Exhibit
10.3


 


ASSUMPTION
AGREEMENT


 


THIS
ASSUMPTION AGREEMENT (as the same may be amended, modified or supplemented from
time to time, this “Assumption”), dated as of January 28, 2008, made by AMERICAN PHYSICAL SECURITY GROUP, LLC, a
Delaware limited liability company (the “New Subsidiary”), in favor of
the Lender (as defined below), recites and provides:


 


R
E C I T A L S


 


Pursuant
to the terms of a Loan Agreement, dated as of May 2, 2007, as amended by
the First Amendment to Loan Agreement, dated as of July 12, 2007 (as
further amended, modified or supplemented from time to time, the “Loan
Agreement”), between American
Defense Systems, Inc., a Delaware corporation (the “Company”), A.
J. Piscitelli & Associates, Inc., a New York corporation (“AJP”,
and together with the Company, the “Original Borrowers”), and Commerce
Bank, N.A., a national banking association (the “Lender”), the Lender
agreed to extend credit to the Original Borrowers.  Capitalized terms defined in the Loan
Agreement shall have the same defined meanings when such terms are used and not
defined in this Assumption.


 


Pursuant
to the terms and conditions of the Asset Purchase Agreement, of even date
herewith, by and between the Company, the New Subsidiary, American Anti Ram, Inc.,
a Virginia corporation (“AAR”) and the Owners (as therein defined, and
as the collective owners of all of the issued and outstanding capital stock of
AAR), the New Subsidiary acquired all of the assets of AAR.  The Original Borrowers and the New
Subsidiary, together with the other Subsidiaries of the Original Borrowers, are
engaged in business on a consolidated and integrated basis, and their
integrated operations include applying for and making use of credit on a joint
basis.  Accordingly, the Original
Borrowers have requested that the New Subsidiary become a Borrower under the
Loan Agreement and the other Loan Documents. 
The Lender has agreed to accept the New Subsidiary as a Borrower
thereunder, and the New Subsidiary has agreed to assume the Obligations.  Accordingly, the New Subsidiary agrees as
follows:


 


1.             The New Subsidiary (a) assumes
and agrees to be jointly and severally liable with each other Borrower for all
of the Obligations now existing or hereafter arising, including, without
limitation, the Obligations arising out of the Loan Agreement, the Term Note,
the Revolving Credit Note and the other Loan Documents, and (b) agrees to
be jointly and severally bound by all of the terms, covenants and conditions of
the Loan Agreement, the Term Note, the Revolving Credit Note and the other Loan
Documents, and hereby assumes all of the Obligations of the Borrowers
thereunder and agrees to be jointly and severally liable therefor.


 


2.             The New Subsidiary represents that
all items of equipment and inventory of the New Subsidiary are located at the
places specified in Schedule 1 hereto.  During the five years immediately preceding
the date of this Agreement, neither the New Subsidiary nor any predecessor of
the New Subsidiary has used any corporate or fictitious name other than its
current corporate name.  The New
Subsidiary has no trade names.  The chief
executive office and mailing address of the New Subsidiary is 541 Eastpark
Court, Sandston, Virginia  23150.  The New Subsidiary’s exact legal name is that
indicated on the signature pages hereof. 
The New Subsidiary is an organization of the type, and is organized in
the jurisdiction set forth herein.  The
signature page hereof accurately sets forth the New Subsidiary’s
organizational 


 

















 


identification
number or accurately states that it has none. 
All of the representations and warranties set forth in the Loan
Agreement are incorporated by reference in this Assumption, and shall be deemed
to have been made and given by the New Subsidiary as of the date hereof as
though such representations and warranties were applicable to it.


 


4.             The New Subsidiary also agrees to
execute, deliver and, if applicable, record, such additional instruments,
documents and agreements as the Lender may reasonably require for the purpose
of effecting the assumption described herein.


 


IN
WITNESS WHEREOF, the New Subsidiary has caused this Assumption to be executed
by its duly authorized representative as of the day and year first written
above.


 


 


	
   

  	
  NEW SUBSIDIARY:

  
	
   

  	
   

  
	
   

  	
  AMERICAN PHYSICAL SECURITY
  GROUP, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Organizational Number:

  	
  4491581

  
				



 


2

















 


SCHEDULE 1


 


EQUIPMENT AND
INVENTORY LOCATIONS


 


Locations of Equipment:


 


New Subsidiary:


 


541 Eastpark Court


Sandston, Virginia  23150


 


Locations of Inventory:


 


New Subsidiary:


 


541 Eastpark Court


Sandston, Virginia  23150


 


3