Exhibit 10.3


 


INDUSTRIAL
MANAGEMENT LLC, as Agent for Owner, as landlord, having an office at 575 Underhill Boulevard, Suite 125, Syosset, New
York 11791 (hereinafter referred to as Landlord”) and AMERICAN DEFENSE SYSTEMS,
INC., as tenant, having an office at 230 Duffy Avenue, Hicksville, New
York 11801 (hereinafter referred to as “Tenant”).


 


W I T N E S S E T H:


 


WHEREAS,
the Landlord, as successor-in-interest to Long Island Industrial Group One,
LLC, and Tenant are parties to the Lease (as defined in Schedule “A”) with
respect to the Existing Premises (as defined in Schedule “A”) in the Building
(as defined in Schedule “A”); and


 


WHEREAS,
the Tenant desires to lease certain additional space at the Building
substantially as shown on the attached sketch and Landlord is willing to lease
the additional space to the Tenant subject to the provisions of this Second
Amendment to Lease; and


 


WHEREAS,
Tenant and Landlord desire to confirm and memorialize their understanding with
respect to the foregoing and to amend and modify the Lease as herein provided.


 


NOW,
THEREFORE, in consideration of $1.00 to each in hand paid and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, it is mutually agreed that the Lease is modified as follows:


 


1.             Effective as of February 1,
2007, the Lease shall be amended as follows:


 


(a)               Landlord hereby
leases to Tenant and Tenant does hereby lease from Landlord certain additional
space (the “Second Additional Space”) in the Building substantially as shown on
the attached sketch commencing on February 1, 2007 and ending on the
Expiration Date (i.e., September 30, 2011, and Landlord hereby further
leases to Tenant and Tenant does 


 


 

















 


(b)           hereby further lease
from Landlord certain other additional space (the “Third Additional Space”) in
the Building substantially as shown on the attached sketch, commencing on June 1,
2007 and ending on the Expiration Date. 
During the period commencing on February 1, 2007 through and
including the Expiration Date, the annual rental rate for the Second Additional
Space, the Third Additional Space and the Existing Premises under the Lease
combined shall be as set forth on Schedule A attached.


 


(c)           The term “demised premises” (as such
term is used and defined in the Lease) shall be deemed modified including
therein the Third Additional Space, effective as of June 1, 2007.


 


(d)           Tenant shall use and occupy the
Second and Third Additional Spaces for such use as is permitted in accordance
with the Lease and the Certificate of Occupancy for the Building, if any, and
for no other purpose.  Tenant shall not
utilize the demised premises or any part thereof or any other part of the
Property for the placement or use of fixed storage vessels or systems of any
type.  Tenant acknowledges and agrees
that it will not allow the fueling of vehicles or product transfer operations
of any type to occur at or about the demised premises, or elsewhere at the
Property in connection with or incidental to its use of the demised premises or
otherwise.  This includes, but is not
limited to, fueling of vehicles and any type of bulk transfer of products,
which are prohibited.


 


(e)           Tenant’s percentage and proportionate
share of Additional Rent as set forth in the Lease shall be increased to be as
set forth on Schedule A at the caption “Tenant’s New Percentage”.


 


(f)            Tenant’s minimum common area
maintenance charge as indicated in clause (i) of Paragraph 42nd(c) of
the Lease shall be increased to be as set forth on Schedule A at


 


 

















 


the
caption “Minimum Common Area Maintenance Charge”, subject to further increase(s) as
provided in said Paragraph 42nd(c) of the Lease.


 


(g)           Tenant’s minimum snow removal charge
as indicated in clause (ii) of Paragraph 42nd(c) of the
Lease shall be increased to be as set forth on Schedule A at the caption
“Minimum Snow Removal Charge”, subject to further increase(s) as provided
in said Paragraph 42nd(c) of the Lease.


 


(h)           Tenant’s minimum insurance charge as
indicated in clause (iii) of Paragraph 42nd(c) of the
Lease shall be increased to be as set forth on Schedule A at the caption
“Minimum Insurance Charge”, subject to further increase(s) as provided in
said Paragraph 42nd(c) of the Lease.


 


2.             Tenant accepts the Second
Additional Space in its present “as-is” condition in all respects.  Landlord shall perform the work (“Landlord’s
Work”) set forth on Schedule B in the Third Additional Space in accordance with
the provisions of Schedule B attached hereto and made a part “Additional
Security” upon the execution of this Second Amendment to Lease, by check,
subject to collection, as additional security under the provisions of Paragraph
32 of the Lease, increasing the security deposit with Landlord presently in the
amount set forth in Schedule “A” at the caption “Existing Security” to the
total amount set forth in Schedule A at the caption “Total Security”.


 


4.             If Landlord is unable or fails to
give possession of the Second and/or Third Additional Space(s) or any part(s) thereof
on any particular date for any reason, including, without limitation, the
holding over by the present occupant of any part thereof, if any, Landlord
shall not be subject to any liability for failure to give possession on any
particular date, and neither the validity of the Lease nor this Second
Amendment to Lease shall be impaired under


 


 


 

















 


such
circumstances, except the rent payable hereunder shall be equitably abated on a
pro-rata basis to take into account the portion(s) of the Second and/or
Third Additional Space(s) not so delivered until delivered. Accordingly,
Tenant hereby waives the provisions of Section 223-a of the Real Estate
Property Law of the State of New York and agrees that the provisions of this
paragraph are intended to constitute “an express provision to the contrary”
within the meaning of Section 223-a.


 


5.             Tenant represents and warrants that
no broker other than the brokers named in Schedule “A”, if any, at the caption
“Broker” was involved in this Amendment to Lease.  Tenant agrees to indemnify, defend, and hold
harmless Landlord from any and all costs, expenses, and liability including
legal fees incurred by Landlord as a result of a breach of the aforementioned
warranty or any inaccuracy or alleged inaccuracy of the above
representation.  Landlord shall pay any
such broker so named in Schedule A under a separate agreement.


 


6.             Except as modified by this Second
Amendment to Lease, all of the remaining provisions of the Lease are ratified
and approved and shall continue in full force and effect.


 


7.             This Second Amendment to Lease
shall not be binding on Landlord unless and until both Landlord and Tenant
shall have executed this Second Amendment to Lease and a duly executed original
thereof is delivered to each of the respective parties herein.


 


 


 

















	
   

  	
   

  	
   

  
	
  LANDLORD:

  	
   

  	
  LONG
  ISLAND INDUSTRIAL MANAGEMENT,

  
	
   

  	
   

  	
  as
  Agent for Owner

  
	
   

  	
   

  	
   

  
	
  TENANT:

  	
   

  	
  AMERICAN
  DEFENSE SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
  PURPOSE
  OF AMENDMENT:

  	
   

  	
  Additional
  Space

  
	
   

  	
   

  	
   

  
	
  LEASE:
  

  	
   

  	
  Dated
  September 23, 2004, as amended by Amendment to Lease dated May 31,
  2006

  
	
   

  	
   

  	
   

  
	
  EXISTING
  PREMISES:

  	
   

  	
  The
  Premises presently demised under the Lease at

  
	
   

  	
   

  	
  the
  Building

  
	
   

  	
   

  	
   

  
	
  BUILDING:

  	
   

  	
  230
  Duffy Avenue, Hicksville, NY 11801

  
	
   

  	
   

  	
   

  
	
  SECOND
  ADDITIONAL SPACE:

  	
   

  	
  Substantially
  as shown on the attached sketch

  
	
   

  	
   

  	
   

  
	
  THIRD
  ADDITIONAL SPACE:

  	
   

  	
  Substantially
  as shown on the attached sketch

  
	
   

  	
   

  	
   

  
	
  NEW
  TENANT PERCENTAGE:

  	
   

  	
  79.0%
  effective as of February 1, 2007;

  
	
   

  	
   

  	
  and
  92.0% effective as of June 1, 2007.

  
	
   

  	
   

  	
   

  
	
  MINIMUM
  COMMON AREA

  	
   

  	
  $48,500.00
  per annum effective as of February 1, 2007;

  
	
  MAINTENANCE
  CHARGE:

  	
   

  	
  and
  $56,855.00 per annum effective as of June 1, 2007.

  
	
   

  	
   

  	
   

  
	
  MINIMUM
  SNOW REMOVAL

  	
   

  	
  $9,700.00
  per annum effective as of February 1, 2007;

  
	
  CHARGE:

  	
   

  	
  and
  $11,371.00 per annum effective as of June 1, 2007.

  
	
   

  	
   

  	
   

  
	
  MINIMUM
  INSURANCE CHARGE:

  	
   

  	
  $14,550.00
  per annum effective as of February 1, 2007;

  
	
   

  	
   

  	
  and
  $17,056.50 per annum effective as of June 1, 2007.

  
	
   

  	
   

  	
   

  
	
  ADDITIONAL
  SECURITY:

  	
   

  	
  $35,363.33

  
	
   

  	
   

  	
   

  
	
  EXISTING
  SECURITY:

  	
   

  	
  $115,733.34

  
	
   

  	
   

  	
   

  
	
  TOTAL
  SECURITY:

  	
   

  	
  $151,096.67

  
	
   

  	
   

  	
   

  
	
  BROKER:

  	
   

  	
   

  



 


 


 

















 


 


	
  TERM

  	
   

  	
  MONTHLY

  	
   

  	
  ANNUALLY

  	
   

  
	
  2/1/2007 to 5/31/2007

  	
   

  	
  $

  	
  64,408.33

  	
   

  	
  $

  	
  772,900.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6/1/2007 to 9/30/2007

  	
   

  	
  $

  	
  75,548.33

  	
   

  	
  $

  	
  906,580.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/1/2007 to 9/30/2008

  	
   

  	
  $

  	
  77,814.78

  	
   

  	
  $

  	
  933,777.40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/1/2008 to 9/30/2009

  	
   

  	
  $

  	
  80,149.23

  	
   

  	
  $

  	
  961,790.72

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/1/2009 to 9/30/2010

  	
   

  	
  $

  	
  82,553.70

  	
   

  	
  $

  	
  990,644.44

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/1/2010 to 9/30/2011

  	
   

  	
  $

  	
  85,030.32

  	
   

  	
  $

  	
  1,020,363.78

  	
   

  



 


 


	
  LONG
  ISLAND INDUSTRIAL MANAGEMENT LLC, as Agent for Owner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/

  	
   

  	
   

  
	
   

  	
  Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


	
  AMERICAN
  DEFENSE SYSTEMS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  VP, Corporate Counsel, Secretary

  	
   

  	
   

  



 


 


 

















 


Tenant acknowledges and
agrees to accept the Additional Space in its “as is” condition in all respects
as of the date hereof except for “Landlords Work.”  Landlord’s work shall mean and be strictly
limited to the construction as indicated on the plans attached to this lease
(if applicable) and made part of thereof and as described below.  In the event of a discrepancy between the
plan and this work letter, the work letter shall take precedence.  Landlord, at Landlord’s expense, shall
initially (one time only) perform Landlord’s work within the Additional Space
premises in a building standard manner utilizing building standard materials
(or equivalent) and labor selected by Landlord.


 


1.                                       Utility service to demised Premises:


 




	
  a.

  	
  Electric

  	
   

  	
  Individually metered service.

  
	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Gas

  	
   

  	
  Individually metered
  and sized to satisfy requirements for heating.

  
	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  Sanitary

  	
   

  	
  4-inch sanitary pipe.

  
	
   

  	
   

  	
   

  	
   

  
	
  d.

  	
  Utility

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Service

  	
   

  	
  Tenant to apply to
  utility company for electric and gas service immediately upon

  
	
   

  	
   

  	
   

  	
  receipt of Delivery of
  possession from Landlord.

  






 


2.                                       Remove all debris from premises. Landlord
to remove shelves from basement. Landlord to remove carpets on first floor as
per walk thru. Premises to be left in broom clean condition.


 


3.                                       Landlord to install one (1) overhead
door in old boiler room. Landlord to pave outside boiler room.


 


4.                                       Landlord to demolish second floor except
for the bathroom core. Landlord to replace all outside broken windows in office
area 


5.                                       Existing systems to be delivered in
working order.


 


6.                                       Landlord is not responsible for
telephone, computer, data or communication wiring and all associated conduit
and equipment required for such. Landlord is not responsible for the wiring or
connecting of Tenants equipment unless noted above. Elimination of one or all
of the items of work listed above will not constitute a credit.


 


Landlord’s Work shall be
deemed substantially completed notwithstanding the fact that (I) minor or
insubstantial details of construction, mechanical adjustment or decoration
remain to be performed or (II) portions of Landlord’s Work have not been
completed because under good construction scheduling, such work should not be
done until after still incomplete finishing or other work to be done by Tenant
is completed.  If the substantial
completion of Landlord’s Work shall be delayed due to any act or omission of
Tenant or its employees, agents or contractors (including but not limited to
any delays due to any additional work that Tenant authorizes the Landlord to
perform) or the inclusion in Landlord’s work of any work that is long-lead in
nature, then, the substantial completion of Landlords Work shall be deemed to
have occurred on the date when Landlord’s Work would have been substantially
completed but for said delay.


 


Any additional work that
Tenant authorizes the Landlord to perform will be at the sole cost and expense
of the Tenant and will include a fee of 21% of the actual cost to the Landlord
for the Landlord’s supervision and overhead. Tenant will execute a Work Authorization
Form prepared by the Landlord and issue a check for the full amount of the
cost of such work (including 21%) PRIOR to the Landlord performing any such
work.  Failing the execution of such Work
Authorization Form and payment, Landlord shall perform only such work as
is presently shown on this Schedule 13. 
However, nothing contained herein shall obligate Landlord to perform any
such additional work absent Landlord agreeing to do so.