CONVERSION AND REPURCHASE AGREEMENT

THIS CONVERSION AND REPURCHASE AGREEMENT (this “ Agreement ”) is made on October 31, 2006 between Modtech Holdings, Inc., a Delaware corporation (the “ Company ”), and Amphora Limited (the “ Investor ”).

WHEREAS, the Company and the Investor entered into that certain Securities Purchase Agreement, dated as of December 31, 2004, as amended (the " Securities Purchase Agreement "), pursuant to which, among other things, the Investor purchased from the Company a Senior Secured Convertible Note, dated as of December 31, 2004, which note was exchanged for an Amended and Restated Senior Secured Convertible Note dated as of August 5, 2005 (the " 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. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to them in the Note.

WHEREAS, the Company and the Investor desire to enter into this Conversion and Repurchase Agreement, pursuant to which, among other things, (i) the Company shall repurchase $9,746,666 in outstanding principal amount of the Note (the " Repurchased Amount ") for $8,000,000 (the " Repurchase Price ") and (ii) the Investor shall elect to convert $7,820,000 outstanding principal amount (the " Converted Amount ") into 1,000,000 shares of Common Stock (the " Conversion Shares ").

WHEREAS, the Company and the Investor also desire to enter into a Registration Rights Agreement (the " Registration Rights Agreement ") pursuant to which the Company shall register the Restricted Shares for resale by the Investor.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties hereto agree as follows:

Section 1 . Repurchase and Conversion.

(a)    Repurchase . The Company hereby agrees to repurchase from the Investor the Repurchased Amount, which amount shall be purchased by the Company in cash at the Repurchase Price.

(b)    Conversion. Prior to the Closing (as defined below), the Investor shall deliver a Conversion Notice to the Company reflecting the Investor's election to convert the Converted Amount into the Conversion Shares on the Closing Date (as defined below) at a conversion ratio of 127.87723785.

(c)    Closing . Subject to the satisfaction or waiver of the conditions set forth in Sections 4 below, at the closing contemplated by this Agreement (the " Closing "), the transactions contemplated hereby shall be deemed consummated. The date and time of the Closing (the “ Closing Date ”) shall be 10:00 a.m., New York City time, on the date hereof, subject to notification of satisfaction or waiver of the conditions to the Closing set forth in Section 4 below (or such other time and date as is mutually agreed to by the Company and the Investor). The Closing shall occur on the Closing Date at the office of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022.

(d)    Form of Payment; Delivery of Shares and Note . On the Closing Date, the Company shall (i) pay $5,000,000 of the Repurchase Price (" Initial Repurchase Payment ") to the Investor for the Repurchased Amount by wire transfer of immediately available funds in accordance with the Investor’s written wire instructions and (ii) deliver to the Investor, in accordance with Section 3(c) of the Note, the Conversion Shares. The Company shall pay the Repurchase Price, in part, by allowing the Senior Agent (as defined below) to draw $5,000,000 from the Letter of Credit with the Letter of Credit Bank (each as defined in the Securities Purchase Agreement). No later than (5) Business Days after the Closing Date (the " Repurchase Deadline "), the Company shall pay to the Investor the remaining $3,000,000 of the Repurchase Price (the " Balance Repurchase Payment ") by wire transfer of immediately available funds in accordance with the wire instructions previously delivered by the Investor. Following the Investor's receipt of the full Repurchase Price and the Conversion Shares, the Investor shall deliver the original Note to the Company for cancellation.

(e)    Failure to Pay Repurchase Price. In the event that the Investor does not receive the Balance Repurchase Payment by the Repurchase Deadline, the Repurchased Amount hereunder shall be deemed to be only $5,000,000 and the outstanding Principal amount under the Note as of such Repurchase Deadline shall be equal to $4,746,666.

Section 2 . Release of Letter of Credit Funds . Amphora Limited, in its capacity as the Senior Agent under, and as defined in the Securities Purchase Agreement (the " Senior Agent "), shall draw $5,000,000 under the Letter of Credit (the " Letter of Credit Amount ") in connection with the payment of the Repurchase Price, which payment shall be considered a Redemption Event for purposes of the Letter of Credit. On or immediately prior to the Closing Date, the Senior Agent shall deliver to the Letter of Credit Bank a drawing certificate, in the form attached to the Letter of Credit, requesting release of such Letter of Credit Amount by wire transfer of immediately available funds to the Investor.

Section 3 . Representations And Warranties.

(a)    Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this Agreement. This Agreement has been duly and validly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect that affect creditors’ rights generally, and by legal and equitable limitations on the availability of specific remedies.

(b)    No Conflicts. The execution, delivery and performance by the Company of this Agreement and consummation by the Company of the transactions contemplated by this Agreement do not and will not: (i) violate the organizational documents of the Company, (ii) violate any decree or judgment of any court or other governmental authority applicable to or binding on the Company; (iii) violate any provision of any federal or state statute, rule or regulation which is applicable to the Company; or (iv) violate any contract to which the Company or any of its assets or properties are bound, or conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of , any agreement, indenture or instrument to which Company is a party.

(c)    Approvals; No Suspensions. The Company has obtained all governmental, regulatory or third party consents and approvals if any, and approval from its stockholders, necessary, if any, to consummate the transactions contemplated by this Agreement. The Common Stock has not have been suspended by the SEC or the Principal Market from trading on the Principal Market and no suspension have been threatened by the SEC or the Principal Market either (A) in writing by the SEC or the Principal Market or (B) by falling below the minimum listing maintenance requir