Amended And Restated Registration Rights Agreement

EXHIBIT 10.3


AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT


Amended and Restated Registration Rights Agreement (the "Agreement"), dated as of February 29, 2000, by and among Altiva Financial Corporation, a Delaware corporation (the "Company"), and Holders (as defined herein) of the Company's Amended and Restated 12% Secured Convertible Senior Notes due 2006 (the "Notes").


WHEREAS, the Company has issued to Holders $14,000,000 principal amount of the Notes; and


WHEREAS, based on the conversion exercise price in effect on the date hereof, the Notes are convertible, subject to certain conditions, into 7,865,168 shares of the common stock of the Company, par value $0.01 (the "Common Stock") (such shares, subject to adjustment in accordance with the terms of the Notes, including an adjustment resulting in a reduction in the conversion exercise price to be $0.98 upon mandatory conversion of $6,428,000 principal amount of 12% Secured Convertible Senior Notes due 2006 issued by the Company in exchange for 12 1/2% Subordinated Notes due 2001 previously issued by the Company, are herein after referred to as the "Securities"); and


WHEREAS, the Company and the Holders have entered into a Registration Rights Agreement, dated as of August 31, 1999, as amended by Amendment No. 1 to the Registration Rights Agreement, dated as of December 13, 1999, Amendment No. 2 to the Registration Rights Agreement, dated as of December 30, 1999, Amendment No. 3 to the Registration Agreement, dated as of February 2, 2000, and Amendment No. 4 to the Registration Rights Agreement, dated as of February 11, 2000 (collectively, the "Existing Agreement"); and


WHEREAS, the Company and the Holders desire to amend and restate the Existing Agreement to reflect that the aggregate principal amount of Notes issued and sold by the Company to the Purchaser has increased from $10,000,000 to $14,000,000, that the number of shares of Common Stock that the Notes are convertible into has increased from 2,000,000 shares to 7,865,168 shares and to otherwise amend the agreements of the parties; and


WHEREAS, as an inducement to Holders to purchase the Notes, the Company agreed to register the Securities into which the Notes are convertible;


NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by all parties hereto, the


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parties, intending to be legally obligated, hereby agree as follows:


SECTION 1. DEFINITIONS


As used in this Agreement, the following capitalized terms shall have the following meanings:


"Act": The Securities Act of 1933, as amended.


"Broker-Dealer": Any broker or dealer registered as such under the Exchange Act.


"Closing Date": The date of this Agreement.


"Commission" or "SEC": The United States Securities and Exchange Commission.


"DTC": The Depository Trust Company.


"Effectiveness Target Date": As defined in Section 3 hereof.


"Exchange Act": The Securities Exchange Act of 1934, as amended.


"Holders": As defined in Section 2(b) hereof.


"Indemnified Holder": As defined in Section 7(a) hereof


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


"Person": An individual, partnership, corporation, trust or unincorporated organization, or a government or an agency, authority or political subdivision thereof.


"Prospectus": The prospectus included in a Resale Registration Statement, as amended or supplemented, including post-effective amendments, thereto.


"Registration Default": As defined in Section 4 hereof.


"Resale Registration Statement": As defined in Section 3 hereof.


"Securities": As defined in the preamble hereto.


"Transfer Restricted Securities": Each Security, until the earliest to occur of (a) the date on which such Security has been effectively registered under the Act and disposed of in accordance with a Resale Registration Statement or other applicable registration statement and (b) the date on which such Security is distributed to the public pursuant to Rule 144 under the 3


Act or may be sold to the public without compliance with such rule.


"Underwritten Registration" or "Underwritten Offering": An offering in which securities of the Company are sold to an underwriter for reoffering to the public pursuant to an effective registration statement filed with the Commission.


SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT


(A) TRANSFER RESTRICTED SECURITIES. The Transfer Restricted Securities are subject to the terms of this Agreement and may be sold in accordance with the provisions hereof.


(B) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is deemed to be a holder of Transfer Restricted Securities (each, a "Holder") whenever such Person owns (i) Notes, directly or indirectly through a participation interest therein, or (ii) Securities prior to (A) the resale of Securities in accordance with the terms hereof or (B) the time that such Securities are no longer considered to be Transfer Restricted Securities.


SECTION 3. RESALE REGISTRATION STATEMENT


(A) REGISTRATION. The Company shall cause to be filed with the Commission promptly after the Closing Date, but in no event later than April 15, 2000, one or more registration statements on Form S-1, S-2 or S-3, or other applicable form (each a "Resale Registration Statement"), and use its reasonable best efforts to cause such Resale Registration Statement to be declared effective by the Commission promptly, but in no event later than June 15, 2000 (the "Effectiveness Target Date"). In connection with the foregoing, the Company shall (A) file all pre-effective amendments to such Resale Registration Statement as may be necessary in order to cause such Resale Registration Statement to become effective, (B) if applicable, file a post-effective amendment to such Resale Registration Statement pursuant to Rule 430A under the Securities Act and (C) cause all necessary filings in connection with the registration and qualification of the Securities to be made under the state securities and Blue Sky laws of such jurisdictions as are necessary. Subject to the provisions of Section 5(c) hereof, the Company shall use its reasonable best efforts to keep such Resale Registration Statement continuously effective, supplemented and amended to the extent necessary to ensure that it is available for resales of Securities by the Holders of Transfer Restricted Securities entitled to the benefit of this Section 3(a), and to ensure that it conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, and all state securities or Blue Sky laws until the earlier of (i) the sale of all Securities in accordance with a Resale Registration Statement or (ii) the date on which all Transfer Restricted Securities may be sold without restriction pursuant to Rule 144 under the Act.


(B) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE SHELF REGISTRATION Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Resale Registration Statement pursuant to this Agreement


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unless and until such Holder furnishes to the Company in writing, within twenty (20) business days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Resale Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Transfer Restricted Securities shall be entitled to Liquidated Damages pursuant to Section 4 hereof unless and until such Holder shall have used its reasonable best efforts to provide all such reasonably requested information. Each Holder as to which any Resale Registration Statement is being effected agrees to promptly furnish to the Company any and all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.


SECTION 4. LIQUIDATED DAMAGES


The parties hereto agree and acknowledge that under the terms of the Existing Agreement the Holders of the Notes are entitled to payment of an aggregate of $6,595 as liquidated damages (the "Old Liquidated Damages"). If (a) the Company shall not have filed the Resale Registration Statement with the Commission on or prior to April 15, 2000, (b) the Resale Registration Statement shall not have been declared effective by the SEC by the Effectiveness Target Date or (c) the Resale Registration Statement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded within ten (10) business days by a post-effective amendment that cures such failure and that is itself declared effective within thirty (30) business days (each such event referred to in clauses (a) through (c), a "Registration Default"), additional cash interest ("New Liquidated Damages") shall accrue to each Holder of the Notes commencing upon the occurrence of such Registration Default in an amount equal to $0.05 per week per $1,000 principal amount of the Notes held by such Holder during the ninety (90) day period following the occurrence of such Registration Default. The amount of New Liquidated Damages will increase by an additional $0.05 per week per $1,000 principal amount of the Notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of New Liquidated Damages for all Registration Defaults of $0.50 per week per $1,000 principal amount of Notes. The Old Liquidated Damages and the new Liquidated Damages are (collectively referred to as "Liquidated Damages"). All accrued Liquidated Damages shall be paid to Holders by the Company in the same manner as interest is paid pursuant to the Notes. Following the cure of all Registration Defaults relating to any particular Transfer Restricted Securities, the accrual of New Liquidated Damages with respect to such Transfer Restricted Securities will cease.


All obligations of the Company set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such Security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such Security shall have been satisfied in full.


SECTION 5. REGISTRATION PROCEDURES


(A) RESALE REGISTRATION STATEMENT. In connection with each Resale Registration Statement, the Company shall comply with all the provisions of Section 5(b) below and shall file


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and use its reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities in accordance with the terms of this Agreement.


(B) GENERAL PROVISIONS. In connection with any Resale Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of the Securities by Broker-Dealers), the Company shall:


(i) use its reasonable best efforts to keep such Resale
Registration Statement continuously effective and provide all requisite
financial statements during the period specified in Section 3 of this
Agreement, and upon the occurrence of any event that would cause any
such Resale Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or (B) not to be
effective and usable for resale of Transfer Restricted Securities
during the period required by this Agreement, the Company shall file
promptly, and as appropriate, an amendment or supplement to such Resale
Registration Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B),
use its reasonable best efforts to cause such amendment to be declared
effective and such Resale Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;


(ii) prepare and file with the Commission such amendments
and post-effective amendments to the Resale Registration Statement as
may be necessary to keep the Resale Registration Statement effective
for the applicable period set forth in Section 3 hereof or such shorter
period as will terminate when all Transfer Restricted Securities
covered by such Resale Registration Statement cease to be Transfer
Restricted Securities; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Act in a timely manner; and reasonably
assist Holders in complying with the provisions of the Act with respect
to the disposition of all Securities covered by such Resale
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Resale Registration Statement or supplement to the
Prospectus;


(iii) advise the underwriter(s), if any, and selling
Holders promptly and, if requested by such Persons in writing, to
confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to any Resale Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Resale Registration
Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance by the
Commission of any stop order or other order or action suspending the
effectiveness of the Resale Registration Statement under the Act or of
the suspension by any state securities or Blue Sky commission of the
exemption, qualification or registration of the Transfer


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Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, or (D)
of the existence of any fact or the happening of any event that makes
any statement of a material fact made in the Resale Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Resale Registration
Statement or the Prospectus in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
If at any time the Commission shall issue any stop order or other order
or take other action suspending the effectiveness of the Resale
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the exemption,
qualification or registration of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Company shall use its
reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;


(iv) furnish to each of the selling Holders and each of
the underwriter(s), if any, before filing with the Commission, copies
of any Resale Registration Statement or any Prospectus included therein
or any amendments or supplements to any such Resale Registration
Statement or Prospectus (including all documents incorporated by
reference after the initial filing of such Resale Registration
Statement), which documents will be subject to the review of such
Holders and underwriter(s), if any, for a period of at least five (5)
business days, and the Company will not file any such Resale
Registration Statement or Prospectus or any amendment or supplement to
any such Resale Registration Statement or Prospectus (including all
such documents incorporated by reference) to which a selling Holder of
Transfer Restricted Securities covered by such Resale Registration
Statement or the underwriter(s), if any, shall reasonably object within
five (5) business days after the receipt thereof. A selling Holder or
underwriter, if any, shall be deemed to have reasonably objected to
such filing if such Resale Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed,
contains a material misstatement or omission;


(v) make available at reasonable times and upon
reasonable notice for inspection by the selling Holders, any
underwriter participating in any disposition pursuant to such Resale
Registration Statement and any attorney or accountant retained by such
selling Holders or any of the underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Company
and cause the Company's' officers, directors and employees to supply
all information reasonabl ...