Unassociated Document


    


     

    Exhibit
      10.1

     

    CONVERSION
      AND REPURCHASE AGREEMENT

     

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

     

    WHEREAS,
      the Company and the Investor entered into that certain Securities Purchase
      Agreement, dated as of December 31, 2004, as amended (the "Securities
      Purchase Agreement"),
      pursuant to which, among other things, the Investor purchased from the Company
      a
      Senior Secured Convertible Note, dated as of December 31, 2004, which note
      was
      exchanged for an Amended and Restated Senior Secured Convertible Note dated
      as
      of August 5, 2005 (the "Note"),
      which
      is convertible into shares of the Company's common stock, par value $0.01 per
      share (the "Common
      Stock"),
      in
      accordance with the terms thereof. Capitalized terms used herein and not
      otherwise defined herein shall have the respective meanings ascribed to them
      in
      the Note.

     

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

     

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

     

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

     

    Section
      1.
      Repurchase and Conversion.

     

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

     

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

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

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

     

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

     

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

     

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

     

    Section
      3.
      Representations And Warranties. 

     

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

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

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

     

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

     

    (d) Solvency.
      Neither
      the Company nor any of its Subsidiaries has taken any steps to seek protection
      pursuant to any bankruptcy law nor does the Company have any knowledge or reason
      to believe that its creditors intend to initiate involuntary bankruptcy
      proceedings or any actual knowledge of any fact that would reasonably lead
      a
      creditor to do so. The Company and its Subsidiaries, individually and on a
      consolidated basis, are not as of the date hereof, and after giving effect
      to
      the transactions contemplated hereby to occur at the Closing, will not be
      Insolvent (as defined below). For purposes of this Section 3(d), "Insolvent"
      means,
      with respect to any Person (i) the present fair saleable value of such Person's
      assets is less than the amount required to pay such Person's total Indebtedness,
      (ii) such Person is unable to pay its debts and liabilities, subordinated,
      contingent or otherwise, as such debts and liabilities become absolute and
      matured, (iii) such Person intends to incur or believes that it will incur
      debts
      that would be beyond its ability to pay as such debts mature or (iv) such Person
      has unreasonably small capital with which to conduct the business in which
      it is
      engaged as such business is now conducted and is proposed to be
      conducted

     

    Section
      4.
      Conditions to Investor's Obligations Hereunder. The
      obligations of the Investor to the Company hereunder are subject to the
      satisfaction of each of the following conditions,
      provided
      that
      these conditions are for Investor’s sole benefit and may be waived by Investor
      at any time in its sole discretion by providing the Company with prior written
      consent thereof.

     

    (a) The
      Company shall have executed this Agreement and the Registration Rights Agreement
      and delivered the same to the Investor.

     

    (b) The
      Company shall have delivered the consent of Bank
      of
      America, N.A.
      in the
      form attached hereto as Exhibit
      A
      to the
      Investor.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (c) The
      Company shall have paid Schulte Roth & Zabel LLP the Investor Counsel
      Expense.

     

    (d) There
      has
      been no material adverse change and no material adverse development in the
      business, properties, operations, condition (financial or otherwise), results
      of
      operations or prospects of the Company or its Subsidiaries.

     

    Section
      5.
      Covenants.

     

    (a) Disclosure
      of Transactions and Other Material Information.
      

     

    (1) On
      or
      before 8:30 a.m., New York Time, on the
      first
      (1st)
      Business Day following the date of this Agreement, the Company shall have filed
      a Current Report on Form 8-K (i) describing the terms of the transactions
      contemplated by this Agreement and attaching a copy of this Agreement and (ii)
      disclosing any other any material, nonpublic information regarding the Company
      or any of its Subsidiaries provided to the Investor (other than as required
      by
      the immediately succeeding sentence) by the Company or any Subsidiary or any
      of
      its or their respective officers, directors, employees and agents which had
      not
      been previously disclosed by the Company. On or before 8:30 a.m., New York
      Time,
      on the second (2nd)
      Business Day following the date of this Agreement, the Company shall have filed
      a Current Report on Form 8-K describing
      the material terms of the new financing between the Company and Laurus Master
      Fund, Ltd.

     

    (2) The
      Company shall not, and shall cause each of its Subsidiaries and its and each
      of
      their respective officers, directors, employees and agents, not to, provide
      the
      Investor with any material, nonpublic information regarding the Company or
      any
      of its Subsidiaries from and after the filing of the 8-K Filing with the SEC
      without the express written consent of the Investor.

     

    (b) Fees
      and Expenses.
      At the
      Closing, the Company shall reimburse the Investor for its reasonable legal
      fees
      and expenses in connection with the preparation and negotiation of this
      Agreement by paying any such amount to Schulte Roth & Zabel LLP (the
      "Investor
      Counsel Expense").
      The
      Company shall pay all stamp and other taxes and duties levied in connection
      with
      the issuance of the Conversion Shares. The Company shall also reimburse the
      Investor in an amount up to $10,000 for its reasonable legal fees and expenses
      in connection with the preparation and delivery of any opinion of Schulte Roth
      & Zabel LLP required pursuant to Section 5(c) below.

     

    (c) Removal
      of Legends.
      The
      Company shall use its best efforts, and cooperate in any way with the Investor,
      to effectuate the removal of the restrictive legends on the 189,189 shares
      (the
      "Restricted
      Shares")
      of
      Common Stock issued to the Investor in connection with the partial conversion
      on
      May 4, 2006 of the Note. On or prior to December 31, 2006, if the Company has
      received a opinion from Schulte Roth & Zabel LLP, in a form and substance
      reasonably acceptable to the Company, opining that the Restricted Shares are
      eligible for resale pursuant to Rule 144(k) of the Securities Act of 1933,
      as
      amended, the Company shall deliver to the Transfer Agent, with a copy to the
      Investor, a signed written instruction directing the Transfer Agent to remove
      the restrictive legends on the Restricted Shares on December 31, 2006. The
      Company shall also register the Restricted Shares on the registration statement
      filed by the Company in accordance with the terms of the Registration Rights
      Agreement.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    Section
      6.
      Miscellaneous.

     

    (a) Governing
      Law; Jurisdiction; Jury Trial.
      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 submits to the non-exclusive
      jurisdiction of the state and federal courts sitting in The City of New York,
      Borough of Manhattan, for the adjudication of any dispute hereunder or in
      connection herewith or with any transaction contemplated hereby or discussed
      herein, and hereby irrevocably waives, and agrees not to assert in any suit,
      action or proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or proceeding is brought
      in an inconvenient forum or that the venue of such suit, action or proceeding
      is
      improper. 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.
      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 WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
      HEREBY. 

     

    (b) Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party;
      provided that a facsimile signature shall be considered due execution and shall
      be binding upon the signatory thereto with the same force and effect as if
      the
      signature were an original, not a facsimile signature.

     

    (c) Headings.
      The
      headings of this Agreement are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Agreement.

     

    (d) Severability.
      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.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (e) No
      Third Party Beneficiaries.
      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.

     

    (f) No
      Strict Construction.
      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.

     

    (g) Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and assigns in accordance with the terms of the
      Securities Purchase Agreement.

     

    (h) Further
      Assurances.
      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 the 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.

     

    (i) Survival.
      The
      representations and warranties of the Company and the Investor contained herein
      and the agreements and covenants set forth herein shall survive the
      Closing

     

    (j) Remedies.
      The
      Investor shall have all rights and remedies set forth in the Transaction
      Documents and all rights and remedies which such holders have been granted
      at
      any time under any other agreement or contract and all of the rights which
      such
      holders have under any law. Any Person having any rights under any provision
      of
      this Agreement shall be entitled to enforce such rights specifically (without
      posting a bond or other security), to recover damages by reason of any breach
      of
      any provision of this Agreement and to exercise all other rights granted by
      law.
      Furthermore, the Company recognizes that in the event that it fails to perform,
      observe, or discharge any or all of its obligations under this Agreement, any
      remedy at law may prove to be inadequate relief to the Investor. The Company
      therefore agrees that the Investor shall be entitled to seek temporary and
      permanent injunctive relief in any such case without the necessity of proving
      actual damages and without posting a bond or other security.

     

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    IN
      WITNESS WHEREOF,
      the
      Company and the Investor have caused their respective signature page to this
      Conversion and Repurchase Agreement to be duly executed as of the date first
      written above.

     

    


     

    
      	 	
              MODTECH
                HOLDINGS, INC.

               

               

            
	 	
              By:

            	 
	 	 	
              Name:
                

            
	 	 	
              Title:
                

            


    

    


     


    
      
         

      

      
         

        
          

        

      

      
         

        
          


           

        

      

    



    IN
      WITNESS WHEREOF,
      the
      Company and the Investor have caused their respective signature page to this
      Conversion and Repurchase Agreement to be duly executed as of the date first
      written above.

     

    
      	 	
              AMPHORA
                LIMITED

            
	 	
              By:
                Amaranth Advisors L.L.C.,

            
	 	 	
              Its
                Trading Advisor

               

               

            
	 	
              By:

            	 
	 	 	
              Name:
                

            
	 	 	
              Title:
                

            


    

    


     


    
      
         

      

      
         

        
          

        

      

      
         

        
          


           

        

      

    



    Exhibit
      A

     

    Form
      of Bank of America, N.A. Consent