compliance with the stockholder approval
requirements of the NASD. The affirmative vote of the holders of a majority of
the shares of Company Common Stock present in person or by proxy at a duly
called meeting of the stockholders of the Company at which a quorum, consisting
of the holders of a majority of the outstanding shares of Company Common Stock
present in person or by proxy, is present is the only vote of the stockholders
of the Company necessary to approve the conversion features of the Notes in
their entirety.

         (bb)  Stock Purchase Agreement. The Company has heretofore delivered a
true and complete copy of the Stock Purchase Agreement, including the related
disclosure schedules, to the Purchaser.

         (cc)  Disclosure. None of the representations and warranties of the
Company or any of the information or documents which have been Previously
Disclosed to the Purchaser pursuant hereto are false or misleading in any
material respect or contain any untrue statement of a material fact, or omit to
state any material fact required to be stated or necessary to make any such
information or document, at the time and in light of the circumstances, not
misleading. Copies of all documents referred to in this Section 3.1 are true,
correct and complete copies thereof and include all amendments, supplements and
modifications thereto and all waivers thereunder.

         SECTION 3.2   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

         (a)    Investment Intent. The Purchaser represents and warrants to the
Company that the Securities to be acquired by it hereunder are being acquired
for its own account for investment and

                                      14
<PAGE>   18

with no intention of distributing or reselling such Securities or any part
thereof or interest therein in any transaction which would be in violation of
federal or State securities laws, without prejudice, however, to the
Purchaser's right, subject to the provisions of this Agreement and the
Registration Rights Agreement, at all times to sell participation interests in
the Notes in accordance with Section 6.13 hereof and/or to sell or otherwise
dispose of all or any part of such Securities under an effective registration
statement under the Securities Act and other applicable State securities laws
or under an exemption from such registration, and subject, nevertheless, to the
disposition of the Purchaser's property being at all times within its control.

         (b)   Transfer Restrictions. If the Purchaser should decide to dispose
of any of the Securities, such Purchaser understands and agrees that it may do
so only as set forth below: (i) to the Company or (ii) to any Person reasonably
believed by such Purchaser to be a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in compliance with Rule 144A under the
Securities Act. In connection with any transfer of any Securities. In
connection with any transfer pursuant to clause (ii) above, the Company may
request reasonable certification as to the status of the transferor's
transferee as a qualified institutional buyer. The Purchaser agrees to the
imprinting, so long as appropriate, (i) on the Notes of the legend set forth on
the form of Note included as Exhibit B hereto and (ii) on certificates
representing the Common Stock issuable upon conversion of the Notes of a legend
substantially similar to such legend. The Notes and certificates evidencing the
Common Stock issuable upon conversion of the Notes also shall bear any other
legends required by applicable federal or State securities laws, which legends
may be removed when, in the opinion of counsel to the Company experienced in
the applicable securities laws, the same are no longer required under the
applicable requirements of such securities laws. The Company agrees that it
will provide the Purchaser, upon request, with a substitute document evidencing
the Securities not bearing such legend at such time as such legend is no longer
applicable.

         (c)   Stop Transfer Instructions. The Purchaser agrees that the
Company shall be entitled to make a notation on its records and give
instructions to any transfer agent of the Securities in order to implement the
restrictions on transfer set forth in Section 3.2(b) of this Agreement.

         (d)   Accredited Investor, etc. The Purchaser represents and warrants
to, and covenants and agrees with, the Company that (i) at the time it was
offered the Notes, it was, (ii) at the date hereof, it is, and (iii) at the
Closing, it will be, a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act, and has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits
and risks of the prospective investment in the Notes, and has so evaluated the
merits and risks of such investment, is able to bear the economic risk of such
investment and, at the present time, is able to afford a complete loss of such
investment.

         (e)   Due Execution. The Purchaser represents and warrants to the
Company that this Agreement has been, and each Related Agreement to which it
will become a party will be, duly executed and delivered by it or on its behalf
and constitutes, or will constitute, as applicable, a valid and binding
obligation of such Purchaser, enforceable against the Purchaser in accordance
with its

                                      15
<PAGE>   19

terms, except that (i) rights to indemnity and contribution under the
Registration Rights Agreement may be limited by applicable law, (ii)
enforceability may be limited by bankruptcy, insolvency, moratorium and similar
laws affecting creditors' rights generally and (iii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles
of general applicability.

         (f)   No Conflict. The Purchaser represents and warrants to the
Company that neither the execution and delivery of this Agreement and each of
the Related Agreements to which the Purchaser is or will become a party, nor
consummation of the transactions contemplated hereby and thereby, nor
compliance by the Purchaser with any of the provisions hereof or thereof, (i)
does or will conflict with or result in a breach of any provisions of the
articles of incorporation or bylaws or equivalent documents of the Purchaser,
(ii) violate, conflict with or result in a breach of any term, condition or
provision of, or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or give rise to any right
of termination, cancellation or acceleration with respect to, or result in the
creation of any Lien upon my property or asset of the Purchaser pursuant to any
material note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which the Purchaser is a party,
or by which any of its properties or assets may be bound or affected, or (iii),
subject to the compliance referred to in clause (i) and (ii) of the succeeding
sentence, violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Purchaser. Except for (i) compliance with
applicable federal and State securities laws in connection with the performance
by the Purchaser of its obligations under the Registration Rights Agreement and
(ii) any required compliance by the Purchaser with applicable federal and State
securities laws and the HSR Act in connection with the issuance of shares of
Common Stock upon conversion of the Notes in accordance with their terms, the
Purchaser represents and warrants to the Company that no consent, approval,
order or other authorization of any Governmental Entity or of any third party
is legally required by or on behalf of the Purchaser in connection with the
execution, delivery and performance of this Agreement and each Related
Agreement to which it will become a party.

         (g)   Access to Information. The Purchaser acknowledges that prior to
the date hereof it has been afforded (i) the opportunity to ask such questions
as it has deemed necessary of, and to receive answers from, representatives of
the Company concerning the terms and conditions of the offering of the Notes
and the merits and risks of investing in the Notes and (ii) access to
information about the Company and the Company's financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment in the Notes.

         (h)   Reliance. The Purchaser understands and acknowledges that (i)
the Notes are being offered and sold without registration under the Securities
Act in a transaction that is exempt from the registration provisions of the
Securities Act and (ii) such exemption depends in part on, and that the Company
will rely upon, the accuracy and truthfulness of the foregoing representations
and warranties of such Purchaser, and such Purchaser hereby consents to such
reliance.

                                      16
<PAGE>   20

                                   ARTICLE IV
                      CONDITIONS PRECEDENT TO THE CLOSING

         SECTION 4.1   CONDITIONS TO OBLIGATIONS OF THE PARTIES. The respective
obligations of each of the parties hereto to fulfill their obligations under
Section 2.1 hereof at the Closing shall be subject to the satisfaction or
waiver prior to the Closing of the following conditions:

         (a)    All requirements prescribed by law which are necessary to the
consummation of the transactions contemplated by this Agreement shall have been
satisfied.

         (b)    No party hereto shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of any of the transactions contemplated by this
Agreement.

         (c)    No statute, rule or regulation shall have been enacted,
entered, promulgated, interpreted, applied or enforced by any Governmental
Entity which prohibits, restricts or makes illegal consummation of any of the
transactions contemplated by this Agreement.

         (d)    Each of the parties hereto shall have received (i) a
counterpart to this Agreement, duly executed and delivered by the parties
hereto, and (ii) a counterpart of each Related Agreement (other than the
Notes), substantially in the form attached hereto as an exhibit, which shall
have been duly executed and delivered by the Company, the Purchaser and in the
case of the Intercreditor Agreement the other party or parties thereto.

         SECTION 4.2   CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The
obligations of the Purchaser to fulfill its obligations under Section 2.1
hereof shall be subject to the satisfaction or waiver prior to the Closing of
the following conditions:

         (a)    Each of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the Closing Date as if made on the
Closing Date (or on the date when made in the case of any representation or
warranty which specifically relates to an earlier date); the Company shall have
performed, in all material respects, each of its covenants and agreements
contained in this Agreement to be performed prior to the Closing; and the
Purchaser shall have received a certificate signed by the Chief Executive
Officer and the Chief Financial Officer of the Company, dated the Closing Date,
to the foregoing effect.

         (b)    The Company shall have delivered to the Purchaser a duly
executed Note, registered in the name of the Purchaser, sufficient to evidence
the Note to be issued and sold by the Company and purchased by the Purchaser,
as set forth on Exhibit A hereto, against payment therefor to the Company in an
amount equal to the principal amount thereof.

                                      17
<PAGE>   21

         (c)    The Purchaser shall have received, in form and substance
reasonably satisfactory to it, (i) opinions, addressed to the Purchaser and
dated the Closing Date, of King & Spalding and Venable, Baetjer and Howard, LLP
special counsel to the Company, with respect to the indicated matters set forth
in Exhibit F hereto and (ii) the opinions delivered pursuant to Sections 8.11
and 9.05 of the Stock Purchase Agreement, addressed to the Purchaser or
otherwise indicated therein or in an accompanying document that they may be
relied upon by the Purchasers as if addressed directly to them.

         (d)    No party to this Agreement (other than the Purchaser) shall be
in material breach of this Agreement unless such breach shall have been waived
in writing by each of the other parties to this Agreement.

         (e)    The Company shall have obtained in writing all consents of
third parties necessary to permit the consummation of the transactions
contemplated by this Agreement and the Related Agreements, as Previously
Disclosed pursuant to Section 3.1(f) hereof, and no such consent shall contain
any term or condition that the Purchaser reasonably deems to be materially
disadvantageous to the Company or the Purchaser.

         (f)    Each of City National Bank of West Virginia and Sovereign
Bancorp, Inc. shall have waived any adjustments to the terms of the stock
options issued to them pursuant to the Stock Option Agreement, dated May 29,
1998, between the Company and each such entity, that may be required pursuant
to Section 7 of such Stock Option Agreements as a result of the issuance of the
Notes or the conversion thereof to shares of Common Stock, in each case in form
and substance reasonably satisfactory to the Purchaser.

         (g)    The Purchaser and T. Rowe Price shall have entered into a
Participation Agreement, substantially in the form previously provided by the
Purchaser to the Company, pursuant to which T. Rowe Price shall purchase a
$2,000,000 participation interest in the Notes issued to the Purchaser pursuant
to this Agreement.

         (h)    The Purchaser shall have received such other certificates,
opinions, documents and instruments related to the transactions contemplated
hereby (including without limitation the Acquisition) as may have been
reasonably required by it and are customary for transactions of this type, and
all corporate and other proceedings, and all documents, instruments and other
legal matters in connection with the transactions contemplated by this
Agreement, shall be reasonably satisfactory in form and substance to it and its
counsel.

         SECTION 4.3   CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company to fulfill its obligations under Section 2.1 hereof
shall be subject to the satisfaction or waiver prior to the Closing of the
following conditions:

         (a)    Each of the representations and warranties of the Purchaser
contained in this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as

                                      18
<PAGE>   22

of the Closing Date as if made on the Closing Date (or on the date when made in
the case of any representation and warranty which specifically relates to an
earlier date), and the Company shall have received a certificate signed by a
duly authorized representative of each Purchaser to the foregoing effect.

         (b)    The Purchaser shall have delivered to the Company a dollar
amount equal to the principal amount of the Notes to be issued and sold by the
Company and purchased by the Purchaser pursuant to this Agreement, as set forth
on Exhibit A hereto, such amount to be payable (i) by wire transfer of
immediately available funds to an account with a bank designated by the
Company, by notice to the Purchaser to be provided no later than two Business
Days prior to the Closing Date, or (ii) a federal (same day) funds check
payable to the order of the Company.

         (c)    No party to this Agreement (other than the Company) shall be in
material breach of this Agreement unless such breach shall have been waived in
writing by each of the other parties to this Agreement.

         (d)    The Company shall have obtained in writing all consents of
third parties necessary to permit the consummation of the transactions
contemplated by this Agreement and the Related Agreements (other than the
consents referred to in Section 4.2(f) hereof) and no such consent shall
contain any term or condition that the Company reasonably deems to be
materially disadvantageous to the Company.

         (e)    The Company shall have received such other certificates,
opinions, documents and instruments related to the transactions contemplated
hereby as may have been reasonably required by the Company and are customary
for transactions of this type, and all corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement, shall be reasonably satisfactory
in form and substance to the Company and its counsel.

                                   ARTICLE V

                                   COVENANTS

         SECTION 5.1  SHAREHOLDER MEETING. The Company shall (i) take all
action necessary (including without limitation the preparation, filing and
dissemination of requisite proxy materials) to have its shareholders approve in
accordance with the requirements of the NASD the issuance of the number of
shares of Common Stock issuable upon conversion of the Notes to be sold
pursuant to this Agreement which may not be issued without such approval (the
"Stockholder Approval") at the first annual meeting of the shareholders of the
Company held after the date hereof or at a special meeting of shareholders
which is called for the purpose prior to the holding of such annual meeting of
shareholders, (ii) recommend that its shareholders approve the issuance of such
Common Stock

                                      19
<PAGE>   23

and use its reasonable best efforts to obtain, as promptly as practicable, such
approval and (iii) reasonably cooperate and consult with the Purchasers with
respect to the foregoing matters.

         SECTION 5.2  APPLICATIONS.

         (a)    Notwithstanding any other provision hereof to the contrary, the
right of a holder, whether on its own behalf or on behalf of a holder of a
participation interest in the Notes, to convert the principal amount of any
Note, or any portion thereof, and the obligation of the Company to issue any
shares of Common Stock upon the exercise of such conversion right, are subject
to the condition that, if upon receipt by the Company of written notice of
conversion from any holder, whether on its behalf or on behalf of a holder of
participation interest in the Notes, outside counsel advises the Company in
writing (a copy of which shall be provided to the converting holder) that in
its opinion the Company, such holder and/or any participant on behalf of whom
such holder is attempting to exercise conversion rights are required under
applicable law to make a filing under the HSR Act in connection with such
conversion and issuance of shares of Common Stock, no shares of Common Stock
shall be issued to such holder until all applicable filings under the HSR Act
are made by the Company and, if required under the HSR Act, by such holder and
any other person or persons and all applicable waiting periods under the HSR
Act have expired or been terminated. As soon as practicable after the receipt
from any holder of the Notes, whether on its behalf or on behalf of a holder of
a participation interest in the Notes (collectively the "Notice Giver"), of
notice of an intent to convert an amount of Notes sufficient to require a
filing under the HSR Act, but in any event no later than the tenth Business Day
after receipt of such notice, the Company will (i) prepare and file with the
Antitrust Division of the U.S. Department of Justice (the "DOJ") and the
Federal Trade Commission (the "FTC") the Notification and Report Form
(accompanied by all documentary attachments contemplated thereby) required by
the HSR Act, (ii) upon the request of any Notice Giver, request early
termination of the waiting period imposed by the HSR Act, (iii) coordinate and
cooperate with the Notice Giver in responding to formal and informal requests
for additional information and documentary material from the DOJ and the FTC in
connection with such filing, (iv) use its reasonable best efforts to take, or
cause to be taken, all reasonable action and to do, or cause to be done, all
things reasonably necessary and appropriate to permit the issuance to the
Notice Giver of the shares of Common Stock issuable upon the conversion of the
Notes with respect to which any filing is required under the HSR Act and (v)
reimburse the holders of the Notes for the entire amount of any filing fee or
any other costs and expenses incurred by holders of the Notes in connection
therewith (including legal fees) or as required to be paid under the HSR Act.
The Notice Giver agrees to provide to the Company all reasonable cooperation in
connection with the making of such filings under the HSR Act; provided,
however, that neither the Company nor any such Notice Giver shall be required
in connection with any such filing to enter into any agreement, or take or
refrain from taking any action, as a condition to obtaining any approval
required under the HSR Act if, in the judgment of such party, such condition
could have a material adverse effect on such party or its business. In the
event that despite their reasonable efforts, the Company and such Notice Giver
do not receive all approvals required under the HSR Act in connection with such
conversion, such holder's notice of conversion shall be deemed to be rescinded
and the Company shall not be

                                      20
<PAGE>   24

obligated to take any further action with respect to the conversion of such
Note pursuant to such notice of exercise.

         (b)    In the event that any other approval, consent or non-objection
need be obtained by the Company from, or a notice or other filing need be filed
by the Company with, any Governmental Entity in connection with (i) the
execution, delivery and performance of this Agreement or any Related Agreement
by the Company or (ii) the Company's issuance of Common Stock upon conversion
of the Notes, the Company shall take all actions reasonably necessary to obtain
any such approval, consent or non-objection or file such notice or other filing
as promptly as practicable, and the Purchaser agrees to cooperate with the
Company in obtaining or filing the same. The Company shall provide copies of
any notice, application or other document required to be filed pursuant to this
Section 5.2 (excluding any confidential information) to the holder(s) seeking
to convert a Note or Notes into Common Stock for review not less than three
Business Days prior to the making of such filing and shall keep such holder
apprised of the status of such filing and the consideration thereof by the
relevant Governmental Entity.

         SECTION 5.3  INVESTIGATION AND CONFIDENTIALITY.

         (a)    The Company shall permit the Purchaser and its representatives
reasonable access during normal business hours to its properties and personnel,
and shall disclose and make available to the Purchaser all books, papers and
records relating to the assets, stock ownership, properties, operations,
obligations and liabilities of the Company and its Subsidiaries, including, but
not limited to, all books of account (including the general ledger), tax
records, minute books of meetings of boards of directors (and any committees
thereof) and shareholders, organizational documents, bylaws, material contracts
and agreements, filings with any regulatory authority, accountants' work
papers, litigation files, loan files, plans affecting employees, and any other
business activities or prospects in which the Purchaser may have a reasonable
interest in connection with an investment in the Securities, provided that such
access shall be reasonably related to the transactions contemplated hereby and
not unduly interfere with normal operations, and provided further that in the
event that any of the foregoing are in the control of any third party, the
Company shall use its reasonable best efforts to cause such third party to
provide access to such materials to the Purchaser who shall request the same.
In the event that the Company is prohibited by law from providing any of the
access referred to in the preceding sentence to the Purchaser, it shall use its
reasonable best efforts to obtain promptly waivers thereof so as to permit such
access. The Company shall make the directors, officers, employees and agents
and authorized representatives (including counsel and independent public
accountants) of the Company and its Subsidiaries available to confer with the
Purchaser and its representatives, provided that such access shall be
reasonably related to the transactions contemplated hereby and not unduly
interfere with normal operations.

         (b)    All information furnished to the Purchaser by the Company
previously in connection with the transactions contemplated by this Agreement
or pursuant hereto shall be treated as the sole property of the Company and the
Purchaser covenants, severally and not jointly and as to itself only, that it
shall use its best efforts to keep confidential all such information and shall
not directly or

                                      21
<PAGE>   25

indirectly use such information for any purpose other than in connection with
the transactions contemplated hereby. The obligation to keep such information
confidential shall continue for five years from the date hereof but shall not
apply to (i) any information which the Purchaser can establish by convincing
evidence (x) was already in its possession prior to the disclosure thereof by
the Company; (y) was then generally known to the public; or (z) became known to
the public through no fault of the Purchaser; or (ii) disclosures pursuant to a
legal requirement or in accordance with an order of a court of competent
jurisdiction, provided that the Purchaser shall use its reasonable best efforts
to give the Company prior notice thereof as promptly as practicable but in any
event not less than five Business Days prior to such disclosure and shall limit
such disclosure to the minimum amount required by such legal requirement or
court order.

         SECTION 5.4  PRESS RELEASES. The Company and the Purchaser shall agree
with each other as to the form and substance of any press release related to
this Agreement or the transactions contemplated hereby, and consult with each
other as to the form and substance of other public disclosures which may relate
to the transactions contemplated by this Agreement, provided, however, that
nothing contained herein shall prohibit any party, following prior notification
to such other parties, from making any disclosure which it determines in good
faith is required by law or regulation. For purposes of the foregoing, the
Company may treat a law firm designated from time to time by the Purchaser as
the authorized representative of the Purchaser.

         SECTION 5.5  NO SOLICITATION. Prior to the Closing, neither the
Company nor any of the directors, officers, employees, representatives or
agents of the Company shall solicit or encourage inquiries or proposals with
respect to, furnish any information relating to, or participate in any
negotiations or discussions concerning, any acquisition, lease or purchase of
all or a substantial portion of the assets of, or any equity interest in, the
Company, or any business combination with the Company, other than as
contemplated by this Agreement. The Company will immediately notify the
Purchaser orally and in writing if any such inquiries or proposals are received
by, or such information is requested from, or any such negotiations or
discussions are sought to be initiated with, the Company.

         SECTION 5.6  USE OF PROCEEDS. On the Closing Date the Company shall
use the net proceeds from the sale of the Notes pursuant to this Agreement to
repay the Amended and Restated Promissory Notes, dated July 30, 1999, by and
between the Company and each of the Purchaser and T. Rowe Price Recovery Fund
II, L.P., plus interest thereon to the date of repayment, which repayment shall
occur concurrently with the issuance of the Notes upon transfer of the Amended
and Restated Promissory Notes to the Company. Any remainder of such net
proceeds shall be available to the Company for general corporate purposes.

         SECTION 5.7  CURRENT INFORMATION. Between the date hereof and the
Closing, the Company shall provide to the Purchaser (i) promptly following the
filing thereof, copies of each Securities Document filed by the Company under
the Securities Laws and (ii) concurrently with the mailing thereof, copies of
each communication sent by the Company to its shareholders generally.

                                      22
<PAGE>   26

         SECTION 5.8  RULE 144 AND RULE 144A REPORTING. With a view to making
available to holders of Securities the benefits of certain rules and
regulations of the Commission which may permit the sale of the Securities to
the public without registration, the Company agrees at all times to:

         (a)    make and keep public information available, as those terms are
understood and defined in Rules 144 and 144A under the Securities Act (or any
successors thereto); and

         (b)    use its reasonable best efforts to file with the Commission in
a timely manner all Securities Documents required to be filed by the Company
under the Securities Laws.

         SECTION 5.9  STAY, EXTENSION AND USURY LAWS.

         The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law or other
law which would prohibit or forgive the Company from paying all or any portion
of the principal of, premium, if any, or interest on the Notes, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of its obligations under the Notes, and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantages of any such law.

                                   ARTICLE VI

                                 MISCELLANEOUS

         SECTION 6.1  SURVIVAL OF PROVISIONS. The representations, warranties,
covenants and agreements of the Company and the Purchaser made herein shall
remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of the Purchaser or the Company, as the case
may be, (ii) acceptance of any of the Securities and payment by the Purchaser
therefor and retirement thereof, (iii) the transfer of any Securities or
interest therein by the Purchaser or (iv) any termination of this Agreement.

         SECTION 6.2  TERMINATION.  This Agreement may be terminated:

         (a)    by mutual agreement of the Company and the Purchaser;

         (b)    by the Company by written notice to the Purchaser if any of the
conditions specified in Sections 4.1 and 4.3 of this Agreement has not been met
or waived by it pursuant to the terms of this Agreement by 5:00 p.m., Eastern
Time, on August 31, 1999, provided, however, that the right to terminate this
Agreement pursuant to this Section 6.2(b) shall not be available to the Company
to the extent that any action by the Company or failure by the Company to
fulfill any obligation

                                      23
<PAGE>   27

under this Agreement has been a cause of, or resulted in, the failure of any
one or more of the conditions specified in Sections 4.1 and 4.3 of this
Agreement not being fulfilled by such date; or

         (c)    by the Purchaser by written notice to the Company if any of the
conditions specified in Sections 4.1 and 4.2 of this Agreement has not been met
or waived by such Purchaser pursuant to the terms of this Agreement by 5:00
p.m., Eastern Time, on August 31, 1999, provided, however, that the right to
terminate this Agreement pursuant to this Section 6.2(c) shall not be available
to the Purchaser to the extent that any action by such Purchaser or failure by
such Purchaser to fulfill any obligation under this Agreement has been a cause
of, or resulted in, the failure of any one or more of the conditions specified
in Sections 4.1 and 4.2 of this Agreement not being fulfilled by such date.

         SECTION 6.3   WAIVER; AMENDMENTS.

         No failure or delay on the part of the Company or the Purchaser in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
the Purchaser at law or in equity. No waiver of or consent to any departure by
the Company or the Purchaser from any provision of this Agreement shall be
effective unless signed in writing by the party entitled to the benefit
thereof. Except as otherwise provided herein, no amendment, modification or
termination of any provision of this Agreement shall be effective unless signed
in writing by or on behalf of the Company and the Purchaser. Any amendment,
supplement or modification of or to any of this Agreement, any waiver of any
provision of this Agreement, and any consent to any departure from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which made or given. Except where
notice is specifically required by this Agreement, no notice to or demand on
any party hereto in any case shall entitle another party hereto to any other or
further notice or demand in similar or other circumstances.

         SECTION 6.4   COMMUNICATIONS. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, telecopier, or air courier
guaranteeing overnight delivery:

                (i)    if to the Purchaser, initially at the address set forth
         below its name on Exhibit A hereto, and thereafter at such other
         address, notice of which is given in accordance with this Section 6.4,
         with a copy to T. Rowe Price at T. Rowe Price Recovery Fund, II, L.P.,
         100 E. Pratt Street, Baltimore, Maryland 21202; and

                (ii)   if to the Company, initially at 1000 Parkwood Circle,
         Suite 600, Atlanta, Georgia 30339, Attention: Chief Financial Officer;
         and thereafter at such other address notice of which is given in
         accordance with this Section 6.4.

                                      24
<PAGE>   28

         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being sent by certified mail, return receipt requested, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next Business Day if timely delivered to an air courier guaranteeing
overnight delivery.

         SECTION 6.5   COSTS, EXPENSES AND TAXES. The Company agrees to pay (i)
all costs and expenses incurred by it in connection with the negotiation,
preparation, typing, reproduction, execution, delivery and performance of this
Agreement and the Related Agreements and any amendment or supplement or
modification hereof or thereof (except to the extent otherwise provided in the
Registration Rights Agreement), including without limitation, attorneys fees
and expenses and all reasonable costs and expenses incurred by it in connection
with the Company's administration of this Agreement and any Related Agreement,
and (ii) the expenses of the Purchaser and T. Rowe Price incurred in connection
with the transactions provided for herein, including reasonable fees and
expenses payable to counsel to the Purchaser and T. Rowe Price in connection
with the negotiation, preparation, typing, reproduction, execution and delivery
of this Agreement and the Related Agreements, provided that such fees and
expenses of counsel in this clause (ii) shall not exceed $200,000. The Company
shall pay all reasonable costs and expenses (including, without limitation,
attorneys' fees and expenses), if any, incurred by the Purchaser in connection
with any waiver, amendment or modification of any provision of this Agreement
or any Related Agreement with respect to an obligation of, or requested by, the
Company. In addition, the Company shall pay any and all stamp, transfer and
other similar taxes payable in connection with the execution and delivery of
this Agreement or the original issuance of any of the Securities, and shall
save and hold the Purchaser harmless from and against any and all liabilities
with respect to or resulting from any delay in paying, or omission to pay, such
taxes.

         SECTION 6.6   EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.

         SECTION 6.7   BINDING EFFECT; ASSIGNMENT. Prior to the Closing, the
rights and obligations of any Purchaser under this Agreement may not be
assigned to any other Person except with the prior written consent of the
Company, and after the Closing the rights and obligations of the Purchaser may
be assigned by such Purchaser to any Person purchasing Securities from the
Purchaser contemporaneously with such assignment (provided the rights so
assigned shall apply to the Securities so purchased), subject to the provisions
of Section 3.2(b). The rights and obligations of the Company under this
Agreement may not be assigned by the Company without the consent of the
Purchaser. Except as expressly provided in this Agreement, this Agreement shall
not be construed so as to confer any right or benefit upon any Person other
than the parties to this Agreement, and their respective successors and
permitted assigns. This Agreement shall be binding upon the Company and the
Purchaser and their respective permitted successors and assigns.

                                      25
<PAGE>   29

         SECTION 6.8   GOVERNING LAW. THE PARTIES HERETO ACKNOWLEDGE THAT THE
TRANSACTIONS CONTEMPLATED BY THIS 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.

         SECTION 6.9.  USURY.

         All agreements between the Company and the holders of the Notes,
whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of acceleration of
the maturity of the Notes or otherwise, shall the interest contracted for,
charged, received, paid or agreed to be paid to the Noteholders exceed the
maximum amount permissible under the laws of the State of Maryland (hereinafter
the "Applicable Law"). If, from any circumstance whatsoever, interest would
otherwise be payable to the holders of the Notes in excess of the maximum
amount permissible under the Applicable Law, the interest payable to the
holders of the Notes shall be reduced to the maximum amount permissible under
the Applicable Law, and if from any circumstance the holders of the Notes shall
ever receive anything of value deemed interest by the Applicable Law in excess
of the maximum amount permissible under the Applicable Law, an amount equal to
the excessive interest shall be applied to the reduction of the principal of
the Notes and not to the payment of interest, or if such excessive amount of
interest exceeds the unpaid principal amount of the Notes, such excess shall be
refunded to the Company. All interest paid or agreed to be paid to the holders
of the Notes shall, to the extent permitted by the Applicable Law, be
amortized, prorated, allocated and spread throughout the full term of the Notes
(including any renewal or extension) until payment in full of the principal so
that the interest on the Notes for such full term shall not exceed the maximum
amount permissible under the Applicable Law. The Purchaser expressly disavows
any intent to contract for, charge or receive interest in an amount which
exceeds the maximum amount permissible under the Applicable Law. This paragraph
as well as similar paragraphs set forth in the Notes and the Collateral
Documents shall control all agreements between the Company and the holders of
the Notes.

         SECTION 6.10  SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability only without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

         SECTION 6.11  HEADINGS AND GENDER. The Article and Section headings
and Table of Contents used or contained in this Agreement are for convenience
of reference only and shall not affect the construction of this Agreement. Use
of a particular gender herein shall be considered to represent the masculine,
feminine or neuter gender whenever appropriate.

                                      26
<PAGE>   30

         SECTION 6.12  INTEGRATION. This Agreement (including documents
delivered pursuant hereto), the Related Agreements and the Agreement among the
Company, the Purchaser and T. Rowe Price, dated the date hereof, constitute the
entire agreement among the parties with respect to the subject matter thereof
and there are no promises or undertakings with respect thereto not expressly
set forth or referred to herein or therein.

         SECTION 6.13  PARTICIPATION INTERESTS. The Company acknowledges and
agrees that immediately following the consummation of the transactions
contemplated hereby the Purchaser will sell an undivided participation interest
in the Note or Notes acquired by it in the principal 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, and that the Purchaser or any other registered
holder of a Note shall have the right to sell additional participation
interests to T. Rowe Price and/or any other third party (individually a
"Participant" and collectively the "Participants") on such terms as it 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 such amount 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.

         SECTION 6.14  KNOWLEDGE LIMITATION. All representations and warranties
of the Company that directly or indirectly relate to MCI contained in Article
III of this Agreement are based on the actual knowledge of the Company. For
this purpose, "actual knowledge of the Company" shall be deemed to mean the
actual knowledge of the Company's Chief Executive Officer and its Executive
Vice President and Chief Financial Officer after the conduct of such inquiry,
including without limitation a review of this Agreement and related schedules
and the Stock Purchase Agreement and related schedules, as they deem necessary
or appropriate in order to ensure the accuracy of such representations and
warranties in all material respects.

                                      27
<PAGE>   31

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

                              ALTIVA FINANCIAL CORPORATION

                              By: /s/ Edward B. Meyercord
                                  ---------------------------------------
                                  Name: Edward B. Meyercord
                                  Title:  Chairman and Chief Executive Officer

                              VALUE PARTNERS, LTD

                              By:  EWING & PARTNERS,
                                   General Partner

                              By: /s/ Timothy G. Ewing
                                  ---------------------------------
                                  Name: Timothy G. Ewing
                                  Title:  Managing Partner

                                      28
<PAGE>   32

                                                                      EXHIBIT A

<TABLE>
<CAPTION>
   Name and Address of Purchaser             Principal Amount of Notes
-------------------------------------  -------------------------------------

<S>                                    <C>
Value Partners, LTD                                 $7,000,000
4514 Cole Avenue - Suite 808
Dallas, Texas 75205
Attn:  Mr. Timothy Ewing
W (214) 522-2100
FAX (214) 522-2176
</TABLE><PAGE>   1

                                                                    EXHIBIT 10.2

               AMENDMENT #1 TO SECURED CONVERTIBLE NOTE PURCHASE
                                   AGREEMENT

         This Amendment #1 (the "Amendment") to the Secured Convertible Note
Purchase Agreement (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 13, 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
$250,000;

                                   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.    Section 1.1 of the Purchase Agreement is amended as follows:

            a.    A definition of the term "Additional Notes" shall be added
and shall read as follows: "'Additional Notes' means up to $250,000 principal
amount of 12% Secured Convertible Notes due 2006 which may be issued and sold
by the Company and purchased by the Purchaser pursuant to this Agreement
substantially in the form of Exhibit B hereto, as amended, supplemented or
otherwise modified from time to time."

            b.    A definition of the term "Initial Notes" shall be added and
shall read as follows: "'Initial Notes' means $7,000,000 principal amount of
12% Secured Convertible Notes due 2006 which may be issued and sold by the
Company and purchased by the Purchaser pursuant to this Agreement substantially
in the form of Exhibit B hereto, as amended, supplemented or otherwise modified
from time to time."

            c.    The definition of the term "Notes" shall be amended to read
as follows: "'Notes' shall mean the Initial Notes and the Additional Notes."

            d.    A definition of the term "Participation Agreement" shall be
added and shall read as follows: "'Participation Agreement' means the
participation agreement referred to in Section 6.13 hereof, as amended,
supplemented or otherwise modified from time to time."

            e.    The definition of the term Previously Disclosed shall be
amended to read as follows: "'Previously Disclosed' means, with respect to the
Initial Closing, disclosed

<PAGE>   2

in a letter dated the date hereof delivered from the Company to the Purchaser
or from the Purchaser to the Company, as applicable, specifically referring to
the appropriate section of this Agreement and describing in reasonable detail
the matters contained therein. With respect to any Additional Closing,
'Previously Disclosed' shall mean a letter dated as of a date on or prior to
the date of such Additional Closing, delivered from the Company to the
Purchaser or from the Purchaser to the Company, as applicable, specifically
referring to the appropriate section of this Agreement and describing in
reasonable detail the matters contained therein."

      2.    Article II of the Purchase Agreement is hereby amended to read as
follows:

      "SECTION 2.1 PURCHASE AND SALE OF NOTES. Subject to the terms and
conditions herein set forth: (i) the Company agrees that it will issue and sell
to the Purchaser and the Purchaser agrees that it will purchase from the
Company the principal amount of Initial Notes set forth opposite such
Purchaser's name on Exhibit A hereto at a price equal to such principal amount;
and (ii) the Company agrees that it will issue and sell to the Purchaser and
the Purchaser agrees that it will purchase from the Company the principal
amount of Additional Notes set forth opposite such Purchaser's name on Exhibit
A hereto, as such exhibit may be amended, modified or supplemented by the
parties from time to time.

      SECTION 2.2 CLOSING. Subject to the satisfaction or waiver of all of the
conditions to the parties' obligations hereunder specified in Article IV of
this Agreement: (i) the purchase and sale of the Initial Notes will take place
at a closing (the "Initial Closing") to be held at the offices of Venable,
Baetjer and Howard, LLP, in Baltimore, Maryland, at such time and on such day
as the parties hereto mutually agree upon; and (ii) the purchase and sale of
the Additional Notes will take place at a closing to be held at the offices of
Venable, Baetjer and Howard, LLP, in Baltimore, Maryland (or at such other
place as may be mutually designated by the parties), at such time and on such
day as the parties hereto mutually agree upon (the "Additional Closing," and
together with the Initial Closing the "Closing"). The date on which a Closing is
to occur is referred to herein as a 'Closing Date.'"

      3.    The introduction to Section 4.2 of the Purchase Agreement and
paragraphs (b), (c) and (g) of such section are hereby amended to read as
follows:

      "SECTION 4.2 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. Except as
otherwise specified in this Section 4.2, the obligations of the Purchaser to
fulfill its obligations under Section 2.1 hereof shall be subject to the
satisfaction or waiver prior to the Closing relating to the Initial Notes and
the Additional Notes, as applicable, of the following conditions:"

      "(b)  The Company shall have delivered to the Purchaser a duly executed
Note, registered in the name of the Purchaser, sufficient to evidence the Note
to be issued and sold by the Company and purchased by the Purchaser, as set
forth on Exhibit A hereto, as amended, modified or supplemented by the parties
from time to time, against payment

                                       2
<PAGE>   3

therefor to the Company in an amount equal to the principal amount thereof."

      "(c)  The Purchaser shall have received, in form and substance reasonably
satisfactory to it, (i) opinions, addressed to the Purchaser and dated the
Closing Date, of King & Spalding and Venable, Baetjer and Howard, LLP special
counsel to the Company, with respect to the indicated matters set forth in
Exhibit F hereto and (ii) with respect to the Initial Closing, the opinions
delivered pursuant to Sections 8.11 and 9.05 of the Stock Purchase Agreement,
addressed to the Purchaser or otherwise indicated therein or in an accompanying
document that they may be relied upon by the Purchasers as if addressed
directly to them."

      "(g)  The Purchaser and T. Rowe Price shall have entered into a
Participation Agreement, substantially in the form previously provided by the
Purchaser to the Company, pursuant to which T. Rowe Price shall purchase a
participation interest in the Notes issued to the Purchaser pursuant to this
Agreement as set forth therein."

      4.    The introduction to Section 4.3 of the Purchase Agreement and
paragraph (b) of such section are hereby amended to read as follows:

      "SECTION 4.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company to fulfill its obligations under Section 2.1 hereof
shall be subject to the satisfaction or waiver prior to the Closing relating to
the Initial Notes and the Additional Notes, as applicable, of the following
conditions:"

      "(b)  The Purchaser shall have delivered to the Company a dollar amount
equal to the principal amount of the Notes to be issued and sold by the Company
and purchased by the Purchaser pursuant to this Agreement, as set forth on
Exhibit A hereto, as amended, modified or supplemented by the parties from time
to time, such amount to be payable (i) by wire transfer of immediately
available funds to an account with a bank designated by the Company, by notice
to the Purchaser to be provided no later than two Business Days prior to the
Closing Date, or (ii) a federal (same day) funds check payable to the order of
the Company."

                                       3
<PAGE>   4

      4.    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 relating to the 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 an amended Participation Agreement and (iii) 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 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."

      5.    Section 6.14 of the Purchase Agreement is hereby deleted in its
entirety.

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

                                       4
<PAGE>   5

      7.    It is understood that the parties are entering into this Amendment
to facilitate the issuance of an additional $250,000 principal amount of 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 Sections 4.2(c) and 4.2(f) of the Purchase Agreement, provided
that the consents referred to in the latter section are obtained within two
Business Days after such Closing; and

            (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.

      8.    RECITALS; INCORPORATION.

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

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

      9.    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
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.

      10.   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

                                       5
<PAGE>   6

            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.

      11.   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.

      12.   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

                                       6
<PAGE>   7

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.

      13.   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.

      14.   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.

      15.   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.

      16.   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.

                                       7
<PAGE>   8

      17.   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.

      18.   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.

      19.   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.

      20.   TEXAS LANGUAGE.

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

                                       8
<PAGE>   9

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.

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

                                       9
<PAGE>   10

                                                                      EXHIBIT A

                          TO SECURED CONVERTIBLE NOTE
                               PURCHASE AGREEMENT

<TABLE>
<CAPTION>

<S>                                 <C>                                          <C>
Purchaser of Initial Notes:         Principal Amount of Initial Notes:           $7,000,000
---------------------------         ----------------------------------

Value Partners, LTD
4514 Cole Avenue - Suite 808
Dallas, Texas 75205
Attn: Mr. Timothy Ewing
(214) 522-2100 (TEL)
(214) 522-2176 (FAX)

Purchaser of Additional Notes:      Principal Amount of Additional Notes:        $  250,000
------------------------------      --------------------------------------

Value Partners, LTD
4514 Cole Avenue - Suite 808
Dallas, Texas 75205
Attn: Mr. Timothy Ewing
(214) 522-2100 (W)
(214) 522-2176 (FAX)
</TABLE>

                                      10

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