8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act Of 1934

Date of Report (Date of earliest event reported): May 27, 2008

American Defense Systems, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	000-53092	83-0357690
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

230 DUFFY AVENUE

HICKSVILLE, NY  11801

(Address of principal executive offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code:  (516) 390-5300

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a- 12 under the Exchange Act (17 CFR 240.14a- 12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement.

American Defense Systems, Inc. (the “Company”) previously entered into a Securities Purchase Agreement (the “Purchase Agreement”), dated March 7, 2008, with certain investors (the “Series A Holders”), pursuant to which the investors acquired shares of the Company’s Series A Convertible Preferred Stock (“Preferred Shares”) and related warrants (“Warrants”).  The Purchase Agreement has been filed as an Exhibit to Amendment No. 1 to the Company’s registration statement on Form 10, filed with the SEC on March 21, 2008.

On May 23, 2008, in furtherance of the Company’s pending application to list its common stock on the American Stock Exchange (“AMEX”), the Company and the Series A Holders entered into a Consent and Agreement of Series A Convertible Preferred Stockholders (the “Consent and Agreement”).  The Consent and Agreement provides, among other things, (i) that for the purpose only of determining the number of votes each Preferred Share shall be entitled to vote pursuant to the Certificate of Designations, Preferences and Rights of such Preferred Shares (“Certificate of Designations”), the Conversion Price (as defined in the Certificate of Designations) on the record date for the taking of any vote shall not be deemed less than an amount equal to $2.00; and (ii) that in no event shall any Preferred Share be converted into shares of common stock pursuant to the Certificate of Designations, any Dividend Share (as that term is defined in the Certificate of Designations) be issued pursuant to the Certificate of Designations, or any Warrant Share be issued upon exercise of the Warrants, if such conversion, issuance or exercise would cause the Company to have issued more than 7,858,358 shares of Common Stock, without approval of the holders of the Common Stock or the agreement, waiver or consent of the AMEX with respect to such stockholder approval.

Pursuant to the Consent and Agreement, the Company will provide each stockholder entitled to vote at a special or annual meeting of stockholders of the Company (the “Stockholder Meeting”), which shall be promptly called and held not later than December 31, 2008, a proxy statement, soliciting each such stockholder’s affirmative vote for approval of resolutions providing for the Company’s issuance of all of the Securities (as that term is defined in the Purchase Agreement) as described in the Transaction Documents (as that term is defined in the Purchase Agreement) in accordance with applicable law and the rules and regulations of AMEX (such affirmative approval being referred to herein as the “Stockholder Approval”).  Additionally, for the Fiscal year ended December 31, 2008, the Company has agreed (A) to achieve (i) Revenues (as that term is defined in the Consent and Agreement) equal to or exceeding $50,000,000 and (ii) Consolidated EBITDA (as that term is defined in the Consent and Agreement) equal to or exceeding $13,500,000, and (B) to publicly disclose and disseminate its operating results for such period, no later than February 15, 2009.

On May 23, 2008, as required by the Consent and Agreement, certain stockholders of the Company (the “Stockholders”) entered into a voting agreement with the Company (the “Voting Agreement”).  Pursuant to the Voting Agreements, the Stockholders have agreed, among other things, to vote in favor of the Stockholder Approval.  The Voting Agreement shall be terminate immediately following the Stockholder Approval.

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Item 3.03 Material Modification to Rights of Security Holders.

The description of the terms and conditions of the Consent and Agreement of Series A Convertible Preferred Stockholders, which is included in Item 1.01 of this report, is incorporated by reference into this Item 3.03.

Item 9.01	Financial Statements and Exhibits.
(c)	Exhibits
10.1	Consent and Agreement of Series A Convertible Preferred Stockholders, dated May 23, 2008.
10.2	Form of Voting Agreement for Anthony Piscitelli, Gary Sidorsky and Curtis Taufman.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 23, 2008
	AMERICAN DEFENSE SYSTEMS, INC.
	By:	/s/ Gary Sidorsky
		Chief Financial Officer

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EX-10.1

Exhibit 10.1

CONSENT AND AGREEMENT

OF

SERIES A CONVERTIBLE PREFERRED STOCKHOLDERS

AMERICAN DEFENSE SYSTEMS, INC.

May 23, 2008

Reference is made to (i) that certain Securities Purchase Agreement, dated March 7, 2008 (“Purchase Agreement”), by and among American Defense Systems, Inc. (the “Company”) and West Coast Opportunity Fund, LLC, Centaur Value Fund, LP and United Centaur Master Fund (collectively, the “Holders”), pursuant to which the Holders acquired shares of the Company’s Series A Convertible Preferred Stock (“Preferred Shares”) and related warrants (“Warrants”), and (ii) that certain Certificate of Designations, Preferences and Rights of such Preferred Shares (“Certificate of Designations”).

The Company has applied (the “Application”) to list its common stock (“Common Stock”) on the American Stock Exchange (“Amex”).  In order to comply with the rules of the Amex, including, without limitation, Sections 101, 122 and 713 of the Amex Company Guide, and for the Application to be approved, it is necessary, among other things, that this Consent and Agreement be agreed to by the Holders.

The undersigned, being the holders of the outstanding Preferred Shares of the Company, hereby consent and agree as follows:

1.Minimum Conversion Price Regarding Voting. Notwithstanding any contrary or inconsistent provision in the Certificate of Designations or Purchase Agreement other than the limits regarding the Maximum Percentage as set forth (and defined) in the Certificate of Designations, for the purpose only of determining the number of votes each Preferred Share shall be entitled to vote pursuant to the Certificate of Designations, the Conversion Price (as defined in the Certificate of Designations) on the record date for the taking of any vote (or, if no such record date is established, at the date such vote is taken or any written consent of stockholders is solicited) shall not in any case be deemed less than an amount equal to $2.00 (as adjusted for any stock splits, stock dividends, recapitalizations, combinations, reverse stock splits or other similar events after the Subscription Date (as defined in the Certificate of Designations)).

2.Limitations on Certain Conversions. Notwithstanding any contrary or inconsistent provision of the Certificate of Designations or Purchase Agreement, in no event shall (i) any Preferred Share be converted into shares of Common Stock pursuant to the Certificate of Designations, (ii) any Dividend Share (as defined in the Certificate of Designations) be issued pursuant to the Certificate of Designations, or (iii) any Warrant Share be issued upon exercise of the Warrants, if such conversion, issuance or exercise would cause the Company to have issued in the aggregate more than 7,858,358 shares of Common Stock (as adjusted for any stock splits, stock dividends, recapitalizations, combinations, reverse stock splits or other similar events after the Subscription Date) (which amount equals approximately 19.99% of the total shares of Common Stock outstanding on the initial closing date under the Purchase Agreement) (the “Exchange Cap”), without approval of the holders of the Common Stock or the agreement,

waiver of consent of the Amex with respect to such stockholder approval. Any then outstanding Preferred Shares and Warrant Shares or fraction thereof that cannot be converted or exercised, as applicable, as a result of the preceding sentence shall remain outstanding in accordance with, and subject to, the Certificate of Designations, the Warrants and Purchase Agreement, other than the right of conversion or exercise as applicable, until such stockholder approval or Amex consent is obtained.   Until such approval or waiver is obtained, no Holder shall be issued, upon exercise or conversion, as applicable, of any Warrants or Preferred Shares, shares of Common Stock in an amount greater than the product of the Exchange Cap multiplied by a fraction, the numerator of which is the aggregate stated value amount of the number of Preferred Shares issued to such Holder pursuant to the Securities Purchase Agreement on the Closing Date and the denominator of which is the aggregate stated value of all the Preferred Shares issued to the Holders pursuant to the Securities Purchase Agreement on the Closing Date (with respect to each holder, the “Exchange Cap Allocation”).  In the event that any Holder shall sell or otherwise transfer any of such Holder’s Warrants or Preferred Shares, the transferee shall be allocated a pro rata portion of such Holder’s Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation allocated to such transferee.  In the event that any Holder of Preferred Shares shall convert or exercise all of such Holder’s Preferred Shares and Warrants, as applicable, into a number of shares of Common Stock which, in the aggregate, is less than such Holder’s Exchange Cap Allocation, then the difference between such Holder’s Exchange Cap Allocation and the number of shares of Common Stock actually issued to such Holder shall be allocated to the respective Exchange Cap Allocations of the remaining Holders of Preferred Shares and Warrants on a pro rata basis in proportion to the shares of Common Stock underlying the Preferred Shares and Warrants then held by each such Holder.

3.Listing.  Notwithstanding any contrary or inconsistent provision of the Certificate of Designations or Purchase Agreement, including, without limitation, Section 4(f) (Listing) of the Purchase Agreement, the Holders agree that the extent to which the Company is required to secure or maintain the listing of the Conversion Shares, Warrant Shares, Dividend Shares and other Listed Securities (each term as defined in the Purchase Agreement) shall be subject to any limitations imposed, or otherwise required, by the Amex pursuant to the Amex Company Guide or their discretionary authority.

4.Stockholder Approval.  The Company shall provide each stockholder entitled to vote at a special or annual meeting of stockholders of the Company (the “Stockholder Meeting”), which shall be promptly called and held not later than December 31, 2008 (the “Stockholder Meeting Deadline”), a proxy statement, substantially in the form which has been previously reviewed by Schulte Roth & Zabel LLP, at the expense of the Company, not to exceed $10,000 (which review shall be completed within five (5) Business Days (as defined in the Purchase Agreement) of such counsel’s receipt of the proxy statement and such review requirement shall be waived if such counsel has not completed its review within such five (5) Business Day period), soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions providing for the Company’s issuance of all of the Securities (as defined in the Purchase Agreement) as described in the Transaction Documents (as defined in the Purchase Agreement) in accordance with applicable law and the rules and regulations of Amex (such affirmative approval being referred to herein as the “Stockholder Approval”), and the Company shall use its reasonable best efforts to solicit its stockholders’ approval of such

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resolutions  and to cause the board of directors of the Company to recommend to the stockholders that they approve such resolutions.  The Company shall be obligated to use its reasonable best efforts to obtain the Stockholder Approval by the Stockholder Meeting Deadline.  If, despite the Company’s reasonable best efforts the Stockholder Approval is not obtained on or prior to the Stockholder Meeting Deadline, the Company shall cause an additional Stockholder Meeting to be held every six (6) months thereafter until such Stockholder Approval is obtained or the Preferred Shares are no longer outstanding.

5.Equity Conditions.  The parties hereby agree that unless and until the Stockholder Approval is obtained, the Equity Conditions (as defined in Certificate of Designations) shall not have been satisfied.

6.Financial Covenants and Operating Results.

(a)For purposes of this Section 6, the following definitions shall apply.

(i)“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether through holding beneficial ownership interests in such other Person, by contract or otherwise.  Notwithstanding anything herein to the contrary, in no event shall any holder of Preferred Stock be considered an “Affiliate” of the Company hereunder.

(ii)“Consolidated EBITDA” means, with respect to the Company for any period, the Consolidated Net Income of the Company and its Subsidiaries for such period, plus (i) without duplication, the sum of the following amounts of the Company and its Subsidiaries for such period and to the extent deducted in determining Consolidated Net Income of the Company for such period:  (A) Consolidated Net Interest Expense, (B) income tax expense, (C) depreciation expense, and (D) amortization expense.

(iii)“Consolidated Net Income” means, with respect to the Company for any period, the net income (loss) of the Company and its Subsidiaries for such period, determined on a consolidated basis and in accordance with GAAP, but excluding from the determination of Consolidated Net Income (without duplication) (a) any extraordinary or non recurring gains or losses or gains or losses from Dispositions, (b) restructuring charges, (c) any tax refunds, net operating losses or other net tax benefits, (d) effects of discontinued operations and (e) interest income (including interest paid-in-kind).

(iv)“Consolidated Net Interest Expense” means, with respect to any Person for any period, gross interest expense of the Company and its Subsidiaries for such period determined on a consolidated basis and in accordance with GAAP (including, without limitation, interest expense paid to Affiliates of the Company), less (i) the sum of (A) interest income for such period and (B) gains for such period on Hedging Agreements (to the extent not included in interest income above and to the extent not deducted in the calculation of gross interest expense), plus (ii) the sum of (A) losses for such period on Hedging Agreements (to the extent not included in gross interest expense) and (B) the upfront costs or fees for such period associated with

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Hedging Agreements (to the extent not included in gross interest expense), in each case, determined on a consolidated basis and in accordance with GAAP.

(v)“Fiscal Year” means the Company’s fiscal year that ends on December 31, or such other fiscal year adopted by the Company for the financial reporting purposes in accordance with GAAP.

(vi)“Hedging Agreement” means any interest rate, foreign currency, commodity or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity or equity values (including, without limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.

(viii)“Revenues” means the amount set forth in the line item entitled “Total Net Revenues” in the Company’s publicly available consolidated financial statements, as prepared in accordance with GAAP.

(b)Financial Covenants.  For the Fiscal Year ended December 31, 2008, the Company shall achieve (a) Revenues equal to or exceeding $50,000,000 for such period and (b) Consolidated EBITDA equal to or exceeding $13,500,000 for such period (the “Financial Covenants”).  For purposes of determining whether Revenues and EBITDA satisfy the foregoing Financial Covenants, the financial impact of any acquisitions (whether stock or asset transactions), mergers, business combinations, tender or exchange offers or similar transactions consummated by the Company and its Subsidiaries after the Effective Date shall not be included.

(c)Operating Results Announcement.  No later than February 15, 2009 (the “Operating Results Announcement Deadline”), the Company shall publicly disclose and disseminate (the date of such disclosure, the “Operating Results Announcement Date”) its operating results (the “Operating Results”) for the Fiscal Year ended December 31, 2008.  The announcement of the Operating Results shall state (A) the amount of the Consolidated EBITDA and Revenues for Fiscal Year ended December 31, 2008 and (B) whether the Company has achieved the Financial Covenants; provided, however, that in the event that the Company shall not have announced the Operating Results for the Fiscal Year ended December 31, 2008 by the Operating Results Announcement Deadline, the Company shall be deemed to have failed to achieve the Financial Covenants.  On the Operating Results Announcement Date, the Company shall also provide to the Holders a certification, executed on behalf of the Company by the Chief Financial Officer of the Company, certifying that the Company has either achieved or failed to achieve each Financial Covenant.

7.Transaction Documents.  The parties hereby agree that this Consent and Agreement shall be deemed to be a Transaction Document (as defined in the Securities Purchase Agreement).  For the avoidance of doubt, any covenant herein which is breached shall be deemed a Triggering Event under Section 3(a)(vii) the Certificate of Designations for which there shall be no cure period.

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8.Dilutive Issuances.  The Company shall not, in any manner, enter into or effect any Dilutive Issuance (as defined in the Certificate of Designations) until the Stockholder Approval is obtained.

9.Effective Time.  This Consent and Agreement shall be effective upon the delivery to each of the Holders of a Voting Agreement in the form of Exhibit A attached hereto duly executed by the Company and each of Anthony Piscitelli, Gary Sidorsky and Curtis Taufman (the “Voting Agreements”) (the date of such delivery, the “Effective Date”).  Prior to obtaining the Stockholder Approval, the Company shall not amend, waive or modify any provision of any of the Voting Agreements.

10.Disclosure.  On or before 8:30 a.m., New York City time, on the first (1^st) Business Day following the Effective Date, the Company shall file a Current Report on Form 8-K describing the terms of this Consent and Agreement and attaching a copy of the form of this Consent and Agreement.

11.Expenses.  The Company shall pay the reasonable legal fees and expenses of Schulte Roth & Zabel LLP, incurred by the Holders in connection with the negotiation of this Consent and Agreement and the Voting Agreements.

12.Transferees.  Notwithstanding any contrary of inconsistent provision of the Certificate of Designations or Purchase Agreement, the transfer of any Preferred Shares shall be subject to the transferee’s written agreement to be bound by the terms of this Consent and Agreement as a Holder.

This Consent and Agreement (i) may be executed and delivered in counterparts and by PDF or facsimile, and (ii) shall be governed by the laws of the State of Delaware (without giving effect to principles of conflicts of laws).

[Signatures follow]

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IN WITNESS WHEREOF, the undersigned have executed this Consent and Agreement as of the date first set forth above.

WEST COAST OPPORTUNITY FUND, LLC
By:
	Name:
	Title:
CENTAUR VALUE FUND, LP
By:
	Name:
	Title:
UNITED CENTAUR MASTER FUND
By:
	Name:
	Title:
		ACCEPTED AND AGREED:
		AMERICAN DEFENSE SYSTEMS, INC.
		By:
			Name:
			Title:

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EX-10.2

Exhibit 10.2

EXHIBIT A

VOTING AGREEMENT

VOTING AGREEMENT, dated as of May 23, 2008 (this “Agreement”), by and among American Defense Systems, Inc., a Delaware corporation (the “Company”), and the stockholder listed on the signature page hereto under the heading “Stockholder” (the “Stockholder”).

WHEREAS, the Company and certain investors (each, an “Investor”, and collectively, the “Investors”) have entered into a Securities Purchase Agreement, dated as March 7, 2008 (the “Securities Purchase Agreement”), pursuant to which, among other things, the Company has agreed to issue and sell to the Investors and the Investors have agreed to purchase, (i) shares of the Company’s Series A Convertible Preferred Stock (“Preferred Shares”), which Preferred Shares are convertible into shares of the common stock, par value $0.001 per share (the “Common Stock”); and (ii) warrants which are exercisable to purchase shares of Common Stock.

WHEREAS, as of the date hereof, the Stockholder owns the number of shares of Common Stock as set forth on Appendix A hereto; and

WHEREAS, as a condition to the willingness of the Investors to enter into that certain Consent and Agreement of Series A Convertible Preferred Stockholders, dated as of May 23, 2008 (the “Consent and Agreement”), the Investors have required that the Stockholder agree, and in order to induce the Investors to enter into the Consent and Agreement, the Stockholder has agreed, to enter into this Agreement with respect to all the Common Stock now owned and which may hereafter be acquired by the Stockholder and any other securities, if any, which the Stockholder is currently entitled to vote, or after the date hereof, becomes entitled to vote, at any meeting of stockholders of the Company (the “Other Securities”).

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE I

VOTING AGREEMENT OF THE STOCKHOLDER

SECTION 1.01.      Voting Agreement. Subject to the last sentence of this Section 1.01, the Stockholder hereby agrees that at any meeting of the stockholders of the Company, however called, and in any action by written consent of the Company’s stockholders, the Stockholder shall vote the Common Stock and the Other Securities:  (a) in favor of the Stockholder Approval (as defined in the Consent and Agreement) as described in Section 4 of the Consent and Agreement; and (b) against any proposal or any other corporate action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company under the Consent and Agreement or which could result in any of the conditions to the Company’s obligations under the Consent and Agreement not being fulfilled. The Stockholder acknowledges receipt and review of a copy of the Securities Purchase Agreement, the Consent and Agreement and the other Transaction Documents (as

defined in the Securities Purchase Agreement). The obligations of the Stockholder under this Section 1.01 shall terminate immediately following the occurrence of the Stockholder Approval.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER

The Stockholder hereby represents and warrants to each of the Investors as follows:

SECTION 2.01.      Authority Relative to This Agreement. The Stockholder has all necessary power and authority to execute and deliver this Agreement, to perform his or its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Stockholder and constitutes a legal, valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, except (a) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws now or hereafter in effect relating to, or affecting generally the enforcement of creditors’ and other obligees’ rights, (b) where the remedy of specific performance or other forms of equitable relief may be subject to certain equitable defenses and principles and to the discretion of the court before which the proceeding may be brought, and (c) where rights to indemnity and contribution thereunder may be limited by applicable law and public policy.

SECTION 2.02.      No Conflict. (a)  The execution and delivery of this Agreement by the Stockholder does not, and the performance of this Agreement by the Stockholder shall not, (i) conflict with or violate any federal, state or local law, statute, ordinance, rule, regulation, order, judgment or decree applicable to any Stockholder or by which the Common Stock or the Other Securities owned by the Stockholder are bound or affected or (ii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the Common Stock or the Other Securities owned by the Stockholder pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Stockholder is a party or by which the Stockholder or the Common Stock or Other Securities owned by the Stockholder are bound.

(b)           The execution and delivery of this Agreement by the Stockholder does not, and the performance of this Agreement by the Stockholder shall not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental entity by the Stockholder.

SECTION 2.03.      Title to the Stock. As of the date hereof, the Stockholder is the owner of the number of shares of Common Stock set forth opposite its name on Appendix A attached hereto, entitled to vote, without restriction, on all matters brought before holders of capital stock of the Company, which Common Stock represent on the date hereof the percentage of the outstanding stock and voting power of the Company set forth on such Appendix. Such Common Stock are all the securities of the Company owned, either of record or beneficially, by

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the Stockholder. Such Common Stock are owned free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Stockholder’s voting rights, charges and other encumbrances of any nature whatsoever, except for transfer restriction under federal or applicable state securities or blue sky law and that certain lock-up letter agreement (“Lock-Up Agreement”) with the Company dated March 7, 2008. No Stockholder has appointed or granted any proxy, which appointment or grant is still effective, with respect to the Common Stock or Other Securities owned by the Stockholder.

ARTICLE III

COVENANTS

SECTION 3.01.      No Disposition or Encumbrance of Stock. The Stockholder hereby covenants and agrees that he will comply with the terms and conditions of his Lock-Up Agreement.

SECTION 3.02.      Company Cooperation. The Company agrees that at any time in which any Stockholder Approval is required pursuant to Section 4 of the Consent and Agreement, it will use its reasonable best efforts to cause holders of Common Stock or Other Securities representing the percentage of outstanding capital stock required to vote in favor of the transactions contemplated by the Securities Purchase Agreement in order for the Company to comply with its obligations under Section 4 of the Consent and Agreement to so vote in favor of such transactions.

ARTICLE IV

MISCELLANEOUS

SECTION 4.01.      Further Assurances. Each Stockholder will execute and deliver such further documents and instruments and take all further action as may be reasonably necessary in order to give effect to the voting agreement and other covenants of the Stockholder contemplated hereby.

SECTION 4.02.      Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that any Investor (without being joined by any other Investor) shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or in equity. Any Investor shall be entitled to its reasonable attorneys’ fees in any action brought to enforce this Agreement in which it is the prevailing party.

SECTION 4.03.      Entire Agreement. This Agreement constitutes the entire agreement among the Company and the Stockholder (other than the Securities Purchase Agreement, the Consent and Agreement and the other Transaction Documents) with respect to the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, among the Company and the Stockholder with respect to the subject matter hereof.

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SECTION 4.04.      Amendment. The provisions of this Agreement may not be amended or waived, nor may this Agreement be terminated by the Company other than pursuant to the provisions of Section 4.07.

SECTION 4.05.      Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of this Agreement is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the terms of this Agreement remain as originally contemplated to the fullest extent possible.

SECTION 4.06.      Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The parties hereby agree that all actions or proceedings arising directly or indirectly from or in connection with this Agreement shall be litigated only in the Supreme Court of the State of New York or the United States District Court for the Southern District of New York located in New York County, New York. The parties consent to the jurisdiction and venue of the foregoing courts and consent that any process or notice of motion or other application to any of said courts or a judge thereof may be served inside or outside the State of New York or the Southern District of New York by registered mail, return receipt requested, directed to the party being served at its address set forth on the signature ages to this Agreement (and service so made shall be deemed complete three (3) days after the same has been posted as aforesaid) or by personal service or in such other manner as may be permissible under the rules of said courts. Each of the Company and each Stockholder irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action, or proceeding brought in such a court and any claim that suit, action, or proceeding has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

SECTION 4.07.      Termination. This Agreement shall terminate immediately following the occurrence of the Stockholder Approval.

[Signature Page Follows]

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IN WITNESS WHEREOF, each of Stockholder and the Company has duly executed this Agreement.

	THE COMPANY:
	AMERICAN DEFENSE SYSTEMS, INC.
	By:
		Name:
		Title:
Dated: May       , 2008

	STOCKHOLDER:
Dated: May       , 2008
	Address:

APPENDIX A

Stockholder Common Stock
Owned Percentage of Common
Stock Outstanding Voting Percentage of Common Stock Outstanding