Document:

Exhibit
        10.61

       

    

    REGISTRATION
      RIGHTS AGREEMENT

     

    This
      Registration Rights Agreement (this “Agreement”)
      is
      made and entered into as of February 29, 2008, by and between Modtech Holdings,
      Inc., a Delaware corporation (the “Company”),
      and
      Valens Offshore SPV I, Ltd. (the “Purchaser”).

     

    This
      Agreement is made pursuant to the Amendment and Waiver Agreement dated as of
      the
      date hereof among the Purchaser, Laurus Master Fund, Ltd., Valens U.S. SPV
      I,
      LLC and the Company (the “Amendment
      Agreement”),
      and
      pursuant to the Warrants referred to therein and defined below.

     

    The
      Company and the Purchaser hereby agree as follows:

     

    1. Definitions.
      Capitalized terms used and not otherwise defined herein that are shall have
      the
      meanings given to such terms in the Purchase Agreements (as defined in the
      Amendment Agreement). As used in this Agreement, the following terms shall
      have
      the following meanings:

     

    “Amendment
      Agreement”
      has the
      meaning given to such term in the Preamble hereto.

     

    “Commission”
      means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
      means
      shares of the Company’s common stock, par value $0.01 per share.

     

    “Effectiveness
      Date”
      means,
      (i) with respect to the initial Registration Statement required to be filed
      hereunder, a date no later than one hundred eighty (180) days following the
      date
      hereof and (ii) with respect to each additional Registration Statement required
      to be filed hereunder (if any), a date no later than sixty (60) days following
      the applicable Filing Date.

     

    “Effectiveness
      Period”
      has the
      meaning set forth in Section 2(a).

     

    “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended, and any successor
      statute.

     

    “Filing
      Date”
      means,
      with respect to the Registration Statement required to be filed hereunder in
      respect of the shares of Common Stock (a) issuable upon exercise of any Warrant,
      the date which is ninety (90) days after the issuance of such Warrant and (b)
      with the shares of Common Stock issuable to the Holder as a result of
      adjustments to the Exercise Price made pursuant to the Warrant or otherwise,
      thirty (30) days after the occurrence of such event.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Holder”
      or
“Holders”
      means
      the Purchaser or any of its affiliates or transferees to the extent any of
      them
      hold Registrable Securities, other than those purchasing Registrable Securities
      in a market transaction.

     

    “Indemnified
      Party”
      has the
      meaning set forth in Section 5(c).

     

    “Indemnifying
      Party”
      has the
      meaning set forth in Section 5(c).

     

    “Proceeding”
      means an
      action, claim, suit, investigation or proceeding (including, without limitation,
      an investigation or partial proceeding, such as a deposition), whether commenced
      or threatened.

     

    “Prospectus”
      means
      the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by such Registration Statement,
      and all other amendments and supplements to the Prospectus, including
      post-effective amendments, and all material incorporated by reference or deemed
      to be incorporated by reference in such Prospectus.

     

    “Registrable
      Securities”
      means
      the shares of Common Stock issued upon the exercise of any
      Warrants.

     

    “Registration
      Statement”
      means
      each registration statement required to be filed hereunder, including the
      Prospectus therein, amendments and supplements to such registration statement
      or
      Prospectus, including pre- and post-effective amendments, all exhibits thereto,
      and all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.

     

    “Rule
      144”
      means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

     

    “Rule
      415”
      means
      Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

     

    “Securities
      Act”
      means
      the Securities Act of 1933, as amended, and any successor statute.

     

    “Trading
      Market”
      means
      any of the NASD Over The Counter Bulletin Board, NASDAQ Capital Market, the
      NASDAQ National Markets System, the American Stock Exchange or the New York
      Stock Exchange

     

    “Warrants”
      means
      the Common Stock purchase warrants dated as of the date hereof issued pursuant
      to the Amendment Agreement.

     

    
      
        
        

      

      
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    2. Registration.

     

    (a) On
      or
      prior to the Filing Date, the Company shall prepare and file with the Commission
      a Registration Statement covering the Registrable Securities for a selling
      stockholder resale offering to be made on a continuous basis pursuant to Rule
      415. The Registration Statement shall be on Form S-3 (except if the Company
      is
      not then eligible to register for resale the Registrable Securities on Form
      S-3,
      in which case such registration shall be on another appropriate form in
      accordance herewith). The Company may include in a single registration statement
      the “Registrable Securities” defined under the Registration Rights Agreements in
      paragraphs 3 and 4 of Schedule 7(b) hereto, subject to the requirement that
      if
      at any time the Commission takes the position that the offering of some or
      all
      of the Registrable Securities in such combined Registration Statement is not
      eligible to be made on a delayed or continuous basis under the provisions of
      Rule 415, the Company shall remove from the Registration Statement that number
      of the Registrable Securities as defined in the Registration Rights Agreement
      described in paragraph 4 of Schedule 7(b) hereto as the Commission may require
      to assure the Company’s compliance with the requirements of Rule 415. The
      Company shall cause each Registration Statement to become effective and remain
      effective as provided herein. The Company shall use its best efforts to cause
      each Registration Statement to be declared effective under the Securities Act
      as
      promptly as possible after the filing thereof, but in any event no later than
      the Effectiveness Date. The Company shall use its reasonable commercial efforts
      to keep each Registration Statement continuously effective under the Securities
      Act until the date which is the earlier date of when (i) all Registrable
      Securities covered by such Registration Statement have been sold or (ii) all
      Registrable Securities covered by such Registration Statement may be sold
      immediately without registration under the Securities Act and without volume
      restrictions pursuant to Rule 144(k), (or its successor), as determined by
      the
      counsel to the Company pursuant to a written opinion letter to such effect,
      addressed and acceptable to the Company’s transfer agent and the affected
      Holders (the “Effectiveness
      Period”).

     

    
      
        
        

      

      
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    (b) If:
      (i)
      the Registration Statement is not filed on or prior to the Filing Date; (ii)
      the
      Registration Statement is not declared effective by the Commission by the
      Effectiveness Date; (iii) after the Registration Statement is filed with and
      declared effective by the Commission, the Registration Statement ceases to
      be
      effective (by suspension or otherwise) as to all Registrable Securities to
      which
      it is required to relate at any time prior to the expiration of the
      Effectiveness Period (without being succeeded immediately by an additional
      registration statement filed and declared effective) for a period of time which
      shall exceed thirty (30) days in the aggregate per year (defined as a period
      of
      365 days commencing on the date the Registration Statement is declared
      effective) or more than twenty (20) consecutive calendar days; or (iv) the
      Common Stock is not listed or quoted, or is suspended from trading on any
      Trading Market for a period of three (3) consecutive Trading Days (provided
      the
      Company shall not have been able to cure such trading suspension within thirty
      (30) days of the notice thereof or list the Common Stock on another Trading
      Market); (any such failure or breach being referred to as an “Event,”
and
      for purposes of clause (i) or (ii) the date on which such Event occurs, or
      for
      purposes of clause (iii) the date which such thirty (30) day or twenty (20)
      consecutive day period (as the case may be) is exceeded, or for purposes of
      clause (v) the date on which such three (3) Trading Day period is exceeded,
      being referred to as “Event Date”), then until the applicable Event is cured,
      the Company shall pay to each Holder an amount in cash, as liquidated damages
      and not as a penalty, equal to 1.0% for each thirty (30) day period (prorated
      for partial periods) on a daily basis of the original principal amount of the
      “Additional Note” (as defined in the Amendment Agreement) held by the Holder;
      provided that, the maximum aggregate amount of liquidated damages that may
      be
      charged to the Company pursuant to this Section 2(b) shall not exceed 10% of
      the
      initial principal amount of the Holder’s Additional Note. While such Event
      continues, such liquidated damages shall be paid not less often than each thirty
      (30) days. Any unpaid liquidated damages as of the date when an Event has been
      cured by the Company shall be paid within three (3) days following the date
      on
      which such Event has been cured by the Company. At its option, the Company
      may
      pay up to fifty percent (50%) of the liquidated damages (the “Equity
      Damage Amount”)
      by
      delivering from time to time to the Holder, which such deliveries shall occur
      simultaneously with delivery to the Holder of the cash portion of the liquidated
      damage amounts as required by this Section 2(b), warrants (the “New Warrants”)
      substantially identical to the Warrants (except that the per share exercise
      price under the New Warrants shall be equal to the par value of the Common
      Stock) to purchase that number of shares of Common Stock whose aggregate Fair
      Market Value (as hereafter defined) equals the Equity Damage Amount. For
      purposes hereof, “Fair
      Market Value”
shall
      mean the average of the closing price of the Common Stock for the ten (10)
      trading days immediately prior to issuance of the applicable New Warrants.
      The
      shares of Common Stock issuable upon exercise of any New Warrants shall be
      included within the definition of Registrable Securities and shall be included
      within (I) the initial Registration Statement if the liquidated damages arise
      from an Event occurring prior to the date such initial Registration Statement
      is
      declared effective by the SEC and (II) a new Registration Statement to be filed
      on or prior to the applicable Filing Date and declared effective by the SEC
      on
      or prior to the applicable Effectiveness Date, in the event the liquidated
      damages arise from an Event occurring after the date the initial Registration
      Statement is declared effective by the SEC.

     

    (c) Within
      three (3) business days of the Effectiveness Date, the Company shall cause
      its
      counsel to issue a blanket opinion in the form attached hereto as Exhibit A,
      to
      the transfer agent stating that the shares are subject to an effective
      registration statement and can be reissued free of restrictive legend upon
      notice of a sale by the Purchaser and confirmation by the Purchaser that it
      has
      complied with the prospectus delivery requirements, provided that the Company
      has not advised the transfer agent orally or in writing that the opinion has
      been withdrawn. Copies of the blanket opinion required by this Section 2(c)
      shall be delivered to the Purchaser within the time frame set forth
      above.

     

    3. Registration
      Procedures.
      If and
      whenever the Company is required by the provisions hereof to effect the
      registration of any Registrable Securities under the Securities Act, the Company
      will, as expeditiously as possible:

     

    (a) prepare
      and file with the Commission a Registration Statement with respect to such
      Registrable Securities, respond as promptly as possible to any comments received
      from the Commission, and use its best efforts to cause the Registration
      Statement to become and remain effective for the Effectiveness Period with
      respect thereto, and promptly provide to the Purchaser copies of all filings
      and
      Commission letters of comment relating thereto;

     

    
      
        
        

      

      
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    (b) prepare
      and file with the Commission such amendments and supplements to such
      Registration Statement and the Prospectus used in connection therewith as may
      be
      necessary to comply with the provisions of the Securities Act with respect
      to
      the disposition of all Registrable Securities covered by such Registration
      Statement and to keep such Registration Statement effective until the expiration
      of the Effectiveness Period applicable to such Registration
      Statement;

     

    (c) furnish
      to the Purchaser such number of copies of the Registration Statement and the
      Prospectus included therein (including each preliminary Prospectus) as the
      Purchaser reasonably may request to facilitate the public sale or disposition
      of
      the Registrable Securities covered by the Registration Statement;

     

    (d) use
      its
      best efforts to register or qualify the Purchaser’s Registrable Securities
      covered by such Registration Statement under the securities or “blue sky” laws
      of such jurisdictions within the United States as the Purchaser may reasonably
      request, provided, however, that the Company shall not for any such purpose
      be
      required to qualify generally to transact business as a foreign corporation
      in
      any jurisdiction where it is not so qualified or to consent to general service
      of process in any such jurisdiction;

     

    (e) list
      the
      Registrable Securities covered by such Registration Statement with any
      securities exchange on which the Common Stock of the Company is then
      listed;

     

    (f) promptly
      (and in any event within three (3) Business Days following such occurrence)
      notify the Purchaser at any time when a Prospectus relating thereto is required
      to be delivered under the Securities Act, of the happening of any event of
      which
      the Company has knowledge as a result of which the Prospectus contained in
      such
      Registration Statement, as then in effect, includes an untrue statement of
      a
      material fact or omits to state a material fact required to be stated therein
      or
      necessary to make the statements therein not misleading in light of the
      circumstances then existing; and

     

    (g) make
      available for inspection by the Purchaser and any attorney, accountant or other
      agent retained by the Purchaser, all publicly available, non-confidential
      financial and other records, pertinent corporate documents and properties of
      the
      Company, and cause the Company’s officers, directors and employees to supply all
      publicly available, non-confidential information reasonably requested by the
      attorney, accountant or agent of the Purchaser.

     

    4. Registration
      Expenses.
      All
      expenses relating to the Company’s compliance with Sections 2 and 3 hereof,
      including, without limitation, all registration and filing fees, printing
      expenses, fees and disbursements of counsel and independent public accountants
      for the Company, fees and expenses (including reasonable counsel fees) incurred
      in connection with complying with state securities or “blue sky” laws, fees of
      the NASD, transfer taxes, fees of transfer agents and registrars, fees of,
      and
      disbursements incurred by, one counsel for the Holders are called “Registration
      Expenses”. All selling commissions applicable to the sale of Registrable
      Securities, including any fees and disbursements of any special counsel to
      the
      Holders beyond those included in Registration Expenses, are called “Selling
      Expenses.” The Company shall only be responsible for all Registration
      Expenses.

     

    
      
        
        

      

      
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    5. Indemnification.

     

    (a) In
      the
      event of a registration of any Registrable Securities under the Securities
      Act
      pursuant to this Agreement, the Company will indemnify and hold harmless the
      Purchaser, and its officers, directors and each other person, if any, who
      controls the Purchaser within the meaning of the Securities Act, against any
      losses, claims, damages or liabilities, joint or several, to which the
      Purchaser, or such persons may become subject under the Securities Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any untrue statement or alleged
      untrue statement of any material fact contained in any Registration Statement
      under which such Registrable Securities were registered under the Securities
      Act
      pursuant to this Agreement, any preliminary Prospectus (unless connected in
      the
      final sale prospectus) or final Prospectus contained therein, or any amendment
      or supplement thereof, or arise out of or are based upon the omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein not misleading, and will reimburse
      the
      Purchaser, and each such person for any reasonable legal or other expenses
      incurred by them in connection with investigating or defending any such loss,
      claim, damage, liability or action; provided,
      however,
      that
      the Company will not be liable in any such case if and to the extent that any
      such loss, claim, damage or liability arises out of or is based upon an untrue
      statement or alleged untrue statement or omission or alleged omission so made
      in
      conformity with information furnished by or on behalf of the Purchaser or any
      such person in writing specifically for use in any such document.

     

    (b) In
      the
      event of a registration of the Registrable Securities under the Securities
      Act
      pursuant to this Agreement, the Purchaser will indemnify and hold harmless
      the
      Company, and its officers, directors and each other person, if any, who controls
      the Company within the meaning of the Securities Act, against all losses,
      claims, damages or liabilities, joint or several, to which the Company or such
      persons may become subject under the Securities Act or otherwise, insofar as
      such losses, claims, damages or liabilities (or actions in respect thereof)
      arise out of or are based upon any untrue statement or alleged untrue statement
      of any material fact which was furnished in writing by the Purchaser to the
      Company expressly for use in (and such information is contained in) the
      Registration Statement under which such Registrable Securities were registered
      under the Securities Act pursuant to this Agreement, any preliminary Prospectus
      or final Prospectus contained therein, or any amendment or supplement thereof,
      or arise out of or are based upon the omission or alleged omission to state
      therein a material fact required to be stated therein or necessary to make
      the
      statements therein not misleading, and will reimburse the Company and each
      such
      person for any reasonable legal or other expenses incurred by them in connection
      with investigating or defending any such loss, claim, damage, liability or
      action, provided,
      however,
      that
      the Purchaser will be liable in any such case if and only to the extent that
      any
      such loss, claim, damage or liability arises out of or is based upon an untrue
      statement or alleged untrue statement or omission or alleged omission so made
      in
      conformity with information furnished in writing to the Company by or on behalf
      of the Purchaser specifically for use in any such document. Notwithstanding
      the
      provisions of this paragraph, the Purchaser shall not be required to indemnify
      any person or entity in excess of the amount of the aggregate net proceeds
      received by the Purchaser in respect of Registrable Securities in connection
      with any such registration under the Securities Act.

     

    
      
        
        

      

      
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    (c) Promptly
      after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified
      Party”)
      of
      notice of the commencement of any action, such Indemnified Party shall, if
      a
      claim for indemnification in respect thereof is to be made against a party
      hereto obligated to indemnify such Indemnified Party (an “Indemnifying
      Party”),
      notify the Indemnifying Party in writing thereof, but the omission so to notify
      the Indemnifying Party shall not relieve it from any liability which it may
      have
      to such Indemnified Party other than under this Section 5(c) and shall only
      relieve it from any liability which it may have to such Indemnified Party under
      this Section 5(c) if and to the extent the Indemnifying Party is prejudiced
      by
      such omission. In case any such action shall be brought against any Indemnified
      Party and it shall notify the Indemnifying Party of the commencement thereof,
      the Indemnifying Party shall be entitled to participate in and, to the extent
      it
      shall wish, to assume and undertake the defense thereof with counsel
      satisfactory to such Indemnified Party, and, after notice from the Indemnifying
      Party to such Indemnified Party of its election so to assume and undertake
      the
      defense thereof, the Indemnifying Party shall not be liable to such Indemnified
      Party under this Section 5(c) for any legal expenses subsequently incurred
      by
      such Indemnified Party in connection with the defense thereof; if the
      Indemnified Party retains its own counsel, then the Indemnified Party shall
      pay
      all fees, costs and expenses of such counsel, provided,
      however,
      that,
      if the defendants in any such action include both the Indemnified Party and
      the
      Indemnifying Party and counsel for the Indemnified Party shall have reasonably
      concluded that there may be reasonable defenses available to the Indemnified
      Party which are different from or additional to those available to the
      Indemnifying Party or if counsel for the Indemnified Party shall have reasonably
      concluded that the interests of the Indemnified Party may reasonably be deemed
      to conflict with the interests of the Indemnifying Party, the Indemnified Party
      shall have the right to select one separate counsel and to assume such legal
      defenses and otherwise to participate in the defense of such action, with the
      reasonable expenses and fees of such separate counsel and other expenses related
      to such participation to be reimbursed by the Indemnifying Party as
      incurred.

     

    (d) In
      order
      to provide for just and equitable contribution in the event of joint liability
      under the Securities Act in any case in which either (i) the Purchaser, or
      any
      officer, director or controlling person of the Purchaser, makes a claim for
      indemnification pursuant to this Section 5 but it is judicially determined
      (by
      the entry of a final judgment or decree by a court of competent jurisdiction
      and
      the expiration of time to appeal or the denial of the last right of appeal)
      that
      such indemnification may not be enforced in such case notwithstanding the fact
      that this Section 5 provides for indemnification in such case, or (ii)
      contribution under the Securities Act may be required on the part of the
      Purchaser or such officer, director or controlling person of the Purchaser
      in
      circumstances for which indemnification is provided under this Section 5; then,
      and in each such case, the Company and the Purchaser will contribute to the
      aggregate losses, claims, damages or liabilities to which they may be subject
      (after contribution from others) in such proportion so that the Purchaser is
      responsible only for the portion represented by the percentage that the public
      offering price of its securities offered by the Registration Statement bears
      to
      the public offering price of all securities offered by such Registration
      Statement, provided,
      however,
      that,
      in any such case, (A) the Purchaser will not be required to contribute any
      amount in excess of the public offering price of all such securities offered
      by
      it pursuant to such Registration Statement; and (B) no person or entity guilty
      of fraudulent misrepresentation (within the meaning of Section 10(f) of the
      Act)
      will be entitled to contribution from any person or entity who was not guilty
      of
      such fraudulent misrepresentation.

     

    
      
        
        

      

      
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    6. Representations
      and Warranties.

     

    (a) The
      Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
      Act and, except with respect to certain matters which the Company has disclosed
      to the Purchaser on Schedule
      4.21
      to the
      Purchase Agreements, the Company has filed all proxy statements, reports,
      schedules, forms, statements and other documents required to be filed by it
      under the Exchange Act. The Company has filed (i) its Annual Report on Form
      10-K
      for its fiscal year ended December 31, 2006 and (ii) its Quarterly Report on
      Form 10-Q for the fiscal quarters ended March 31, 2007, June 30, 2007 and
      September 30, 2007 
      (collectively, the “SEC
      Reports”).
      Each
      SEC Report was, at the time of its filing, in substantial compliance with the
      requirements of its respective form and none of the SEC Reports, nor the
      financial statements (and the notes thereto) included in the SEC Reports, as
      of
      their respective filing dates, contained any untrue statement of a material
      fact
      or omitted to state a material fact required to be stated therein or necessary
      to make the statements therein, in light of the circumstances under which they
      were made, not misleading. The financial statements of the Company included
      in
      the SEC Reports comply as to form in all material respects with applicable
      accounting requirements and the published rules and regulations of the
      Commission or other applicable rules and regulations with respect thereto.
      Such
      financial statements have been prepared in accordance with generally accepted
      accounting principles (“GAAP”)
      applied on a consistent basis during the periods involved (except (i) as may
      be
      otherwise indicated in such financial statements or the notes thereto or (ii)
      in
      the case of unaudited interim statements, to the extent they may not include
      footnotes, customary year-end adjustments, or may be condensed) and fairly
      present in all material respects the financial condition, the results of
      operations and the cash flows of the Company and its subsidiaries, on a
      consolidated basis, as of, and for, the periods presented in each such SEC
      Report.

     

    (b) The
      Common Stock is listed or quoted, as applicable, for trading on the NASDAQ
      Global Market and, except as set forth below, satisfies all requirements for
      the
      continuation of such listing or quotation, as applicable, and the Company shall
      do all things necessary for the continuation of such listing or quotation,
      as
      applicable. Except as set forth below, the Company has not received any notice
      that its Common Stock will be delisted from or no longer be quoted on, as
      applicable, the NASDAQ Global Market (except for prior notices which have been
      fully remedied) or that the Common Stock does not meet all requirements for
      the
      continuation of such listing or quotation, as applicable. On January 16, 2008,
      the Company received a letter from The Nasdaq Stock Market notifying it that
      for
      the 30 consecutive business days preceding the date of the letter the bid price
      of the Company’s common stock had closed below the $1.00 per share minimum bid
      price required for continued inclusion on The Nasdaq Global Market pursuant
      to
      Nasdaq Marketplace Rule 4450(a) (5). In accordance with Nasdaq Marketplace
      Rule
      4450(e) (2), the Company has 180 calendar days from the date of the Nasdaq
      letter, or until July 14, 2008, to regain compliance with the minimum bid price
      rule. 

     

    (c) Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would cause
      the offering of the Securities pursuant to the Amendment Agreement to be
      integrated with prior offerings by the Company for purposes of the Securities
      Act which would prevent the Company from selling the Common Stock pursuant
      to
      Rule 506 under the Securities Act, or any applicable exchange-related
      stockholder approval provisions, nor will the Company or any of its affiliates
      or subsidiaries take any action or steps that would cause the offering of the
      Securities to be integrated with other offerings.

     

    
      
        
        

      

      
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    (d) The
      Warrants and the shares of Common Stock that the Purchaser may acquire pursuant
      to any Warrants are all restricted securities under the Securities Act as of
      the
      date of this Agreement. The Company will not issue any stop transfer order
      or
      other order impeding the sale and delivery of any of the Registrable Securities
      at such time as such Registrable Securities are registered for public sale
      or it
      has received an opinion of counsel that an exemption from registration is
      available, except as required by federal or state securities laws.

     

    (e) The
      Company understands the nature of the Registrable Securities issuable upon
      the
      exercise of any Warrants and recognizes that the issuance of such Registrable
      Securities may have a potential dilutive effect. The Company specifically
      acknowledges that its obligation to issue the Registrable Securities is binding
      upon the Company and enforceable regardless of the dilution such issuance may
      have on the ownership interests of other shareholders of the
      Company.

     

    (f) Except
      for agreements made in the ordinary course of business, there is no agreement
      that has not been filed with the Commission as an exhibit to a registration
      statement or to a form required to be filed by the Company under the Exchange
      Act, the breach of which could reasonably be expected to have a material and
      adverse effect on the Company and its subsidiaries, or would prohibit or
      otherwise interfere with the ability of the Company to enter into and perform
      any of its obligations under this Agreement in any material
      respect.

     

    (g) The
      Company will at all times have authorized and reserved a sufficient number
      of
      shares of Common Stock for the full exercise of the Warrants.

     

    (h) The
      Company shall provide written notice to each Holder of (i) the occurrence of
      each Discontinuation Event (as defined below) and (ii) the declaration of
      effectiveness by the SEC of each Registration Statement required to be filed
      hereunder, in each case within one (1) business day of the date of each such
      occurrence and/or declaration.

     

    7. Miscellaneous.

     

    (a) Remedies.
      In the
      event of a breach by the Company or by a Holder, of any of their respective
      obligations under this Agreement, each Holder or the Company, as the case may
      be, in addition to being entitled to exercise all rights granted by law and
      under this Agreement, including recovery of damages, will be entitled to
      specific performance of its rights under this Agreement.

     

    (b) No
      Piggyback on Registrations.
      Except
      as and to the extent set forth on Schedule 7(b) hereto, neither the Company
      nor
      any of its security holders (other than the Holders in such capacity pursuant
      hereto) may include securities of the Company in any Registration Statement
      other than the Registrable Securities, and the Company shall not after the
      date
      hereof enter into any agreement providing any such right for inclusion of shares
      in the Registration Statement to any of its security holders. Except as and
      to
      the extent specified in Schedule
      7(b)
      hereto,
      the Company has not previously entered into any agreement granting any
      registration rights with respect to any of its securities to any person or
      entity that have not been fully satisfied.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (c) Compliance.
      Each
      Holder covenants and agrees that it will comply with the prospectus delivery
      requirements of the Securities Act as applicable to it in connection with sales
      of Registrable Securities pursuant to each Registration Statement.

     

    (d) Discontinued
      Disposition.
      Each
      Holder agrees by its acquisition of such Registrable Securities that, upon
      receipt of a notice from the Company of the occurrence of a Discontinuation
      Event (as defined below), such Holder will forthwith discontinue disposition
      of
      such Registrable Securities under the applicable Registration Statement until
      such Holder’s receipt of the copies of the supplemented Prospectus and/or
      amended Registration Statement or until it is advised in writing (the
“Advice”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement. The Company may provide appropriate stop orders to
      enforce the provisions of this paragraph. For purposes of this Agreement, a
      “Discontinuation
      Event”
shall
      mean (i) when the Commission notifies the Company whether there will be a
“review”
of
      such
      Registration Statement and whenever the Commission comments in writing on such
      Registration Statement (the Company shall provide true and complete copies
      thereof and all written responses thereto to each of the Holders); (ii) any
      request by the Commission or any other Federal or state governmental authority
      for amendments or supplements to such Registration Statement or Prospectus
      or
      for additional information; (iii) the issuance by the Commission of any stop
      order suspending the effectiveness of such Registration Statement covering
      any
      or all of the Registrable Securities or the initiation of any Proceedings for
      that purpose; (iv) the receipt by the Company of any notification with respect
      to the suspension of the qualification or exemption from qualification of any
      of
      the Registrable Securities for sale in any jurisdiction, or the initiation
      or
      threatening of any Proceeding for such purpose; and/or (v) the occurrence of
      any
      event or passage of time that makes the financial statements included in such
      Registration Statement ineligible for inclusion therein or any statement made
      in
      such Registration Statement or Prospectus or any document incorporated or deemed
      to be incorporated therein by reference untrue in any material respect or that
      requires any revisions to such Registration Statement, Prospectus or other
      documents so that, in the case of such Registration Statement or Prospectus,
      as
      the case may be, it will not contain any untrue statement of a material fact
      or
      omit to state any material fact required to be stated therein or necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading.

     

    (e) Piggy-Back
      Registrations.
      If at
      any time after the date hereof there is not an effective Registration Statement
      covering all of the Registrable Securities required to be covered hereunder
      and
      the Company shall determine to prepare and file with the Commission a
      registration statement relating to an offering for its own account or the
      account of others under the Securities Act of any of its equity securities,
      other than on Form S-4 or Form S-8 (each as promulgated under the
      Securities Act) or their then equivalents relating to equity securities to
      be
      issued solely in connection with any acquisition of any entity or business
      or
      equity securities issuable in connection with stock option or other employee
      benefit plans, then the Company shall send to each Holder written notice of
      such
      determination and, if within fifteen (15) days after receipt of such notice,
      any
      such Holder shall so request in writing, the Company shall include in such
      registration statement all or any part of such Registrable Securities such
      Holder requests to be registered, to the extent the Company may do so without
      violating registration rights of others which exist as of the date of this
      Agreement, subject to customary underwriter cutbacks applicable to all holders
      of registration rights and subject to obtaining any required consent of any
      selling stockholder(s) to such inclusion under such registration
      statement.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (f) Amendments
      and Waivers.
      The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, unless the same shall be in writing
      and
      signed by the Company and the Holders of the then outstanding Registrable
      Securities. Notwithstanding the foregoing, a waiver or consent to depart from
      the provisions hereof with respect to a matter that relates exclusively to
      the
      rights of certain Holders and that does not directly or indirectly affect the
      rights of other Holders may be given by Holders of at least a majority of the
      Registrable Securities to which such waiver or consent relates; provided,
      however,
      that
      the provisions of this sentence may not be amended, modified, or supplemented
      except in accordance with the provisions of the immediately preceding
      sentence.

     

    (g) Notices.
      Any
      notice or request hereunder may be given to the Company or the Purchaser at
      the
      respective addresses set forth below or as may hereafter be specified in a
      notice designated as a change of address under this Section 7(g). Any notice
      or
      request hereunder shall be given by registered or certified mail, return receipt
      requested, hand delivery, overnight mail, Federal Express or other national
      overnight next day carrier (collectively, “Courier”)
      or
      telecopy (confirmed by mail). Notices and requests shall be, in the case of
      those by hand delivery, deemed to have been given when delivered to any party
      to
      whom it is addressed, in the case of those by mail or overnight mail, deemed
      to
      have been given three (3) business days after the date when deposited in the
      mail or with the overnight mail carrier, in the case of a Courier, the next
      business day following timely delivery of the package with the Courier, and,
      in
      the case of a telecopy, when confirmed. The address for such notices and
      communications shall be as follows:

     

    
      	
              If
                to the Company:

            	
              Modtech
                Holdings, Inc.

              2830
                Barrett Avenue

              Perris,
                California 92571

              Attention: Chief
                Financial Officer

              Facsimile:
                (951) 943-9655

            
	 	 
	
              with
                a copy to:

            	
              Haddan
                & Zepfel LLP

              500
                Newport Center Drive 

              Suite
                580

              Newport
                Beach, California 92660

              Attention:   Robert
                J. Zepfel, Esq.

              Facsimile:   (949)
                706-6060

            
	 	 
	
              If
                to a Purchaser:

            	
              To
                the address set forth under such Purchaser name on the signature
                pages
                hereto.

            
	 	 
	
              If
                to any other Person who is then

              the
                registered Holder:

            	
              To
                the address of such Holder as it appears in the stock transfer books
                of
                the Company

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    or
      such
      other address as may be designated in writing hereafter in accordance with
      this
      Section 7(g) by such Person.

     

    (h) Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. The Company may not assign its rights or obligations hereunder without
      the prior written consent of each Holder. Each Holder may assign their
      respective rights hereunder in the manner and to the persons and entities as
      permitted under the Purchase Agreements.

     

    (i) Execution
      and Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

     

    (j) Governing
      Law, Jurisdiction and Waiver of Jury Trial.
      THIS
      AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
      THE
      LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
      SUCH
      STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company hereby
      consents and agrees that the state or federal courts located in the County
      of
      New York, State of New York shall have exclusion jurisdiction to hear and
      determine any Proceeding between the Company, on the one hand, and the
      Purchaser, on the other hand, pertaining to this Agreement or to any matter
      arising out of or related to this Agreement; provided,
      that
      the Purchaser and the Company acknowledge that any appeals from those courts
      may
      have to be heard by a court located outside of the County of New York, State
      of
      New York, and further provided,
      that
      nothing in this Agreement shall be deemed or operate to preclude the Purchaser
      from bringing a Proceeding in any other jurisdiction to collect the obligations,
      to realize on the Collateral or any other security for the obligations, or
      to
      enforce a judgment or other court order in favor of the Purchaser. The Company
      expressly submits and consents in advance to such jurisdiction in any Proceeding
      commenced in any such court, and the Company hereby waives any objection which
      it may have based upon lack of personal jurisdiction, improper venue or
forum
      non conveniens.
      The
      Company hereby waives personal service of the summons, complaint and other
      process issued in any such Proceeding and agrees that service of such summons,
      complaint and other process may be made by registered or certified mail
      addressed to the Company at the address set forth in Section 7(g) and that
      service so made shall be deemed completed upon the earlier of the Company’s
      actual receipt thereof or three (3) days after deposit in the U.S. mails, proper
      postage prepaid. The parties hereto desire that their disputes be resolved
      by a
      judge applying such applicable laws. Therefore, to achieve the best combination
      of the benefits of the judicial system and of arbitration, the parties hereto
      waive all rights to trial by jury in any Proceeding brought to resolve any
      dispute, whether arising in contract, tort, or otherwise between the Purchaser
      and/or the Company arising out of, connected with, related or incidental to
      the
      relationship established between then in connection with this Agreement. If
      either party hereto shall commence a Proceeding to enforce any provisions of
      this Agreement, the Purchase Agreements, the Amendment Agreement or any other
      Related Agreement, then the prevailing party in such Proceeding shall be
      reimbursed by the other party for its reasonable attorneys’ fees and other costs
      and expenses incurred with the investigation, preparation and prosecution of
      such Proceeding.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (k) Cumulative
      Remedies.
      The
      remedies provided herein are cumulative and not exclusive of any remedies
      provided by law.

     

    (l) Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their reasonable efforts to
      find and employ an alternative means to achieve the same or substantially the
      same result as that contemplated by such term, provision, covenant or
      restriction. It is hereby stipulated and declared to be the intention of the
      parties that they would have executed the remaining terms, provisions, covenants
      and restrictions without including any of such that may be hereafter declared
      invalid, illegal, void or unenforceable.

     

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

     

    IN
      WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
      as
      of the date first written above.

    

    
      	
              MODTECH
                HOLDINGS, INC.

            
	 
	
              By:

            	
              /s/
                Kenneth S. Cragun

            
	
              Name:     

            	
              Kenneth
                S. Cragun

            
	
              Title:

            	
              Chief
                Financial Officer

            
	 	 
	
              VALENS
                OFFSHORE SPV I, LTD.

            
	 
	
              By:
                

            	
              Valens
                Capital Management, LLC, its

              investment
                manager

            
	 	 
	
              By:

            	
              /s/
                Patrick Regan

            
	
              Name:
                

            	
              Patrick
                Regan

            
	
              Title:

            	
              Authorized
                Signatory

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	 	
              Address
                for Notices:

            
	 	 
	 	
              Valens
                Offshore SPV I, Ltd.

            
	 	
              c/o
                Valens Capital Management, LLC

            
	 	
              335
                Madison Avenue, 10th Floor

            
	 	
              New
                York, New York 10017

            
	 	
              Attention:   Portfolio
                Services

            
	 	
              Facsimile:    212-541-4410

            

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    ____________,
      200___

     

    [Continental
      Stock Transfer

    &
      Trust Company

    Two
      Broadway

    New
      York,
      New York 10004

    Attn:
      William Seegraber]

     

    
      	 	
              Re:

            	
              Modtech
                Holdings, Inc. Registration Statement on Form
                [S-3]

            

    

     

    Ladies
      and Gentlemen:

     

    As
      counsel to Modtech Holdings, Inc., a Delaware corporation (the “Company”),
      we
      have been requested to render our opinion to you in connection with the resale
      by the individuals or entitles listed on Schedule
      A
      attached
      hereto (the “Selling
      Stockholders”),
      of an
      aggregate of __________ shares (the “Shares”)
      of the
      Company’s Common Stock.

     

    A
      Registration Statement on Form [S-3]
      under
      the Securities Act of 1933, as amended (the “Act”),
      with
      respect to the resale of the Shares was declared effective by the Securities
      and
      Exchange Commission on [date].
      Enclosed is the Prospectus dated [date].
      We
      understand that the Shares are to be offered and sold in the manner described
      in
      the Prospectus.

     

    This
      letter shall serve as our notice to you that the Shares are, as of this date,
      freely transferable by the Selling Stockholders pursuant to the Registration
      Statement. Unless you receive separate notice or instructions from us following
      the date hereof, you need not require further letters from us to effect any
      future legend-free issuance or re-issuance of the Shares.

     

    Very
      truly yours,

     

    [Company
      counsel]

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Schedule
      A to Exhibit A

     

    
      	
              Selling
                Stockholder

            	 	
              R/N/O

            	 	
              Shares

              Being
                Offered

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      7(b)

    

    1. The
      Company is a party to the First Amended and Restated Registration Rights
      Agreement with Amphora Limited, Peninsula Catalyst Fund, L.P., and others,
      dated
      August 5, 2005 and to a Registration Rights Agreement with Amphora Limited,
      dated October 31, 2006, with respect to 189,189 shares of common stock The
      registration statements described in these agreements have been declared
      effective, but there are ongoing obligations under the agreements, including
      indemnification provisions.

    

    2. [intentionally
      omitted]

    

    3. The
      Company is also a party to a Registration
      Rights Agreement with
      Valens U.S. SPV I, LLC, dated February 29, 2008, with respect to 195,935 shares
      of common stock and a Registration Rights Agreement with Valens Offshore SPV
      I,
      LTD, also dated February 29, 2008 with respect to 266,408 shares of common
      stock. The registration statements described in these two Registration Rights
      Agreements have not yet been filed. 

    

    4. The
      Company intends to enter into a single Registration Rights Agreement in the
      next
      10 days with various investors to register between approximately 3,125,000
      and
      4,166,667 shares of common stock to be issued upon conversion of convertible
      preferred stock to be issued to such investors.

    

    5.
      Outstanding
      Warrants

    

    Warrants
      to acquire the number of shares of common stock at the exercise prices set
      forth
      below are currently outstanding and exercisable:

    

      
        	
                No.
                  of Shares of Common Stock

              	 	
                Exercise
                  Price

              	 
	
                770,349

              	 	
                $

              	
                7.82

              	 
	
                770,348

              	 	
                $

              	
                7.31

              	 
	
                581,395

              	 	
                $

              	
                5.69

              	 
	
                192,029

              	 	
                $

              	
                5.06

              	 
	
                192,029

              	 	
                $

              	
                5.29

              	 
	
                192,028

              	 	
                $

              	
                6.53

              	 

      

    The
      warrants were originally issued to Laurus Master Fund, Ltd.

    

    
      
        
        

      

      
        17Exhibit
      10.62

     

    REGISTRATION
      RIGHTS AGREEMENT

     

    This
      Registration Rights Agreement (this “Agreement”)
      is
      made and entered into as of February 29, 2008, by and between Modtech Holdings,
      Inc., a Delaware corporation (the “Company”),
      and
      Valens Offshore SPV I, Ltd. (the “Purchaser”).

     

    This
      Agreement is made pursuant to the Amendment and Waiver Agreement dated as of
      the
      date hereof among the Purchaser, Laurus Master Fund, Ltd., Valens U.S. SPV
      I,
      LLC and the Company (the “Amendment
      Agreement”),
      and
      pursuant to the Warrants referred to therein and defined below.

     

    The
      Company and the Purchaser hereby agree as follows:

     

    1. Definitions.
      Capitalized terms used and not otherwise defined herein that are shall have
      the
      meanings given to such terms in the Purchase Agreements (as defined in the
      Amendment Agreement). As used in this Agreement, the following terms shall
      have
      the following meanings:

     

    “Amendment
      Agreement”
      has the
      meaning given to such term in the Preamble hereto.

     

    “Commission”
      means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
      means
      shares of the Company’s common stock, par value $0.01 per share.

     

    “Effectiveness
      Date”
      means,
      (i) with respect to the initial Registration Statement required to be filed
      hereunder, a date no later than one hundred eighty (180) days following the
      date
      hereof and (ii) with respect to each additional Registration Statement required
      to be filed hereunder (if any), a date no later than sixty (60) days following
      the applicable Filing Date.

     

    “Effectiveness
      Period”
      has the
      meaning set forth in Section 2(a).

     

    “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended, and any successor
      statute.

     

    “Filing
      Date”
      means,
      with respect to the Registration Statement required to be filed hereunder in
      respect of the shares of Common Stock (a) issuable upon exercise of any Warrant,
      the date which is ninety (90) days after the issuance of such Warrant and (b)
      with the shares of Common Stock issuable to the Holder as a result of
      adjustments to the Exercise Price made pursuant to the Warrant or otherwise,
      thirty (30) days after the occurrence of such event.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Holder”
      or
“Holders”
      means
      the Purchaser or any of its affiliates or transferees to the extent any of
      them
      hold Registrable Securities, other than those purchasing Registrable Securities
      in a market transaction.

     

    “Indemnified
      Party”
      has the
      meaning set forth in Section 5(c).

     

    “Indemnifying
      Party”
      has the
      meaning set forth in Section 5(c).

     

    “Proceeding”
      means an
      action, claim, suit, investigation or proceeding (including, without limitation,
      an investigation or partial proceeding, such as a deposition), whether commenced
      or threatened.

     

    “Prospectus”
      means
      the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by such Registration Statement,
      and all other amendments and supplements to the Prospectus, including
      post-effective amendments, and all material incorporated by reference or deemed
      to be incorporated by reference in such Prospectus.

     

    “Registrable
      Securities”
      means
      the shares of Common Stock issued upon the exercise of any
      Warrants.

     

    “Registration
      Statement”
      means
      each registration statement required to be filed hereunder, including the
      Prospectus therein, amendments and supplements to such registration statement
      or
      Prospectus, including pre- and post-effective amendments, all exhibits thereto,
      and all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.

     

    “Rule
      144”
      means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

     

    “Rule
      415”
      means
      Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

     

    “Securities
      Act”
      means
      the Securities Act of 1933, as amended, and any successor statute.

     

    “Trading
      Market”
      means
      any of the NASD Over The Counter Bulletin Board, NASDAQ Capital Market, the
      NASDAQ National Markets System, the American Stock Exchange or the New York
      Stock Exchange

     

    “Warrants”
      means
      the Common Stock purchase warrants dated as of the date hereof issued pursuant
      to the Amendment Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2. Registration.

     

    (a) On
      or
      prior to the Filing Date, the Company shall prepare and file with the Commission
      a Registration Statement covering the Registrable Securities for a selling
      stockholder resale offering to be made on a continuous basis pursuant to Rule
      415. The Registration Statement shall be on Form S-3 (except if the Company
      is
      not then eligible to register for resale the Registrable Securities on Form
      S-3,
      in which case such registration shall be on another appropriate form in
      accordance herewith). The Company may include in a single registration statement
      the “Registrable Securities” defined under the Registration Rights Agreements in
      paragraphs 3 and 4 of Schedule 7(b) hereto, subject to the requirement that
      if
      at any time the Commission takes the position that the offering of some or
      all
      of the Registrable Securities in such combined Registration Statement is not
      eligible to be made on a delayed or continuous basis under the provisions of
      Rule 415, the Company shall remove from the Registration Statement that number
      of the Registrable Securities as defined in the Registration Rights Agreement
      described in paragraph 4 of Schedule 7(b) hereto as the Commission may require
      to assure the Company’s compliance with the requirements of Rule 415. The
      Company shall cause each Registration Statement to become effective and remain
      effective as provided herein. The Company shall use its best efforts to cause
      each Registration Statement to be declared effective under the Securities Act
      as
      promptly as possible after the filing thereof, but in any event no later than
      the Effectiveness Date. The Company shall use its reasonable commercial efforts
      to keep each Registration Statement continuously effective under the Securities
      Act until the date which is the earlier date of when (i) all Registrable
      Securities covered by such Registration Statement have been sold or (ii) all
      Registrable Securities covered by such Registration Statement may be sold
      immediately without registration under the Securities Act and without volume
      restrictions pursuant to Rule 144(k), (or its successor), as determined by
      the
      counsel to the Company pursuant to a written opinion letter to such effect,
      addressed and acceptable to the Company’s transfer agent and the affected
      Holders (the “Effectiveness
      Period”).

     

    (b) If:
      (i)
      the Registration Statement is not filed on or prior to the Filing Date; (ii)
      the
      Registration Statement is not declared effective by the Commission by the
      Effectiveness Date; (iii) after the Registration Statement is filed with and
      declared effective by the Commission, the Registration Statement ceases to
      be
      effective (by suspension or otherwise) as to all Registrable Securities to
      which
      it is required to relate at any time prior to the expiration of the
      Effectiveness Period (without being succeeded immediately by an additional
      registration statement filed and declared effective) for a period of time which
      shall exceed thirty (30) days in the aggregate per year (defined as a period
      of
      365 days commencing on the date the Registration Statement is declared
      effective) or more than twenty (20) consecutive calendar days; or (iv) the
      Common Stock is not listed or quoted, or is suspended from trading on any
      Trading Market for a period of three (3) consecutive Trading Days (provided
      the
      Company shall not have been able to cure such trading suspension within thirty
      (30) days of the notice thereof or list the Common Stock on another Trading
      Market); (any such failure or breach being referred to as an “Event,”
and
      for purposes of clause (i) or (ii) the date on which such Event occurs, or
      for
      purposes of clause (iii) the date which such thirty (30) day or twenty (20)
      consecutive day period (as the case may be) is exceeded, or for purposes of
      clause (v) the date on which such three (3) Trading Day period is exceeded,
      being referred to as “Event Date”), then until the applicable Event is cured,
      the Company shall pay to each Holder an amount in cash, as liquidated damages
      and not as a penalty, equal to 1.0% for each thirty (30) day period (prorated
      for partial periods) on a daily basis of the original principal amount of the
      “Additional Note” (as defined in the Amendment Agreement) held by the Holder;
      provided that, the maximum aggregate amount of liquidated damages that may
      be
      charged to the Company pursuant to this Section 2(b) shall not exceed 10% of
      the
      initial principal amount of the Holder’s Additional Note. While such Event
      continues, such liquidated damages shall be paid not less often than each thirty
      (30) days. Any unpaid liquidated damages as of the date when an Event has been
      cured by the Company shall be paid within three (3) days following the date
      on
      which such Event has been cured by the Company. At its option, the Company
      may
      pay up to fifty percent (50%) of the liquidated damages (the “Equity
      Damage Amount”)
      by
      delivering from time to time to the Holder, which such deliveries shall occur
      simultaneously with delivery to the Holder of the cash portion of the liquidated
      damage amounts as required by this Section 2(b), warrants (the “New Warrants”)
      substantially identical to the Warrants (except that the per share exercise
      price under the New Warrants shall be equal to the par value of the Common
      Stock) to purchase that number of shares of Common Stock whose aggregate Fair
      Market Value (as hereafter defined) equals the Equity Damage Amount. For
      purposes hereof, “Fair
      Market Value”
shall
      mean the average of the closing price of the Common Stock for the ten (10)
      trading days immediately prior to issuance of the applicable New Warrants.
      The
      shares of Common Stock issuable upon exercise of any New Warrants shall be
      included within the definition of Registrable Securities and shall be included
      within (I) the initial Registration Statement if the liquidated damages arise
      from an Event occurring prior to the date such initial Registration Statement
      is
      declared effective by the SEC and (II) a new Registration Statement to be filed
      on or prior to the applicable Filing Date and declared effective by the SEC
      on
      or prior to the applicable Effectiveness Date, in the event the liquidated
      damages arise from an Event occurring after the date the initial Registration
      Statement is declared effective by the SEC.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c) Within
      three (3) business days of the Effectiveness Date, the Company shall cause
      its
      counsel to issue a blanket opinion in the form attached hereto as Exhibit A,
      to
      the transfer agent stating that the shares are subject to an effective
      registration statement and can be reissued free of restrictive legend upon
      notice of a sale by the Purchaser and confirmation by the Purchaser that it
      has
      complied with the prospectus delivery requirements, provided that the Company
      has not advised the transfer agent orally or in writing that the opinion has
      been withdrawn. Copies of the blanket opinion required by this Section 2(c)
      shall be delivered to the Purchaser within the time frame set forth
      above.

     

    3. Registration
      Procedures.
      If and
      whenever the Company is required by the provisions hereof to effect the
      registration of any Registrable Securities under the Securities Act, the Company
      will, as expeditiously as possible:

     

    (a) prepare
      and file with the Commission a Registration Statement with respect to such
      Registrable Securities, respond as promptly as possible to any comments received
      from the Commission, and use its best efforts to cause the Registration
      Statement to become and remain effective for the Effectiveness Period with
      respect thereto, and promptly provide to the Purchaser copies of all filings
      and
      Commission letters of comment relating thereto;

     

    (b) prepare
      and file with the Commission such amendments and supplements to such
      Registration Statement and the Prospectus used in connection therewith as may
      be
      necessary to comply with the provisions of the Securities Act with respect
      to
      the disposition of all Registrable Securities covered by such Registration
      Statement and to keep such Registration Statement effective until the expiration
      of the Effectiveness Period applicable to such Registration
      Statement;

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c) furnish
      to the Purchaser such number of copies of the Registration Statement and the
      Prospectus included therein (including each preliminary Prospectus) as the
      Purchaser reasonably may request to facilitate the public sale or disposition
      of
      the Registrable Securities covered by the Registration Statement;

     

    (d) use
      its
      best efforts to register or qualify the Purchaser’s Registrable Securities
      covered by such Registration Statement under the securities or “blue sky” laws
      of such jurisdictions within the United States as the Purchaser may reasonably
      request, provided, however, that the Company shall not for any such purpose
      be
      required to qualify generally to transact business as a foreign corporation
      in
      any jurisdiction where it is not so qualified or to consent to general service
      of process in any such jurisdiction;

     

    (e) list
      the
      Registrable Securities covered by such Registration Statement with any
      securities exchange on which the Common Stock of the Company is then
      listed;

     

    (f) promptly
      (and in any event within three (3) Business Days following such occurrence)
      notify the Purchaser at any time when a Prospectus relating thereto is required
      to be delivered under the Securities Act, of the happening of any event of
      which
      the Company has knowledge as a result of which the Prospectus contained in
      such
      Registration Statement, as then in effect, includes an untrue statement of
      a
      material fact or omits to state a material fact required to be stated therein
      or
      necessary to make the statements therein not misleading in light of the
      circumstances then existing; and

     

    (g) make
      available for inspection by the Purchaser and any attorney, accountant or other
      agent retained by the Purchaser, all publicly available, non-confidential
      financial and other records, pertinent corporate documents and properties of
      the
      Company, and cause the Company’s officers, directors and employees to supply all
      publicly available, non-confidential information reasonably requested by the
      attorney, accountant or agent of the Purchaser.

     

    4. Registration
      Expenses.
      All
      expenses relating to the Company’s compliance with Sections 2 and 3 hereof,
      including, without limitation, all registration and filing fees, printing
      expenses, fees and disbursements of counsel and independent public accountants
      for the Company, fees and expenses (including reasonable counsel fees) incurred
      in connection with complying with state securities or “blue sky” laws, fees of
      the NASD, transfer taxes, fees of transfer agents and registrars, fees of,
      and
      disbursements incurred by, one counsel for the Holders are called “Registration
      Expenses”. All selling commissions applicable to the sale of Registrable
      Securities, including any fees and disbursements of any special counsel to
      the
      Holders beyond those included in Registration Expenses, are called “Selling
      Expenses.” The Company shall only be responsible for all Registration
      Expenses.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    5. Indemnification.

     

    (a) In
      the
      event of a registration of any Registrable Securities under the Securities
      Act
      pursuant to this Agreement, the Company will indemnify and hold harmless the
      Purchaser, and its officers, directors and each other person, if any, who
      controls the Purchaser within the meaning of the Securities Act, against any
      losses, claims, damages or liabilities, joint or several, to which the
      Purchaser, or such persons may become subject under the Securities Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any untrue statement or alleged
      untrue statement of any material fact contained in any Registration Statement
      under which such Registrable Securities were registered under the Securities
      Act
      pursuant to this Agreement, any preliminary Prospectus (unless connected in
      the
      final sale prospectus) or final Prospectus contained therein, or any amendment
      or supplement thereof, or arise out of or are based upon the omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein not misleading, and will reimburse
      the
      Purchaser, and each such person for any reasonable legal or other expenses
      incurred by them in connection with investigating or defending any such loss,
      claim, damage, liability or action; provided,
      however,
      that
      the Company will not be liable in any such case if and to the extent that any
      such loss, claim, damage or liability arises out of or is based upon an untrue
      statement or alleged untrue statement or omission or alleged omission so made
      in
      conformity with information furnished by or on behalf of the Purchaser or any
      such person in writing specifically for use in any such document.

     

    (b) In
      the
      event of a registration of the Registrable Securities under the Securities
      Act
      pursuant to this Agreement, the Purchaser will indemnify and hold harmless
      the
      Company, and its officers, directors and each other person, if any, who controls
      the Company within the meaning of the Securities Act, against all losses,
      claims, damages or liabilities, joint or several, to which the Company or such
      persons may become subject under the Securities Act or otherwise, insofar as
      such losses, claims, damages or liabilities (or actions in respect thereof)
      arise out of or are based upon any untrue statement or alleged untrue statement
      of any material fact which was furnished in writing by the Purchaser to the
      Company expressly for use in (and such information is contained in) the
      Registration Statement under which such Registrable Securities were registered
      under the Securities Act pursuant to this Agreement, any preliminary Prospectus
      or final Prospectus contained therein, or any amendment or supplement thereof,
      or arise out of or are based upon the omission or alleged omission to state
      therein a material fact required to be stated therein or necessary to make
      the
      statements therein not misleading, and will reimburse the Company and each
      such
      person for any reasonable legal or other expenses incurred by them in connection
      with investigating or defending any such loss, claim, damage, liability or
      action, provided,
      however,
      that
      the Purchaser will be liable in any such case if and only to the extent that
      any
      such loss, claim, damage or liability arises out of or is based upon an untrue
      statement or alleged untrue statement or omission or alleged omission so made
      in
      conformity with information furnished in writing to the Company by or on behalf
      of the Purchaser specifically for use in any such document. Notwithstanding
      the
      provisions of this paragraph, the Purchaser shall not be required to indemnify
      any person or entity in excess of the amount of the aggregate net proceeds
      received by the Purchaser in respect of Registrable Securities in connection
      with any such registration under the Securities Act.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (c) Promptly
      after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified
      Party”)
      of
      notice of the commencement of any action, such Indemnified Party shall, if
      a
      claim for indemnification in respect thereof is to be made against a party
      hereto obligated to indemnify such Indemnified Party (an “Indemnifying
      Party”),
      notify the Indemnifying Party in writing thereof, but the omission so to notify
      the Indemnifying Party shall not relieve it from any liability which it may
      have
      to such Indemnified Party other than under this Section 5(c) and shall only
      relieve it from any liability which it may have to such Indemnified Party under
      this Section 5(c) if and to the extent the Indemnifying Party is prejudiced
      by
      such omission. In case any such action shall be brought against any Indemnified
      Party and it shall notify the Indemnifying Party of the commencement thereof,
      the Indemnifying Party shall be entitled to participate in and, to the extent
      it
      shall wish, to assume and undertake the defense thereof with counsel
      satisfactory to such Indemnified Party, and, after notice from the Indemnifying
      Party to such Indemnified Party of its election so to assume and undertake
      the
      defense thereof, the Indemnifying Party shall not be liable to such Indemnified
      Party under this Section 5(c) for any legal expenses subsequently incurred
      by
      such Indemnified Party in connection with the defense thereof; if the
      Indemnified Party retains its own counsel, then the Indemnified Party shall
      pay
      all fees, costs and expenses of such counsel, provided,
      however,
      that,
      if the defendants in any such action include both the Indemnified Party and
      the
      Indemnifying Party and counsel for the Indemnified Party shall have reasonably
      concluded that there may be reasonable defenses available to the Indemnified
      Party which are different from or additional to those available to the
      Indemnifying Party or if counsel for the Indemnified Party shall have reasonably
      concluded that the interests of the Indemnified Party may reasonably be deemed
      to conflict with the interests of the Indemnifying Party, the Indemnified Party
      shall have the right to select one separate counsel and to assume such legal
      defenses and otherwise to participate in the defense of such action, with the
      reasonable expenses and fees of such separate counsel and other expenses related
      to such participation to be reimbursed by the Indemnifying Party as
      incurred.

     

    (d) In
      order
      to provide for just and equitable contribution in the event of joint liability
      under the Securities Act in any case in which either (i) the Purchaser, or
      any
      officer, director or controlling person of the Purchaser, makes a claim for
      indemnification pursuant to this Section 5 but it is judicially determined
      (by
      the entry of a final judgment or decree by a court of competent jurisdiction
      and
      the expiration of time to appeal or the denial of the last right of appeal)
      that
      such indemnification may not be enforced in such case notwithstanding the fact
      that this Section 5 provides for indemnification in such case, or (ii)
      contribution under the Securities Act may be required on the part of the
      Purchaser or such officer, director or controlling person of the Purchaser
      in
      circumstances for which indemnification is provided under this Section 5; then,
      and in each such case, the Company and the Purchaser will contribute to the
      aggregate losses, claims, damages or liabilities to which they may be subject
      (after contribution from others) in such proportion so that the Purchaser is
      responsible only for the portion represented by the percentage that the public
      offering price of its securities offered by the Registration Statement bears
      to
      the public offering price of all securities offered by such Registration
      Statement, provided,
      however,
      that,
      in any such case, (A) the Purchaser will not be required to contribute any
      amount in excess of the public offering price of all such securities offered
      by
      it pursuant to such Registration Statement; and (B) no person or entity guilty
      of fraudulent misrepresentation (within the meaning of Section 10(f) of the
      Act)
      will be entitled to contribution from any person or entity who was not guilty
      of
      such fraudulent misrepresentation.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    6. Representations
      and Warranties.

     

    (a) The
      Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
      Act and, except with respect to certain matters which the Company has disclosed
      to the Purchaser on Schedule
      4.21
      to the
      Purchase Agreements, the Company has filed all proxy statements, reports,
      schedules, forms, statements and other documents required to be filed by it
      under the Exchange Act. The Company has filed (i) its Annual Report on Form
      10-K
      for its fiscal year ended December 31, 2006 and (ii) its Quarterly Report on
      Form 10-Q for the fiscal quarters ended March 31, 2007, June 30, 2007 and
      September 30, 2007 
      (collectively, the “SEC
      Reports”).
      Each
      SEC Report was, at the time of its filing, in substantial compliance with the
      requirements of its respective form and none of the SEC Reports, nor the
      financial statements (and the notes thereto) included in the SEC Reports, as
      of
      their respective filing dates, contained any untrue statement of a material
      fact
      or omitted to state a material fact required to be stated therein or necessary
      to make the statements therein, in light of the circumstances under which they
      were made, not misleading. The financial statements of the Company included
      in
      the SEC Reports comply as to form in all material respects with applicable
      accounting requirements and the published rules and regulations of the
      Commission or other applicable rules and regulations with respect thereto.
      Such
      financial statements have been prepared in accordance with generally accepted
      accounting principles (“GAAP”)
      applied on a consistent basis during the periods involved (except (i) as may
      be
      otherwise indicated in such financial statements or the notes thereto or (ii)
      in
      the case of unaudited interim statements, to the extent they may not include
      footnotes, customary year-end adjustments, or may be condensed) and fairly
      present in all material respects the financial condition, the results of
      operations and the cash flows of the Company and its subsidiaries, on a
      consolidated basis, as of, and for, the periods presented in each such SEC
      Report.

     

    (b) The
      Common Stock is listed or quoted, as applicable, for trading on the NASDAQ
      Global Market and, except as set forth below, satisfies all requirements for
      the
      continuation of such listing or quotation, as applicable, and the Company shall
      do all things necessary for the continuation of such listing or quotation,
      as
      applicable. Except as set forth below, the Company has not received any notice
      that its Common Stock will be delisted from or no longer be quoted on, as
      applicable, the NASDAQ Global Market (except for prior notices which have been
      fully remedied) or that the Common Stock does not meet all requirements for
      the
      continuation of such listing or quotation, as applicable. On January 16, 2008,
      the Company received a letter from The Nasdaq Stock Market notifying it that
      for
      the 30 consecutive business days preceding the date of the letter the bid price
      of the Company’s common stock had closed below the $1.00 per share minimum bid
      price required for continued inclusion on The Nasdaq Global Market pursuant
      to
      Nasdaq Marketplace Rule 4450(a) (5). In accordance with Nasdaq Marketplace
      Rule
      4450(e) (2), the Company has 180 calendar days from the date of the Nasdaq
      letter, or until July 14, 2008, to regain compliance with the minimum bid price
      rule. 

     

    (c) Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would cause
      the offering of the Securities pursuant to the Amendment Agreement to be
      integrated with prior offerings by the Company for purposes of the Securities
      Act which would prevent the Company from selling the Common Stock pursuant
      to
      Rule 506 under the Securities Act, or any applicable exchange-related
      stockholder approval provisions, nor will the Company or any of its affiliates
      or subsidiaries take any action or steps that would cause the offering of the
      Securities to be integrated with other offerings.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (d) The
      Warrants and the shares of Common Stock that the Purchaser may acquire pursuant
      to any Warrants are all restricted securities under the Securities Act as of
      the
      date of this Agreement. The Company will not issue any stop transfer order
      or
      other order impeding the sale and delivery of any of the Registrable Securities
      at such time as such Registrable Securities are registered for public sale
      or it
      has received an opinion of counsel that an exemption from registration is
      available, except as required by federal or state securities laws.

     

    (e) The
      Company understands the nature of the Registrable Securities issuable upon
      the
      exercise of any Warrants and recognizes that the issuance of such Registrable
      Securities may have a potential dilutive effect. The Company specifically
      acknowledges that its obligation to issue the Registrable Securities is binding
      upon the Company and enforceable regardless of the dilution such issuance may
      have on the ownership interests of other shareholders of the
      Company.

     

    (f) Except
      for agreements made in the ordinary course of business, there is no agreement
      that has not been filed with the Commission as an exhibit to a registration
      statement or to a form required to be filed by the Company under the Exchange
      Act, the breach of which could reasonably be expected to have a material and
      adverse effect on the Company and its subsidiaries, or would prohibit or
      otherwise interfere with the ability of the Company to enter into and perform
      any of its obligations under this Agreement in any material
      respect.

     

    (g) The
      Company will at all times have authorized and reserved a sufficient number
      of
      shares of Common Stock for the full exercise of the Warrants.

     

    (h) The
      Company shall provide written notice to each Holder of (i) the occurrence of
      each Discontinuation Event (as defined below) and (ii) the declaration of
      effectiveness by the SEC of each Registration Statement required to be filed
      hereunder, in each case within one (1) business day of the date of each such
      occurrence and/or declaration.

     

    7. Miscellaneous.

     

    (a) Remedies.
      In the
      event of a breach by the Company or by a Holder, of any of their respective
      obligations under this Agreement, each Holder or the Company, as the case may
      be, in addition to being entitled to exercise all rights granted by law and
      under this Agreement, including recovery of damages, will be entitled to
      specific performance of its rights under this Agreement.

     

    (b) No
      Piggyback on Registrations.
      Except
      as and to the extent set forth on Schedule 7(b) hereto, neither the Company
      nor
      any of its security holders (other than the Holders in such capacity pursuant
      hereto) may include securities of the Company in any Registration Statement
      other than the Registrable Securities, and the Company shall not after the
      date
      hereof enter into any agreement providing any such right for inclusion of shares
      in the Registration Statement to any of its security holders. Except as and
      to
      the extent specified in Schedule
      7(b)
      hereto,
      the Company has not previously entered into any agreement granting any
      registration rights with respect to any of its securities to any person or
      entity that have not been fully satisfied.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (c) Compliance.
      Each
      Holder covenants and agrees that it will comply with the prospectus delivery
      requirements of the Securities Act as applicable to it in connection with sales
      of Registrable Securities pursuant to each Registration Statement.

     

    (d) Discontinued
      Disposition.
      Each
      Holder agrees by its acquisition of such Registrable Securities that, upon
      receipt of a notice from the Company of the occurrence of a Discontinuation
      Event (as defined below), such Holder will forthwith discontinue disposition
      of
      such Registrable Securities under the applicable Registration Statement until
      such Holder’s receipt of the copies of the supplemented Prospectus and/or
      amended Registration Statement or until it is advised in writing (the
“Advice”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement. The Company may provide appropriate stop orders to
      enforce the provisions of this paragraph. For purposes of this Agreement, a
      “Discontinuation
      Event”
shall
      mean (i) when the Commission notifies the Company whether there will be a
“review”
of
      such
      Registration Statement and whenever the Commission comments in writing on such
      Registration Statement (the Company shall provide true and complete copies
      thereof and all written responses thereto to each of the Holders); (ii) any
      request by the Commission or any other Federal or state governmental authority
      for amendments or supplements to such Registration Statement or Prospectus
      or
      for additional information; (iii) the issuance by the Commission of any stop
      order suspending the effectiveness of such Registration Statement covering
      any
      or all of the Registrable Securities or the initiation of any Proceedings for
      that purpose; (iv) the receipt by the Company of any notification with respect
      to the suspension of the qualification or exemption from qualification of any
      of
      the Registrable Securities for sale in any jurisdiction, or the initiation
      or
      threatening of any Proceeding for such purpose; and/or (v) the occurrence of
      any
      event or passage of time that makes the financial statements included in such
      Registration Statement ineligible for inclusion therein or any statement made
      in
      such Registration Statement or Prospectus or any document incorporated or deemed
      to be incorporated therein by reference untrue in any material respect or that
      requires any revisions to such Registration Statement, Prospectus or other
      documents so that, in the case of such Registration Statement or Prospectus,
      as
      the case may be, it will not contain any untrue statement of a material fact
      or
      omit to state any material fact required to be stated therein or necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading.

     

    (e) Piggy-Back
      Registrations.
      If at
      any time after the date hereof there is not an effective Registration Statement
      covering all of the Registrable Securities required to be covered hereunder
      and
      the Company shall determine to prepare and file with the Commission a
      registration statement relating to an offering for its own account or the
      account of others under the Securities Act of any of its equity securities,
      other than on Form S-4 or Form S-8 (each as promulgated under the
      Securities Act) or their then equivalents relating to equity securities to
      be
      issued solely in connection with any acquisition of any entity or business
      or
      equity securities issuable in connection with stock option or other employee
      benefit plans, then the Company shall send to each Holder written notice of
      such
      determination and, if within fifteen (15) days after receipt of such notice,
      any
      such Holder shall so request in writing, the Company shall include in such
      registration statement all or any part of such Registrable Securities such
      Holder requests to be registered, to the extent the Company may do so without
      violating registration rights of others which exist as of the date of this
      Agreement, subject to customary underwriter cutbacks applicable to all holders
      of registration rights and subject to obtaining any required consent of any
      selling stockholder(s) to such inclusion under such registration
      statement.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (f) Amendments
      and Waivers.
      The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, unless the same shall be in writing
      and
      signed by the Company and the Holders of the then outstanding Registrable
      Securities. Notwithstanding the foregoing, a waiver or consent to depart from
      the provisions hereof with respect to a matter that relates exclusively to
      the
      rights of certain Holders and that does not directly or indirectly affect the
      rights of other Holders may be given by Holders of at least a majority of the
      Registrable Securities to which such waiver or consent relates; provided,
      however,
      that
      the provisions of this sentence may not be amended, modified, or supplemented
      except in accordance with the provisions of the immediately preceding
      sentence.

     

    (g) Notices.
      Any
      notice or request hereunder may be given to the Company or the Purchaser at
      the
      respective addresses set forth below or as may hereafter be specified in a
      notice designated as a change of address under this Section 7(g). Any notice
      or
      request hereunder shall be given by registered or certified mail, return receipt
      requested, hand delivery, overnight mail, Federal Express or other national
      overnight next day carrier (collectively, “Courier”)
      or
      telecopy (confirmed by mail). Notices and requests shall be, in the case of
      those by hand delivery, deemed to have been given when delivered to any party
      to
      whom it is addressed, in the case of those by mail or overnight mail, deemed
      to
      have been given three (3) business days after the date when deposited in the
      mail or with the overnight mail carrier, in the case of a Courier, the next
      business day following timely delivery of the package with the Courier, and,
      in
      the case of a telecopy, when confirmed. The address for such notices and
      communications shall be as follows:

     

    
      	
              If
                to the Company:

            	
              Modtech
                Holdings, Inc.

              2830
                Barrett Avenue

              Perris,
                California 92571

              Attention: Chief
                Financial Officer

              Facsimile:
                (951) 943-9655

            
	
               

              with
                a copy to:

            	
               

              Haddan
                & Zepfel LLP

              500
                Newport Center Drive 

              Suite
                580

              Newport
                Beach, California 92660

              Attention:
                Robert J. Zepfel, Esq.

              Facsimile:
                (949) 706-6060

            
	
               

              If
                to a Purchaser:

            	
               

              To
                the address set forth under such Purchaser name on the signature
                pages
                hereto.

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
              If
                to any other Person who is then
the registered
                Holder:

            	
              To
                the address of such Holder as it appears in the stock transfer books
                of
                the Company

            

    

     

    or
      such
      other address as may be designated in writing hereafter in accordance with
      this
      Section 7(g) by such Person.

     

    (h) Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. The Company may not assign its rights or obligations hereunder without
      the prior written consent of each Holder. Each Holder may assign their
      respective rights hereunder in the manner and to the persons and entities as
      permitted under the Purchase Agreements.

     

    (i) Execution
      and Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

     

    (j) Governing
      Law, Jurisdiction and Waiver of Jury Trial.
      THIS
      AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
      THE
      LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
      SUCH
      STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company hereby
      consents and agrees that the state or federal courts located in the County
      of
      New York, State of New York shall have exclusion jurisdiction to hear and
      determine any Proceeding between the Company, on the one hand, and the
      Purchaser, on the other hand, pertaining to this Agreement or to any matter
      arising out of or related to this Agreement; provided,
      that
      the Purchaser and the Company acknowledge that any appeals from those courts
      may
      have to be heard by a court located outside of the County of New York, State
      of
      New York, and further provided,
      that
      nothing in this Agreement shall be deemed or operate to preclude the Purchaser
      from bringing a Proceeding in any other jurisdiction to collect the obligations,
      to realize on the Collateral or any other security for the obligations, or
      to
      enforce a judgment or other court order in favor of the Purchaser. The Company
      expressly submits and consents in advance to such jurisdiction in any Proceeding
      commenced in any such court, and the Company hereby waives any objection which
      it may have based upon lack of personal jurisdiction, improper venue or
forum
      non conveniens.
      The
      Company hereby waives personal service of the summons, complaint and other
      process issued in any such Proceeding and agrees that service of such summons,
      complaint and other process may be made by registered or certified mail
      addressed to the Company at the address set forth in Section 7(g) and that
      service so made shall be deemed completed upon the earlier of the Company’s
      actual receipt thereof or three (3) days after deposit in the U.S. mails, proper
      postage prepaid. The parties hereto desire that their disputes be resolved
      by a
      judge applying such applicable laws. Therefore, to achieve the best combination
      of the benefits of the judicial system and of arbitration, the parties hereto
      waive all rights to trial by jury in any Proceeding brought to resolve any
      dispute, whether arising in contract, tort, or otherwise between the Purchaser
      and/or the Company arising out of, connected with, related or incidental to
      the
      relationship established between then in connection with this Agreement. If
      either party hereto shall commence a Proceeding to enforce any provisions of
      this Agreement, the Purchase Agreements, the Amendment Agreement or any other
      Related Agreement, then the prevailing party in such Proceeding shall be
      reimbursed by the other party for its reasonable attorneys’ fees and other costs
      and expenses incurred with the investigation, preparation and prosecution of
      such Proceeding.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (k) Cumulative
      Remedies.
      The
      remedies provided herein are cumulative and not exclusive of any remedies
      provided by law.

     

    (l) Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their reasonable efforts to
      find and employ an alternative means to achieve the same or substantially the
      same result as that contemplated by such term, provision, covenant or
      restriction. It is hereby stipulated and declared to be the intention of the
      parties that they would have executed the remaining terms, provisions, covenants
      and restrictions without including any of such that may be hereafter declared
      invalid, illegal, void or unenforceable.

     

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

     

    IN
      WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
      as
      of the date first written above.

     

    

      
        	
                MODTECH
                  HOLDINGS, INC.

              
	 
	
                By:

              	/s/
                Kenneth S. Cragun
	
                Name:

              	
                Kenneth
                  S. Cragun

              
	
                Title:

              	
                Chief
                  Financial Officer

              
	 	 
	
                VALENS
                  OFFSHORE SPV I, LTD.

              
	
                By:

              	
                Valens
                  Capital Management, LLC, its investment manager

              
	 	 
	
                By:

              	/s/
                Patrick Regan
	
                Name:

              	
                Patrick
                  Regan

              
	
                Title:

              	
                Authorized
                  Signatory

              

      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        	Address
                for Notices:
	 
	
                Valens
                  Offshore SPV I, Ltd.

              
	
                c/o
                  Valens Capital Management, LLC

              
	
                335
                  Madison Avenue, 10th Floor

              
	
                New
                  York, New York 10017 

              
	
                Attention:
                  Portfolio
                  Services

              
	
                Facsimile: 
                  212-541-4410

              

      

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    ____________,
      200___

     

    [Continental
      Stock Transfer

    &
      Trust Company

    Two
      Broadway

    New
      York,
      New York 10004

    Attn:
      William Seegraber]

     

    
      	 	
              Re:

            	
              Modtech
                Holdings, Inc. Registration Statement on Form
                [S-3]

            

    

     

    Ladies
      and Gentlemen:

     

    As
      counsel to Modtech Holdings, Inc., a Delaware corporation (the “Company”),
      we
      have been requested to render our opinion to you in connection with the resale
      by the individuals or entitles listed on Schedule
      A
      attached
      hereto (the “Selling
      Stockholders”),
      of an
      aggregate of __________ shares (the “Shares”)
      of the
      Company’s Common Stock.

     

    A
      Registration Statement on Form [S-3]
      under
      the Securities Act of 1933, as amended (the “Act”),
      with
      respect to the resale of the Shares was declared effective by the Securities
      and
      Exchange Commission on [date].
      Enclosed is the Prospectus dated [date].
      We
      understand that the Shares are to be offered and sold in the manner described
      in
      the Prospectus.

     

    This
      letter shall serve as our notice to you that the Shares are, as of this date,
      freely transferable by the Selling Stockholders pursuant to the Registration
      Statement. Unless you receive separate notice or instructions from us following
      the date hereof, you need not require further letters from us to effect any
      future legend-free issuance or re-issuance of the Shares.

     

    Very
      truly yours,

     

    [Company
      counsel]

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Schedule
      A to Exhibit A

    
      	
               

              Selling
                Stockholder

            	 	
               

              R/N/O

            	 	
              Shares
Being
                Offered

            
	 	 	 	 	 

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      7(b)

    

    1. The
      Company is a party to the First Amended and Restated Registration Rights
      Agreement with Amphora Limited, Peninsula Catalyst Fund, L.P., and others,
      dated
      August 5, 2005 and to a Registration Rights Agreement with Amphora Limited,
      dated October 31, 2006, with respect to 189,189 shares of common stock The
      registration statements described in these agreements have been declared
      effective, but there are ongoing obligations under the agreements, including
      indemnification provisions.

    

    2. [intentionally
      omitted]

    

    3. The
      Company is also a party to a Registration
      Rights Agreement with
      Valens U.S. SPV I, LLC, dated February 29, 2008, with respect to 195,935 shares
      of common stock and a Registration Rights Agreement with Valens Offshore SPV
      I,
      LTD, also dated February 29, 2008 with respect to 266,408 shares of common
      stock. The registration statements described in these two Registration Rights
      Agreements have not yet been filed. 

    

    4. The
      Company intends to enter into a single Registration Rights Agreement in the
      next
      10 days with various investors to register between approximately 3,125,000
      and
      4,166,667 shares of common stock to be issued upon conversion of convertible
      preferred stock to be issued to such investors.

    

    5.
      Outstanding
      Warrants

    

    Warrants
      to acquire the number of shares of common stock at the exercise prices set
      forth
      below are currently outstanding and exercisable:

    

      
        	
                No. of Shares of Common Stock

              	 	
                 

              	
                Exercise
                  Price

              	 
	
                770,349

              	 	
                 

              	
                
                  $

                

              	
                7.82

              	 
	
                770,348

              	 	
                 

              	
                
                  $

                

              	
                7.31

              	 
	
                581,395

              	 	
                 

              	
                
                  $

                

              	
                5.69

              	 
	
                192,029

              	 	
                 

              	
                
                  $

                

              	
                5.06

              	 
	
                192,029

              	 	
                 

              	
                
                  $

                

              	
                5.29

              	 
	
                192,028

              	 	
                
                   

                

              	
                
                  $

                

              	
                6.53

              	 

      

       

    

    The
      warrants were originally issued to Laurus Master Fund, Ltd.

     

    
      
        
        

      

      
        17

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