Document:

SUBSCRIPTION
AND INVESTMENT REPRESENTATION AGREEMENT

    

    Units
comprised of (i) one (1) share of common stock, par value $0.00001 per share
(the “Common Stock”) and (ii) one warrant, with each full warrant allowing
the  purchase one  (1) share of Common Stock, (collectively
the “Unit” or “Units”)

    

     (Except
as otherwise noted, all references to “dollars” or “$” are in United States
dollars).

    

    The
undersigned, ___________________________________________ (the “undersigned” or
the “Investor”), hereby
subscribes for the purchase of Units of Next 1 Interactive, Inc. Next 1, a
Nevada corporation (“Next 1”), in the
aggregate amount of up to a maximum of $1,000,000.    The
undersigned herewith submits the undersigned’s check or effects a wire transfer
of immediately available funds in the amount of $______________ in full payment
for such Units (the “Subscription
Price”).  In exchange for such payment of the Subscription
Price, the undersigned shall receive from the Next 1 ________________ amount of
Units.

    

    The
undersigned understands that (i) Next 1 is offering $1,000,000 in Units and the
Units may be redistributed to various related parties provided such distribution
is done in not less than $25,000 increments, (ii) the offering and sale of the
Units will only remain open until ________, 2010, unless such offer is extended
by the Company.

    

    The
undersigned hereby agrees to send payment of the $_____________ Subscription
Price either:

    

    

    
      	
               
      

            	
              a.

            	
              by
      mailing a check, payable to  Next 1 Interactive, Inc.
      “

            

    

    

    
      	
               
      

            	
              b.

            	
              wiring
      payment of the Subscription Price to the account set forth
      below

            

    

    

    Name
of Bank:  Bank of America

    Address
of Bank:  1381 Weston Rd, Weston FL

    Account
Name: Next 1 Interactive, Inc.

    Account
No.:

    ABA
No.:  026009593

    Reference:
Next 1 Interactive, Inc.

    

    In either
case, the undersigned agrees to execute this Subscription and Investment
Representation Agreement and mail same to Next One Interactive Inc, 2400 North
Commerce Parkway, Weston, Florida, 33326, Attn: Bill Kerby – CEO.

    

    Consummation
of the sale of the Securities to the undersigned and to all other Investors in
connection with the offering of a maximum of $600,000 of Units shall be
completed on or before ________, 2010 (the “Closing Date”),
unless such Closing Date shall be extended by  the Company
..

    

    1.    Certain
Representations of the Subscriber

    

    In
connection with, and in consideration of, the sale of the Securities to the
undersigned, the undersigned hereby represents and warrants to the Company and
its officers, directors, employees, agents and shareholders that the
undersigned:

    

    (a)           
Is familiar with (i)  Next 1’s Public Filings and is entering this
private placement agreement  in connection with this Next 1’s offering
of up to ______ Units in the amount of $________ per unit with each unit
comprised of ___________ common shares of Next 1 Interactive Inc and
___________warrants with each warrant having a two (2) year term and an exercise
price of $1.00 for  Next 1 Common Stock  and (ii) such other
information as the undersigned has received from Next 1 (collectively, the
“Next 1
Materials”).

    

    (b)           Has
had an opportunity to review and ask questions of an officer of Next 1
concerning the Next 1 Materials and desires no further information respecting
such Next 1 Materials.

     

    
      
         

      

      
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    (c)           Realizes
that Next 1 has incurred losses since its inception and must raise additional
funds to support its operations.

    

    (d)           Realizes
and accepts the personal financial risk attendant to the fact that that purchase
of the Units represents a speculative investment involving a high degree of
risk, and should not be purchased by any persons not prepared to lose their
entire investment.

    

    (e)           Can
bear the economic risk of an investment in the Units for an indefinite period of
time, can afford to sustain a complete loss of such investment, has no need for
liquidity in connection with an investment in the Units, and can afford to hold
the Units indefinitely.

    

    (f)        
   Realizes that there will be a limited market for the Units,
and that there are significant restrictions on the transferability of such
Units.

    

    (g)           Realizes
that the Units have not been registered for sale under the Securities Act of
1933, as amended (the “Act”), or applicable
state securities laws (the “State Laws”), and they may be sold only pursuant to
registration under the Act and State Law, or an opinion of counsel that such
registration is not required.

    

    (h)           Is
experienced and knowledgeable in financial and business matters, capable of
evaluating  the merits and risks of investing in the Units and does
not need or desire the assistance of a knowledgeable representative to aid in
the evaluation of such risks (or, in the alternative, has a knowledgeable
representative whom such investor intends to use in connection with a decision
as to whether to purchase the Units).

    

    (i)        
   Realizes that (a) there are substantial restrictions on the
transfer of the Units; (b) there is currently limited public market for the
Units and accordingly, for the above and other reasons, the undersigned may not
be able to liquidate an investment in such securities for an indefinite
period.

    

    2.      REPRESENTATIONS AND WARRANTIES OF
NEXT 1. Next 1 represents and warrants to and agrees with Investor, as
follows:

    

    (a)           The
Next 1 Materials as of their respective dates do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.

     

    (b)           Next
1 is authorized to issue 200,000,000 shares of its Common Stock. As of the date
hereof, an aggregate of 35,523,118 shares of Common Stock are issued and
outstanding.

     

    (c)           All
of the outstanding shares of capital stock of Next 1 has been duly authorized
and validly issued, is fully paid and non-assessable.

     

    (d)           Next
1 has the requisite corporate power and authority to enter into and execute,
deliver and perform their obligations under this Agreement, the Units and the
Warrants (collectively, the “Transaction
Documents”), including, without limitation to to permit the exercise of
such Warrants into Common Stock of Next 1. Each of the Transaction Documents has
been duly and validly authorized by Next 1 and, when executed and delivered by
Next 1, will constitute a valid and legally binding agreement of Next 1,
enforceable against Next 1 in accordance with their terms except as the
enforcement thereof may be limited by (A) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally or
(B) general principles of equity and the discretion of the court before
which any proceeding therefore may be brought (regardless of whether such
enforcement is considered in a proceeding at law or in equity) (collectively,
the “Enforceability
Exceptions”).

     

    
      
         

      

      
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    (e)           The
Units have been duly authorized and, when issued upon payment thereof in
accordance with this Agreement, will have been validly issued, fully paid and
nonassessable.  The stockholders of Next 1 have no preemptive or
similar rights with respect to the Common Stock.

     

    (f)            The
execution, delivery and performance by Next 1 of the Transaction Documents and
the consummation by Next 1 of the transactions contemplated thereby and the
fulfillment of the terms thereof will not violate, conflict with or constitute
or result in a breach of or a default under  (i) the articles of
incorporation of Next 1 or the bylaws of Next 1 (or similar organizational
document) or (ii) any statute, judgment, decree, order, rule or regulation
of any court or governmental agency or other body applicable to Next 1or any of
its respective properties or assets.

     

    3.     Investment
Intent

    

    The
undersigned has been advised that the Units have not been registered under the
Act or relevant State Laws but are being offered, and will be offered, and sold
pursuant to exemptions from the Act and State Laws, and that Next 1’s reliance
upon such exemption is predicated in part on the undersigned’s representations
contained herein.  The undersigned represents and warrants that the
Units are being purchased for the undersigned’s own account and for long term
investment and without the intention of reselling or redistributing the Units;
that the undersigned has made no agreement with others regarding any of the
Units; and that the undersigned’s financial condition is such that it is not
likely that it will be necessary for the undersigned to dispose of any of the
Units in the foreseeable future.  The undersigned is aware that (1)
there is presently no public market for the Units, and in the view of the
Securities and Exchange Commission a purchase of securities with an intent to
resell by reason of any foreseeable specific contingency or anticipated change
in market values, or any change in the liquidation or settlement of any loan
obtained for the acquisition of any of the Units and for which the Units were or
may be pledged as security would represent an intent inconsistent with the
investment representations set forth above, and (2) the transferability of the
Units is restricted and (a) requires the written consent of Next 1, and (b) will
be further restricted by a legend placed on the certificate(s) representing the
Units containing substantially the following language:

    

    The
securities represented by this certificate have not been registered under either
the Securities Act of 1933 or applicable state securities laws and may not be
sold, transferred, assigned, offered, pledged or otherwise distributed for value
unless there is an effective registration statement under such Act and such laws
covering such securities, or Next 1 receives an opinion of counsel acceptable to
Next 1 stating that such sale, transfer, assignment, offer, pledge or other
distribution for value is exempt from the registration and prospectus delivery
requirements of such Act and such laws.

    

    The
undersigned further represents and agrees that if contrary to the undersigned’s
foregoing intentions, the undersigned should later desire to dispose of or
transfer any of the Units in any manner, the undersigned shall not do so without
first obtaining (1) an opinion of counsel satisfactory to Next 1 that such
proposed disposition or transfer may be made lawfully without the registration
of such Units pursuant to the Act and applicable State Laws, or (2) registration
of such Units (it being expressly understood that Next 1 shall not have any
obligation to register such Units except as explicitly provided by written
agreement).

    

    4.     Residence

    

    The
undersigned represents and warrants that the undersigned is a bona fide resident of
_________________________ and that the Units are being accepted by the
undersigned in the undersigned’s name solely for the undersigned’s own
beneficial interest and not as nominee for, on behalf of, for the beneficial
interest of, or with the intention to transfer to, any other person, trust or
organization except as specifically set forth in this Agreement).

    

    PARAGRAPH
6 BELOW IS REQUIRED IN CONNECTION WITH EXEMPTIONS FROM THE ACT AND STATE LAWS
BEING RELIED ON BY NEXT 1 WITH RESPECT TO OFFER AND SALE OF THE
UNITS.  ALL OF SUCH INFORMATION WILL BE KEPT CONFIDENTIAL AND WILL BE
REVIEWED ONLY BY NEXT 1, THE AGENT, AND THEIR COUNSEL.  THE
UNDERSIGNED AGREES TO FURNISH ANY ADDITIONAL INFORMATION WHICH NEXT 1 OR THEIR
COUNSEL DEEMS NECESSARY IN ORDER TO VERIFY THE RESPONSES SET FORTH
ABOVE.

     

    
      
         

      

      
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    5.      Accredited
Status

    

    The
undersigned represents and warrants as follows (check if
applicable):

    

    a.           Accredited Investor:
Individual

    

    (1)_______
The undersigned is an individual with a net worth, or a joint net worth together
with his or her spouse, in excess of $1,000,000.  (In calculating net
worth, you may include equity in personal property and real estate, including
your principal residence, cash, short term investments, stock and
securities.  Equity in personal property and real estate should be
based on the fair market value of such property minus debt secured by such
property.)

    

    (2)________
The undersigned is an individual who had an individual income in excess of
$200,000 in each of the prior two years and reasonably expects an income in
excess of $200,000 in the current year; or

    

    (3)________
The undersigned is an individual who had with his/her spouse joint income in
excess of $300,000 in each of the prior two years and reasonably expects an
income in excess of $300,000 in the current year.

    

    (4)________
The undersigned is a director or executive officer of the Company.

    

    b.           Accredited Investor:
Entity

    

    (1)________
The undersigned is an entity all of whose equity owners meet one of the tests
set forth in a through d above.

    

    (2)________
The undersigned is an entity and is an “Accredited Investor” as defined in Rule
501(a) of Regulation D under the Act.  This representation is based on
the following (check one or more, as applicable):

    

    (a)______
The undersigned (or in the case of a trust, the undersigned trustee) is a bank
or savings and loan association as defined in Sections 3(a)(2) and 3(a)(5)(A) of
the Act, acting either in its individual or fiduciary capacity.

    

    (b)______
The undersigned is an insurance company as defined in Section 2(13) of the
Act.

    

    (c)_______
The undersigned is an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act.

    

    (d)________
The undersigned is a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (e)________
The undersigned is an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974 and either (check one
of more, as applicable):

    

    (i)________
the investment decision is made by a plan fiduciary, as defined in Section 3(21)
of such Act, which is either a bank, savings and loan association, insurance
company, or registered investment advisor; or

    

    (ii)________
the employee benefit plan has total assets in excess of $5,000,000;
or

    

    (iii)________
the plan is a self-directed plan with investment decisions made solely by
persons who are “Accredited Investors” as defined under the 1933
Act.

    

    (f)________
The undersigned is a private business development company as defined in Section
202(a)(22) of the Investment Advisors Act of 1940.

    

    (g)________
The undersigned has total assets in excess of $5,000,000, was not formed for the
specific purpose of acquiring shares of the Company and is one or more of
the following (check one or more, as appropriate):

    

    (i)________an
organization described in Section 501(c)(3) of the Internal Revenue Code;
or

    

    (ii)________
a corporation; or

    

    (iii)________
a Massachusetts or similar business, trust; or

    

    (iv)________
a partnership.

    

    (h)_________
The undersigned is a trust with total assets exceeding $5,000,000, which was not
formed for the specific purpose of acquiring shares of the Company and whose
purchase is directed by a person who has such knowledge and experience in
financial and business matters that he/she is capable of evaluating the merits
and risks of the investment in the Units.  IF
ONLY THIS RESPONSE IS CHECKED, PLEASE CONTACT THE COMPANY TO RECEIVE AND
COMPLETE AN INFORMATION STATEMENT BEFORE THIS SUBSCRIPTION CAN BE CONSIDERED BY
NEXT 1.

    

    6.     Manner
in Which Title to the Units and warrants Is To Be Held

    

    Please
check one:

    ______Individual

    ______Joint
Tenant with Right of Survivorship

    ______Partnership

    ______Tenants
in Common

    ______Corporation

    ______Other
(Specify_____________________)

    

    7.     Miscellaneous

    

    (a)           The
undersigned agrees that the undersigned understands the meaning and legal
consequences of the agreements, representations, and warranties contained
herein; agrees that such agreements, representations and warranties shall
survive and remain in full force and effect after the execution of the Units;
and further agrees to indemnify and hold harmless Next 1, each of their current
and future officers, directors, employees, agents and shareholders from and
against any and all loss, damage or liability due to, or arising out of, a
breach of any agreement, representation or warranty of the undersigned contained
herein.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
 

    (b)           This
Agreement shall inure to the benefit of and be binding upon Investor, Next
1  and their respective successors and legal representatives. Neither
Next 1, nor any Investor may assign this Agreement or any rights or obligation
hereunder without the prior written consent of the other party.

    

    (c)           This
Agreement, together with Transaction Documents, constitutes the entire agreement
among the parties hereto and supersedes all prior agreements, understandings and
arrangements, oral or written, among the parties hereto with respect to the
subject matter hereof and thereof.

     

    (d)           If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired
thereby.

     

    (e)           THE
VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET
FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PROVISIONS RELATING TO CONFLICTS
OF LAW TO THE EXTENT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY.  THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREE THAT ACTIONS, SUITS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT MAY BE BROUGHT ONLY IN STATE OR FEDERAL COURTS
LOCATED IN THE CITY OF NEW YORK, NEW YORK AND HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF SUCH COURTS FOR SUCH PURPOSE.

    

    (f)           This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

     

    (g)           Facsimile
signatures shall be construed and considered original signatures for purposes of
enforcement of the terms of this agreement.

     

     

    
      
         

      

      
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      SIGNATURE PAGE TO SUBSCRIPTION
AGREEMENT

    

     

     

    
      INDIVIDUAL
SUBSCRIBERS:

    

     

    
      
        
          
            
              
                
                  
                    
                      	    
             	 
      
	
                              Signature

                            	 
      
	 
      	 
      
	       
      	 
      
	
                              Name
      (Typed or Printed)

                            	 
      
	 
      	 
      
	         
        	 
      
	
                              Street
      Address

                            	 
      
	 
      	 
      
	     
        	 
      
	
                              City,
      State and Zip Code

                            	 
      
	 
      	 
      
	       
        	 
      
	
                              Home
      Telephone Number

                            	 
      
	 
      	 
      
	  
        	 
      
	
                              Social
      Security Number

                            	 
      
	 
      	 
      
	 
      	 
      
	
                              Tax
      Identification Number (for corporations or other entities)

                            	 
      

                    

                  

                

              

            

          

        

      

    

     

    Next 1
Interactive, Inc., hereby acknowledges receipt from ______________________of such subscriber’s check
in the amount of $_______ _____, and
accepts this subscription of       ____Units as
of _________, 2010.

     

    
      
        
          
            
              	 
      	
                      NEXT
      1 INTERACTIVE, INC.

                    
	 
      	 
      
	 
      	
                       
      

                    
	 
      	
                      Signature

                    
	 
      	 
      
	 
      	
                        
      

                    
	 
      	
                      Name
      (Typed or Printed)

                    
	 
      	 
      
	 
      	
                        
      

                    
	 
      	
                      Title

                    

            

          

        

      

    

     

     

     

    
      
         

      

      
        7Unassociated Document

    WAIVER
AGREEMENT

    

    This
Waiver Agreement (the “Agreement”) is made and
entered into, effective as of August 13, 2010 (the “Effective Date”), by and among
American Defense Systems, Inc., a Delaware corporation (the “Company”), and the
stockholders of the Company parties hereto (individually, a “Holder” and collectively, the
“Holders”).  Unless
otherwise specified herein, capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Certificate of
Designations (as defined below).

    

    RECITALS

    

    A.           The
Company and the Holders are parties to the Securities Purchase Agreement, dated
as of March 7, 2008 (as may be amended, modified, restated or supplemented from
time to time, the “Securities
Purchase Agreement”), pursuant to which the Holders purchased from the
Company shares of the Company’s Series A Convertible Preferred Stock, par value
$0.001 per share (the “Series A
Preferred Stock”), the terms of which are set forth in Exhibit A
(Certificate of Designations, Preferences and Rights of Series A Convertible
Preferred Stock) to the Company’s Third Amended and Restated Certificate of
Incorporation, as amended (the “Certificate of
Designations”).

    

    B.           Under
the Certificate of Designations, if any share of the Series A Preferred Stock
remains outstanding on December 31, 2010 (the “Maturity Date”), the Company
is required to redeem all of the then outstanding shares of the Series A
Preferred Stock on such date (such provision of the Certificate of Designations
is herein referred to as the “Mandatory Redemption
Provision”).

    

    C.           Pursuant
to a Waiver Agreement by and among the parties hereto, dated April 8, 2010 (the
“April Waiver
Agreement”), the Holders agreed to extend the Maturity Date to April 1,
2011.

    

    D.           The
Holders are willing to extend the Maturity Date to July 1, 2011, on the terms
and conditions hereinafter provided.

    

    TERMS OF
AGREEMENTS

    

    In
consideration of the premises and further valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

    

    1.           Extension
of Maturity Date.  As of the Effective Date, notwithstanding
any provision of the Certificate of Designations, any of the other Transaction
Documents (as defined in the Securities Purchase Agreement, the “Transaction Documents”) or the
April Waiver Agreement to the contrary, the parties hereto hereby agree to
extend the Maturity Date from April 1, 2011 to July 1, 2011 (the period from
December 31, 2010 to July 1, 2011, inclusive, the “Extension
Period”).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    2.           Waiver.           As
of the Effective Date, the Holders hereby agree that, during the Extension
Period: (i) the Holders hereby waive any right to the redemption of the Series A
Preferred Stock under the Mandatory Redemption Provision until the last day of
the Extension Period; (ii) the Company’s failure to comply with the Mandatory
Redemption Provision prior to the last day of the Extension Period shall be
deemed not to be a breach of such provision or the terms and conditions of, or
applicable to, the Series A Preferred Stock; (iii) and the Holders shall and do
hereby waive (A) all rights and remedies that would otherwise be available to
the Holders under the Certificate of Designations or any of the other
Transaction Documents as a result of the Company’s failure to comply with the
Mandatory Redemption Provision during the Extension Period to the extent that
such rights or remedies arise as a result of the existence or continuation of
the Company’s failure to comply with the Mandatory Redemption Provision,
including, without limitation, the remedies available to the Holders pursuant to
Section (4)(a)(ii) of the Certificate of Designations and (B) any Equity
Conditions Failure and any Triggering Event otherwise arising under the
Certificate of Designations as a result of any such failure to comply with the
Mandatory Redemption Provision prior to the last day of the Extension
Period.

    

    3.           Agreements
of the Company.           The
Company hereby (a) agrees that except as expressly provided in Sections 1 and 2
hereof, nothing in this Agreement shall constitute a waiver by the Holders of
any Triggering Event or Equity Condition Failure which may be continuing on the
date hereof or may occur after the date hereof and (b) affirms that the
Company's obligation to comply with the Mandatory Redemption Provision arises
upon the last day of the Extension Period, with respect to all then outstanding
shares of the Series A Preferred Stock.  Except as provided herein,
each Holder reserves the right, in its discretion, to exercise any or all rights
or remedies under the Certificate of Designation, the other Transaction
Documents, applicable law and otherwise as a result of any Triggering Event or
Equity Condition Failure that may be continuing on the date hereof or any
Triggering Event that may occur after the date hereof, and each Holder has not
waived any of such rights or remedies.  Except as expressly provided
in this Agreement, no delay on the Holder’s part in exercising such rights or
remedies, should be construed as a waiver of any such rights or
remedies.  Upon the last day of the Extension Period, the agreement of
the Holders to waive any of its remedies and rights pursuant to Section 2 hereof
shall automatically and without further action terminate and be of no force and
effect, it being understood and agreed that the effect of such termination will
be to permit the Holders to seek to exercise any and all of its rights and
remedies at any time and from time to time thereafter, including, without
limitation, the right to require redemption of all or any portion of Series A
Preferred Stock and exercise any other rights and remedies set forth in the
Certificate of Designation, the other Transaction Documents, applicable law or
otherwise, in each case, without any notice, passage of time or forbearance of
any kind.

    
      
         

      

      
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    4.           Miscellaneous.

    

    (a)           Governing Law; Jurisdiction;
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
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.

     

    (b)           Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature and a signature delivered electronically
(including by delivery via electronic mail of a signature page in “pdf” format)
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile or electronic signature.

     

    (c)           Headings.  The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

     

    (d)           Severability.  If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

     

    (e)           Entire Agreement;
Amendments.  This Agreement and the other Transaction Documents
supersede all other prior oral or written agreements between or among the
Holders, the Company, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein,
neither the Company nor any Holder makes any representation, warranty, covenant
or undertaking with respect to such matters.  No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the Required Holders, and any amendment to this Agreement made in
conformity with the provisions of this Section 4(e) shall be binding on all
Holders and holders of Securities (as such term is defined in the Securities
Purchase Agreement), as applicable.  No provision hereof may be waived
other than by an instrument in writing signed by the party against whom
enforcement is sought.  No such amendment shall be effective to the
extent that it applies to less than all of the holders of the applicable
Securities then outstanding.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (f)           Notices.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile numbers for such communications
shall be:

    

    If to the
Company:

    

    
      
        	
                American
      Defense Systems, Inc.

              
	
                230
      Duffy Avenue

              
	
                Hicksville,
      NY 11801

              
	
                Telephone:

              	
                (516)
      390-5300

              
	
                Facsimile:

              	
                (516)
      390-5308

              
	
                Attention:

              	
                Chief
      Financial Officer

              

      

    

    

    With a
copy (for informational purposes only) to:

    

    
      
        	
                Greenberg
      Traurig, LLP

              
	
                1750
      Tysons Boulevard

              
	
                Suite
      1200

              
	
                McLean,
      Virginia 22102

              
	
                Telephone:

              	
                (703)
      749-1336

              
	
                Facsimile:

              	
                (703)
      749-1301

              
	
                Attention:

              	
                Jeffrey
      R. Houle, Esq.

              

      

    

    

    If to a
Holder, to its address and facsimile number set forth on the Schedule of Buyers
attached to the Securities Purchase Agreement, with copies to such Holder's
representatives as set forth on such Schedule of Buyers,

     

    with a
copy (for informational purposes only) to:

     

    
      
        	
                Reicker,
      Pfau, Pyle & McRoy LLP

              
	
                1421
      State Street, Suite B

              
	
                Santa
      Barbara, CA 93101

              
	
                Telephone:

              	
                (805)
      966-2440

              
	
                Facsimile:

              	
                (805)
      966-3320

              
	
                Attention:

              	
                Michael
      E. Pfau, Esq.

              

      

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    or to
such other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

     

    (g)           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of shares of the Series A Preferred Stock.  The Company
shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Required Holders.  No Holder shall
assign or otherwise transfer any shares of Series A Preferred Stock without the
written agreement of the assignee or transferee of such stock to be bound by
this Agreement in all respects as a Holder hereunder.

     

    (h)           No Third Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

     

    (i)           Further
Assurances.  Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, to vote all of
such Holder’s capital stock of the Company in favor of any amendments to the
Company’s certificate of incorporation and Certificate of Designations to change
the Maturity Date to July 1, 2011.

     

    (j)           No Strict
Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.

     

    (k)           Independent Nature of
Holders’ Obligations and Rights.  The obligations of each
Holder under this Agreement are several and not joint with the obligations of
any other Holder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder under this
Agreement.  Nothing contained herein, and no action taken by any
Holder pursuant hereto, shall be deemed to constitute the Holders as, and the
Company acknowledges that the Holders do not so constitute, a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert or as a group, and
the Company will not assert any such claim with respect to such obligations or
the transactions contemplated by this Agreement and the Company acknowledges
that the Holders are not acting in concert or as a group with respect to such
obligations or the transactions contemplated hereby.  The Company
acknowledges and each Holder confirms that it has independently participated in
the negotiation of the transaction contemplated hereby with the advice of its
own counsel and advisors.  Each Holder shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement, and it shall not be necessary for any
other Holder to be joined as an additional party in any proceeding for such
purpose.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each
Holder and the Company have caused their respective signature page to this
Waiver Agreement to be duly executed as of the date first written
above.

     

    
      
        
          	
                  COMPANY:

                
	 
      
	
                  AMERICAN
      DEFENSE SYSTEMS, INC.

                
	 
      
	
                  By:

                	
                  /s/ Gary Sidorsky

                
	 
      	
                  Name:
      Gary Sidorsky

                
	 
      	
                  Title:
      Chief Financial Officer

                

        

      

    

    

    [Signature
Page to Waiver Agreement]

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each
Holder and the Company have caused their respective signature page to this
Waiver Agreement to be duly executed as of the date first written
above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	
                                                      HOLDERS:

                                                    
	 
	
                                                      WEST
      COAST OPPORTUNITY FUND, LLC

                                                    
	 
	
                                                      By:

                                                    	
                                                      West
      Cost Asset Management, Inc.,
      its

                                                    
	 
      	
                                                      Managing
      Member

                                                    

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/
      Atticus Lowe

            
	 
      	 
      	
              Name:  
      Atticus Lowe

            
	 
      	 
      	
              Title:  
      CIO of West Coast Asset

            
	 
      	 
      	
                Management,
      Inc.

            

    

     

    [Signature
Page to Waiver Agreement]

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each
Holder and the Company have caused their respective signature page to this
Waiver Agreement to be duly executed as of the date first written
above.

     

    
      
        
          
            	
                    HOLDERS:

                  
	 
      
	
                    CENTAUR
      VALUE FUND, LP

                  
	 
      
	
                    By:

                  	
                    /s/ Zeke Ashton

                  
	 
      	
                    Name:
      Zeke Ashton

                  
	 
      	
                    Title:  
      Managing Partner

                  

          

        

      

    

    

    [Signature
Page to Waiver Agreement]

    
      
         

      

      
        8

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