Exhibit 10.2
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (this Amendment) dated as of July 12,
2007, is made by and among AMERICAN DEFENSE SYSTEMS, INC., a Delaware
corporation (the "Company"), A. J. PISCITELLI & ASSOCIATES, INC., a New York
corporation ("AJP," with the Company and AJP collectively, the "Borrowers", and
individually, a "Borrower"), and COMMERCE BANK, N.A., a national banking
association (the "Bank").
RECITALS
The Borrowers and the Bank are parties to a Loan Agreement dated May 2, 2007
(the "Loan Agreement").
The Bank and the Borrowers have agreed to amend the Loan Agreement, subject to
the terms and conditions hereof.
Accordingly, for valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties hereto agree as
follows:
AGREEMENT
SECTION 1.
INCORPORATION OF RECITALS.
THE
FOREGOING RECITALS ARE INCORPORATED IN AND MADE A PART OF THIS AMENDMENT TO THE
SAME EXTENT AND WITH THE SAME FORCE AND EFFECT AS IF FULLY SET FORTH HEREIN.
ALL CAPITALIZED TERMS USED HEREIN, INCLUDING THE FOREGOING RECITALS, AND NOT
OTHERWISE DEFINED SHALL HAVE THE MEANINGS ASCRIBED TO SUCH TERMS IN THE LOAN
AGREEMENT.
SECTION 2.
AMENDMENT TO LOAN AGREEMENT.
THE LOAN
AGREEMENT IS HEREBY AMENDED AS FOLLOWS:
2.1
THE DEFINITION OF "BORROWING BASE REDUCTIONS"
IN THE SCHEDULE OF DEFINED TERMS ATTACHED TO THE LOAN AGREEMENT IS AMENDED TO
READ AS FOLLOWS:
"Borrowing Base Reductions" means, at any time, the sum of the following (a) any
outstanding letters of credit issued by the Lender or any Affiliate of the
Lender for the account of any Borrower, (b) any Rate Variance Liability, (c) the
Fixed Asset Costs Reserve, and (c) the sum of the credit limits established for
any credit card issued by the Lender or any Affiliate of the Lender to any
Borrower.
2.2
THE REMAINING TERMS OF THE LOAN AGREEMENT
SHALL REMAIN IN FULL FORCE AND EFFECT AND ARE RATIFIED AND AFFIRMED IN ALL
RESPECTS.
SECTION 3.
MODIFICATION OF LOAN DOCUMENTS.
THE
BORROWERS AGREE THAT, EFFECTIVE AS OF THE DATE OF THIS AMENDMENT THAT EACH
REFERENCE IN ANY LOAN DOCUMENTS TO THE LOAN AGREEMENT SHALL BE DEEMED A
REFERENCE TO THE LOAN AGREEMENT AS AMENDED HEREBY.
SECTION 4.
AMENDMENT ONLY; NO NOVATION.
THE
BORROWERS ACKNOWLEDGE AND AGREE THAT THIS AMENDMENT ONLY AMENDS CERTAIN TERMS OF
THE LOAN AGREEMENT AND IS NOT A NOVATION, AND THE BORROWERS
RATIFY AND CONFIRM THE TERMS AND PROVISIONS OF, AND THEIR OBLIGATIONS UNDER, THE
LOAN AGREEMENT AND EACH OTHER LOAN DOCUMENT IN ALL RESPECTS.
THE BORROWERS
ACKNOWLEDGE AND AGREE THAT THERE ARE NO DEFENSES, COUNTERCLAIMS OR SETOFFS
AGAINST ANY OF THEIR OBLIGATIONS UNDER THE LOAN DOCUMENTS.
IN THE EVENT ANY OF
THE TERMS ON ANY OF THE LOAN DOCUMENTS CONFLICT WITH THE TERMS OF THIS
AMENDMENT, THE TERMS OF THIS AMENDMENT SHALL CONTROL.
SECTION 5.
REPRESENTATIONS AND WARRANTIES.
EACH
BORROWER REPRESENTS AND WARRANTS THAT THIS AMENDMENT HAS BEEN DULY AUTHORIZED,
EXECUTED AND DELIVERED BY IT IN ACCORDANCE WITH RESOLUTIONS ADOPTED BY ITS BOARD
OF DIRECTORS. WHEN EXECUTED AND DELIVERED, THE LOAN DOCUMENTS