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