LAURUS MASTER FUND,
LTD.
c/o Laurus Capital
Management, LLC
825 Third
Avenue
New York, New York
10022
December 28,
2006
Modtech
Holdings, Inc.
2830 Barrett
Avenue
Perris,
California 92571
Attention:
Chief Financial Officer
Amendment and Waiver
Agreement
Gentlemen:
Reference is made to (a) the Secured Convertible
Term Note (the “ Note ”) dated October 31, 2006
made by Modtech Holdings Inc. (the “ Company ”)
in favor of Laurus Master Fund, Ltd. (“ Laurus
”); (b) the Securities Purchase Agreement (the “
Purchase Agreement ”) dated as of October 31, 2006;
(c) the Common Stock Purchase Warrant dated October 31, 2006 made
by the Company in favor of Laurus for the purchase of up to 581,395
Shares of Common Stock (as such terms are defined therein) (“
Warrant No. 1 ”) and (d) the Common Stock Purchase
Warrant dated October 31, 2006 made by the Company in favor of
Laurus for the purchase of up to 1,540,697 Shares of Common Stock
(as such terms are defined therein) (“ Warrant No. 2
”, and together with Warrant No. 1, the “
Warrants ” and each, a “ Warrant
”). The Note, the Purchase Agreement and the Warrants are
hereinafter collectively referred to as, the “
Documents ” and each, as a “ Document
”. Capitalized terms used herein that are not defined shall
have the meaning given to them in the Note, Purchase Agreement
and/or Warrants, as applicable.
The Company has requested that Laurus amend the
Documents and Laurus is willing to do so on the terms and
conditions set forth below.
In consideration of Laurus’ agreement to
provide additional financial accommodations to the Company and
other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree
that:
1. the last sentence of Section 2.1(a) of the Note
is amended and restated in its entirety to read as
follows:
“For the
purposes hereof, subject to Section 3.6 hereof, the “Fixed
Conversion Price” means $3.57”;
2. effective upon the Waiver Effective Date (as
defined below), Section 3.2 of the Note is amended by replacing the
percentage “4.99%” in the tenth and twelfth lines
thereof with “9.99%”
3. the last sentence of Section 7.3 of the Purchase
Agreement is amended and restated in its entirety to read as
follows:
“The
Stock Acquisition Limitation shall automatically become null and
void without any notice to the Company upon the earlier to occur of
the existence of an Event of Defa
