Exhibit 10.4


 




 





IRREVOCABLE
PROXY AND VOTING AGREEMENT


 


by and between


 


ANTHONY
PISCITELLI


(“Stockholder”)


 


and


 


WEST COAST
OPPORTUNITY FUND, LLC


CENTAUR VALUE
FUND, LP


UNITED
CENTAUR MASTER FUND


(“Holders”)


 




 





MAY 22,
2009


 




 




















 


IRREVOCABLE PROXY AND VOTING AGREEMENT


 


THIS IRREVOCABLE PROXY AND VOTING AGREEMENT (the
“Agreement”) is made and
entered into, dated for reference purposes as of May 22, 2009 (the “Effective
Date”), by and among ANTHONY PISCITELLI (“Stockholder”);
and WEST COAST OPPORTUNITY
FUND, LLC, CENTAUR VALUE FUND, LP, and UNITED
CENTAUR MASTER FUND (each, an “Investor” and collectively the
“Investors”).  Unless otherwise
specified herein, capitalized terms used and not otherwise defined herein shall
have the meanings assigned to such terms in the Settlement Agreement (as
defined below).


 


RECITALS:


 


A.            Stockholder
currently is the holder of 8,047,394 shares of the common capital stock (the “Common
Stock”) of AMERICAN DEFENSE SYSTEMS, INC., a
Delaware corporation (the “Company”).


 


B.            Investors are
holders of shares of the Company’s Series A Convertible Preferred
Stock,  par value $0.001 per share (the “Series A
Preferred Stock”), and concurrently with the execution of this Agreement,
the Company and Investors are executing that certain Settlement Agreement,
Waiver and Amendment dated as of May 22, 2009 (the “Settlement
Agreement”), pursuant to Section 3(g) of which, the Company is
agreeing, subject to the occurrence of the condition described therein, to use
its best efforts to obtain from its stockholders approval of (i) a
reduction in the Conversion Price, and (ii) an amendment of the Company’s
Certificate of Incorporation to confer upon the holders of Preferred Shares the
right to elect the Director Designees (such actions, the “Company Actions”).


 


C.            The
parties have agreed to execute this Agreement in order to memorialize
Stockholder’s agreement to grant a proxy and vote his shares of Company capital
stock in favor of such proposals as are necessary or convenient for effecting
the Company Actions, and the parties have agreed to execute this Agreement in
order to memorialize that voting agreement.


 


AGREEMENTS:


 


NOW, THEREFORE, in consideration of the foregoing and the
mutual promises, representations, warranties, covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:


 


1.             DEFINITIONS.  For purposes of
this Agreement, the term:


 


(a)           “BENEFICIALLY OWN” or “BENEFICIAL
OWNERSHIP” with respect to any securities shall mean Stockholder’s
having such ownership, control or power to direct the voting with respect
thereto.


 


(b)           “STOCKHOLDER SHARES” collectively shall mean and
include, as of any date, all of the shares of the voting capital stock of the
Company Beneficially Owned by Stockholder as of such date, including all shares
of common stock, preferred stock and other voting securities of the Company
owned by Stockholder as of the Effective Date of this Agreement and all other shares
of common stock, preferred stock and other voting securities hereafter acquired
by Stockholder, however acquired.


 


2.             VOTING AGREEMENT.  As an inducement to Investors to enter into
the Settlement Agreement, Stockholder hereby covenants and agrees with Investors
that subject to Section 3(c), below, at any meeting of the Company’s
stockholders, however called, and in connection with any written consent of the
Company’s stockholders, Stockholder shall vote the Stockholder Shares as of the
date of 


 


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such meeting or written
consent in favor of the Company Actions and against approval of any proposal
made in opposition to or in competition with consummation of the Company
Actions.


 


3.             IRREVOCABLE PROXY


 


(a)           APPOINTMENT.  For the term of this Agreement, Stockholder
hereby constitutes and appoints West Coast Opportunity Fund, LLC, which shall
act by and through ATTICUS LOWE or
LANCE HELFERT (the “Proxy
Holders”), or either of them, with full power of substitution, as
Stockholder’s true and lawful proxy and attorney-in-fact to vote at any meeting
(and any adjournment or postponement thereof) of the Company’s stockholders,
and in connection with any written consent of the Company’s stockholders, (i) in
favor of approval of amendments to the Company’s Certificate of Incorporation,
bylaws, and agreements to which the Company is a party or by which it is bound,
to effect the Company Actions, and (iii) against approval of any proposal
made in opposition to or in competition with consummation of the Company
Actions.


 


(b)           IRREVOCABLE.  The proxy and power of attorney granted
herein shall be irrevocable during the term of this Agreement, shall be deemed
to be coupled with an interest sufficient in law to support an irrevocable
proxy, and shall revoke all prior proxies granted by Stockholder.  Stockholder shall not grant to any person any
proxy which conflicts with the proxy granted herein, and any attempt to do so
shall be void.  The power of attorney
granted herein is a durable power of attorney and shall survive the death or
incapacity of Stockholder.


 


(c)           EXERCISE.  The Proxy Holder may exercise the proxy
granted herein, only during the term of this Agreement, and shall have the
right to vote the Stockholder Shares at any meeting of the Company’s
stockholders and in any action by written consent of the Company’s stockholders
in accordance with the provisions of Sections 3(a) and (b),
above.  Unless expressly requested by
Investors or the Proxy Holder in writing, Stockholder shall not vote any or all
of the Stockholder Shares, with respect to the matters described in Section 3(a) above,
at any such meeting or in connection with any such written consent of
stockholders with respect to the matters described in Section 3(a) above;
provided that Stockholder may, and the
Proxy Holders shall have no right to, vote the Stockholder Shares with respect
to all other matters.  The vote of the
Proxy Holder shall control in any conflict between a vote of or written consent
with respect to the Stockholder Shares by the Proxy Holder and a vote or action
by Stockholder with respect to the Stockholder Shares.


 


4.             OTHER COVENANTS, REPRESENTATIONS AND WARRANTIES.  Stockholder hereby represents and warrants to
and covenants with the Company as follows:


 


(a)           OWNERSHIP OF STOCKHOLDER SHARES.  Stockholder is the Beneficial Owner of all of
the current Stockholder Shares.  On the
date hereof, the Current Stockholder Shares constitute all of the voting
securities of the Company beneficially owned by Stockholder.  Stockholder has voting power with respect to
the matters set forth in Section 2 and Section 3(a) above,
with respect to all of the Stockholder Shares, free and clear of any
limitations, qualifications or restrictions on such rights.


 


(b)           POWER; BINDING AGREEMENT.  Stockholder has the legal capacity, power and
authority to enter into and perform all of his obligations under this
Agreement.


 


(c)           RESTRICTION ON TRANSFER, PROXIES AND NON-INTERFERENCE.  Except as otherwise expressly contemplated by
this Agreement, during the term of this Agreement, Stockholder shall not,
directly or indirectly:  (i) offer
for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or understanding
with respect to or consent to the offer for sale, sale, transfer, tender,
pledge, encumbrance, assignment or other 


 


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disposition of, any or all
of the Stockholder Shares Beneficially Owned by Stockholder as of the Effective
Date, other than to the extent permitted pursuant to Section 5
below; or (ii) grant any proxies or powers of attorney with respect to any
Stockholder Shares or deposit any Stockholder Shares into a voting trust or
enter into a voting agreement with respect to any Stockholder Shares in a
manner inconsistent with Stockholder’s obligations under Section 2
and Section 3(a) above.


 


5.             STOP TRANSFER; ADJUSTMENTS.  Stockholder agrees with, and covenants to,
the Company that Stockholder shall not request that the Company register the
transfer (book-entry or otherwise) of any certificate or uncertificated
interest representing any Stockholder Shares Beneficially Owned by Stockholder
as of the Effective Date, and the Company may refuse to register any such
transfer on its books and records unless (i) such transfer is permitted
pursuant to the provisions of the Lock-Up Agreement executed by Stockholder, (ii) prior
to effecting any such transfer, the Stockholder obtains a written agreement
between the transferee and the Company by which the transferee expressly agrees
to be bound by and comply with this Agreement to the same extent as if such
transferee were the “Stockholder” hereunder with respect to the Stockholder
Shares being transferred to it, and (iii) such transfer shall not cause
the representations of Stockholder in this Agreement to be untrue.


 


6.             TERM AND TERMINATION.  The term of this Agreement, including without
limitation the proxy granted pursuant to Section 3 hereof and
Stockholder’s covenants and agreements contained herein with respect to the
Stockholder Shares, shall commence on the Effective Date of this Agreement and
shall terminate immediately upon the earliest to occur of: (a) such date
on which no shares of Series A Preferred Stock remain outstanding, or
(b) June 30, 2011.


 


7.             REMEDIES.  Notwithstanding anything to the contrary
contained in this Agreement, in the event of a breach or threatened breach by
Stockholder of any representation, warranty, covenant, agreement or obligation
set forth in this Agreement prior to such termination of this Agreement, the
Company shall have all remedies available under applicable law, including but
not limited to (a) obtaining equitable relief to prevent such breach, and (b) obtaining
an order of specific performance requiring Stockholder to comply with
Stockholder’s obligations hereunder.


 


8.             MISCELLANEOUS


 


(a)           ENTIRE AGREEMENT;
AMENDMENTS.  This
Agreement (a) represents the entire understanding of the parties regarding
the subject matter hereof, and supersedes all other prior and contemporaneous
agreements and understandings, both written and oral, between or among the
parties with respect to the subject matter hereof, and (b) may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
parties hereto.


 


(b)           NOTICES.  All notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be deemed to be given and received (i) when delivered in
person, (ii) on the date on which transmitted by facsimile provided that there is a written receipt evidencing a
successful transmission, (iii) on the third (3rd) business day after
the date on which deposited in the United States mail in a sealed envelope,
postage prepaid, or (iv) on the next business day after the date on which
deposited in a sealed envelope with a nationally-recognized overnight courier (e.g., Federal Express), freight prepaid, addressed to the
party for whom intended at the address set forth on the signature page, below,
or such other address or facsimile number, notice of which is provided in a
manner permitted by this Section 8(b).


 


(c)           ASSIGNMENT.  This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the other
party; provided, however, that in connection
with 


 


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any assignment that is
consented to by the other party, the rights and duties created herein shall
attach to the Stockholder Shares and be binding upon any person to whom legal
or beneficial ownership shall pass by operation of law.


 


(d)           SEVERABILITY.  Whenever possible,
each provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, then such invalidity,
illegality or unenforceability will not affect any other provision or portion
of any provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
herein.


 


(e)           NO WAIVER.  The failure of any
party hereto to exercise any right, power or remedy provided under this
Agreement or otherwise available in respect hereof at law or in equity, or to
insist upon compliance by any other party hereto with its obligations
hereunder, and any custom or practice of the parties at variance with the terms
hereof, shall not constitute a waiver by such party of its right to exercise
any such or other right, power or remedy or to demand such compliance.


 


(f)            GOVERNING LAW; VENUE; WAIVER OF JURY
TRIAL. 
All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of Delaware, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of Delaware or any other
jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Delaware. 
Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in Wilmington, Delaware, for the
adjudication of any dispute under or in connection with this Agreement or the
other documents or agreements contemplated hereby (including the Securities
Purchase Agreement and the documents and agreements executed in connection
therewith, notwithstanding any provision therein to the contrary) or with any
transaction contemplated hereby or thereby or discussed herein or therein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner
permitted by law.  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.


 


(G)          COUNTERPARTS.  This Agreement may
be executed in two or more counterparts, each of which shall be deemed to be an
original and all of which, taken together, shall constitute one and the same
agreement, binding on each signatory thereto.


 


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IN
WITNESS WHEREOF, the
parties hereto have executed this Agreement, effective as of the date first set
forth above.


 


	
  “STOCKHOLDER:”

  	
   

  	
  “INVESTORS:”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WEST COAST OPPORTUNITY FUND, LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Anthony Piscitelli

  	
   

  	
  By

  	
  /s/
  Atticus Lowe

  
	
  Anthony
  Piscitelli

  	
   

  	
   

  	
  Name &
  title: Atticus Lowe, CIO of Managing Member

  
	
   

  	
   

  	
   

  
	
  Address, Facsimile No. & Email for
  Notices:

  	
   

  	
  CENTAUR VALUE FUND, LP

  
	
   

  	
   

  	
   

  
	
  Anthony
  Piscitelli

  	
   

  	
   

  
	
  American
  Defense Systems, Inc.

  	
   

  	
   

  
	
  230
  Duffy Avenue, Unit C

  	
   

  	
  By

  	
  /s/
  Zeke Ashton

  
	
  Hicksville,
  NY 11801  

  	
   

  	
   

  	
  Name &
  title: Zeke Ashton, Managing Partner

  
	
  Facsimile
  No.: (516) 390-5308

  	
   

  	
   

  
	
   

  	
   

  	
  UNITED CENTAUR MASTER FUND

  
	
  With a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Greenberg
  Traurig, LLP

  	
   

  	
   

  
	
  1750 Tysons
  Boulevard

  	
   

  	
  By

  	
  /s/ Zeke Ashton

  
	
  Suite 1200

  	
   

  	
   

  	
  Name &
  title: Zeke Ashton, Managing Partner

  
	
  McLean, Virginia
  22102

  	
   

  	
   

  
	
  Telephone:

  	
  (703) 749-1336

  	
   

  	
  Address, Facsimile No. & Email for
  Notices:

  
	
  Facsimile:

  	
  (703) 749-1301

  	
   

  	
   

  
	
  Attention:

  	
  Jeffrey
  R. Houle, Esq.

  	
   

  	
  To
  each Investor at its respective address and facsimile number set forth on the
  Schedule of Buyers attached to the Securities Purchase Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Michael E. Pfau, Esq.

  
	
   

  	
   

  	
  Reicker, Pfau, Pyle, McRoy & Herman LLP

  
	
   

  	
   

  	
  1421 State Street, Suite B

  
	
   

  	
   

  	
  P.O. Box 1470

  
	
   

  	
   

  	
  Santa Barbara, California 93102-1470

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile No.: (805) 966-3320

  
	
   

  	
   

  	
  Email Address: mpfau@rppmh.com

  
							



 


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