Exhibit 10.64
 
LAURUS MASTER FUND, LTD.
VALENS U.S. SPV I, LLC
VALENS OFFSHORE SPV I, LTD.
335 Madison Avenue, 10the Floor
New York, New York 10017
 
February 29, 2008
 
Modtech Holdings, Inc.
2830 Barrett Avenue
Perris, California 92571
Attention: Chief Financial Officer
 
Ladies and Gentlemen:
 
Reference is made to that certain Amendment and Waiver Agreement (the “Amendment
Agreement”) dated as of the date hereof among Modtech Holdings, Inc. (the
“Company”), Laurus Master Fund, Ltd. (“Laurus”), Valens U.S. SPV I, LLC (“Valens
US”) and Valens Offshore SPV I, Ltd. (“Valens Offshore,” together with Laurus
and Valens US, each a “Lender,” collectively, the “Lenders”); (ii) the Common
Stock Warrant dated as of the date hereof by the Company in favor of Laurus for
2,537,657 shares of the Company’s common stock; (iii) the Common Stock Warrant
dated as of the date hereof by the Company in favor of Valens US for 195,935
shares of the Company’s common stock; (iv) the Common Stock Warrant dated as of
the date hereof by the Company in favor of Valens Offshore for 266,408 shares of
the Company’s common stock (the documents listed in items (ii) through (iv) are
collectively hereinafter referred to as the “Warrants”). Defined terms not
otherwise defined in this letter agreement (the “Letter Agreement”) shall have
the meanings set forth in the Amendment Agreement.
 
The Lenders hereby irrevocably agree with the Company that for the period
commencing on the date hereof and ending on May 1, 2008 (such period, the
“Restriction Period”), except as set forth herein, no Lender shall directly or
indirectly offer, sell, contract to sell, hypothecate, pledge or otherwise
dispose of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by such Lender or any affiliate of such Lender or any person in
privity with such Lender) (each, a “Transfer”), including the filing (or
participation in the filing) of a registration statement with the Securities and
Exchange Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), with respect to, any shares of common stock of the Company (the “Common
Stock”) or securities that entitle such Lender to acquire shares of the Common
Stock beneficially owned, held or hereafter acquired by such Lender (together
with the Common Stock, the “Securities”). Beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act. In order to
enforce this agreement, the Company may impose irrevocable stop-transfer
instructions preventing BNY Mellon Shareholder Services, the Company’s transfer
agent (the “Transfer Agent”), from effecting any actions in violation of this
Letter Agreement.
 

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The restrictions imposed by this Letter Agreement shall (i) terminate following
such time that the Company shall effect a reorganization, consolidate with or
merge into any other entity (where the Company is not the surviving entity) or
in the event that the Company transfers all or substantially all of its
properties and assets and (ii) not restrict any Lender from enforcing any of its
rights and remedies with respect to the Common Stock under Warrants.
 
Notwithstanding the foregoing restrictions, any Lender shall be permitted to
sell, on any trading day during the Restriction Period, shares of the Common
Stock in the amount of up to twenty percent (20%) of the average daily trading
volume on such trading day.
 
Notwithstanding the foregoing restrictions, (i) each Lender is permitted to
pledge or otherwise collateralize the Securities as part of a commercial or
margin loan against all or substantially all of such Lender’s general portfolio
of securities and (ii) the Company is required to register the Securities in
accordance with the Amendment Agreement and/or any Registration Rights Agreement
entered into in connection with the Warrants, but the fact of such registration
shall not serve to release the Lenders from the restrictions on Transfer
otherwise contained herein.
 
The Lenders hereby represent that each Lender has the power and authority to
execute, deliver and perform this Letter Agreement, that each Lender has
received adequate consideration therefor and that each Lender will indirectly
benefit from the closing of the transaction contemplated by the Amendment
Agreement.
 
This Letter Agreement may not be amended or otherwise modified in any respect
without the written consent of each of the Company and the Lenders. This Letter
Agreement shall be construed and enforced in accordance with the laws of the
State of New York without regard to the principles of conflict of laws. Each of
the Lenders and the Company hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court sitting in the Southern
District of New York and the courts of the State of New York located in
Manhattan, for the purposes of any suit, action or proceeding arising out of or
relating to this Letter Agreement, and hereby waives, and agrees not to assert
in any such suit, action or proceeding any claim that (i) it is not personally
subject to the jurisdiction of such court, (ii) the suit, action or proceeding
is brought in an inconvenient forum, or (iii) the venue of the suit, action or
proceeding is improper. Each of the Lenders and the Company hereby waives
personal service of process and consents to process being served in any suit,
action or proceeding relating to this Letter Agreement by receiving a copy
thereof sent to such party at the address beneath its signature hereto and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Each of the Lenders and the Company hereby waives any right
to a trial by jury. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each of the Lenders
and the Company agrees and understands that no issuance or sale of the
Securities is created or intended by virtue of this Letter Agreement.
 
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This Letter Agreement shall be binding on all respective successors and assigns
of the Lenders and the Company.
 
[Remainder of Page Intentionally Left Blank; Signatures Follow]
 
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This Letter Agreement may be executed in two or more counterparts, all of which
when taken together may be considered one and the same agreement.

Very truly yours,   LAURUS MASTER FUND, LTD.
By:  
Laurus Capital management, LLC, its
 
investment manager
   
By:
/s/ Patrick Regan
Name: Patrick Regan Title:   Authorized Signatory   Address for Notice:   c/o
Laurus Capital Management, LLC 335 Madison Avenue, 10th Floor New York, New York
10017 Attn:  Portfolio Services   VALENS U.S. SPV I, LLC
By:
Valens Capital management, LLC, its
 
investment manager
   
By:
/s/ Patrick Regan
Name:  Patrick Regan Title:     Authorized Signatory   Address for Notice:   c/o
Valens Capital Management, LLC 335 Madison Avenue, 10th Floor New York, New York
10017
Attn:  Portfolio Services

 
[Additional Signatures Follow]
 
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VALENS OFFSHORE SPV I, LTD.
By:  
Valens Capital management, LLC, its
investment manager
   
By:
/s/ Patrick Regan
Name:  Patrick Regan Title:     Authorized Signatory   Address for Notice:   c/o
Valens Capital Management, LLC 335 Madison Avenue, 10th Floor New York, New York
10017 Attn: Portfolio Services

Acknowledged and agreed to
as of the date set forth above:

MODTECH HOLDINGS, INC.
 
By: 
/s/ Kenneth S. Cragun
Name: Kenneth S. Cragun
Title:    Chief Financial Officer
 
Address for Notice:
 
2830 Barrett Avenue
Perris, California 92571
Attention: Chief Financial Officer

 
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