Exhibit 10.3

 

FIRST AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

 

This FIRST AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
“Agreement”), dated as of August 5, 2005, by and among Modtech Holdings, Inc., a
Delaware corporation, with headquarters located at 2830 Barrett Avenue, Perris,
California 92571 (the “Company”), and the undersigned buyers (each, a “Buyer”,
and collectively, the “Buyers”).

 

WHEREAS:

 

A. The Company has issued and sold to Amphora Limited (“Amphora”) (i) a senior
subordinated secured convertible note of the Company (the “Note”). Concurrently
with the execution of this Agreement, the Note is being amended to increase the
principal by $900,000 (the “Amended Note”). The Amended Note will, among other
things, be convertible into the Company’s common stock, $.01 par value per share
(the “Common Stock” which as converted, the “Conversion Shares”). In connection
with the issuance of the Note, the Company issued separate warrants (the
“Original Amphora Warrants”), which will be exercisable to purchase shares of
Common Stock (as exercised collectively, the “Original Amphora Warrant Shares”).

 

B. In connection with the issuance of the Amended Note, the Company is issuing
additional warrants (the “New Amphora Warrants” and with the Original Amphora
Warrants, the “Amphora Warrants”), exerciseable to purchase shares of Common
Stock (as exercised, collectively the New Amphora Warrant Shares, and
collectively with the Original Amphora Warrant Shares, (the “Amphora Warrant
Shares”).

 

C. In connection with the Company’s sale of the Note and the Original Amphora
Warrants issued in connection with the Note (the “Amphora Financing”), the
Company granted Amphora registration and other rights pursuant to a Registration
Rights Agreement dated December 30, 2004 (the “Original Agreement”).

 

D. In connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the “Securities Purchase Agreement”), the Company
has agreed, upon the terms and subject to the conditions set forth in the
Securities Purchase Agreement, to issue and sell to each Buyer (i) that number
of shares of the Company’s Common Stock as set forth in the Securities Purchase
Agreement (the “New Common Shares”), and (ii) warrants (the “New Warrants”)
exercisable to purchase shares of Common Stock (as exercised collectively, the
“New Warrant Shares”).

 

E. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the “1933 Act”), and
applicable state securities laws.

 

F. As the registration rights to be granted in connection with the sale of the
New Common Shares and the New Warrant Shares are substantially similar to the
registration

 

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rights granted in the Original Agreement relating to the Conversion Shares and
the Amphora Warrant Shares, the Company and Amphora desire to amend and restate
the Original Agreement and include in one agreement all the registration rights
relating to the securities acquired in the Amphora Financing and the Securities
Purchase Agreement;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers
hereby agree as follows:

 

  1. Definitions.

 

Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:

 

a. “Business Day” means any day other than Saturday, Sunday or any other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.

 

b. “Common Shares” means collectively, the Conversion Shares and the New Common
Shares.

 

c. “D&O Investors” means any of the following individuals: Myron Wick, Charles
McGettigan, David Buckley, Dennis Shogren, Ron Savona, Karen Andreasen and Rick
Bartolotti.

 

d. “Effective Date” means the date the Registration Statement has been declared
effective by the SEC.

 

e. “Effectiveness Deadline” means November 7, 2005.

 

f. “Filing Deadline” means 30 calendar days after the date of this agreement.

 

g. “Investor” means a Buyer or any transferee or assignee thereof to whom a
Buyer assigns its rights under this Agreement and who agrees to become bound by
the provisions of this Agreement in accordance with Section 9 and any transferee
or assignee thereof to whom a transferee or assignee assigns its rights under
this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9.

 

h. “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

 

i. “register,” “registered,” and “registration” refer to a registration effected
by preparing and filing one or more Registration Statements (as defined below)
in

 

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compliance with the 1933 Act and pursuant to Rule 415 and the declaration or
ordering of effectiveness of such Registration Statement(s) by the SEC.

 

j. “Registrable Securities” means (i) the Common Shares, (ii) the Warrant Shares
issued or issuable upon exercise of the Warrants and (iii) any share capital of
the Company issued or issuable with respect to the Common Shares, the Warrant
Shares, or the Warrants as a result of any split, dividend, recapitalization,
exchange or similar event or otherwise, without regard to any limitations on
exercises of the Warrants.

 

k. “Registration Statement” means a registration statement or registration
statements of the Company filed under the 1933 Act covering the Registrable
Securities.

 

l. “Required Holders” means holders of at least 70% of the Registrable
Securities, including holders of at least 50% of the Registrable Securities
acquired pursuant to the Securities Purchase Agreement.

 

m. “Required Registration Amount” means (i) 130% of the sum of (A) the number of
Conversion Shares issued and issuable as of the trading day immediately
preceding the applicable date of determination, and (B) the number of Warrant
Shares issued and issuable pursuant to the Warrants as of the trading day
immediately preceding the applicable date of determination, plus (ii) 100% of
the number of New Common Shares issued as of the date hereof, in all cases
subject to adjustment as provided in Section 2(e).

 

n. “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing
for offering securities on a continuous or delayed basis.

 

o. “SEC” means the United States Securities and Exchange Commission.

 

p. “Warrant Shares” means collectively, the Amphora Warrant Shares and the New
Warrant Shares.

 

q. “Warrants” means collectively, the Amphora Warrants and the New Warrants.

 

  2. Registration.

 

a. Mandatory Registration. The Company shall prepare, and, as soon as
practicable but in no event later than the Filing Deadline, file with the SEC
the Registration Statement on Form S-3 covering the resale of all of the
Registrable Securities. In the event that Form S-3 is unavailable for such a
registration, the Company shall use such other form as is available for such a
registration, subject to the provisions of Section 2(d). The Registration
Statement prepared pursuant hereto shall register for resale at least the number
of shares of Common Stock equal to the Required Registration Amount as of date
the Registration Statement is initially filed with the SEC. The Registration
Statement shall contain (except if otherwise directed by the Required Holders)
the “Selling Stockholders” and “Plan of Distribution” sections in substantially
the form attached hereto as Exhibit B. The Company shall use its best efforts to

 

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have the Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the Effectiveness Deadline.

 

b. Allocation of Registrable Securities. The initial number of Registrable
Securities included in any Registration Statement and any increase in the number
of Registrable Securities included therein shall be allocated pro rata among the
Investors based on the number of Registrable Securities held by each Investor at
the time the Registration Statement covering such initial number of Registrable
Securities or increase thereof is declared effective by the SEC. In the event
that an Investor sells or otherwise transfers any of such Investor’s Registrable
Securities, each transferee shall be allocated a pro rata portion of the then
remaining number of Registrable Securities included in such Registration
Statement for such transferor. Any Shares of Common Stock included in a
Registration Statement and which remain allocated to any Person which ceases to
hold any Registrable Securities covered by such Registration Statement shall be
allocated to the remaining Investors, pro rata based on the number of
Registrable Securities then held by such Investors which are covered by such
Registration Statement. In no event shall the Company include any securities
other than Registrable Securities on any Registration Statement without the
prior written consent of the Required Holders.

 

c. Legal Counsel. Subject to Section 5 hereof, Amphora Limited and Peninsula
Catalyst Fund, L.P. shall each have the right to select one legal counsel to
review and oversee any registration pursuant to this Section 2 (“Legal
Counsel”). The Company and each Legal Counsel shall reasonably cooperate with
each other in performing the Company’s obligations under this Agreement, it
being understood that Legal Counsel will function independently from each other.

 

d. Ineligibility for Form S-3. In the event that Form S-3 is not available for
the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another
appropriate form reasonably acceptable to the Required Holders and (ii)
undertake to amend the Registration Statement on Form S-3 as soon as such form
is available and an amendment is otherwise necessary, provided that the Company
shall maintain the effectiveness of the Registration Statement then in effect
until such time as the amendment on Form S-3 covering the Registrable Securities
has been declared effective by the SEC.

 

e. Sufficient Number of Shares Registered. In the event the number of shares
available under a Registration Statement filed pursuant to Section 2(a) is
insufficient to cover all of the Registrable Securities required to be covered
by such Registration Statement or an Investor’s allocated portion of the
Registrable Securities pursuant to Section 2(b), the Company shall amend the
applicable Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover at least
the Required Registration Amount as of the trading day immediately preceding the
date of the filing of such amendment or new Registration Statement, in each
case, as soon as practicable, but in any event not later than fifteen (15) days
after the necessity therefor arises. The Company shall use its reasonable best
efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof. For purposes of
the foregoing provision, the number of shares available under a Registration
Statement shall be

 

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deemed “insufficient to cover all of the Registrable Securities” if at any time
the number of shares of Common Stock available for resale under the Registration
Statement is less than the product determined by multiplying (i) the Required
Registration Amount as of such time by (ii) 1.0. The calculation set forth in
the foregoing sentence shall be made without regard to any limitations on the
exercise of the Warrants and such calculation shall assume that the Warrants are
then exercisable for shares of Common Stock at the then prevailing Exercise
Price (as defined in the Warrants).

 

f. Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. If (i) a Registration Statement covering all of the
Registrable Securities required to be covered thereby and required to be filed
by the Company pursuant to this Agreement is (A) not filed with the SEC on or
before the respective Filing Deadline (a “Filing Failure”) or (B) not declared
effective by the SEC on or before the respective Effectiveness Deadline (an
“Effectiveness Failure”) or (ii) on any day after the Effective Date sales of
all of the Registrable Securities required to be included on such Registration
Statement cannot be made (other than during an Allowable Grace Period (as
defined in Section 3(r)) pursuant to such Registration Statement or otherwise
(including, without limitation, because of a failure to keep such Registration
Statement effective, to disclose such information as is necessary for sales to
be made pursuant to such Registration Statement, to register a sufficient number
of shares of Common Stock or to maintain the listing of the Common Stock) (a
“Maintenance Failure”) then, as partial relief for the damages to any holder by
reason of any such delay in or reduction of its ability to sell the underlying
Shares of Common Stock (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each holder of
Registrable Securities relating to such Registration Statement an amount in cash
equal to (A) one and one percent (1.0%) of the aggregate Purchase Price (as such
term is defined in the Securities Purchase Agreement or the securities purchase
agreement relating to the Amphora Financing, as applicable) of the Registrable
Securities on each of the following dates: (i) the day of a Filing Failure; (ii)
the day of an Effectiveness Failure; and (iii) the initial day of a Maintenance
Failure, and (B) two percent (2.0%) of the aggregate Purchase Price (as such
term is defined in the Securities Purchase Agreement or the securities purchase
agreement relating to the Amphora Financing, as applicable) of such Investor’s
Registrable Securities on each of the following dates: (i) on every thirtieth
day after the day of a Filing Failure and thereafter (pro rated for periods
totaling less than thirty days) until such Filing Failure is cured; (ii) on
every thirtieth day after the day of an Effectiveness Failure and thereafter
(pro rated for periods totaling less than thirty days) until such Effectiveness
Failure is cured; (iii) on every thirtieth day after the initial day of a
Maintenance Failure and thereafter (pro rated for periods totaling less than
thirty days) until such Maintenance Failure is cured. The payments to which a
holder shall be entitled pursuant to this Section 2(g) are referred to herein as
“Registration Delay Payments.” Registration Delay Payments shall be paid on the
earlier of (I) the last day of the calendar month during which such Registration
Delay Payments are incurred and (II) the third Business Day after the event or
failure giving rise to the Registration Delay Payments is cured. In the event
the Company fails to make Registration Delay Payments in a timely manner, such
Registration Delay Payments shall bear interest at the rate of 2.0% per month
(prorated for partial months) until paid in full. Notwithstanding anything
herein to the contrary, D&O Investors shall not be entitled to receive any
Registration Delay Payments.

 

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  3. Related Obligations.

 

At such time as the Company is obligated to file a Registration Statement with
the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will use its best
efforts to effect the registration of the Registrable Securities in accordance
with the intended method of disposition thereof and, pursuant thereto, the
Company shall have the following obligations:

 

a. The Company shall submit to the SEC, within two (2) Business Days after the
Company learns that no review of a particular Registration Statement will be
made by the staff of the SEC or that the staff has no further comments on a
particular Registration Statement, as the case may be, a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than 48 hours after the submission of such request. The Company shall
keep each Registration Statement effective pursuant to Rule 415 at all times
until the earlier of (i) the date as of which the Investors (excluding officers
and directors) may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Rule 144(k) (or any
successor thereto) promulgated under the 1933 Act or (ii) the date on which the
Investors shall have sold all of the Registrable Securities covered by such
Registration Statement (the “Registration Period”). The Company shall ensure
that each Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein (in the case of
prospectuses, in the light of the circumstances in which they were made) not
misleading.

 

b. The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by such Registration Statement until the expiration of the
Registration Period. In the case of amendments and supplements to a Registration
Statement which are required to be filed pursuant to this Agreement (including
pursuant to this Section 3(b)) by reason of the Company filing a report on Form
10-Q, Form 10-K or any analogous report under the Securities Exchange Act of
1934, as amended (the “1934 Act”), the Company shall have incorporated such
report by reference into such Registration Statement, if applicable, or shall
file such amendments or supplements with the SEC on the same day on which the
1934 Act report is filed which created the requirement for the Company to amend
or supplement such Registration Statement.

 

c. The Company shall (A) permit Legal Counsel to review and comment upon (i) a
Registration Statement at least five (5) Business Days prior to its filing with
the SEC and (ii) all amendments and supplements to all Registration Statements
(except for Annual Reports on Form 10-K, and Reports on Form 10-Q and any
similar or successor reports) within a reasonable number of days prior to their
filing with the SEC, and (B) not file any Registration Statement or amendment or
supplement thereto in a form to which Legal Counsel reasonably objects. The
Company shall not submit a request for acceleration of the effectiveness

 

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of a Registration Statement or any amendment or supplement thereto without the
prior approval of Legal Counsel, which consent shall not be unreasonably
withheld. The Company shall furnish to Legal Counsel, without charge, (i) copies
of any correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement if Legal Counsel requests
such correspondence, (ii) promptly after the same is prepared and filed with the
SEC, one copy of any Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference, if requested by an Investor, and all exhibits and (iii) upon the
effectiveness of any Registration Statement, one copy of the prospectus included
in such Registration Statement and all amendments and supplements thereto. The
Company shall reasonably cooperate with Legal Counsel in performing the
Company’s obligations pursuant to this Section 3.

 

d. The Company shall furnish to each Investor whose Registrable Securities are
included in any Registration Statement, without charge, (i) promptly after the
same is prepared and filed with the SEC, at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if requested by an
Investor, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any Registration Statement, ten (10) copies of the prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may reasonably request)
and (iii) such other documents, including copies of any preliminary or final
prospectus, as such Investor may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities owned by such
Investor.

 

e. The Company shall use its reasonable best efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by Investors of the Registrable Securities covered by a Registration
Statement under such other securities or “blue sky” laws of such applicable
jurisdictions in the United States, as the Required Holders may reasonably
request (ii) prepare and file in those jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(e), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction.
The Company shall promptly notify Legal Counsel and each Investor who holds
Registrable Securities of the receipt by the Company of any notification with
respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or “blue sky” laws of any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.

 

f. The Company shall notify Legal Counsel and each Investor in writing of the
happening of any event, as promptly as practicable after becoming aware of such
event, as a result of which the prospectus included in a Registration Statement,
as then in effect,

 

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includes an untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, nonpublic
information), or the Company’s reasonable determination that a post-effective
amendment to a Registration Statement is appropriate and, subject to Section
3(r), promptly prepare a supplement or amendment to such Registration Statement
to correct such untrue statement or omission, or otherwise amend such
Registration Statement and deliver ten (10) copies of such supplement or
amendment to Legal Counsel and each Investor (or such other number of copies as
Legal Counsel or such Investor may reasonably request). The Company shall also
promptly notify Legal Counsel and each Investor in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed, and
when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile on the same day of such effectiveness and
by overnight mail), (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related information, and
(iii) of the Company’s reasonable determination that a post-effective amendment
to a Registration Statement would be appropriate.

 

g. The Company shall use its reasonable best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible
moment and to notify Legal Counsel and each Investor who holds Registrable
Securities being sold of the issuance of such order or suspension and the
resolution thereof or its receipt of actual notice of the initiation or threat
of any proceeding for such purpose.

 

h. At the reasonable request of any Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of the Registration Statement and
thereafter from time to time on such dates as an Investor may reasonably request
a letter, dated such date, from the Company’s independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the Investors.

 

i. The Company shall make available for inspection by (i) any Investor, (ii)
Legal Counsel and (iii) one firm of accountants or other agents retained by the
Investors (collectively, the “Inspectors”), all pertinent financial and other
records, and pertinent corporate documents and properties of the Company
(collectively, the “Records”), as shall be reasonably deemed necessary by each
Inspector, and cause the Company’s officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree to hold in strict confidence and shall not make
any disclosure (except to an Investor) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (c) the
information in such Records has

 

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been made generally available to the public other than by disclosure in
violation of this Agreement. Each Investor agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential. Nothing herein (or in any other confidentiality agreement
between the Company and any Investor) shall be deemed to limit the Investors’
ability to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations.

 

j. The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

 

k. The Company shall use its reasonable best efforts either to (i) cause all of
the Registrable Securities covered by a Registration Statement to be listed on
each securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) secure the
inclusion for quotation of all of the Registrable Securities on the Nasdaq
National Market or (iii) if, despite the Company’s reasonable best efforts, the
Company is unsuccessful in satisfying the preceding clauses (i) and (ii), to
secure the inclusion for quotation of all of the Registrable Securities on The
Nasdaq SmallCap Market for such Registrable Securities and, without limiting the
generality of the foregoing, to use its reasonable best efforts to arrange for
at least two market makers to register with the National Association of
Securities Dealers, Inc. (“NASD”) as such with respect to such Registrable
Securities or (iv) if, despite the Company’s reasonable best efforts, the
Company is unsuccessful in satisfying the preceding clauses (i)-(iii), to secure
the inclusion for quotation of all of the Registrable Securities on the NASD’s
OTC Bulletin Board or the American Stock Exchange. The Company shall pay all
fees and expenses in connection with satisfying its obligation under this
Section 3(k).

 

l. The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend
once legally permissible) representing the Registrable Securities to be offered
pursuant to a Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the Investors may reasonably
request and registered in such names as the Investors may request.

 

m. If requested by an Investor, the Company shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment such

 

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information as an Investor reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering;
(ii) as soon as practicable make all required filings of such prospectus
supplement or post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) as soon as practicable, supplement or make amendments to any Registration
Statement if reasonably requested by an Investor holding any Registrable
Securities.

 

n. The Company shall use its reasonable best efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary to
consummate the disposition of such Registrable Securities.

 

o. The Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, the provisions of Rule 158 under the 1933 Act) covering a
twelve-month period beginning not later than the first day of the Company’s
fiscal quarter next following the effective date of a Registration Statement.

 

p. The Company shall otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC in connection with any
registration hereunder.

 

q. Within two (2) Business Days after a Registration Statement which covers
Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.

 

r. Notwithstanding anything to the contrary herein, at any time after the
Effective Date, the Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the time is not,
in the good faith opinion of the Board of Directors of the Company, in the best
interest of the Company and otherwise required (a “Grace Period”); provided,
that the Company shall promptly (i) notify the Investors in writing of the
existence of material, non-public information giving rise to a Grace Period
(provided that in each notice the Company will not disclose the content of such
material, non-public information to the Investors) and the date on which the
Grace Period will begin, and (ii) notify the Investors in writing of the date on
which the Grace Period ends; and, provided further, that no Grace Period shall
exceed twenty (20) consecutive days and during any three hundred sixty five
(365) day period such Grace Periods shall not exceed an aggregate of forty-five
(45) days and the first day of any Grace Period must be at least two (2) trading
days after the last day of any prior Grace Period (each, an “Allowable Grace
Period”). For purposes of determining the length of a Grace Period above, the
Grace Period shall begin on and include the date the

 

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Investors receive the notice referred to in clause (i) and shall end on and
include the later of the date the Investors receive the notice referred to in
clause (ii) and the date referred to in such notice. The provisions of Section
3(g) hereof shall not be applicable during the period of any Allowable Grace
Period. Upon expiration of the Grace Period, the Company shall again be bound by
the first sentence of Section 3(f) with respect to the information giving rise
thereto unless such material, non-public information is no longer applicable.
Notwithstanding anything to the contrary, the Company shall cause its transfer
agent to deliver unlegended shares of Common Stock to a transferee of an
Investor in accordance with the terms of the Securities Purchase Agreement or
the securities purchase agreement underlying the Amphora Financing, as
applicable, in connection with any sale of Registrable Securities with respect
to which an Investor has entered into a contract for sale prior to the
Investor’s receipt of the notice of a Grace Period and in compliance with
Section 4(c) and for which the Investor has not yet settled.

 

s. The Company shall use its best efforts to maintain the eligibility of its
registration statement on Form S-3 so that it is available for the registration
of the resale of Registrable Securities.

 

  4. Obligations of the Investors.

 

a. At least seven (7) Business Days prior to the first anticipated filing date
of a Registration Statement, the Company shall notify each Investor in writing
of the information the Company requires from each such Investor if such Investor
elects to have any of such Investor’s Registrable Securities included in such
Registration Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.

 

b. Each Investor, by such Investor’s acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.

 

c. Each Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first
sentence of 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended Shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement or
the securities purchase agreement underlying the Amphora Financing, as
applicable, in connection with any sale of Registrable Securities with

 

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respect to which an Investor has entered into a contract for sale prior to the
Investor’s receipt of a notice from the Company of the happening of any event of
the kind described in Section 3(g) or the first sentence of 3(f) and for which
the Investor has not yet settled.

 

d. Each Investor covenants and agrees that it will comply with the prospectus
delivery requirements of the 1933 Act as applicable to it in connection with
sales of Registrable Securities pursuant to the Registration Statement.

 

  5. Expenses of Registration.

 

All reasonable expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company shall be paid by the Company. The Company shall also
reimburse Peninsula Catalyst Fund, L.P. and Amphora for the fees and
disbursements of their respective Legal Counsel in connection with registration,
filing or qualification pursuant to Sections 2 and 3 of this Agreement which
amount shall be limited to $10,000 for each Legal Counsel for each Registration
Statement.

 

  6. Indemnification.

 

In the event any Registrable Securities are included in a Registration Statement
under this Agreement:

 

a. To the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor, the directors, officers,
members, partners, employees, agents, representatives of, and each Person, if
any, who controls any Investor within the meaning of the 1933 Act or the 1934
Act (each, an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, amounts paid in settlement or expenses, joint or several, (collectively,
“Claims”) incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified Damages”), to which any of them
may become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other “blue sky” laws of any jurisdiction in which Registrable Securities are
offered (“Blue Sky Filing”), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in the light of the circumstances under which the statements therein
were made, not misleading, (iii)

 

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any violation or alleged violation by the Company of the 1933 Act, the 1934 Act,
any other law, including, without limitation, any state securities law, or any
rule or regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation of this
Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, “Violations”). Subject to Section 6(c), the Company shall
reimburse the Indemnified Persons, promptly as such expenses are incurred and
are due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d); (ii) with respect to any
preliminary prospectus, shall not inure to the benefit of any such Person from
whom the Person asserting any such Claim purchased the Registrable Securities
that are the subject thereof (or to the benefit of any Person controlling such
Person) if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then amended or
supplemented, if such prospectus was timely made available by the Company
pursuant to Section 3(d), and the Indemnified Person was promptly advised in
writing not to use the incorrect prospectus prior to the use giving rise to a
violation and such Indemnified Person, notwithstanding such advice, used it or
failed to deliver the correct prospectus as required by the 1933 Act and such
correct prospectus was timely made available pursuant to Section 3(d); (iii)
shall not be available to the extent such Claim is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by
the Company, including a corrected prospectus, if such prospectus or corrected
prospectus was timely made available by the Company pursuant to Section 3(d);
and (iv) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.

 

b. In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each, an
“Indemnified Party”), against any Claim or Indemnified Damages to which any of
them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar
as such Claim or Indemnified Damages arise out of or are based upon any
Violation, in each case to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement, such Investor’s failure to comply with prospectus
delivery requirements or such Investor’s breach of Section 4(c); and, subject to
Section 6(c), such Investor will reimburse any legal or other expenses
reasonably incurred by an Indemnified Party in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to

 

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contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably withheld or
delayed; provided, further, however, that the Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as does
not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.

 

c. Promptly after receipt by an Indemnified Person or Indemnified Party under
this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. In the case of an
Indemnified Person, legal counsel referred to in the immediately preceding
sentence shall be selected by the Investors holding a majority in interest of
the Registrable Securities included in the Registration Statement to which the
Claim relates. The Indemnified Party or Indemnified Person shall cooperate fully
with the indemnifying party in connection with any negotiation or defense of any
such action or Claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified Party
or Indemnified Person which relates to such action or Claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person reasonably apprised
at all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to entry
of any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such Claim or litigation, and such settlement shall not include
any admission as to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder,

 

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the indemnifying party shall be subrogated to all rights of the Indemnified
Party or Indemnified Person with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action.

 

d. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred.

 

e. The indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

 

  7. Contribution.

 

To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that: (i) no Person
involved in the sale of Registrable Securities which Person is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) in connection with such sale shall be entitled to contribution from any
Person involved in such sale of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.

 

  8. Reports Under the 1934 Act.

 

With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration (“Rule 144”), the Company agrees to:

 

a. make and keep public information available, as those terms are understood and
defined in Rule 144;

 

b. file with the SEC in a timely manner all reports and other documents required
of the Company under the 1933 Act and the 1934 Act so long as the Company
remains subject to such requirements and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and

 

c. furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of Rule 144, the 1933
Act and the 1934 Act, (ii) a copy

 

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of the most recent annual report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Investors to sell such securities pursuant to
Rule 144 without registration.

 

  9. Assignment of Registration Rights.

 

The rights under this Agreement shall be automatically assignable by an Investor
to any transferee of all or not less than 15,000 shares of such Investor’s
Registrable Securities if: (i) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act or applicable state securities laws;
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein; and (v)
such transfer shall have been made in accordance with the applicable
requirements of the Securities Purchase Agreement or the securities purchase
agreement underlying the Amphora Financing, as applicable.

 

  10. Amendment of Registration Rights.

 

Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Holders. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.

 

  11. Miscellaneous.

 

a. This Agreement amends and restates the Original Agreement in its entirety,
and as of the date hereof, the Original Agreement is of no further force or
effect.

 

b. A Person is deemed to be a holder of Registrable Securities whenever such
Person owns or is deemed to own of record such Registrable Securities. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company shall act
upon the basis of instructions, notice or election received from the such record
owner of such Registrable Securities.

 

c. Any notices, consents, waivers or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt, when delivered personally; (ii)
upon receipt, when sent by facsimile or electronic mail (provided confirmation
of transmission is mechanically or electronically generated and kept on file by
the sending party); or (iii) one Business Day after

 

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deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:

 

If to the Company:

 

Modtech Holdings, Inc.

2830 Barrett Avenue

Perris, California 92571

Telephone:

   (951) 943-4014

Facsimile:

   (951) 940-0427

Attention:

   Dennis Shogren, Chief Financial Officer

 

With a copy to:

 

Jon Haddan

Haddan & Zepfel LLP

500 Newport Center Drive, Suite 580

Newport Beach, CA 92660

Telephone:

   949-706-6000

Facsimile:

   949-706-6060

 

If to Legal Counsel:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:

   (212) 756-2000

Facsimile:

   (212) 593-5955

Attention:

   Eleazer N. Klein, Esq.

 

And

 

Shartsis Friese LLP

One Maritime Plaza, 18th Floor

San Francisco, California 94111-3598

Telephone:

   (415) 421-6500

Facsimile:

   (415) 421-2922

Attention:

   Steven O. Gasser, Esq.

 

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer’s representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. If a notice provided for hereunder is delivered
via facsimile or electronic mail, such notice shall be valid only if an original
hard copy is delivered within one business day of the time such facsimile is
delivered. Written confirmation of receipt (A) given

 

REGISTRATION RIGHTS AGREEMENT

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by the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender’s facsimile machine or
computer containing the time, date, recipient facsimile number or electronic
mail address and an image of the first page of such transmission or (C) provided
by a courier or overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.

 

d. Failure of any party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.

 

e. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

f. This Agreement, the other Transaction Documents (as defined in the Securities
Purchase Agreement or the securities purchase agreement underlying the Amphora
Financing, as applicable) and the instruments referenced herein and therein
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the other Transaction Documents and the instruments
referenced herein and therein supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

 

g. Subject to the requirements of Section 9, this Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns of each of
the parties hereto.

 

h. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

 

i. This Agreement may be executed in identical counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
agreement.

 

REGISTRATION RIGHTS AGREEMENT

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This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile or electronic mail transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

 

j. Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

 

k. All consents and other determinations required to be made by the Investors
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by the Required Holders.

 

l. The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent and no rules of strict
construction will be applied against any party.

 

m. This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

 

n. The obligations of each Buyer hereunder are several and not joint with the
obligations of any other Buyer, and no provision of this Agreement is intended
to confer any obligations on any Buyer vis-à-vis any other Buyer. Nothing
contained herein, and no action taken by any Buyer pursuant hereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated herein.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

COMPANY: MODTECH HOLDINGS, INC. By:   /s/ DENNIS SHOGREN    

Name: Dennis Shogren

   

Title: Chief Financial Officer

 

REGISTRATION RIGHTS AGREEMENT

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

BUYERS: Peninsula Catalyst Fund, L.P. By: Peninsula Catalyst Management LLC Its:
General Partner

By:

 

/s/ Mike Ogborne

Name:

 

Mike Ogborne

Title:

 

Managing Member

 

Peninsula Catalyst QP Fund, L.P. By: Peninsula Catalyst Management LLC Its:
General Partner

By:

 

/s/ Mike Ogborne

Name:

 

Mike Ogborne

Title:

 

Managing Partner

 

REGISTRATION RIGHTS AGREEMENT

         

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

Peninsula Fund, L.P. By: PCM Capital LLC Its: General Partner

By:

 

/s/ Scott A. Bedford

Name:

 

Scott A. Bedford

Title:

 

Managing Member

 

REGISTRATION RIGHTS AGREEMENT

         

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

Gruber & McBaine International       Lagunitas Partners LP

By: Gruber & McBaine Capital Management LLC

     

By: Gruber & McBaine Capital Management LLC

Its: Attorney-in-Fact

     

Its: General Partner

By:   /s/ JON D. GRUBER       By:   /s/ JON D. GRUBER

Name:

 

Jon D. Gruber

     

Name:

 

Jon D. Gruber

Title:

 

Manager

     

Title:

 

Manager

 

Wallace Foundation       Hamilton College By: Gruber & McBaine Capital
Management, LLC       By: Gruber & McBaine Capital Management, LLC Its:
Attorney-in-Fact       Its: Attorney-in-Fact By:   /s/ JON D. GRUBER       By:  
/s/ JON D. GRUBER

Name:

 

Jon D. Gruber

     

Name:

 

Jon D. Gruber

Title:

 

Manager

     

Title:

 

Manager

 

Donaghy Sales, Inc.       Gruber Family Foundation By: Gruber & McBaine Capital
Management, LLC       By: Gruber & McBaine Capital Management, LLC Its:
Attorney-in-Fact       Its: Attorney-in-Fact By:   /s/ JON D. GRUBER       By:  
/s/ JON D. GRUBER

Name:

 

Jon D. Gruber

     

Name:

 

Jon D. Gruber

Title:

 

Manager

     

Title:

 

Manager

 

Jon D. & Linda W. Gruber Trust         By:   /s/ JON D. GRUBER       /s/ J.
PATTERSON MCBAINE

Name:

 

Jon D. Gruber

     

Name:

 

J. Patterson McBaine

Title:

 

Trustee

           

 

REGISTRATION RIGHTS AGREEMENT

         

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

Dolphin Offshore Partners, L.P. By:   /s/ PETER E. SALAS Name:   Peter E. Salas
Title:   General Partner

 

REGISTRATION RIGHTS AGREEMENT

         

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

AMPHORA LIMITED

By: Amaranth Advisors L.L.C.,

Its Trading Advisor

By:   /s/ KARL J. WACHTER    

Name: Karl J. Wachter

   

Title: Authorized Signatory

 

REGISTRATION RIGHTS AGREEMENT

         

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

/s/ MYRON A. WICK, III

Name:   Myron A. Wick, III

/s/ CHARLES A. MCGETTIGAN

Name:   Charles A. McGettigan

/s/ DAVID BUCKLEY

Name:   David Buckley

/s/ DENNIS SHOGREN

Name:   Dennis Shogren

/s/ RON SAVONA Name:   Ron Savona /s/ KAREN ANDREASEN

Name:   Karen Andreasen

/s/ RICK BARTOLOTTI

Name:   Rick Bartolotti

 

REGISTRATION RIGHTS AGREEMENT

         

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SCHEDULE OF BUYERS

 

Buyer

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Buyer’s Address
and Facsimile Number

--------------------------------------------------------------------------------

  

Buyer’s Representative’s Address
and Facsimile Number

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Peninsula Catalyst Fund, L.P.   

235 Pine Street Suite 1818

San Francisco, CA 94104

 

Telephone: (415) 568-3380

Facsimile: (415) 568-3385

  

Shartsis Friese LLP

One Maritime Plaza, 18th Floor

San Francisco, California 94111-3598

Attn: Steven O. Gasser, Esq.

Telephone: (415) 421-6500

Facsimile: (415) 421-2922

Peninsula Catalyst Fund QP, L.P.   

235 Pine Street Suite 1818

San Francisco, CA 94104

 

Telephone: (415) 568-3380

Facsimile: (415) 568-3385

  

Shartsis Friese LLP

One Maritime Plaza, 18th Floor

San Francisco, California 94111-3598

Attn: Steven O. Gasser, Esq.

Telephone: (415) 421-6500

Facsimile: (415) 421-2922

Peninsula Fund, L.P.   

235 Pine Street Suite 1818

San Francisco, CA 94104

 

Telephone: (415) 568-3380

Facsimile: (415) 568-3385

   None Lagunitas Partners, L.P.   

50 Osgood Place

San Francisco, California 94133

 

Telephone: (415) 981-2101

Facsimile: (415) 981-6434

   None Gruber & McBaine International   

50 Osgood Place

San Francisco, California 94133

 

Telephone: (415) 981-2101

Facsimile: (415) 981-6434

   None Hamilton College   

50 Osgood Place

San Francisco, California 94133

 

Telephone: (415) 981-2101

Facsimile: (415) 981-6434

   None Wallace Foundation   

50 Osgood Place

San Francisco, California 94133

 

Telephone: (415) 981-2101

Facsimile: (415) 981-6434

   None Donaghy Sales, Inc.   

50 Osgood Place

San Francisco, California 94133

 

Telephone: (415) 981-2101

Facsimile: (415) 981-6434

   None

 

SCHEDULE OF BUYERS

   1     

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Gruber Family Foundation   

50 Osgood Place

San Francisco, California 94133

 

Telephone: (415) 981-2101

Facsimile: (415) 981-6434

   None Jon D. & Linda W. Gruber   

50 Osgood Place

San Francisco, California 94133

 

Telephone: (415) 981-2101

Facsimile: (415) 981-6434

   None J. Patterson McBaine   

50 Osgood Place

San Francisco, California 94133

 

Telephone: (415) 981-2101

Facsimile: (415) 981-6434

   None Dolphin Offshore Partners, L.P.   

C/o Dolphin Asset Management

129 E. 17th Street

New York, New York 10003

Facsimile: (212) 202-3817

   None Amphora Limited   

c/o Amaranth Advisors L.L.C.

One American Lane

Greenwich, CT 06831

Attention: General Counsel

Facsimile: (203) 422-3540

Telephone: (203) 422-3340

Residence: Cayman Islands

  

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attn: Eleazer Klein, Esq.

Facsimile: (212) 593-5955

Telephone: (212) 756-2000

Myron A. Wick, III

Charles A. McGettigan

David Buckley

Dennis Shogren

Ron Savona

Karen Andreasen

Rick Bartolotti

  

c/o Modtech Holdings, Inc.

2830 Barrett Avenue

Perris, California 92571

Telephone: (951) 943-4014

Facsimile: (951) 940-0427

   None

 

SCHEDULE OF BUYERS

   2     

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EXHIBIT A

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

Mellon Investor Services LLC

400 S. Hope Street, 4th Floor

Los Angeles, California 90071

Telephone: (213) 553-9724

Facsimile: (213) 553-9735

Attention: Raymond Torres

 

  Re: Modtech Holdings, Inc.

 

Ladies and Gentlemen:

 

[We are][I am] counsel to Modtech Holdings, Inc., a Delaware corporation (the
“Company”), and have represented the Company in connection with that certain
Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into
by and among the Company and the buyers named therein (collectively, the
“Holders”) pursuant to which the Company issued to the Holders the Company’s
common stock, $.01 par value per share (the “Common Shares”) and warrants
exercisable for shares of Common Stock (the “Warrants”). Pursuant to the
Securities Purchase Agreement, the Company also has entered into a First Amended
and Restated Registration Rights Agreement with the Holders (the “Registration
Rights Agreement”) pursuant to which the Company agreed, among other things, to
register the Common Shares and the shares of Common Stock issuable upon exercise
of the Warrants (the “Warrant Shares”), under the Securities Act of 1933, as
amended (the “1933 Act”). In connection with the Company’s obligations under the
Registration Rights Agreement, on                                  , 200    ,
the Company filed a Registration Statement on Form S-_ (File No.
333-                    ) (the “Registration Statement”) with the Securities and
Exchange Commission (the “SEC”) relating to the Registrable Securities which
names each of the Holders as a selling stockholder thereunder.

 

In connection with the foregoing, [we][I] advise you that a member of the SEC’s
staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no
knowledge, after telephonic inquiry of a member of the SEC’s staff, that any
stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the Common
Shares and the Warrant Shares are available for resale under the 1933 Act
pursuant to the Registration Statement.

 

This letter shall serve as our standing notice to you that the Common Shares and
the Warrant Shares are, as of this date, freely transferable by the Holders
pursuant to the

 

EXHIBIT A

   1     

--------------------------------------------------------------------------------

Registration Statement. Unless you receive separate notice or instructions from
us following the date hereof and preceding a request by a Holder for a
legend-free certificate or reissue thereof, you need not require further letters
from us to effect any future legend-free issuance or reissuance of shares of
Common Stock to the Holders in exchange for their Common Shares or Warrant
Shares as contemplated by the Company’s Irrevocable Transfer Agent Instructions
dated                              , 2005. This letter shall serve as our
standing opinion with regard to this matter.

 

Very truly yours,

[ISSUER’S COUNSEL]

By:          

 

CC: [LIST NAMES OF HOLDERS]

 

EXHIBIT A

   2     

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EXHIBIT B

 

SELLING STOCKHOLDERS

 

The shares of Common Stock being offered by the selling stockholders have either
been issued directly or issued upon exercise of the warrants. For additional
information regarding the issuance of the Common Stock and warrants, see
“Private Placement of Common Stock and Warrants” above. We are registering the
shares of Common Stock in order to permit the selling stockholders to offer the
shares for resale from time to time. Except for the ownership of the Common
Stock and the Warrants issued pursuant to the Securities Purchase Agreement and
the purchase of securities from the Company on December 31, 2004, by Amphora
Limited, the selling stockholders have not had any material relationship with us
within the past three years.

 

The table below lists the selling stockholders and other information regarding
the beneficial ownership of the shares of Common Stock by each of the selling
stockholders. The second column lists the number of shares of Common Stock
beneficially owned by each selling stockholder, as of                     ,
200    , assuming conversion of all convertible notes and exercise of the
warrants held by the selling stockholders on that date, without regard to any
limitations on conversions or exercise.

 

The third column lists the shares of Common Stock being offered by this
prospectus by the selling stockholders.

 

In accordance with the terms of registration rights agreements with the selling
stockholders, this prospectus generally covers the resale of 100% of the Common
Stock and 100% of the number of shares of Common Stock issuable upon exercise of
the related warrants as of the trading day immediately preceding the date the
registration statement is initially filed with the SEC. The fourth column
assumes the sale of all of the shares offered by the selling stockholders
pursuant to this prospectus.

 

Under the terms of Amphora Limited’s agreements with the Company, it may not
exercise the warrants or convert its Notes into Common Stock to the extent such
exercise or conversion would cause it, together with its affiliates, to
beneficially own a number of shares of Common Stock which would exceed 4.99% of
our then outstanding shares of Common Stock following such exercise, excluding
for purposes of such determination shares of Common Stock issuable upon exercise
of the warrants which have not been exercised. The number of shares in the
second column does not reflect this limitation. The selling stockholders may
sell all, some or none of their shares in this offering. See “Plan of
Distribution.”

 

EXHIBIT B

   1     

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Name of Selling Stockholder

--------------------------------------------------------------------------------

   Number of Shares Owned
Prior to Offering

--------------------------------------------------------------------------------

   Maximum Number of Shares
to be Sold Pursuant to this
Prospectus

--------------------------------------------------------------------------------

   Number of Shares Owned
After Offering

--------------------------------------------------------------------------------

Peninsula Catalyst Fund, L.P.         76,125    0 Peninsula Catalyst Fund QP,
L.P.         186,375    0 Peninsula Fund, L.P. (2)         712,500    0
Lagunitas Partners LP         274,800    0 Gruber & McBaine International     
   250,350    0 Hamilton College         136,500    0 Wallace Foundation        
72,750    0 Donaghy Sales, Inc.         45,600    0 Gruber Family Foundation   
     48,450    0 Jon D. & Linda W. Gruber Trust         90,900    0 Jon D. &
Linda W. Gruber Trust         10,650    0 J. Patterson McBaine         45,000   
0 Dolphin Offshore Partners, L.P.         300,000    0 Amphora Limited        
750,000    0 Myron A. Wick, III         23,850    0 Charles A. McGettigan     
   23,850    0 David Buckley         6,000    0 Dennis Shogren         8,100   
0 Ron Savona         2,400    0

 

EXHIBIT B

   2     

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Name of Selling Stockholder

--------------------------------------------------------------------------------

   Number of Shares Owned
Prior to Offering

--------------------------------------------------------------------------------

   Maximum Number of Shares
to be Sold Pursuant to this
Prospectus

--------------------------------------------------------------------------------

   Number of Shares Owned
After Offering

--------------------------------------------------------------------------------

Karen Andreasen         2,400    0 Rick Bartolotti         2,400    0

 

EXHIBIT B

   3     

--------------------------------------------------------------------------------

 

PLAN OF DISTRIBUTION

 

The selling securityholders, or their pledgees, donees, transferees, or any of
their successors in interest selling shares received from a named selling
securityholder as a gift, partnership distribution or other non-sale-related
transfer after the date of this prospectus (all of whom may be selling
securityholders), may sell the securities from time to time on any stock
exchange or automated interdealer quotation system on which the securities are
listed, in the over-the-counter market, in privately negotiated transactions or
otherwise, at fixed prices that may be changed, at market prices prevailing at
the time of sale, at prices related to prevailing market prices or at prices
otherwise negotiated. The selling securityholders may sell the securities by one
or more of the following methods, without limitation:

 

(a) block trades in which the broker or dealer so engaged will attempt to sell
the securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction;

 

(b) purchases by a broker or dealer as principal and resale by the broker or
dealer for its own account pursuant to this prospectus;

 

(c) an exchange distribution in accordance with the rules of any stock exchange
on which the securities are listed;

 

(d) ordinary brokerage transactions and transactions in which the broker
solicits purchases;

 

(e) privately negotiated transactions;

 

(f) short sales;

 

(g) through the writing of options on the securities, whether or not the options
are listed on an options exchange;

 

(h) through the distribution of the securities by any selling securityholder to
its partners, members or stockholders;

 

(i) one or more underwritten offerings on a firm commitment or best efforts
basis;

 

(j) any combination of any of these methods of sale; and

 

(k) any other method permitted pursuant to applicable law.

 

The selling securityholders may also transfer the securities by gift. We do not
know of any arrangements by the selling securityholders for the sale of any of
the securities.

 

The selling securityholders may engage brokers and dealers, and any brokers or
dealers may arrange for other brokers or dealers to participate in effecting
sales of the securities.

 

PLAN OF DISTRIBUTION

   1     

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These brokers, dealers or underwriters may act as principals, or as an agent of
a selling securityholder. Broker-dealers may agree with a selling securityholder
to sell a specified number of the securities at a stipulated price per security.
If the broker-dealer is unable to sell securities acting as agent for a selling
securityholder, it may purchase as principal any unsold securities at the
stipulated price. Broker-dealers who acquire securities as principals may
thereafter resell the securities from time to time in transactions in any stock
exchange or automated interdealer quotation system on which the securities are
then listed, at prices and on terms then prevailing at the time of sale, at
prices related to the then-current market price or in negotiated transactions.
Broker-dealers may use block transactions and sales to and through
broker-dealers, including transactions of the nature described above. The
selling securityholders may also sell the securities in accordance with Rule 144
under the Securities Act of 1933, as amended, rather than pursuant to this
prospectus, regardless of whether the securities are covered by this prospectus.

 

From time to time, one or more of the selling securityholders may pledge,
hypothecate or grant a security interest in some or all of the securities owned
by them. The pledgees, secured parties or persons to whom the securities have
been hypothecated will, upon foreclosure in the event of default, be deemed to
be selling securityholders. As and when a selling securityholder takes such
actions, the number of securities offered under this prospectus on behalf of
such selling securityholder will decrease. The plan of distribution for that
selling securityholder’s securities will otherwise remain unchanged.

 

To the extent required under the Securities Act of 1933, the aggregate amount of
selling securityholders’ securities being offered and the terms of the offering,
the names of any agents, brokers, dealers or underwriters and any applicable
commission with respect to a particular offer will be set forth in an
accompanying prospectus supplement. Any underwriters, dealers, brokers or agents
participating in the distribution of the securities may receive compensation in
the form of underwriting discounts, concessions, commissions or fees from a
selling securityholder and/or purchasers of selling securityholders’ securities
of securities, for whom they may act (which compensation as to a particular
broker-dealer might be in excess of customary commissions).

 

The selling securityholders and any underwriters, brokers, dealers or agents
that participate in the distribution of the securities may be deemed to be
“underwriters” within the meaning of the Securities Act of 1933, and any
discounts, concessions, commissions or fees received by them and any profit on
the resale of the securities sold by them may be deemed to be underwriting
discounts and commissions.

 

A selling securityholder may enter into hedging transactions with broker-dealers
and the broker-dealers may engage in short sales of the securities in the course
of hedging the positions they assume with that selling securityholder,
including, without limitation, in connection with distributions of the
securities by those broker-dealers. The selling securityholders may also sell
shares of Common Stock short and deliver shares of Common Stock covered by this
prospectus to close out short positions and to return borrowed shares in
connection with such short sales. A selling securityholder may enter into option
or other transactions with broker-dealers that involve the delivery of the
securities offered hereby to the broker-dealers, who may then resell or
otherwise transfer those securities. A selling securityholder may also loan or
pledge the securities offered hereby to a broker-dealer and the

 

PLAN OF DISTRIBUTION

   2     

--------------------------------------------------------------------------------

broker-dealer may sell the securities offered hereby so loaned or upon a default
may sell or otherwise transfer the pledged securities offered hereby.

 

The selling securityholders and other persons participating in the sale or
distribution of the securities will be subject to applicable provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, including Regulation M. This regulation may limit the timing of
purchases and sales of any of the securities by the selling securityholders and
any other person. The anti-manipulation rules under the Securities Exchange Act
of 1934 may apply to sales of securities in the market and to the activities of
the selling securityholders and their affiliates. Furthermore, Regulation M may
restrict the ability of any person engaged in the distribution of the securities
to engage in market-making activities with respect to the particular securities
being distributed for a period of up to five business days before the
distribution. These restrictions may affect the marketability of the securities
and the ability of any person or entity to engage in market-making activities
with respect to the securities.

 

We have agreed to indemnify in certain circumstances the selling securityholders
and any brokers, dealers and agents who may be deemed to be underwriters, if
any, of the securities covered by the registration statement, against certain
liabilities, including liabilities under the Securities Act of 1933. The selling
securityholders have agreed to indemnify us in certain circumstances against
certain liabilities, including liabilities under the Securities Act of 1933.

 

The securities offered hereby were originally issued to the selling
securityholders pursuant to an exemption from the registration requirements of
the Securities Act of 1933, as amended. We agreed to register the securities
under the Securities Act of 1933, and to keep the registration statement of
which this prospectus is a part effective until the date on which the selling
securityholders have sold all of the securities. We have agreed to pay all
expenses in connection with this offering, including the fees and expenses of
counsel or other advisors to the selling securityholders, but not including
underwriting discounts, concessions, commissions or fees of the selling
securityholders.

 

We will not receive any proceeds from sales of any securities by the selling
securityholders.

 

We cannot assure you that the selling securityholders will sell all or any
portion of the securities offered hereby.

 

PLAN OF DISTRIBUTION

   3