Exhibit 10.1
AFFINITY TECHNOLOGY GROUP, INC.
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April 13, ▇▇▇▇
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Re: Convertible Note Purchase Agreement (the "Note Purchase
Agreement), dated as of June 2, 2002, as amended, between Affinity
Technology Group, Inc., a Delaware corporation (the "Company"),
and the investors identified on Schedule 1 attached thereto
(collectively, the "Noteholders")
Dear Investor:
On behalf of the Company, I am requesting your consent to certain proposed
amendments to the Note Purchase Agreement to permit the Company to sell
additional 8% Convertible Secured Notes of the Company (the "Notes") thereunder.
The Note Purchase Agreement currently provides that the aggregate principal
amount of all Notes issued by the Company may not exceed $1,500,000. The Company
desires to amend the Note Purchase Agreement to permit the Company to sell up to
an aggregate of $3,000,000 principal amount of Notes thereunder.
The Company also would like to be able to issue Notes with a conversion price
that is greater than $0.20 cents per share.
Section 7.8 of the Note Purchase Agreement provides that the terms of the Note
Purchase Agreement may be amended with the written consent of the Company and
the Noteholders holding at least a majority of the outstanding principal amount
of all Notes. There currently is outstanding $1,139,000 principal amount of
Notes under the Note Purchase Agreement.
To date, the Company has issued an aggregate of $1,425,336 principal amount of
Notes under the Note Purchase Agreement. Three holders have converted $286,336
principal amount of their Notes into shares of the Company's common stock.
Currently, there is outstanding an aggregate of $1,139,000 principal amount of
Notes (excluding interest that has accrued thereon). After giving effect to the
proposed amendments discussed herein, the Company will be permitted to issue
additional Notes having an aggregate of $1,574,664 principal amount under the
Note Purchase Agreement.
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Pursuant to Section 7.8 of the Note Purchase Agreement, the Company has
approved, and is requesting the Noteholders to consent to, the following
amendments to the Note Purchase Agreement:
1. The first Recital on page 1 of the Note Purchase Agreement shall be
amended and restated in its entirety as follows:
"WHEREAS, the Company desires to enter into this Agreement with the
Purchasers to sell and issue up to $3,000,000 principal amount of its
8% convertible secured notes (the "Notes") in substantially the form
attached hereto as Exhibit A; and"
2. Section 1.1 of the Note Purchase Agreement shall be amended by adding
to the end thereof a new sentence to read in its entirety as follows:
"The Purchasers further acknowledge and agree that the Company is
expressly permitted to issue Notes that have a Conversion Price (as
defined in the Note) in excess of $0.20 per share; provided, however,
that in no event shall the Company issue Notes with a Conversion Price
that is less than $0.20 per share.
3. The first sentence of Section 2.2 of the Note Purchase Agreement shall
be amended and restated in its entirety as follows:
"Following the Initial Closing, the Company may issue and sell
additional Notes under this Agreement, on the terms set forth in this
Agreement; provided that the aggregate principal amount of all Notes
issued by the Company at the Initial Closing and each Subsequent
Closing (a "Subsequent Closing" and, together with the Initial
Closing, the Closing") shall not exceed $3,000,000.
Your timely consideration of this matter is greatly appreciated. Please indicate
on the next page whether you consent to the proposed amendments to the Note
Purchase Agreement described above. We have enclosed a self addressed envelope
for your convenience and an additional copy of this letter for you records. In
order for us to timely resolve this matter, we are also requesting that you fax
your response to us at ▇▇▇-▇▇▇-▇▇▇▇.
Yours truly,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman, President and Chief Executive Officer
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Please indicate by check ▇▇▇▇ and signature whether you consent to the proposed
amendments to the Note Purchase Agreement described above.
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______ I hereby consent the proposed amendments to the Note Purchase
Agreement described above.
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Signature Date
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______ I do not consent to the proposed amendments to the Note Purchase
Agreement described above.
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Signature Date
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