Exhibit 10.3
Lock-Up Agreement
May ,
2009
American Defense
Systems, Inc.
230 Duffy Avenue, Unit C
Hicksville, NY 11801
Re: American Defense
Systems, Inc.— Lock-Up Agreement
Dear Sirs:
This Lock-Up Agreement is being
delivered to you in connection with the Settlement Agreement,
Waiver and Amendment (the “ Agreement ”), dated
as of May 22, 2009 by and among American Defense
Systems, Inc., a Delaware corporation (the “
Company ”), and the holders (the “
Holders ”) of the convertible preferred stock of the
Company designated as Series A Convertible Preferred Stock
(the “ Series A Preferred Stock ”), which
shares of Series A Preferred Stock are convertible into shares
of common stock of the Company, par value $0.001 per share (the
“ Common Stock ”). Capitalized terms used
herein and not otherwise defined herein shall have the respective
meanings set forth in the Agreement.
In order to induce the Holders to
enter into the Agreement, the undersigned agrees that, commencing
on the Effective Date and ending on date on which no shares of
Series A Preferred Stock are outstanding (the “
Lock-Up Period ”), the undersigned will not
(i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase, make any short
sale or otherwise dispose of or agree to dispose of, directly or
indirectly, any shares of Common Stock, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended and the rules and regulations
of the Securities and Exchange Commission promulgated thereunder
with respect to any shares of Common Stock owned directly by the
undersigned (including holding as a custodian) or with respect to
which the undersigned has beneficial ownership within the
rules and regulations of the Securities and Exchange
Commission as of the Effective Date (collectively, the “
Undersigned’s Shares ”) or (ii) enter into
any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the
Undersigned’s Shares, whether any such transaction is to be
settled by delivery of such securities, in cash or otherwise.
The foregoing sentence shall not apply to the exercise of options
or warrants or the conversion of a security; provided, however,
that the undersigned agrees that the foregoing sentence shall apply
to any securities issued by the Company to the undersigned upon
such an exercise or conversion.
The foregoing restriction is
expressly agreed to preclude the undersigned or any affiliate of
the undersigned from engaging in any hedging or other transaction
which is designed to or which reasonably could be expected to lead
to or result in a sale or disposit
