Exhibit 10.3
ASSUMPTION
AGREEMENT
THIS ASSUMPTION AGREEMENT (as the
same may be amended, modified or supplemented from time to time,
this “ Assumption ”), dated as of January 28,
2008, made by AMERICAN PHYSICAL SECURITY GROUP, LLC , a
Delaware limited liability company (the “ New
Subsidiary ”), in favor of the Lender (as defined below),
recites and provides:
R E C I T A L S
Pursuant to the terms of a Loan
Agreement, dated as of May 2, 2007, as amended by the First
Amendment to Loan Agreement, dated as of July 12, 2007 (as
further amended, modified or supplemented from time to time, the
“ Loan Agreement ”), between American Defense
Systems, Inc., a Delaware corporation (the “
Company ”), A. J. Piscitelli &
Associates, Inc., a New York corporation (“ AJP
”, and together with the Company, the “ Original
Borrowers ”), and Commerce Bank, N.A., a national banking
association (the “ Lender ”), the Lender agreed
to extend credit to the Original Borrowers. Capitalized terms
defined in the Loan Agreement shall have the same defined meanings
when such terms are used and not defined in this
Assumption.
Pursuant to the terms and conditions
of the Asset Purchase Agreement, of even date herewith, by and
between the Company, the New Subsidiary, American Anti
Ram, Inc., a Virginia corporation (“ AAR ”)
and the Owners (as therein defined, and as the collective owners of
all of the issued and outstanding capital stock of AAR), the New
Subsidiary acquired all of the assets of AAR. The Original
Borrowers and the New Subsidiary, together with the other
Subsidiaries of the Original Borrowers, are engaged in business on
a consolidated and integrated basis, and their integrated
operations include applying for and making use of credit on a joint
basis. Accordingly, the Original Borrowers have requested
that the New Subsidiary become a Borrower under the Loan Agreement
and the other Loan Documents. The Lender has agreed to accept
the New Subsidiary
