Document:

Exhibit
        10.63

       

    

    REAFFIRMATION
      AND RATIFICATION AGREEMENT

     

    As
      of
      February 29, 2008

     

    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

     

    Ladies
      and Gentlemen:

     

    Reference
      is made to (a) the Securities Purchase Agreement, dated as of October 31, 2006
      (as amended, modified and supplemented from time to time, the “First
      Purchase Agreement”)
      by and
      between Modtech Holdings, Inc. (the “Company”)
      and
      Laurus Master Fund, Ltd. (“Laurus”);
      (b)
      the Securities Purchase Agreement, dated as of December 28, 2006 (as amended,
      modified and supplemented from time to time, the “Second
      Purchase Agreement,”
      together with the October Purchase Agreement, the “Purchase
      Agreements”)
      by and
      between the Company and Laurus; (c) the Related Agreements (as defined in the
      Purchase Agreements), (d) the Master Security Agreement, dated as of October
      31,
      2006 (as amended, modified and supplemented from time to time, the “Security
      Agreement”),
      by
      and between the Company and Laurus; (e) the Intellectual Property Security
      Agreement, dated as of October 31, 2006, made by the Company in favor of Laurus
      (as amended, modified or supplemented from time to time, the “IP
      Security Agreement”);
      (f)
      the Restricted Account Agreement dated as of October 31, 2006 by and among
      the
      Company, Laurus and North Fork Bank (as amended, modified and supplemented
      from
      time to time, the “Restricted
      Account Agreement”);
      and
      (g) the side letter agreement regarding restricted cash dated as of October
      31,
      2006 made by the Company in favor of Laurus (as amended , modified and/or
      supplemented from time to time, the “Side
      Letter”;
      and
      collectively with the Purchase Agreements, the Related Agreements, the Master
      Security Agreement, the IP Security Agreement, and the Restricted Account
      Agreement, each an “Existing
      Agreement”
and
      collectively, the “Existing
      Agreements”).

     

    Laurus
      has assigned a portion of its rights under the Existing Agreement to 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”).

     

    To
      induce
      the Lenders to enter into an Amendment and Waiver Agreement dated as of the
      date
      hereof among the Lenders and the Company (the “Amendment Agreement”),
      the
      Company hereby:

    

    (a)
      represents
      and warrants to the Lenders that it has reviewed and approved the terms and
      provisions of (i) the Amendment; (ii) the Additional Secured Term Notes (as
      such
      term is defined in the Amendment ), (iii) the Additional Common Stock Warrants
      (as such term is defined in the Amendment and (iv) the Additional Registration
      Rights Agreements (as such term is defined in the “Amendment”) (the documents
      listed in items (i) through (iv) of this paragraph are collectively hereinafter
      referred to as the “Additional
      Documents”);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) acknowledges,
      ratifies and confirms that, except as expressly modified by the Amendment
      Documents, all of the terms, conditions, representations and covenants contained
      in the Existing Agreements are in full force and effect and shall remain in
      full
      force and effect after giving effect to the execution and effectiveness of
      the
      Amendment Documents;

     

    (c) acknowledges,
      ratifies and confirms that the defined term “Obligations” under the Master
      Security Agreement and the IP Security Agreement, include, without limitation,
      all obligations and liabilities of the Company under the Amendment Documents
      and
      the Existing Agreements, as applicable, and all other obligations and
      liabilities of each of the Company to the Lenders (including interest accruing
      after the filing of any petition in bankruptcy, or the commencement of any
      insolvency, reorganization or like proceeding, whether or not a claim for
      post-filing or post-petition interest is allowed or allowable in such
      proceeding), whether now existing or hereafter arising, direct or indirect,
      liquidated or unliquidated, absolute or contingent;

     

    (d) acknowledges
      and confirms that (i) the occurrence of an Event of Default under any of the
      Amendment Documents shall constitute an Event of Default under the Existing
      Agreements and (ii) the occurrence of an Event of Default under any of the
      Existing Agreements shall constitute an Event of Default under the Amendment
      Documents;

     

    (e) represents
      and warrants that no offsets, counterclaims or defenses exist as of the date
      hereof with respect to any of the Company’s obligations under any of the
      Existing Agreements;

     

    (f) acknowledges,
      ratifies and confirms (i) the grant by the Company to the Lenders of a security
      interest and lien in the assets of the Company as more specifically set forth
      in
      the Existing Agreements, as applicable (the “Security
      Interest Grants”)
      and
      (ii) that the Security Interest Grants secure all the Obligations; 

     

    (g) represents
      and warrants that all of the representations made by or on behalf of the Company
      in the Existing Agreements are true and correct in all material respects on
      and
      as of the date hereof;

     

    (h) releases,
      remises, acquits and forever discharges each Lender and each Lender’s employees,
      agents, representatives, consultants, attorneys, fiduciaries, officers,
      directors, partners, predecessors, successors and assigns, subsidiary
      corporations, parent corporations, and related corporate divisions (all of
      the
      foregoing hereinafter called the “Released
      Parties”),
      from
      any and all actions and causes of action, judgments, executions, suits, debts,
      claims, demands, liabilities, obligations, damages and expenses of any and
      every
      character, known or unknown, direct and/or indirect, at law or in equity, of
      whatsoever kind or nature, for or because of any matter or things done, omitted
      or suffered to be done by any of the Released Parties in any way directly or
      indirectly arising out of or in any way connected to this Reaffirmation and
      Ratification Agreement, the Existing Agreements, the Amendment Documents and
      any
      other document, instrument or agreement made by the undersigned in favor of
      the
      Lenders, in each case arising prior to and including the date of execution
      hereof.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    This
      Reaffirmation and Ratification Agreement may be executed in any number of
      counterparts, each of which when so executed shall be deemed to be an original,
      and all which when taken together shall constitute one and the same
      agreement.

     

    [Remainder
      of this page intentionally left blank.]

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    This
      Reaffirmation and Ratification Agreement shall be governed by and construed
      in
      accordance with the laws of the State of New York.

     

    
      	
              Very
                truly yours,

            
	 
	
              MODTECH
                HOLDINGS, INC.

            
	 
	
              By: 

            	
              /s/
                Kenneth S. Cragun

            
	
              Name:
                Kenneth S. Cragun

            
	
              Title:    Chief
                Financial Officer

            

    

     

    
      	
              ACCEPTED
                AND AGREED TO:

            
	 
	
              LAURUS
                MASTER FUND, LTD.

            
	
              By:  

            	
              Laurus
                Capital Management, LLC,

            
	
            	
              its
                investment manager

            
	 	 
	
              By:

            	
              /s/
                Patrick Regan

            
	
              Name:
                Patrick Regan

            
	
              Title:    Authorized
                Signatory

            
	 	 
	
              VALENS
                U.S. SPV I, LLC

            
	
              By:
                

            	
              Valens
                Capital Management, LLC,

            
	
            	
              its
                investment manager

            
	 	 
	
              By:

            	
              /s/
                Patrick Regan

            
	
              Name:
                Patrick Regan

            
	
              Title:    Authorized
                Signatory

            
	 	 
	
              VALENS
                OFFSHORE SPV I, LTD.

            
	
              By:
                

            	
              Valens
                Capital Management, LLC,

            
	
            	
              its
                investment manager

            
	 	 
	
              By:

            	
              /s/
                Patrick Regan

            
	
              Name:
                Patrick Regan

            
	
              Title:    Authorized
                SignatoryExhibit
        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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    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]

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    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]

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	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

            

    

     

    
      
        
        

      

      
        5

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