exv10w2






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:









 



2


     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.









 



3


     “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









 



4



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:




	 	(i)	 	all Accounts;
	 
	 	(ii)	 	all As-Extracted Collateral;
	 
	 	(iii)	 	all Chattel Paper;
	 
	 	(iv)	 	all Commercial Tort Claims, if any, listed and described in the
Collateral Disclosure List or on any supplement thereto;
	 
	 	(v)	 	all Consignments;
	 
	 	(vi)	 	all Contracts;
	 
	 	(vii)	 	all Copyrights;
	 
	 	(viii)	 	all Copyright Licenses;
	 
	 	(ix)	 	all Deposit Accounts;
	 
	 	(x)	 	all Documents;
	 
	 	(xi)	 	all Equipment;
	 
	 	(xii)	 	all General Intangibles;
	 
	 	(xiii)	 	all Goods;
	 
	 	(xiv)	 	all Health-Care-Insurance Receivables;
	 
	 	(xv)	 	all Instruments;
	 
	 	(xvi)	 	all Inventory;
	 
	 	(xvii)	 	all Investment Property;
	 
	 	(xviii)	 	all Letter-of-Credit Rights;
	 
	 	(xix)	 	all Letters of Credit;
	 
	 	(xx)	 	all Patents;










 



5


	 	(xxi)	 	all Patent Licenses;
	 
	 	(xxii)	 	all Payment Intangibles;
	 
	 	(xxiii)	 	all Promissory Notes;
	 
	 	(xxiv)	 	all Software;
	 
	 	(xxv)	 	all Supporting Obligations;
	 
	 	(xxvi)	 	all Trademarks;
	 
	 	(xxvii)	 	all Trademark Licenses;
	 
	 	(xxviii)	 	all Vehicles; and
	 
	 	(xxix)	 	to the extent not otherwise included, all Proceeds (including
condemnation proceeds), all Accessions and additions thereto and
all substitutions and replacements therefore and products of any
and all of the foregoing.





     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









 



6



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.









 



7


     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









 



8



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 and correct list of all Vehicles owned by the Debtors is set
forth in the Collateral Disclosure List.



     (j) Governmental Obligors. Except as set forth on Schedule 4(j), none of the obligors
on any Accounts, and none of the parties to any Contracts, is a Governmental Authority with respect
to which the Federal Assignment of Claims Act is applicable.



     (k) Deposit Accounts. All deposit, custody, money market or other accounts (whether,
in any case, time or demand or interest or non-interest bearing) maintained by the Debtors with any
bank or any other financial institution are Deposit Accounts and are listed on the Collateral
Disclosure List.



     (l) Commercial Tort Claims. All Commercial Tort Claims to which the Debtors have a
right are listed on the Collateral Disclosure List.



     5. Covenants. The Debtors covenant and agree with the Secured Party that, from and
after the date of this Security Agreement until the obligations are paid in full and the commitment
terminated:



     (a) Further Documentation; Pledge of Instruments and Chattel Paper. At any time and
from time to time, upon the written request of the Secured Party, and at the sole expense of









 



9



the Debtors, the Debtors will promptly and duly execute and deliver such further instruments and
documents and take such further action as the Secured Party may reasonably request for the purpose
of obtaining or preserving the full benefits of this Security Agreement and of the rights and
powers herein granted, including, without limitation, the filing of any financing or continuation
statements under the Code in effect in any jurisdiction with respect to the Encumbrances created
hereby. The Debtors also hereby authorize the Secured Party to file any such financing or
continuation statement without the signature of the Debtors to the extent permitted by applicable
law. A carbon, photographic or other reproduction of this Security Agreement shall be sufficient
as a financing statement for filing in any jurisdiction. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any Instrument or Chattel
Paper (other than Contracts constituting Chattel Paper), such instrument or Chattel Paper shall be
immediately delivered to the Secured Party, duly endorsed in a manner satisfactory to the Secured
Party to be held as Collateral pursuant to this Security Agreement.



     (b) Indemnification. The Debtors agree to pay, and to save the Secured Party harmless
from, any and all liabilities, reasonable costs and expenses (including, without limitation,
reasonable legal fees and expenses) (i) with respect to, or resulting from, any delay in paying,
any and all excise, sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral, (ii) with respect to, or resulting from, any delay not caused by
the Secured Party in complying with any requirement of law, rule, regulation or guideline of any
Governmental Authority (collectively, a “Requirement of Law”) applicable to any of the Collateral
or (iii) in connection with any of the transactions contemplated by this Security Agreement in each
case other than liability arising by the gross negligence or willful misconduct of Secured Party.
In any suit, proceeding or action brought by the Secured Party under any Account or Contract for
any sum owing thereunder, or to enforce any provisions of any Account or Contract, the Debtors will
save, indemnify and keep the Secured Party harmless from and against all expense, loss or damage
suffered by reason of any defense, setoff, counterclaim, recoupment or reduction or liability
whatsoever of the account debtor or obligor thereunder, arising out of a breach by the Debtors of
any obligation thereunder or arising out of any other agreement, indebtedness or liability at any
time owing to or in favor of such account debtor or obligor or its successors from the Debtors.



     (c) Maintenance of Records. The Debtors will keep and maintain at its own cost and
expense satisfactory and complete records of the Collateral, including, without limitation, a
record of all payments received and all credits granted with respect to the Accounts. The Debtors
will mark its books and records pertaining to the Collateral to evidence this Security Agreement
and the security interests granted hereby. For the Secured Party’s further security, the Secured
Party shall have a security interest in all of the Debtors’ books and records pertaining to the
Collateral, and the Debtors shall turn over any such books and records to the Secured Party or to
its representatives during normal business hours at the request of the Secured Party.



     (d) Right of Inspection. Subject to the provisions of the Credit Agreement, the
Secured Party shall at all times have full and free access during normal business hours to all the
books, correspondence and records of the Debtors, and the Secured Party or their respective









 



10



representatives may examine the same, take extracts therefrom and make photocopies thereof, and the
Debtors agree to render to the Secured Party, at the Debtors’ cost and expense, such clerical and
other assistance as may be reasonably requested with regard thereto. The Secured Party and its
respective representatives shall at any reasonable time also have the right to enter into and upon
any premises where any of the Inventory or Equipment is located for the purpose of inspecting the
same, observing its use or otherwise protecting its interests-therein, all subject to the
provisions of the Credit Agreement.



     (e) Compliance with Laws, etc. The Debtors will comply in all material respects with
all Requirements of Law applicable to the Collateral or any part thereof or to the operation of the
Debtors’ business; provided, however, that the Debtors may contest any Requirement of Law in any
reasonable manner which shall not, in the sole opinion of the Secured Party, adversely affect the
Secured Party’s rights or the priority of its Encumbrances on the Collateral.



     (f) Compliance with Terms of Contracts, etc. The Debtors will perform and comply in
all material respects with all its obligations under the Contracts and all its other Contractual
Obligations relating to the Collateral except where such nonperformance and noncompliance could not
reasonably be expected to have a Material Adverse Effect.



     (g) Payment of Obligations. The Debtors will pay promptly when due all taxes,
assessments and governmental charges or levies imposed upon the Collateral or in respect of its
income or profits therefrom, as well as all claims of any kind (including, without limitation,
claims for labor, materials and supplies) against or with respect to the Collateral, except that no
such charge need be paid if (i) the validity thereof is being contested in good faith by
appropriate proceedings, (ii) such proceedings do not involve any material danger of the sale,
forfeiture or loss of any of the Collateral or any interest therein and (iii) such charge is
adequately reserved against on the Debtors’ books in accordance with GAAP.



     (h) Limitation on Encumbrances on Collateral. The Debtors will not create, incur or
permit to exist, will defend the Collateral against, and will take such other action as is
necessary to remove, any Encumbrance or claim on or to the Collateral, other than the Encumbrances
created hereby and other than as permitted pursuant to the Credit Agreement, and will defend the
right, title and interest of the Secured Party in and to any of the Collateral against the claims
and demands of all Persons whomsoever.



     (i) Limitations on Dispositions of Collateral. Subject to the provisions of the
Credit Agreement, the Debtors will not sell, transfer, lease or otherwise dispose of any of the
Collateral, or attempt, offer or contract to do so except for (x) sales of Inventory in the
ordinary course of its business and (y) so long as no Default or Event of Default has occurred and
is continuing, the disposition in the ordinary course of business of property not material to the
conduct of its business or as otherwise permitted under the Credit Agreement.



     (j) Limitations on Modifications, Waivers, Extensions of Contracts and Agreements Giving
Rise to Accounts. Except as otherwise set forth in the Credit Agreement, the Debtors will not
(i) amend, modify, terminate or waive any provision of any Contract or any agreement giving rise to
an account in any manner which could reasonably be expected to materially









 



11



adversely affect the value of such Contracts or Accounts as Collateral when examined in the
aggregate, (ii) fail to exercise promptly and diligently each and every material right which it may
have under each Contract and each agreement giving rise to an Account (other than any right of
termination) where such failure could have a material adverse effect on the value of such Contracts
or Accounts when examined in the aggregate or (iii) fail to deliver to the Secured Party a copy of
each material demand, notice or document received by it relating in any way to any Contract or any
material agreement giving rise to an Account.



     (k) Maintenance of Equipment. The Debtors will maintain each item of Equipment in
good operating condition, ordinary wear and tear and immaterial impairments of value and damage by
the elements excepted, and will provide all maintenance, service and repairs necessary for such
purpose except where the failure to maintain such Equipment could not reasonably be expected to
have a material adverse effect.



     (l) Maintenance of Insurance. Subject to the provisions of the Credit Agreement, the
Debtors will maintain, with financially sound and reputable companies, insurance policies (i)
insuring the Inventory, Equipment and Vehicles against loss by fire, explosion, theft and such
other casualties in amounts comparable to amounts of insurance coverage obtained by similar
businesses of similar size acting prudently and (ii) insuring the Debtors, the Secured Party
against liability for personal injury and property damage relating to such Inventory, Equipment and
Vehicles, such policies to be in such form and amounts and having such coverage as shall be
comparable to forms, amounts and coverage, respectively, obtained by similar businesses of similar
size acting prudently, with losses payable to the Debtors, the Secured Party as its interests may
appear. All such insurance shall (i) provide that no cancellation, material reduction in amount or
material change in coverage thereof shall be effective until at least thirty (30) days after
receipt by the Secured Party of written notice thereof, (ii) name the Secured Party as insured and
(iii) be reasonably satisfactory in all other respects to the Secured Party. If required by the
Secured Party, the Debtors shall deliver to the Secured Party a report of a reputable insurance
broker with respect to such insurance as set forth in the Credit Agreement.



     (m) Further Identification of Collateral. The Debtors will furnish to the Secured
Party from time to time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Secured Party may reasonably
request, all in reasonable detail.



     (n) Notices. The Debtors will advise the Secured Party promptly, in reasonable
detail, at its address set forth in the Credit Agreement, (i) of any Encumbrance (other than
Encumbrances created hereby or permitted under the Credit Agreement) on, or claim asserted against,
any of the Collateral and (ii) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the Collateral or on the
Encumbrances created hereunder.



     (o) Changes in Locations, Name, etc. The Debtors will not (i) change the location of
its chief executive office, chief place of business or jurisdiction of incorporation or
organization from that specified in Section 4 (f) or remove its books and records from the location
specified in Section 4(c), (ii) permit any of the Inventory or Equipment to be kept at a location
other than









 



12



those listed in the Collateral Disclosure List or (iii) change its name, identity or corporate
structure to such an extent that any financing statement filed by the Secured Party in connection
with this Security Agreement would become seriously misleading or faulty under Article 9, unless it
shall have given the Secured Party at least thirty (30) days prior written notice thereof.



     (p) Patents, Copyrights and Trademarks.



          (i) The Debtors (either itself or through licensees) will, except with respect to any
Trademark that the Debtors shall reasonably determine is of negligible economic value to it, (i)
continue to use each Trademark on each and every trademark class of goods applicable to its current
line as reflected in its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii) maintain as in the
past the quality of products and services offered under such Trademark, (iii) with respect to a
registered Trademark, employ such Trademark with the appropriate notice of registration, (iv) not
adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark
unless the Secured Party, shall obtain a perfected security interest in such mark pursuant to this
Security Agreement, and (v) not (and not permit any licensee or sublicensee thereof to) do any act
or knowingly omit to do any act whereby any Trademark may become invalidated.




          (ii) The Debtors will not, except with respect to any Patent that the Debtors shall reasonably
determine is of negligible economic value to it, do any act, or omit to do any act, whereby any
Patent may become abandoned or dedicated.




          (iii) The Debtors will notify the Secured Party immediately if it knows, or has reason to
know, that any application or registration relating to any Patent, Copyright or Trademark may
become abandoned or dedicated, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any proceeding in the
United States Patent and Trademark Office or any court or tribunal in any country) regarding the
Debtors’ ownership of any Patent, Copyright or Trademark or its right to register the same or to
keep and maintain the same.




          (iv) Whenever the Debtors, either by itself or through any Secured Party, employee, licensee
or designee, shall file an application for the registration of any Patent or Trademark with the
United States Patent and Trademark Office or any Copyright with the United States Copyright Office
or any similar office or agency in any other country or any political subdivision thereof, the
Debtors shall report such filing to the Secured Party within five (5) Business Days after the last
day of the fiscal quarter in which such filing occurs.




          (v) The Debtors shall execute and deliver any and all agreements, instruments, documents, and
papers as the Secured Party may request to evidence the Secured Party’s security interest in any
Patent, Copyright or Trademark and the goodwill and general intangibles of the Debtors relating
thereto or represented thereby, and the Debtors hereby constitute the Secured Party its
attorney-in-fact to execute and file all such writings for the foregoing purposes, all acts of such
attorney being hereby ratified and confirmed; such power being coupled with an interest is
irrevocable until the Obligations are paid in full and the commitment is terminated.










 



13




          (vi) The Debtors will take all reasonable and necessary steps, including, without limitation,
in any proceeding before the United States Patent and Trademark Office, or any similar office or
agency in any other country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each registration of any
registered Patents, Copyrights and Trademarks, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.




          (vii) In the event that any material Patent, Copyright or Trademark included in the Collateral
is infringed, misappropriated or diluted by a third party, the Debtors shall promptly notify the
Secured Party after it learns thereof and shall, unless the Debtors shall reasonably determine that
such Patent, Copyright or Trademark is of negligible economic value to the Debtors, promptly sue
for infringement, misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution, or take such other
actions as the Debtors shall reasonably deem appropriate under the circumstances to protect such
Patent, Copyright or Trademark.




     (q) Vehicles. The Debtors will maintain each Vehicle in good operating condition,
ordinary wear and tear and immaterial impairments of value and damage by the elements excepted, and
will provide all maintenance, service and repairs necessary for such purpose. The Debtors will
notify the Secured Party of each acquisition or sale of a vehicle, promptly following the
acquisition or sale thereof. If an Event of Default shall occur and be continuing, at the request
of the Secured Party the Debtors shall, within five (5) Business Days after such request, file
applications for certificates of title indicating the Secured Party’s first priority Encumbrance on
the Vehicles covered by such certificates, together with any other necessary documentation, in each
office in each jurisdiction which the Secured Party shall deem advisable to perfect its
Encumbrances on the Vehicles.



     (r) Inventory. None of the Inventory of the Debtors shall be evidenced by a warehouse
receipt.



     (s) Commercial Tort Claims. The Debtors shall promptly notify the Secured Party in
writing upon incurring or otherwise obtaining a Commercial Tort Claim against any third party, and
upon request of the Secured Party, promptly enter into an amendment to this Agreement or a
supplement to the Collateral Disclosure List and do such other acts or things deemed appropriate by
the Secured Party to give the Secured Party a security interest in any such Commercial Tort Claim.



     6. Secured Party’s Appointment as Attorney-in-Fact.



     (a) Powers. The Debtors hereby irrevocably constitute and appoint the Secured Party
and any of officer or Secured Party thereof with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and stead of the Debtors
and in the name of the Debtors or in its own name, from time to time in the Secured Party’s
discretion, for the purpose of carrying out the terms of this Security Agreement, to take any and
all appropriate action and to execute any and all documents and instruments which may be









 



14



necessary or desirable to accomplish the purposes of this Security Agreement, and, without limiting
the generality of the foregoing, the Debtors hereby give the Secured Party the power and right, on
behalf of the Debtors, without notice to or assent by the Debtors, to do the following:



          (i) in the case of any Account, at any time when the authority of the Debtors to collect the
Accounts has been curtailed or terminated pursuant to the first sentence of Section 3(d) hereof, or
in the case of any other Collateral, at any time when any Event of Default shall have occurred and
is continuing, in the name of the Debtors or its own name, or otherwise, to take possession of and
endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of
moneys due under any Account, Instrument, General Intangible or Contract or with respect to any
other Collateral and to file any claim or to take any other action or proceeding in any court of
law or equity or otherwise deemed appropriate by the Secured Party for the purpose of collecting
any and all such moneys due under any Account, Instrument, General Intangible or Contract or with
respect to any other Collateral whenever payable; and




          (ii) to pay or discharge taxes and Encumbrances levied or placed on the Collateral except for
Permitted Encumbrances under the Credit Agreement, to effect any repairs or any insurance called
for by the terms of this Security Agreement and to pay all or any part of the premiums therefor and
the costs thereof; and upon the occurrence and during the continuance of any Event of Default, (A)
to direct any party liable for any payment under any of the Collateral to make payment of any and
all moneys due or to become due thereunder directly to the Secured Party or as the Secured Party
shall direct; (B) to ask or demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in respect of or arising out of
any Collateral; (C) to sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and
other documents in connection with any of the Collateral; (D) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent jurisdiction to collect the
Collateral or any thereof and to enforce any other right in respect of any Collateral; (E) to
defend any suit, action or proceeding brought against the Debtors with respect to any Collateral;
(F) to settle, compromise or adjust any suit, action or proceeding described in clause (E) above
and, in connection therewith, to give such discharges or releases as the Secured Party may deem
appropriate; (G) to assign any Patent, Copyright or Trademark (along with the goodwill of the
business to which any such Trademark pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the Secured Party shall in its sole discretion determine;
and (H) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the Secured Party were the
absolute owner thereof for all purposes, and to do, at the Secured Party’s option and the Debtors’
expense, at any time, or from time to time, all acts and things which the Secured Party deems
necessary to protect, preserve or realize upon the Collateral and the Secured Party’s Encumbrances
thereon and to effect the intent of this Security Agreement, all as fully and effectively as the
Debtors might do. The Debtors hereby ratify all that said attorneys shall lawfully do or cause to
be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be
irrevocable.










 



15




     (b) Other Powers. The Debtors also authorize the Secured Party, at any time and from
time to time, to execute, in connection with the sale provided for in Section 9 hereof, any
endorsements, assignments or other instruments of conveyance or transfer with respect to the
Collateral.



     (c) No Duty on Secured Party’s Part. The powers conferred on the Secured Party
hereunder are solely to protect the Secured Party’s interests in the Collateral and shall not
impose any duty upon the Secured Party to exercise any such powers. The Secured Party shall be
accountable only for amounts that they actually receives as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or agents shall be
responsible to the Debtors for any act or failure to act hereunder, except for its own gross
negligence or willful misconduct.



     7. Performance by Secured Party of Debtors’ Obligations. If the Debtors fail to
perform or comply with any of its agreements contained herein and the Secured Party, as provided
for by the terms of this Security Agreement, shall itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of the Secured Party incurred in
connection with such performance or compliance, together with interest thereon at a rate per annum
equal to the Default Rate, shall be payable by the Debtors to the Secured Party on demand and shall
constitute Obligations secured hereby.



     8. Proceeds. In addition to the rights of the Secured Party specified in Section 3(d)
with respect to payments of Accounts, it is agreed that if an Event of Default shall occur and be
continuing (a) all Proceeds received by the Debtors consisting of cash, checks and other near-cash
items shall be held by the Debtors in trust for the Secured Party, segregated from other funds of
the Debtors, and shall, forthwith upon receipt by the Debtors, be turned over to the Secured Party
in the exact form received by the Debtors (duly endorsed by the Debtors to the Secured Party, if
required), and (b) any and all such Proceeds received by the Secured Party (whether from the
Debtors or otherwise) may, in the sole discretion of the Secured Party, be held by the Secured
Party as collateral security for, and/or then or at any time thereafter may be applied by the
Secured Party against, the Obligations (whether matured or unmatured), such application to be made
in accordance with the provisions of the Credit Agreement. Any balance of such Proceeds remaining
after the Obligations shall have been paid in full shall be paid over to the Debtors or to
whomsoever may be lawfully entitled to receive the same.



     9. Remedies. If an Event of Default shall occur and be continuing the Secured Party
may exercise, in addition to all other rights and remedies granted to it in this Security Agreement
and in any other instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the Code. Without limiting the generality of the
foregoing, except as otherwise set forth in the Credit Agreement, the Secured Party, without demand
of performance or other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon the Debtors or any other Person (all and
each of which demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do









 



16



any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange,
broker’s board or office of the Secured Party or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on, credit or for future
delivery without assumption of any credit risk. The Secured Party shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of
redemption in the Debtors, which right or equity is hereby waived or released. The Debtors further
agree, at the Secured Party’s request, to assemble the Collateral and make it available to the
Secured Party at places, which the Secured Party shall reasonably select, whether at the Debtors’
premises or elsewhere. The Secured Party shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Secured Party hereunder,
including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Secured Party may elect, and only after
such application and after the payment by the Secured Party of any other amount required by any
provision of law, including, without limitation, Section 615 of the Code, need the Secured Party
account for the surplus, if any, to the Debtors. To the extent permitted by applicable law, the
Debtors waive all claims, damages and demands it may acquire against the Secured Party arising out
of the exercise by the Secured Party of any of its rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least ten (10) days before such sale or other disposition. The
Debtors shall remain liable for any deficiency if the proceeds of any sale or other disposition of
the Collateral are insufficient to pay the obligations and the fees and disbursements of any
attorneys employed by the Secured Party to collect such deficiency.



     10. Limitation on Duties Regarding Preservation of Collateral. The Secured Party’s
sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in
its possession, under Section 9-207 of the Code or otherwise, shall be to deal with it in the same
manner as the Secured Party deals with similar property for its own account. Neither the Secured
Party, nor any of its respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Debtors or otherwise.



     11. Powers coupled with an Interest. All authorizations and agencies herein contained
with respect to the Collateral are irrevocable and powers coupled with an interest.



     12. Severability. Any provision of this Security Agreement, that is prohibited or
unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.









 



17


     13. Paragraph Headings. The paragraph headings used in this Security Agreement are
for convenience of reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.



     14. No Waiver; Cumulative Remedies. The Secured Party shall not by any act (except by
a written instrument pursuant to Section 15 hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event
of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Secured Party, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. A waiver by the Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy, which the Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or remedies provided by
law.



     15. Waivers and Amendments; Successors and Assigns, Governing Law. None of the terms
or provisions of this Security Agreement may be waived, amended, supplemented or otherwise modified
except as provided by the Credit Agreement. This Security Agreement shall be binding upon the
successors and assigns of the Debtors and shall inure to the benefit of the Secured Party and its
respective successors and assigns. This Security Agreement and the rights and obligations of the
parties hereunder shall be construed and interpreted in accordance with the laws of the State of
Connecticut (the “Governing State”) (excluding the laws applicable to conflicts or choice of law).



     DEBTORS AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS SECURITY AGREEMENT OR ANY OF THE OTHER
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF CONNECTICUT OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENT TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON DEBTORS BY MAIL AT THE ADDRESS SET FORTH IN THE SECURITY AGREEMENT.
DEBTORS HEREBY WAIVE ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT
OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT FORUM.



     16. Notices. Notices hereunder shall be given to the Debtors in care of the Debtors
in the manner set forth in the Credit Agreement.



     17. Termination. Upon the indefeasible payment in full in cash and the performance of
the Obligations in full shall terminate and the Secured Party shall deliver any release of the
Encumbrances created under this Security Agreement that the Debtors may reasonably request.



     18. Specific Releases. So long as no Default or Event of Default has occurred and is
continuing, if the Debtors shall sell, transfer, lease or otherwise dispose of any of the
Collateral permitted by the terms of this Security Agreement, including, without limitation,
Section 5(i)









 



18



hereof, and the Credit Agreement, then the Secured Party shall deliver a release in respect of any
Encumbrance created under this Security Agreement in such disposed Collateral that the Debtors may
reasonably request.



     19. Replacement of Notes. Upon receipt of an affidavit of an officer of Bank as to
the loss, theft, destruction or mutilation of any Note or any other security document which is not
of public record, and, in the case of any such loss, theft, destruction or mutilation, upon
cancellation of such Note or other security document, Debtors will issue, in lieu thereof, a
replacement note or other security document in the same principal amount thereof and otherwise of
like tenor.



     20. Waiver of Jury Trial. DEBTORS AND BANK (BY ACCEPTANCE OF THIS NOTE) MUTUALLY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURITY AGREEMENT OR ANY
OTHER DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE
OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF BANK RELATING TO
THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE OTHER DOCUMENTS, AND AGREE THAT NEITHER PARTY
WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR
HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, DEBTORS HEREBY WAIVE ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. DEBTORS CERTIFY THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR BANK TO ACCEPT THIS SECURITY AGREEMENT AND MAKE THE LOANS.



     21. Commercial Transaction. DEBTOR ACKNOWLEDGES THAT THE



     TRANSACTION OF WHICH THIS SECURITY AGREEMENT IS PART IS A COMMERCIAL TRANSACTION AND WAIVES ITS
RIGHTS TO NOTICE AND HEARING UNDER CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES OR BY OTHER
APPLICABLE LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE BANK MAY SEEK OR BE PERMITTED TO
USE.



[Remainder of Page Intentionally Blank / Signature Page Follows]










 



 




[signature page 1 of 2 to Security Agreement]




     IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed
and delivered as of the date first above written.



	 	 	 	 	 	 	 
	Signed, sealed and delivered
	 	 	 	 	 	 
	in the presence of:

	 	DEBTORS	 	 
	 
	 	 	 	 	 	 
	 	 	EDAC TECHNOLOGIES CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dominick A. Pagano	 	 
	 	 	 	 	 
	 	 
	 

	 	 	 	Name: Dominick A. Pagano
Its President	 	 
	 

	 	 	 	Duly Authorized	 	 
	 	 	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	GROS-ITE INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dominick A. Pagano	 	 
	 	 	 	 	 
	 	 
	 

	 	 	 	Name: Dominick A. Pagano
Its President	 	 
	 

	 	 	 	Duly Authorized	 	 
	 	 	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	APEX MACHINE TOOL COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dominick A. Pagano	 	 
	 	 	 	 	 
	 	 
	 

	 	 	 	Name: Dominick A. Pagano

Its President	 	 
	 

	 	 	 	Duly Authorized	 	 
	 	 	 	 	 
	 	 












 



2


[signature page 2 of 2 to Security Agreement]




	 	 	 	 	 	 	 
	 	 	TD BANK, N.A.	 	 
	 
	 

	 	By:
	 	/s/ John E. Cookley	 	 
	 	 	 	 	 
	 	 
	 

	 	 	 	Name: John E. Cookley

Its Senior Vice President	 	 
	 

	 	 	 	Duly Authorized