SECURITY AGREEMENT

Exhibit 10.2

SECURITY AGREEMENT

     This SECURITY AGREEMENT is made as of this 27th day of May, 2009 by and between TD BANK, N.A., a national banking association with an office located at 102 West Main Street, New Britain, Connecticut 06050-0174 (the “Bank” or “Secured Party”) and 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 “Debtors”).

RECITALS

     WHEREAS, Bank has agreed to make certain loans to Debtors, pursuant to the terms of a certain Credit Agreement dated of even date herewith among Debtors and Bank (the “Credit Agreement”), including (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 “Loans”), 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, Debtors have and will derive substantial benefits from the making of such Loans, advances and extensions of credit to Debtors by Bank; and

     WHEREAS, it is a condition precedent to the obligation of the Bank to make loans, advances and other extensions of credit to the Borrowers under the Credit Agreement that the Debtors shall have executed and delivered this Security Agreement to the Secured Party;

     NOW, THEREFORE, in consideration of the premises and to induce the Secured Party to continue to make loans, advances and other extensions of credit under the Credit Agreement, the Debtors hereby agree as follows:

     1.  Defined Terms .

     (a) Unless otherwise defined herein, terms which are defined in the Credit Agreement and used herein are so used as so defined.

     (b) The following terms which are defined in Article 9 are used herein as so defined: Accessions, Accounts, As-Extracted Collateral, Chattel Paper, Commercial Tort Claims, Consignments, Deposit Accounts, Documents, Equipment, Farm Products, General Intangibles, Goods, Health-Care-Insurance Receivables, Instruments, Inventory, Investment Property, Letters of Credit, Letter-of-Credit Rights, Payment Intangibles, Proceeds, Promissory Notes, Software and Supporting Obligations.

     (c) The following terms shall have the following meanings:

     “ Article 9 ” means Article 9 of the Code as in effect on and after October 1, 2001, the effective date of Public Act No. 01-132 of the State of Connecticut.

     “ Bank Account ” means (i) a deposit, custody or other account (whether, in any case, time or demand or interest or non-interest bearing) maintained by the Debtors with the Secured Party, (ii) all cash and securities from time to time held within such accounts and (iii) all dividends and other distributions payable on or with respect to, such account or such cash or securities.

     “ Code ” means the Uniform Commercial Code as from time to time in effect in the State of Connecticut, including, specifically, Article 9.

     “ Collateral ” shall have the meaning assigned to it in Section 2 of this Security Agreement.

     “ Collateral Disclosure List ” means, collectively, those certain Collateral Disclosure Lists executed by Debtors and delivered to the Bank.

     “ Contracts ” means the separate contracts between the Debtors and third parties (including without limitation its customers), as the same may from time to time be amended, supplemented or otherwise modified, including, without limitation, (a) all rights of the Debtors to receive moneys due and to become due to it thereunder or in connection therewith, (b) all rights of the Debtors to damages arising out of, or for, breach or default in respect thereof and (c) all rights of the Debtors to perform and to exercise all remedies thereunder; but excluding any contracts, the assignment or hypothecation of which, for collateral purposes, would result in a default or require, or cause, a forfeiture or permit a revocation of material rights under such contract.

     “ Copyrights ” means (a) all copyrights of the United States or any other country, including, without limitation, any thereof referred to in the Collateral Disclosure List; (b) all copyright registrations filed in the United States or in any other country, including, without limitation, any thereof referred to in the Collateral Disclosure List; and (c) all proceeds thereof.

     “ Copyright License ” means all agreements, whether written or oral, providing for the grant by the Debtors of any right to use any Copyright, including, without limitation, any thereof referred to in the Collateral Disclosure List and all proceeds thereof.

     “ Obligations ” has the meaning set forth in the Credit Agreement.

     “ Patents ” means (a) all patents of the United States and all reissues and extensions thereof, (b) all applications for patents of the United States and all divisions, continuations and continuations-in-part thereof or any other country, including, without limitation, any thereof referred to in the Collateral Disclosure List and (c) all proceeds thereof, including the goodwill of the business connected with the use of and symbolized by the Patents.

     “ Patent License ” means all agreements, whether written or oral, providing for the grant by the Debtors of any right to manufacture, use or sell any invention covered by a Patent, including, without limitation, any thereof referred to in the Collateral Disclosure List and all proceeds thereof.

     “ Requirement of Law ” has the meaning set forth in Section 5.(b) hereof.

     “ Security Agreement ” means this Security Agreement, as amended, supplemented, restated or otherwise modified from time to time.

     “ Trademarks ” means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether registered in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof or otherwise, including, without limitation, any thereof referred to in the Collateral Disclosure List; (b) all renewals thereof; and (c) all proceeds thereof, including the goodwill of the business connected with the use of and symbolized by the Trademarks.

     “ Trademark License ” means any agreement, written or oral, providing for the grant by the Debtors of any right to use any Trademark, including, without limitation, any thereof referred to in the Collateral Disclosure List and all proceeds thereof.

     “ Vehicles ” means all cars, trucks, trailers, construction and earth moving equipment and other vehicles covered by a certificate of title law of any state and, in any event, shall include, without limitation, the vehicles listed in the Collateral Disclosure List and all tires and other appurtenances to any of the foregoing.

     2.  Grant of Security Interest .

     (a) As collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations, the Debtors hereby grant to the Secured Party a security interest in all properties, assets and rights of

Debtors now owned or at any time hereafter acquired by the Debtors or in which the Debtors now have or at any time in the future may acquire any right, title or interest, wherever located or situated and however defined or classified under Article 9 (collectively, the “Collateral”):

     (b) Without limitation of the foregoing, the Collateral includes the following:

     3.  Rights of Secured Party; Limitations on Secured Party’s Obligations .

     (a)  Debtors Remains Liable under Accounts and Contracts . Anything herein to the contrary notwithstanding, the Debtors shall remain liable under each of the Accounts and Contracts to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account and in accordance with and pursuant to the terms and provisions of each such Contract. The Secured Party shall not have any obligation or liability under any Account (or any agreement giving rise thereto) or under any Contract by reason of or arising out of this Security Agreement or the receipt by the Secured Party of any payment relating to such Account or Contract pursuant hereto, nor shall the Secured Party be obligated in any manner to perform any of the obligations of the Debtors under or pursuant to any Account (or any agreement giving rise thereto) or under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto) or under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

     (b)  Notice to Account Debtors and Contracting Parties . Upon the request of the Secured Party at any time after the occurrence and during the continuance of an Event of Default, the Debtors shall notify account debtors on the Accounts and parties to the Contracts that the Accounts and the Contracts have been assigned to the Secured Party and that payments in respect thereof shall be made directly to the Secured Party. The Secured Party may in its own

name or in the name of others communicate with account debtors on the Accounts and parties to the Contracts to verify with them to its satisfaction the existence, amount and terms of any Accounts or Contracts.

     (c)  Analysis of Accounts . Subject to the provisions of the Credit Agreement, the Secured Party shall have the right, at its own expense, to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and Debtors shall furnish all such assistance and information as the Secured Party may reasonably require in connection therewith, provided that the making of the foregoing test verifications shall be at the expense of Debtors if and only if an Event of Default shall have occurred and be continuing. Subject to the provisions of the Credit Agreement, at any time upon the Secured Party’s request and after the occurrence and during the continuance of an Event of Default, or in connection with Debtor’s annual audit, Debtors, at its sole expense, shall cause its independent public accountants or others selected by Debtors and satisfactory to the Secured Party to furnish to the Secured Party reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts.

     (d)  Collections on Accounts . The Secured Party hereby authorizes the Debtors to collect the Accounts subject to the Secured Party’s direction and control as set forth in the Credit Agreement, and the Secured Party may curtail or terminate said authority upon the occurrence and during the continuance of an Event of Default. If required by the Secured Party upon the occurrence and during the continuance of an Event of Default, any payments of Accounts, when collected by the Debtors, shall be forthwith (and, in any event, within two Business Days) deposited by the Debtors in the exact form received, duly endorsed by the Debtors to the Secured Party if required, in a special collateral account maintained by the Secured Party, subject to withdrawal by the Secured Party only, as hereinafter provided, and, until so turned over, shall be held by the Debtors in trust for the Secured Party, segregated from other funds of the Debtors. Each deposit of any such Proceeds shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit. All Proceeds constituting collections of Accounts while held by the Secured Party (or by the Debtors in trust for the Secured Party) shall continue to be collateral security for all of the Obligations and shall not constitute payment thereof until applied as hereinafter provided. If an Event of Default shall have occurred and be continuing, at any time at the Secured Party’s election, the Secured Party shall apply all or any part of the funds on deposit in said special collateral account on account of the Obligations in accordance with the Credit Agreement, and any part of such funds which the Secured Party elects not so to apply and deems not required as collateral security for the Obligations shall be paid over from time to time by the Secured Party to the Debtors or to whomsoever may be lawfully entitled to receive the same. At the Secured Party’s request during the continuance of an Event of Default, the Debtors shall deliver to the Secured Party all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Accounts, including, without limitation, all original orders, invoices and shipping receipts.

     4.  Representations and Warranties . The Debtors hereby represent and warrant that:

     (a)  Title; No Other Encumbrances . Except for the Encumbrance granted to the Secured Party pursuant to this Security Agreement, and the other Encumbrances permitted to exist on the Collateral pursuant to the Credit Agreement, the Debtors own each item of the Collateral free and clear of any and all Encumbrances or claims of others. No security agreement, financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except such as may have been filed in favor of the Secured Party or any other Person holding a Permitted Encumbrance or as may be permitted pursuant to the Credit Agreement.

     (b)  Perfected First Priority Encumbrances . Except with respect to Vehicles referred to in Section 5(q) with respect to Permitted Encumbrances, the Encumbrances granted pursuant to this Security Agreement constitute perfected Encumbrances on the Collateral (not constituting real property) in favor of the Secured Party, which are prior to all other Encumbrances on the Collateral created by the Debtors and in existence on the date hereof, except as otherwise permitted in the Credit Agreement, based upon a search and review of the public files and records referenced in Section 4(a) hereof and which are enforceable as such against all creditors of and purchasers from the Debtors and against any owner or purchaser of the real property where any of the Equipment is located and any present or future creditor obtaining a Encumbrance on such real property.

     (c)  Accounts . The amount represented by the Debtors to the Secured Party from time to time as owing by each account debtor or by all account debtors in respect of the Accounts will at such time be the correct amount actually owing by such account debtor or debtors thereunder in all material respects. No amount payable to the Debtors under or in connection with any Account is evidenced by any Instrument or Chattel Paper (other than Contracts constituting Chattel Paper), which has not been delivered to the Secured Party. The place where the Debtors keep its records concerning the Accounts is set forth in the Collateral Disclosure List.

     (d)  Contracts . No consent of any party (other than the Debtors) to any Contract is required, or purports to be required, in connection with the execution, delivery and performance of this Security Agreement. Each Contract is in full force and effect and constitutes a valid and legally enforceable obligation of the parties thereto, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditor’s rights generally. No consent or authorization of, filing with or other act by or in respect of any Governmental Authority is required in connection with the execution, delivery, performance, validity or enforceability of any of the Contracts by any party thereto other than those which have been duly obtained, made or performed, are in full force and effect and do not subject the scope of any such Contract to any material adverse limitation, either specific or general in nature. Neither the Debtors nor (to the Debtors’ actual knowledge) any other party to any Contract is in default in a manner which could reasonably be expected to materially adversely affect the value of all such Contracts as Collateral or is reasonably likely to become in default in the performance or observance of any of the terms thereof in any material respect. The Debtors have fully performed all its current obligations under each Contract. The right, title and interest of the Debtors in, to and under each Contract are not subject to any defense, offset, counterclaim or claim which in the aggregate could reasonably be expected to have a Material Adverse Effect. No amount payable to the Debtors under or in connection with any Contract is

evidenced by any Instrument or Chattel Paper (other than Contracts constituting Chattel Paper), which has not been delivered to the Secured Party.

     (e)  Inventory and Equipment . The Inventory and the Equipment are kept at the locations listed in the Collateral Disclosure List.

     (f)  Chief Executive Office . The Debtors’ chief executive office, chief place of business and jurisdiction of incorporation or organization is set forth in the Collateral Disclosure List.

     (g)  As-Extracted Collateral . None of the Collateral constitutes, or is the Proceeds of, As-Extracted Collateral.

     (h)  Patents, Copyrights and Trademarks . All Patents, Patent Licenses, Trademarks, Trademark Licenses, Copyrights and Copyright Licenses owned by the Debtors in its own name as of the date hereof are listed on the Collateral Disclosure List. To the best of the Debtors’ knowledge, each Patent, Copyright and Trademark is valid, subsisting, unexpired, enforceable and has not been abandoned. Except as set forth in the Collateral Disclosure List, none of such Patents, Copyrights and Trademarks is the subject of any licensing or franchise agreement. No holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of any Patent, Copyright or Trademark. Except as disclosed in the Credit Agreement, no action or proceeding is pending (i) seeking to limit, cancel or question the validity of any Patent, Copyright or Trademark, or (ii) which, if adversely determined, could reasonably be expected to have a Material Adverse Effect.

     (i)  Vehicles . A complete