Exhibit 4
AFFINITY TECHNOLOGY GROUP, INC.
0000 X Xxxxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxxxxx, XX 00000
April 4, 2005
Accredited Investor
Address
City, State Zip Code
Re: Convertible Note Purchase Agreement (the "Note Purchase
Agreement) between Affinity Technology Group, Inc., a Delaware
corporation (the "Company"), and the investors identified on
Schedule 1 attached thereto (collectively, the "Noteholders")
Dear Accredited Investor:
On behalf of the Company, I am sending you this letter to request your agreement
to amend the Note Purchase Agreement to permit the Company to continue to issue
its 8% Convertible Secured Notes (the "Notes") thereunder.
Pursuant to Section 2.2 of the Note Purchase Agreement, the Company is
prohibited from issuing additional Notes under the Note Purchase Agreement if an
Event of Default (as defined in the Notes) has occurred and is continuing. As
you are aware, pursuant to Section 12 of the Notes, an Event of Default has
occurred and continues due to the Company's inability to pay in full the
principal and accrued interest outstanding under the Notes that matured on June
2, 2004 and March 13, 2005.
Section 7.8 of the 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 principal amount of all Notes
then outstanding. There currently is outstanding $1,156,336 principal amount
under the Notes.
The Company is permitted to issue up to $1,500,000 principal amount of Notes
under the Note Purchase Agreement. To date, the Company has issued an aggregate
of $1,280,336 principal amount of Notes under the Note Purchase Agreement. One
holder has converted $124,000 principal amount of its Notes into shares of the
Company's common stock. As of March 31, 2005, the amount of principal and
accrued interest outstanding under the Notes was $1,156,336 and $219,817,
respectively.
Pursuant to Section 7.8 of the Agreement, the Company has agreed to amend, and
is requesting the Noteholders to amend, Section 2.2 of the Agreement to delete
the last two sentences thereof. As indicated above, these sentences prohibit the
Company from issuing any Notes under the Note Purchase Agreement during the
continuance of an Event of Default. The Company desires to have the ability to
issue up to $219,664 principal amount of the Notes under the Note Purchase
Agreement to secure working capital to fund the Company's operations while we
prosecute the reexamination of our third patent (U.S. Patent No. 6,105,007).
I would also like to take this opportunity to thank each of you for the patience
you have shown as we have prosecuted the reexaminations. It is clear that the
reexaminations have slowed our progress. However, they have not stopped our
progress. Hopefully, you saw our recent press release concerning the conclusion
of the reexamination of our second loan processing patent. Our immediate goal is
to continue the prosecution of the reexamination of our third (and final)
patent.
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Your timely consideration of this matter is greatly appreciated. Please indicate
below as to whether you vote to amend the provisions of Section 2.2 of the
Agreement as 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 000-000-0000.
Yours truly,
X. Xxxx Xxxxxxx
Executive Vice President and Chief Operating Officer
Please indicate by check xxxx and signature your vote concerning the provisions
of Section 2.2 of the Agreement as set forth herein.
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______ I hereby agree to amend Section 2.2 of the Agreement to delete the last
two sentences of Section 2.2 in their entirety.
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Signature Date
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______ I do not agree to amend Section 2.2 of the Agreement.
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Signature Date
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