Exhibit 10.8
EXECUTION VERSION
CONSENT, WAIVER, AMENDMENT AND
EXCHANGE AGREEMENT
CONSENT, WAIVER, AMENDMENT AND
EXCHANGE AGREEMENT (this
“ Agreement ”), dated as of August 5, 2005, by
and between Modtech Holdings, Inc ., a Delaware corporation,
with headquarters located at 2830 Barrett Avenue, Perris,
California 92571 (the “ Company ”), and
Amphora Limited , a Cayman Islands company (the “
Investor ”).
WHEREAS:
A. The Company and the Investor are
parties to that certain Securities Purchase Agreement, dated as of
December 30, 2004 (the “ Existing Securities Purchase
Agreement ”), pursuant to which, among other things, the
Investor purchased from the Company a Senior Subordinated Secured
Convertible Note in the original principal amount of $25,000,000
(the “ Existing Note ”), which is convertible
into shares of the Company’s common stock, par value $0.01
per share (the “ Common Stock ”), in accordance
with the terms thereof (the Existing Note as converted, the “
Existing Conversion Shares ”), in accordance with the
terms thereof.
B. Contemporaneously with the
execution and delivery of the Existing Securities Purchase
Agreement, the Company and the Investor entered into a Registration
Rights Agreement, dated as of December 30, 2004 (the “
Registration Rights Agreement ”), pursuant to which
the Company agreed to provide certain registration rights with
respect to the Registrable Securities (as defined in the
Registration Rights Agreement) under the Securities Act of 1933, as
amended (the “ 1933 Act ”), and the rules and
regulations promulgated thereunder, and applicable state securities
laws.
C. The Company, the Investor and
certain other buyers (collectively, the “ Buyers
”) are entering into a Securities Purchase Agreement, dated
as of the date hereof (the “ Securities Purchase
Agreement ”), pursuant to which, among other things, the
Buyers are purchasing from the Company shares of Common Stock and
warrants to purchase additional shares of Common Stock (the “
Transaction ”).
D. The Company and the Investor
desire to enter into this Agreement, pursuant to which, among other
things, (i) the Investor shall exchange its Existing Note for an
Amended and Restated Senior Subordinated Secured Convertible Note
in the form attached hereto as Exhibit A (the “
Replacement Note ”), which shall be convertible into
Common Stock (as converted, the “ Replacement Conversion
Shares ”), in accordance with the terms thereof and a
related warrant in the form attached hereto as Exhibit B
(the “ Additional Warrant ”) exercisable into
shares of Common Stock (the “ Additional Warrant
Shares ”), (ii) the Investor shall waive certain existing
Events of Default arising from the Company’s breach of
certain financial covenants under the Existing Note, (iii) the
Investor shall consent to the “Fortress Amendment and
Waiver” (as defined below) and the Transaction, (iv) the
Investor shall waive the Registration Delay Payments (as defined in
the Registration Rights Agreement) that are due and payable by the
Company to the Investor as of the date hereof, and (iv) the
Existing Note shall be amended and restated to, among other
thereof, increase the principal amount thereof by $900,000, and to
revise certain defined terms and financial covenants set forth
therein.
E. The exchange of the Existing Note
for the Replacement Note is being made in reliance upon the
exemption from registration provided by Section 3(a)(9) of the 1933
Act.
F. Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings
ascribed to them in the Existing Securities Purchase Agreement or
the Replacement Note, as the case may be. The term “Events of
Default” shall have the meaning ascribed to it under the
Existing Note and “Existing Transaction Documents” as
defined below
NOW, THEREFORE
, in consideration of the foregoing
recitals and the mutual promises hereinafter set forth, the Company
and the Investors hereby agree as follows:
(a) Credit Facility .
Reference is made to: (i) the Financing Agreement, dated as of
February 25, 2005 (the “ Financing Agreement ”),
among the Company, as borrower, the lenders from time to time party
thereto, and Fortress Credit Corp., as collateral agent and
administrative agent for such lenders, and (ii) the First Amendment
and Waiver of Financing Agreement, dated as of August 5, 2005 (the
“ Fortress Amendment and Waiver ”), by and among
each of the lenders that from time to time party thereto, Fortress
Credit Corp., as collateral agent and administrative agent for such
lenders.
(b) Consent and Waiver .
Subject to satisfaction (or waiver) of the conditions to the
“Closing” (as hereinafter defined), as set forth in
Sections 5 and 6 below, upon the occurrence of the Closing,
the Investor hereby:
(i) consents to and acknowledges the
terms of the Fortress Amendment and Waiver and the matters set
forth therein;
(ii) waives the
following:
(A) the Company’s
non-compliance prior to the date hereof with each of the financial
covenants set forth or incorporated by reference into Section 15(e)
of the Existing Note, and any breach, default or Event of Default
that has occurred under the Existing Note, the Existing Purchase
Agreement or any of the other “Transaction Documents”
(as defined in the Existing Purchase Agreement; collectively, the
“ Existing Transaction Documents ”), (1) solely
as a result of such non-compliance and, if applicable, the passage
of time, the giving of notice, or both, or (2) the execution,
delivery and performance of the Fortress Amendment and Waiver by
the Company;
(B) the Company’s failure
prior to the date hereof to timely file any and all reports
required to be filed with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as required by Section
4(c) of the Existing Securities Purchase Agreement and Section 8 of
the Registration Rights Agreement, and any breach, default or Event
of Default that (prior to the date hereof, with or without the
passage of time, the giving of notice, or both) has occurred under
the Existing Note, the Existing Purchase Agreement
2
or any of the other Existing
Transaction Documents, solely as a result of any such failure to
file; and
(C) the Company’s failure to
(i) timely file, obtain and maintain the effectiveness of the
Registration Statement as required by the Registration Rights
Agreement, and (ii) perform the related obligations set forth in
Section 3 of the Registration Rights Agreement, and any breach,
default or Event of Default that has occurred under the Existing
Note, the Existing Purchase Agreement or any of the other Existing
Transaction Documents solely as a result of such failure or
non-performance and, if applicable, the passage of time, the giving
of notice, or both; provided , that the Company shall have
no further obligation under the existing Registration Rights
Agreement to file, obtain or maintain the effectiveness of a
registration statement or perform any other obligations thereunder,
all such obligations being set forth in an Amended and Restated
Registration Rights Agreement dated as of the date
hereof.
(iii) consents to the consummation
of the Transaction in accordance with the terms and conditions set
forth in the Securities Pu
