ENVIRONMENTAL INDEMNITY AGREEMENT

Exhibit 10.7

ENVIRONMENTAL INDEMNITY AGREEMENT

     This ENVIRONMENTAL INDEMNITY AGREEMENT (the “Agreement”) is made as of this 27th day of May, 2009 from EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation, with a place of business at 1806 Farmington Avenue, Farmington, Connecticut 06032, GROS-ITE INDUSTRIES, INC., a Connecticut corporation, with a place of business at 1806 Farmington Avenue, Farmington, Connecticut 06032, and APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation, with a place of business at 1806 Farmington Avenue, Farmington, Connecticut 06032 (collectively, the “Indemnitor”), to TD BANK, N.A., a national banking association with an office located at 102 West Main Street, New Britain, Connecticut 06050-0174 (the “Bank”).

Preliminary Statement

     WHEREAS, EDAC Technologies Corporation is the owner of a fee interest in certain real property located at 10 New Britain Avenue, Plainfield, Connecticut, as more particularly described in Exhibit A to the Mortgage (as hereinafter defined) (the “Land”; the Land, together with all improvements now or hereafter located on the Land, being hereinafter referred to as the “Property”);

     WHEREAS, this Agreement is made pursuant to a certain Credit Agreement of even date herewith by and between Indemnitor and Bank (the “Credit Agreement”), pursuant to which the Bank has made (i) a Mortgage Loan in the amount of TWO MILLION SIX HUNDRED FORTY THOUSAND AND 00/100 DOLLARS ($2,640,000.00) (the “Mortgage Loan”), which Mortgage Loan is evidenced by a certain Mortgage Note of even date herewith in the original amount of TWO MILLION SIX HUNDRED FORTY THOUSAND AND 00/100 DOLLARS ($2,640,000.00) (the “Mortgage Note”), (ii) a Term Loan in the amount of FOUR MILLION THREE HUNDRED SIXTY THOUSAND AND 00/100 DOLLARS ($4,360,000.00) (the “Term Loan”), which Term Loan is evidenced by a certain Term Note of even date herewith in the original amount of FOUR MILLION THREE HUNDRED SIXTY THOUSAND AND 00/100 DOLLARS ($4,360,000.00) (the “Term Note”), and (iii) a Revolving Loan in the amount of SEVEN MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($7,500,000.00) (the “Revolving Loan”, together with the Mortgage Loan and the Term Loan, collectively, the “Loan”), which Revolving Loan is evidenced by a certain Revolving Credit Note of even date herewith in the original amount of SEVEN MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($7,500,000.00) (the “Revolving Credit Note”, together with the Mortgage Note and the Term Note, collectively, the “Note”); and

     WHEREAS, the Note is secured by, among other things, a certain Open-End Mortgage Deed and Security Agreement from EDAC Technologies Corporation in favor of Bank (as amended from time to time, the “Mortgage”) encumbering the Property; and

     WHEREAS, as a condition to making the Loan, Bank requires Indemnitor to provide certain indemnities concerning existing and future asbestos, polychlorinated biphenyls and petroleum products and any other hazardous or toxic materials, wastes and substances which are

defined, determined or identified as such in any Laws (as hereinafter defined) (any such asbestos, polychlorinated biphenyls and petroleum products and any such other hazardous or toxic materials, wastes and substances being hereinafter collectively referred to as “Hazardous Materials”); as used in this Agreement, the term “Laws” means all federal, state and local laws, rules and regulations (whether now existing or hereafter enacted or promulgated), including, but not limited to, the Remediation Standard Regulations, §22a-133k, et seq., and all judicial and administrative interpretations thereof, including any judicial or administrative orders, directives and judgments;

     WHEREAS, to induce Bank to consummate the above described transaction and to lend the indicated amount to Borrower, Indemnitor has agreed to enter into this Agreement;

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitor hereby represents, warrants and covenants to Bank as follows:

     1. Indemnitor covenants and agrees, at its sole cost and expense, to defend, indemnify, protect and save (i) Bank; (ii) any persons or entities owned or controlled by, owning or controlling, or under common control or affiliated, with Bank; (iii) any participants in the Loan; (iv) the directors, officers, partners, employees and agents of Bank and/or such persons or entities; and (v) the heirs, personal representatives, successors and assigns of each of the foregoing persons or entities (each an “Indemnified Party”) harmless against and from, and, if and to the extent paid, reimburse them on demand for, any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys’ and experts’ reasonable fees and disbursements) of any nature whatsoever (collectively, the “Indemnified Matters”) which may at any time be required by or imposed upon, incurred by or asserted or awarded against Bank or an Indemnified Party arising directly or indirectly from, out of, or any way related to:

whether any of such matters arise before or after foreclosure of the Mortgage or other taking of title to all or any portion of the Property by Bank or any affiliate of Bank (provided, however, that any such indemnity shall not, as to any Indemnified Party, be available to the extent that any Indemnified Matter resulted from the actions of an Indemnified Party after title to the Property has been conveyed to such Indemnified Party). Indemnified Matters shall include, without limitation, all of the following: (i) the costs of remediation, removal or abatement (“remedial activities”) of Hazardous Materials from the Property or, when applicable, the surrounding areas (except that the indemnity provided for under this Agreement shall not cover the costs of such remedial activities unless either (a) such remedial activities are required by any Law, (b) such remedial activities constitute accepted practice by owners of similar properties, (c) any present or future use, operation, development, transfer, sale, lease, construction, alteration or reconstruction of all or any portion of the Property is or would be conditioned or affected in any way upon, or is or would be limited in any way until the completion of, such remedial activities, or (d) such removal is necessary to bring the surrounding areas into compliance with the Remediation Standard Regulations, §22a-133k et seq.); (ii) additional costs required to take necessary precautions to protect against, or to mitigate the effects of, the release of Hazardous Materials on, in, under, affecting or emanating from the Property or into the air, any body of water, any other public domain or any surrounding areas; and (iii) costs incurred to comply, in connection with all or any portion of the Property or, when applicable, any surrounding areas, with all applicable Laws with respect to Hazardous Materials (all remedial activities referred to in clause (i) above, all work and other actions to take precautions against any release referred to in clause (ii) above and all work and other actions performed in order to comply with Laws referred to in clause (iii) above being hereinafter collectively referred to as “Corrective Work”). Bank’s rights under this Agreement shall be in addition to all rights of Bank under the Credit Agreement, the Mortgage, the Note and any guaranty or guaranties (whether of payment and/or performance) given to Bank in connection with the Loan and under any other documents evidencing, securing or relating to the Loan (which documents together with the Mortgage, the Note and any such guaranty or guaranties, as amended from time to time, being hereinafter referred to as the “Loan Documents”), and payments by Indemnitor under this Agreement shall not reduce Indemnitor’s obligations and liabilities under the Loan Documents.

     2. Bank hereby agrees that, prior to Bank’s taking the actions described in clauses (x) and (y) below, Indemnitor may, at its sole cost and expense, (x) contest the assertion by any governmental authority or any third party of any obligation or liability affecting Indemnitor, Bank or the Property relating to the Corrective Work and (y) perform the Corrective Work, provided that at all times all of the following conditions are satisfied in full: