Exhibit
10.34


 


AMERICAN DEFENSE
SYSTEMS, INC.

EXECUTIVE EMPLOYMENT AGREEMENT


 


THIS AGREEMENT, dated as of
this August 1st 2008, is made by and between American Defense
Systems, Inc. (“the Company”), a Delaware corporation having offices at
230 Duffy Avenue, Unit C, Hicksville, New York 11801, and Robert C. Aldrich, an individual residing
at 27 Cambridge Avenue, Garden City, NY 11530 (“Executive”) (sometimes referred
to herein individually as “Party” or collectively as “Parties”).


 


WITNESSETH:


 


WHEREAS, the Company and
Executive desire to enter into this Agreement pursuant to which the Company and
Executive shall commemorate the terms of Executive’s employment with the
Company and pursuant to which Executive shall be employed by the Company;


 


NOW, THEREFORE, in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:


 


1.             DEFINITIONS. Those words and terms that have special meanings for
purposes of the Agreement are specially defined through the use of
parenthetical quotations and upper-lower case lettering.


 


2.             TERMS OF EMPLOYMENT.


 


2.1          Employment by the Company.  Executive agrees to be employed
by the Company during the Term of this Agreement upon the terms and subject to
the conditions set forth herein. Executive shall serve as the Chief Security
Officer of the Company, commencing as of the date first set forth above and
continuing for the balance of the Agreement Term and shall have duties
commensurate with his office and ability, including, but not limited to those
duties set forth below in Section 2.2.


 


2.2          Duties.  The Executive shall use his best efforts to perform his duties on
behalf of the Company. Executive is responsible for the identification,
development, implementation, and management of the Company’s (global) security
strategies and programs. Executive, in cooperation with Corporate Counsel and
such other committee as the Board shall determine from time to time, will
direct the development of a strategy to mitigate risk, maintain continuity of
operations, and safeguard the organization. Executive will direct the domestic
and international staff in identifying, developing, implementing, and
maintaining security processes, practices, and policies throughout the Company
in order to reduce risks, respond to incidents, and limit exposure and
liability in all areas of information, financial, physical, personal, and
reputational risk. Executive will research and deploy state-of-the-art
technology solutions and innovative security management techniques to safeguard
the Company’s assets. Executive will develop relationships with high-level law
enforcement and international counterparts to include in-country security and
international security agencies, intelligence, and private sector counterparts
worldwide. Executive, through subordinate managers, will coordinate and
implement site security operations, and activities to ensure protection of executives,
managers, employees, 


 

















 


customers,
stockholders, visitors, etc. and physical and information assets, while
ensuring optimal use of personnel and equipment. The Executive will continue to
pursue professional development.


 


2.3          Term of Agreement. Unless terminated in accordance with Section 5
below, the term of this Agreement will be for a term of one (1) year
commencing on the Effective Date of this Agreement (the “Initial Term”); and
following the Initial Term the Agreement will automatically renew for an
additional term of one (1) year (“Renewal Term”) on each one-year
anniversary of the Agreement (the “Annual Renewal Date”), unless one of the
Parties gives the other Party written notice of non-renewal (in accordance with
Section 6.2 below) at least thirty (30) days before the impending Annual
Renewal Date, in which event this Agreement shall terminate at the end of the
then current Term. Reference herein to “Term” shall refer both to the Initial
Term and any successive Renewal Term, as the context requires.


 


2.4          Performance of Duties. Throughout the
Agreement Term, Executive shall faithfully and diligently perform Executive
duties consistently with Executive position set forth in Section 2.2 of
this Agreement and Executive duties determined in accordance therewith.


 


2.5          Place of Performance. During the
Agreement Term, Executive shall be based at the Company’s offices in
Hicksville, New York, or such other locations as reasonably deemed necessary by
the Company.


 


3.             COMPENSATION AND BENEFITS.


 


3.1          Base Salary. The Company
will compensate the Executive for services to be rendered by the Executive
hereunder at a minimum per annum rate of one hundred fifty thousand dollars
($150,000) (the “Base Salary) which amount may be reviewed on an annual basis by
the Chief Executive Officer and increased from time to time as determined by
the Chief Executive Officer. Executive shall be classified and function as an “exempt”
employee under federal and state wage and hour law. Executive’s Base Salary
shall be payable in accordance with the Company’s customary payroll practices
for executive employees.


 


3.2          Bonus. The Executive
shall earn and be paid an annual bonus each fiscal year (“Annual Bonus”), as
may be approved by the Chief Executive Officer, the Board of Directors and/or a
duly formed compensation committee.  The
payment of the Annual Bonus and any other bonus(es) shall be prorated for any
partial fiscal year during the Term. The Company shall determine, reasonably
and in good faith, the amount and timing of the Annual Bonus and any other
bonus(es).  Executive shall also be
eligible for an additional 5% performance-based bonus as determined by the
Chief Executive Officer and which shall not be construed as part of the Annual
Bonus.


 


3.3          Withholding. All payments
required to be made by the Company to Executive under this Agreement shall be
subject to the withholding of such amounts, if any, relating to tax and other
payroll deductions as must be withheld pursuant to any applicable law or
regulation.


 


3.4          Stock.  In addition to, and
exclusive of, the above bonus payments described in this Section 3,
Executive shall be receive grants of Company Common stock.  It is
the intention of the parties hereto issue 100,000 shares of Common stock of the
Company during the first year 


 


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of the Executive’s contract. The initial
shares will be issued in the amount of 50,000 (at $2.00/share of common stock
and the second set of 50,000 shares at $2.00/share after the completion of six
months of employment.  Any grants
under the Stock Option Plan shall be made in accordance with and subject to the
terms thereof.


 


3.5          Benefits.


 


3.5.1       Participation in Benefit Plans. Except as otherwise provided in this Agreement,
Executive shall be entitled to participate in and receive benefits of any
benefits plans, benefits and privileges given to similar level employees of the
Company, to the extent commensurate with Executive’s then duties and
responsibilities (“Benefit Plans”) when and if such Benefit Plans are
established by the Company. The Company shall not make any changes in such
Benefit Plans that would adversely affect Executives’ rights or benefits
thereunder unless such change occurs pursuant to a program applicable to all
similar level employees of the Company and does not result in a proportionately
greater adverse change in the rights of or benefits to Executive as compared
with any other similar level employee of the Company.


 


3.5.2       Vacation. Executive shall
be entitled to three (3) weeks of paid vacation time each calendar year.


 


3.5.3       D&O
Liability Insurance. The Company shall provide Executive with
director’s and officer’s liability insurance coverage in an amount that the
Company, reasonably and in good faith, determines to be appropriate and
affordable. After expiration of the Executive’s employment and/or termination
of this Agreement, the Company shall provide Executive with director’s and
officer’s liability insurance coverage in an amount and for a period of time
that the Company, reasonably and in good faith, determines to be appropriate
and affordable.


 


3.5.4       Health
Insurance. The Executive shall continue to receive health
insurance benefits through the Federal Employees Program (FEP) and shall be
entitled to receive Executive’s contribution to the FEP. In 2007, PEP
Administrator set contributory amount at ($293.48 per month) or $3528 per
annum. Set amount shall be paid to the Executive by the Company in one lump sum
at the end of each calendar year, and if terminated for any reason, set amount
shall be prorated for the number of months Executive was employed. The amount
is subject to change as determined by the FEP administrator each fiscal year,
and the Company will be obligated to pay the Executive an amount equal to the figure
established by the FEP Administrator and on an annual basis throughout the
Term.


 


3.5.5       Life
Insurance. The Company shall provide Executive with life
insurance in accordance with the terms of any applicable life insurance plan
established by the Company.


 


3.5.6       Long-Term
Disability Insurance. The Company shall provide Executive with
long-term disability insurance in accordance with the terms of any applicable
long-term disability plan established by the Company.


 


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4.             SUPPORT AND EXPENSES.


 


4.1          Telecommute. The Company
shall authorize the Executive to telecommute from Executive’s residence during
those times when it is not advantageous to travel to the office and at times
where personal safety is a concern (example: hazardous or extreme weather
conditions or a homeland security alert is issued).


 


4.2          Expenses. The Company
shall reimburse Executive or otherwise provide for or pay for all reasonable
expenses incurred by the Executive in furtherance of, or in connection with,
the Company’s business, including, but not by way of limitation, traveling
expenses, communications expenses, and all reasonable entertainment expenses
(whether incurred at Executive’s residence, while traveling, or otherwise),
subject to such reasonable documentation and other limitations as may be
established by the Company.


 


5.             TERMINATION.


 


5.1          Termination Due to Death. The Company
shall have the right to terminate Executive’s employment by reason of death, in
which event the Company shall promptly pay his spouse or estate, as applicable,
all compensation, expenses and other amounts owed to Executive as of the Date
of Termination (as defined in Section 5.10 below).


 


5.2          Termination Due to
Disability. The Company shall have the right to terminate
Executive’s employment due to his Disability, in which event the Company shall
promptly pay him all compensation, expenses and other amounts owed to him as of
the Date of Termination (as defined in Section 5.10 below).


 


5.3          Termination
by Executive without Good Reason. Executive shall have the
right to terminate Executive employment at any time without Good Reason (as
that term is defined in Section 5.6 below, and subject to the conditions
specified in Section 5.10 below), in which event the Company shall
promptly pay Executive all compensation, expenses and other amounts owed to him
as of the Date of Termination (as defined in Section 5.10 below) and
thereafter shall no further obligation to pay Executive compensation (unless
required by applicable law).


 


5.4          Termination
by the Company without Cause. The Company
shall have the right to terminate Executive’s employment without Cause upon
thirty (30) days written notice (subject to and in accordance with Sections
5.10 and 6.2 below), in which event the Company shall, on the Date of
Termination, pay Executive all compensation, expenses and other amounts owed to
him as of the Date of Termination (as defined in Section 5.10 and 6.2
below) and shall continue to pay Executive’s Base Salary (in effect as of the
Date of Termination) for six (6) months.


 


5.5          Termination
by the Company For Cause. The Company shall have the
right to terminate the Executive’s employment for Cause subject to the
conditions set forth herein. If the Company terminates Executive’s employment
for Cause, the Company shall promptly pay Executive all compensation, expenses
and other amounts owed to him as of the Date of Termination (as defined in Section 5.10
below) and thereafter shall have no further obligation to pay him compensation.
As used in this Agreement, “Cause” shall mean any of the following: (a) Executive’s
conviction of, or plea of nolo contendere to, a felony or an act of moral
turpitude; (b) Executive’s commission of fraud against or embezzlement of
material misappropriation from the 


 


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Company, or (c) dishonesty or theft by Executive in connection
with his duties or in the course of his employment with the Company; (d) Executive’s
willful misconduct in the performance of Executive’s duties; (e) any
unauthorized use or disclosure by Executive of confidential information or
trade secrets of the Company; or (f) Executive’s breach of confidentiality
or material breach of this Agreement. With respect to relating to subsections
5.5(d) herein, the Board of Directors shall give Executive prompt notice
(in accordance with Section 6.2 below), and shall afford Executive thirty
(30) days after his receipt of such written notice to cure such grounds.


 


5.6          Termination
by Executive for Good Reason. Executive shall
have the right to terminate Executive employment for Good Reason, in which
event Executive shall be entitled to receive the same payments and benefits
specified in Section 5.4 of this Agreement. “Good Reason” shall mean the
occurrence of any of the following without Executives’ prior express written
consent the Company: (a) breaches any material term of this Agreement; (b) makes
or causes a material adverse change in his functions, duties or
responsibilities; or (c) materially reduces his Base Salary.  In order to terminate Executive’s  employment under this section, Executive
shall (i) give the Company thirty (30) days written notice under this Section (subject
to and in accordance with Sections 5.10 and 6.2 below) within ten (10) days
of the most recent event(s) constituting grounds for termination under
this Section during which thirty (30) day period the Company shall be
afforded the opportunity to cure the deficiencies giving rise to such
termination.


 


5.7          Benefits Upon Termination. Except as
otherwise provided in this Agreement, in the event of termination of Executive’s
employment under Section 5.1 through 5.6 above, Executive’s entitlement to
benefits under any Benefit Plan (as defined in Section 3.5 above) shall be
determined in accordance with applicable law and the provisions of such Benefit
Plan.


 


5.8          Termination
by Mutual Consent. Notwithstanding
any of the foregoing provisions of this Section 5, if, at any time during
the Term, the Parties by mutual consent decide to terminate this Agreement,
They may and shall do so by separate agreement setting forth the terms and
conditions of such termination.


 


5.9          Withholding.
All payments required to be made by the Company to Executive under Section 5
of this Agreement shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as must be withheld pursuant to
any applicable law or regulation.


 


5.10        Notice of
Termination. Any purported termination of Executive’s employment
by the Company for any reason, or by Executive for any reason, shall be
communicated by a written “Notice of Termination” to the other Party. A “Notice
of Termination” shall mean a dated notice that: (a) indicates the specific
termination provision in this Agreement relied on; (b) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated; (c) specifies
a Date of Termination; and (d) is given in the manner specified in Section 6.2.
“Date of Termination” shall mean the later of: (i) the date specified in
the Notice of Termination required by this Section; and (ii) the date
Notice of Termination is deemed to have been duly given in accordance with Section 6.2
of this Agreement.


 


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6.             CONFIDENTIALITY.


 


6.1          The
Executive acknowledges that during the period of employment, Executive will
have access to and possession of trade secret, confidential information, and
proprietary information (collectively, as defined more extensively below, “Confidential
Information”) of the Company, its parents, subsidiaries, and affiliates and
their respective clients.  The Executive
recognizes and acknowledges that this Confidential Information is valuable,
special, and unique to the Company’s business, and that access to and knowledge
thereof are essential to the performance of the Executive’s duties to the
Company.  During the Employment Period
and thereafter, Executive will keep secret and will not use or disclose to any
person or entity other than the Company, in any fashion or for any purpose
whatsoever, any Confidential Information relating to the Company, its parents,
subsidiaries, affiliates, or its clients, except at the request or the Company.  To the extent that Executive has signed any
other confidentiality agreement, such agreement continues in full force and
effect.


 


6.2          The term “Confidential
Information” means confidential data and confidential information relating to
the business of the Company, its parents, subsidiaries, and affiliates and
their respective clients, that is or has been disclosed to Executive or of
which Executive became aware as a consequence of or through Executive’s
employment with the Company and that has value to the Company and is not
generally known to the competitors of the Company and includes but is not
limited to information written, in digital form, in graphic form,
electronically stored, orally transmitted or memorized concerning the Company’s
business or operations plans, strategies, portfolio, prospects or objectives,
structure, products, product development, technology, distribution, sales,
services, support and marketing plans, practices, and operations; research and
development, financial records and information, and client lists.


 


6.3          The
Executive further recognizes that the Company has received and in the future
will receive from third parties confidential or proprietary information (“Third
Party Information”) subject to a duty on the Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes.  During the Employment Period
and thereafter, Executive will hold Third Party Information in the strictest
confidence and will not disclose to anyone (other than Company personnel who
need to know such information in connection with their work for the Company) or
use, except in connection with work for the Company, Third Party Information
unless expressly authorized by the Company in writing.


 


6.4          The
Executive further agrees to store and maintain all Confidential Information in
a secure place.  On the termination of
the relationship, Executive agrees to deliver all records, data, information,
and other documents produced or acquired during the period of employment, and
all copies thereof, to the Company.  Such
material at all times will remain the exclusive property of the Company, unless
otherwise agreed to in writing by the Company. 
Upon termination of the relationship, Executive agrees to make no
further use of any Confidential Information on his or her own behalf or on
behalf of any other person or entity other than the Company.


 


6.5          Assignment of Inventions and
Intellectual Property.  In consideration of Executive’s employment, Executive acknowledges and
agrees that the Company shall have exclusive, unlimited ownership rights to all
materials, information and other items created, 


 


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prepared,
derived or developed in connection with or arising from Executive’s employment
relationship with the Company, whether individually or jointly with others,
whether original or considered enhancements, improvement or modifications,
whether or not completed, and whether or not protectable as trade secrets,
service or trademarks, or through patent, copyright, mask work or any other
intellectual, industrial or other form of property protection or proprietary
rights (“Inventions”).  Executive further
agrees that all Inventions shall be deemed made in the course and scope of
Executive’s employment with the Company and shall belong exclusively to the
Company, with the Company having the sole right to obtain, hold and renew, in
its own name and for its own benefit, all registrations and other protections
that may be available by contract, license, law, equity and/or regulation.  To the extent that exclusive title or
ownership rights do not originally vest in the Company as contemplated,
Executive hereby irrevocably assigns, transfers and conveys (and agrees to
assign, transfer and convey in the future) to the Company all such rights.  Executive agrees to give the Company all
reasonable assistance and execute all documents reasonably necessary to assist
and enable the Company to perfect, preserve, enforce, register and record its
rights.  To the extent that Executive has
signed any other assignment of inventions agreement, such agreement continues
in full force and effect.


 


1.             Agreement Not to Compete


 


1.1          The Executive agrees with the Company that the services
which the Executive will render during the Employment Period are unique,
special and of extraordinary character, that the Company will be substantially
dependent upon such services to develop and market its products and to earn a
profit, and that the application of the Executive’s knowledge and services to
any competitive business would be substantially detrimental to the
Company.  Accordingly, in consideration
for employment by the Company and compensation and other benefits pursuant to
this Agreement, and any compensation the Executive may receive after her
employment is terminated, the Executive will not compete or interfere with the
Company or any affiliate of the Company (or any of their successors or
assigns), directly or indirectly during the Employment Period or for the six (6) month
period following termination of Executive’s employment (the “Restricted Period”).


 


The term “compete” as used
herein means to engage in, assist, or have any interest in, including without
limitation as a principal, consultant, employee, owner, shareholder, director,
officer, partner, member, advisor, agent, or financier, any entity that is, or
that is about to become engaged in, any activity that is in competition with,
or competes with the Company, provided that the Executive shall not be deemed
to “compete” with the Company if he does not perform any duties or services for
the competing entity that relate, directly or indirectly, to managing,
producing, soliciting or selling services, programs or products that provide
similar functions to any of the Company’s services, programs or proposed
products.


 


1.2          Furthermore, during the Restricted Period, Executive shall
not, directly or indirectly, with respect to the Company (including any
parents, subsidiaries or affiliates of the Company), or any successors or
assigns:


 


(a)           Solicit any of the Company’s customers except on the
Company’s behalf, or direct any current or prospective customer to anyone other
than the Company for goods or services that the Company provides;


 


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(b)           Directly or indirectly influence any of the Company’s
employees to terminate their employment with the Company or accept employment
with any of the Company’s competitors; or


 


(c)           Interfere with any of the Company’s business
relationships, including without limitation those with customers, suppliers,
consultants, attorneys, or other agents, whether or not evidenced by written or
oral agreements.


 


1.3          The Executive agrees that any breach of this Section 8
shall cause the Company substantial and irrevocable damage and therefore, in
the event of any such breach, the Executive agrees that (i) the Executive
shall not be entitled to any further payments due under the terms of this
Agreement, and (ii) any stock option granted but not exercised shall be
void and have no further force or effect. 
Furthermore, in addition to any other remedies that may be available,
the Company shall have the right to seek specific performance and injunctive
relief as set forth in this Agreement, without the need to post a bond or other
security.


 


1.4          The Executive further acknowledges that the covenants
contained in this Section are a material part of this Agreement and if
this Agreement is terminated for any reason, the Executive will be able to earn
a livelihood without violating these provisions.


 


2.             Return
of Company Property


 


When the Executive leaves
the employ of the Company, the Executive will deliver to the Company (and will
not keep in his possession, recreate or deliver to anyone else) any and all
devices, records, recordings, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
computer materials, equipment, other documents or property, together with all
copies thereof (in whatever medium recorded), belonging to the Company, its
successors or assigns.  The Executive
further agrees that any property situated on the Company’s premises and owned
by the Company, including computer disks and other digital, analog or hard copy
storage media, filing cabinets or other work areas, is subject to inspection by
Company personnel at any time with or without notice.


 


3.             Legal and Equitable Remedies


 


Because the Executive’s
services are personal and unique and because the Executive may have access to
and become acquainted with the Proprietary Information of the Company, and
because the parties agree that irrepressible harm would result in the event of
a breach of Sections 6, 7, 8, and 9 by the Executive, the Company may not have
an adequate remedy at law, the Company will have the right to enforce Sections
6, 7, 8, and 9 and any of their provisions by injunction, restraining order,
specific performance or other injunction relief, without bond, and without
prejudice to any other rights and remedies that the Company may have for a
breach of this Agreement.  The Company’s
remedies under this Section 10 are not exclusive and shall not prejudice
or prohibit any other rights or remedies under this Agreement or otherwise.


 


7.             GENERAL PROVISIONS.


 


7.1          Notice. All Notices of
Termination and other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or 


 


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mailed by certified or registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth below.


 


	
  To
  the Company:

  	
  American
  Defense Systems, Inc.

  
	
   

  	
  230
  Duffy Avenue, Unit C

  
	
   

  	
  Hicksville,
  NY 11801

  
	
   

  	
   

  
	
  To
  Executive:

  	
  Robert
  C. Aldrich

  
	
   

  	
  27
  Cambridge Avenue

  
	
   

  	
  Garden City, NY 11530

  



 


Either Party may change the
address to which Notices of Termination and other communications provided for
in this Agreement shall be sent to that Party, by giving the other Party notice
in the manner in this Section.


 


7.2          Assignment.
The Company shall assign this Agreement and its rights and obligations
hereunder in whole, but not in part, to any corporation or other entity with or
into which the Company may hereafter merge or consolidate or to which the
Company may transfer all or substantially all of its assets, if in any such
case said corporation or other entity shall by operation of law or expressly in
writing assume all obligations of the Company hereunder as fully as if it had
been originally made a party hereto; the Company may not otherwise assign this
Agreement or its rights and obligations hereunder. Executive may not assign or
transfer this Agreement or any rights or obligations hereunder.


 


7.3          Prior
Agreements. Executive has disclosed and provided a copy of
Executive’s independent contractor agreement with Potomac Institute For Policy
Studies, 901 N. Stuart St., Suite 200, Arlington, VA 22203 and independent
contractor agreement with Archaio, L.L.C., 575 Madison Avenue, 10th Floor, New York, NY 10022 to the Chief
Executive Officer and Corporate Counsel for review and Corporate Counsel
interprets that execution of this Agreement will not violate or conflict ( “conflict
of interest”) with or result in a breach or termination of any provision of, or
constitute a default under any other agreement.


 


7.4          Continuing
Status. Executive understands that his employment is
conditioned upon satisfactory completion of a background check and supplements
thereto from time to time. Executive represents that there is nothing in his
background that would prevent such satisfactory completion as related to the
duties of his position described herein. Further, Executive represents that, if
any litigation, civil or criminal, is filed against him during the course of
his employment under this Agreement, he shall notify the Company within five (5) business
days of such filing.


 


7.5          Indemnification.
The Company shall indemnify Executive and hold him harmless for any and
all liabilities arising from the performance of his duties under this Agreement
and services for the Company, subject to and in accordance with applicable law
and any applicable indemnification provisions in the Company’s Articles of
Incorporation and/or Bylaws.


 


7.6          Tax
Treatment of Payments and/or Benefits. Each payment made pursuant
to the terms and Agreement is intended as a separate payment within the meaning
of Code Section 409A and Department of Treasury regulations and other
interpretive guidance issued thereunder. 


 


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To the extent applicable and notwithstanding any other provisions of
this Agreement, this Agreement and payments and benefits hereunder shall be
administered, operated and interpreted in accordance with Code Section 409A
and Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulation or other guidance
that may be issue after the Effective Date of this Agreement; provided however,
in the event that the Company determines that any payments or benefits
hereunder may be taxable to Executive under Code 409A and related Treasury
guidance prior to the payment and/or delivery of such amount, the Company, may (I) adopt
such amendments to the Agreement that the Company reasonably and in good faith
determines necessary or appropriate to preserve the intended tax treatment of
the benefits provided under this Agreement and/or (ii) take such other
actions, including delaying the payment or delivery hereunder, as the Company
determines necessary or appropriate to comply with or exempt the payments or
benefits from the requirements of Code Section 409A.


 


7.7          Amendment and Waiver. No amendment of
modification of this Agreement shall be valid or binding upon the Parties
unless made in writing and signed by each of the Parties.


 


7.8          Non-Waiver of Breach. No failure by
either Party to declare a default due to any breach of any obligation under
this Agreement by the other, nor failure by either Party to act with regard
thereto, shall be considered to be a waiver of any such obligation or of any
future breach.


 


7.9          Severability.
In the event that any of the provisions of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such
invalidity or unenforceability shall not affect the remainder of this Agreement
and such remaining provisions shall be construed as if such invalid or
unenforceable provisions had never been a part hereof. If a court of competent
jurisdiction determines that the length of time, geographical restrictions or
any other restriction, or portion thereof, set forth in this Agreement is
overly restrictive and unenforceable, the parties agree that the court shall
reduce or modify such restrictions to those which it deems reasonable and
enforceable under the circumstances, and as so reduced or modified, the Parties
hereto agree that the restrictions of this Agreement shall remain in full force
and effect.


 


7.10        Governing Law. The validity
and effect of the Agreement and the rights and obligations of the Parties
hereto shall be construed and determined in accordance with the law of the
State of New York without regard to its conflicts of laws and principles.


 


7.11        Dispute Resolution. Any
controversy, dispute or claim arising out of our relating to this Agreement or
breach thereof shall first be resolved through good faith negotiation between
the Parties. If the Parties are unsuccessful at resolving the dispute through
such negotiation, the Parties agree to attempt in good faith to resolve the
dispute by mediation in New York City, New York (or such other location agreed
upon between the Parties), administered by JAMS. Either Party may commence such
mediation by providing the other Party (in accordance with Section 6.2
above) and JAMS a written request for mediation, setting forth the subject of
the dispute and the relief requested. The Parties covenant that they will
cooperate in good faith with JAMS and one another in selecting a mediator from
JAMS panel of neutrals and in scheduling and participating in the mediation
proceedings. If Parties are unsuccessful at 


 


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resolving the dispute through such mediation, the Parties agree to
final and binding arbitration in New York City, New York (or such other
location agreed upon between the Parties) administered by JAMS pursuant to its
Employment Arbitration Rules & Procedures (except insofar as they
conflict with the express provisions of this Section) and subject to JAMS
Policy on Employment Arbitration Minimum Standards of Procedural Fairness. Either
Party initiating such arbitration must do so by filing a written demand for
arbitration (and giving the other Party notice in accordance with Section 6.2
above) at any time following the initial mediation session or forty-five (45)
clays after the date of filing the written request for mediation, whichever
occurs first. The mediation may continue after the commencement of arbitration
if the Parties so agree. Unless otherwise agreed by the parties, the mediator
shall be disqualified from serving as arbitrator. The Arbitrator may, in the
award, allocate all or part of the costs, fees, and expenses of the
arbitration, including the arbitrator’s fees and prevailing Party’s attorneys’
fees. Judgment on the arbitration award may be entered in any court having jurisdiction.
The provisions of this Section may be enforced by any court of competent
jurisdiction, and the Party seeking enforcement shall be entitled to an award
of all costs, fees, and expenses, including attorneys’ fees, to be paid by the
Party against whom enforcement is ordered.


 


7.12        Binding Effect. This Agreement
shall be binding upon and shall inure to the benefit of the transferees,
successors and assigns of the Company, including any corporation or entity with
which the Company may merge or consolidate.


 


7.13        Headings.
Numbers and titles to Sections hereof are for
information purposes only and, where inconsistent with the text, are to be
disregarded.


 


7.15        Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which when taken together,
shall be and constitute one and the same instrument.


 


7.16        Executive’s
Warranties. Executive expressly warrants that Executive has
carefully read and fully understands all the provisions of this Agreement and
is hereby advised by the Company to consult an attorney of his own choosing in
deciding whether to sign this Agreement.


 


IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be duly executed as of the date
and year first written above.


 


	
  The
  Company:

  	
  American
  Defense Systems, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ferg Foley  8/1/2008

  
	
   

  	
   

  	
  Ferg
  Foley

  
	
   

  	
   

  	
  COO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Executive:

  	
  By:

  	
  /s/
  Robert Aldrich  8/1/2008

  
	
   

  	
   

  	
  Robert
  C. Aldrich

  



 


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