Document:

Exhibit 10.24

                                    EXHIBIT A
                   AMENDED AND RESTATED REVOLVING CREDIT NOTE

$1,000,000                                                    Melville, New York
                                                                October 19, 2006

     Reference is made to the $5,000,000 Revolving Credit Note dated September
12, 2003 made by CPI Aerostructures, Inc. and payable to JPMorgan Chase Bank
("Existing Note"). Borrower (as defined below) and Bank (as defined below) each
agree that to the extent that this Amended and Restated Revolving Credit Note
amends the Existing Note, the Existing Note is amended, and to the extent that
this Amended and Restated Revolving Credit Note restates the Existing Note, the
Existing Note is restated.

     FOR VALUE RECEIVED, CPI Aerostructures, Inc. ("Borrower") hereby promises
to pay to the order of JPMorgan Chase Bank, N.A. ("Bank") at the office of Bank
located at 395 North Service Road, Suite 302, Melville, New York 11747 or at
such other location as Bank may direct, the principal sum of $1,000,000, or if
less, the aggregate unpaid principal amount of all Revolving Credit Loans made
by Bank to Borrower pursuant to the Credit Agreement referred to below on the
Revolving Credit Facility Termination Date (as defined in the Credit Agreement
referred to below).

     Borrower also promises to pay interest on the unpaid principal balance of
this Amended and Restated Revolving Credit Note, for the period any principal is
outstanding under such Note, at the office specified above, at the time and rate
per annum specified in the Credit Agreement referred to below. Any amount of
principal or interest due and payable pursuant to this Amended and Restated
Revolving Credit Note which is not paid when due, whether by stated maturity,
acceleration or otherwise, shall bear interest from the date when due until said
principal amount or interest is paid in full, payable on demand, at a rate per
annum equal at all times to the Default Rate.

     Borrower hereby authorizes Bank to endorse on the Schedule annexed to this
Amended and Restated Revolving Credit Note the amount of all Revolving Credit
Loans made to Borrower by Bank and all continuations, conversions and payments
of principal amounts in respect of the Revolving Credit Loans, which
endorsements shall, in the absence of manifest error, be conclusive as to the
outstanding principal amount of all Revolving Credit Loans owed to Bank,
provided, however, that the failure to make such notation with respect to any
Revolving Credit Loan or payment shall not limit or otherwise affect the
obligation of Borrower under the Credit Agreement or this Amended and Restated
Revolving Credit Note.

     If this Amended and Restated Revolving Credit Note becomes due and payable
on a day other than a Business Day, the maturity of this Note shall be extended
to the next

                                       1

following Business Day, and interest shall be payable on such installment at the
rate specified in this Amended and Restated Revolving Credit Note during such
extension.

     All payments on this Amended and Restated Revolving Credit Note shall be
made in lawful money of the United States of America in immediately available
funds.

     Reference is made to the Amended and Restated Revolving Credit Agreement
dated October 19, 2006 between Borrower and Bank (the Revolving Credit
Agreement, as it be amended from time to time, being the "Credit Agreement").
This Amended and Restated Revolving Credit Note is the Revolving Credit Note
referenced in the Credit Agreement and evidences the Revolving Credit Loans made
by Bank to Borrower pursuant to the Credit Agreement. All capitalized terms used
in this Amended and Restated Revolving Credit Note which are not defined in this
Amended and Restated Revolving Credit Note shall have the meaning specified for
such term in the Credit Agreement.

     The Credit Agreement provides for the acceleration of the maturity of the
Revolving Credit upon the occurrence of an Event of Default and for prepayments
on the terms and conditions set forth in such Credit Agreement.

     Borrower hereby waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Amended and Restated Revolving
Credit Note.

     This Amended and Restated Revolving Credit Note shall be governed by, and
interpreted and construed in accordance with, the laws of the state of New York,
without regard to its conflicts of law provisions.

                                        CPI Aerostructures, Inc.

                                        By: /S/ Edward J. Fred
                                            ------------------------------------
                                        Name: Edward J. Fred
                                        Title: President and CEO

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            SCHEDULE TO AMENDED AND RESTATED REVOLVING CREDIT NOTE OF
                            CPI AEROSTRUCTURES, INC.

                                                Unpaid     Name of
Date Loan                         Amount of   Principal     Person
 Made or    Type of   Amount of   Principal   Balance of    Making
 Repaid       Loan       Loan     Repayment     Loans      Notation
---------   -------   ---------   ---------   ----------   --------

                                       3Exhibit 10.25

                     AMENDED AND RESTATED SECURITY AGREEMENT
                             (All Personal Property)

     Reference is made to the Security Agreement dated September 12, 2003
between CPI Aerostructures, Inc. and JPMorgan Chase Bank ("Existing Security
Agreement"). CPI Aerostructures, Inc. and JPMorgan Chase Bank, N.A. agree that
to the extent this Amended and Restated Security Agreement amends the Existing
Security Agreement, the Existing Security Agreement is amended, and to the
extent this Amended and Restated Security Agreement restates the Existing
Security Agreement, the Existing Security Agreement is restated.

     Amended and Restated Security Agreement dated as of October 19, 2006
("Security Agreement") made by CPI Aerostructures, Inc. ("Borrower") to JPMorgan
Chase Bank, N.A. ("Bank").

     In consideration of Bank providing credit to Borrower, Borrower hereby
agrees as follows:

     Section 1. Definitions. As used in this Security Agreement, the following
terms have the following meanings (terms defined in the singular to have the
same meaning when used in the plural and vice versa):

     "Borrower" means CPI Aerostructures, Inc.

     "Collateral" has the meaning specified in "Grant of Security Interest"
(Section 3).

     "Contracts" means each contract, agreement, instrument and indenture to
which Borrower is a party or under which Borrower has any right, title and
interest or to which Borrower or its property is subject.

     "Perfection Certificate" means the Perfection Certificate attached to and
made a part of this Security Agreement, as amended from time to time.

     "Revolving Credit Agreement" means the Amended and Restated Revolving
Credit Agreement dated as of October 19, 2006 between CPI Aerostructures, Inc.
and JPMorgan Chase Bank, N.A.

     "Secured Obligations" means any and all present and future liabilities and
obligations of Borrower to Bank, including those under or in connection with the
Revolving Credit Agreement, whether incurred by Borrower as principal or
guarantor or otherwise, and whether due or to become due, secured or unsecured,
absolute or contingent, joint or several, direct or indirect (including
participations or any interest of Bank in obligations of Borrower to others),
acquired outright, conditionally or as

                                        1

collateral security by Bank from another, liquidated or unliquidated, arising by
operation of law or otherwise, together with all fees and expenses incurred in
collecting any or all of the items specified in this definition or enforcing any
rights under any of the documents executed in connection with any such
liabilities and obligations, including all fees and expenses of Bank's counsel
and of any experts and agents which may be paid or incurred by Bank in
collecting any such items or enforcing any such rights.

     "Security Agreement" means this Security Agreement.

     "UCC" means the Uniform Commercial Code of New York as in effect from time
to time.

     Unless otherwise defined in this Security Agreement, (1) all terms defined
in the Revolving Credit Agreement will have the same meaning specified for such
term in the Revolving Credit Agreement when used in this Security Agreement, and
(2) all terms defined in the UCC that are used in this Security Agreement shall
have the meaning specified in the UCC when used in this Security Agreement.

     Section 2. Rules of Interpretation. When used in this Security Agreement:
(1) "or" is not exclusive, (2) a reference to a law includes any amendment or
modification to such law, and (3) a reference to an agreement, instrument or
document includes any amendment of modification of such agreement, instrument or
document.

     Section 3. Grant of Security Interest. Borrower hereby grants to Bank a
continuing security interest in and lien on all right, title and interest of
Borrower in and to each of the following items, whether now owned or hereafter
acquired, created or existing: (1) all Accounts, (2) all Chattel Paper (whether
tangible or electronic), (3) each Commercial Tort Claim listed on the Perfection
Certificate, (3) all Deposit Accounts, (4) all Documents, (5) all General
Intangibles (including Payment Intangibles and Software), (6) all Goods
(including Inventory, Equipment, Fixtures and Accessions), (7) all Instruments
(including promissory notes), (8) all Investment Property, (9) all
Letter-of-Credit Rights, (10) all Letters of Credit, (11) all Money, (12) all
Supporting Obligations, (13) all Intellectual Property, and (14) all Proceeds
and products of the foregoing ("Collateral").

     Section 4. Security for Secured Obligations. The Collateral secures the
prompt and complete payment when due of all Secured Obligations.

     Section 5. Filing of Financing Statement. Borrower hereby authorizes Bank,
its counsel or its representative, at any time and from time to time, to file
financing statements and amendments covering the Collateral in such
jurisdictions as Bank may deem necessary or desirable to perfect the security
interests granted by Borrower under this Security Agreement. Such financing
statements may describe the collateral covered by such financing statements as
"all personal property of Borrower" or words of similar effect.

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     Section 6. Actions to Perfect Security Interest. Borrower agrees that from
time to time, it will promptly execute and deliver all instruments and
documents, and take all actions, that may be necessary or desirable, or that
Bank may request, for the attachment, perfection and maintenance of the priority
of, the security interest of Bank in any and all of the Collateral or to enable
Bank to exercise and enforce any and all of its rights, powers and remedies
under this Security Agreement with respect to any and all of the Collateral. In
addition, upon the request of Bank, Borrower agrees that in the case of Accounts
where the obligor on such Account is the United States of America or any of its
departments, agencies or instrumentalities, Borrower will take all actions
required to comply with the Assignment of Claims Act of 1940.

     Section 7. Continued Perfection of Security Interest. Borrower shall
immediately notify Bank if any information set forth in the Perfection
Certificate is misleading in any way or is no longer true, correct and complete.
In addition, Borrower shall immediately deliver to Bank a revised Perfection
Certificate that is true, correct, complete and not misleading in any way. Upon
the delivery of such revised Perfection Certificate such revised Perfection
Certificate will be the applicable Perfection Certificate under this Security
Agreement.

     Unless Borrower has provided Bank with thirty (30) days prior written
notice of its intention to do any of the following and prior to taking such
proposed action Borrower has executed and delivered all such additional document
and performed all additional acts as Bank may require, in its sole discretion,
to continue or maintain the existence and priority of the security interest of
Bank in the Collateral, Borrower shall not: (1) change its name, identity or
structure, (2) merge or consolidate into, or transfer any Collateral to any
other party, (3) change the location of its chief executive office or principal
place of business, (4) change the jurisdiction of its organization, (5) relocate
or maintain any Collateral at any location not specified on the Perfection
Certificate, or (6) change the location where the books and records related to
the Collateral are maintained. The provisions of this paragraph are not a
limitation on, or exception to, prohibitions and restrictions set forth in the
Revolving Credit Agreement.

     Section 8. Waivers and Consents. Borrower agrees to (1) obtain all
governmental and other third party waivers, consents and approvals, in form and
substance reasonably satisfactory to Bank, required for the execution and
performance of this Security Agreement by Bank, including, the consent of each
licensor, lessor or other persons obligated on Collateral and (2) to the extent
requested by Bank, obtain waivers and subordinations, in form and substance
satisfactory to Bank, from mortgagees and landlords where any of the Collateral
is located.

     Section 9. Representations and Warranties. At the time of execution of this
Security Agreement and each time Bank provides credit as noted above, Borrower
represents and warrants to Bank as follows:

     (1) Incorporation, Good Standing, Corporate Power and Due Qualification.
Borrower (a) is a corporation duly incorporated, validly existing, and in good
standing

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under the laws of the jurisdiction of its incorporation, (b) has the corporate
power and authority to own its assets and to transact the business in which it
now engages or proposes to engage in, and (c) is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in
which such qualification is required.

     (2) Corporate Authority, No Contravention. The execution, delivery and
performance by Borrower of this Security Agreement are within its corporate
powers, have been duly authorized by all necessary corporate action and do not
and will not (a) require any consent or approval of its stockholders which has
not been obtained, (b) contravene its charter or bylaws, (c) violate any
provision of any law, order, writ, judgment, injunction, decree, determination,
or award presently in effect applicable to it, (d) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement, lease, or instrument to which it is a party or by which it or
its properties may be bound or affected, or (e) result in, or require, the
creation or imposition of any lien upon or with respect to any of the properties
now owned or hereafter acquired by it, other than the lien granted to Bank.

     (3) Governmental Authority. No authorization, approval or other action by,
and no notice to or filing with, any governmental authority is required for the
due execution, delivery and performance by Borrower of this Security Agreement.

     (4) Legally Enforceable Security Agreement. This Security Agreement is the
legal, valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, except to the extent that such enforcement may be
limited by (1) applicable bankruptcy, insolvency, and other similar laws
affecting creditors' rights generally, or (2) general equitable principles,
regardless of whether the issue of enforceability is considered in a proceeding
in equity or at law.

     (5) No Restrictions on Collateral. None of the Collateral is subject to a
restriction, which has not been waived with a copy of such waiver delivered to
Bank, that prohibits, restricts or limits the grant of a security interest in
such Collateral pursuant to this Security Agreement, the perfection of the
security interest granted by this Security Agreement (including the priority of
such security interest) or the exercise by Bank of its rights, remedies and
powers under this Security Agreement or otherwise, except in the case of a
Government Contract where compliance with the Assignment of Claim Act of 1940 is
required for the delivery of the payment to Bank of the Account under such
Contract.

     (6) Valid Security Interest. This Security Agreement creates a valid
security interest in the Collateral and such security interest secures the
payment of all Secured Obligations.

     (7) Perfection of Security Interest. Upon the filing of the financing
statement in the location specified in the Perfection Certificate and the
extension of credit to Borrower pursuant to the Revolving Credit Agreement, the
security interest of Bank will be perfected in all of the Collateral as to which
perfection is obtained by such filing.

                                        4

     (8) Priority of Security Interest. The security interest of Bank in the
Collateral is a first priority security interest and such Collateral is not
subject to any other security interest.

     (9) Claims on Collateral. Borrower owns the Collateral free and clear of
any security interest, except for the security interest created by this Security
Agreement and the security interest (if any) specified in the Perfection
Certificate.

     (10) Perfection Certificate. All information on the Perfection Certificate
is complete, accurate, and correct.

     (11) Acquisition in Ordinary Course of Business. All of the Collateral,
including all Equipment and all Inventory, was acquired in the ordinary course
of business.

     (12) Compliance with Law. All of the Collateral was acquired, used,
produced and sold or disposed of in accordance with all applicable laws,
including in the case of Inventory, the Fair Labor Standards Act.

     (13) Inventory. None of the Inventory is held on consignment or subject to
a sale or return or sale on approval or similar arrangement.

     (14) Equipment. All Equipment which is useful or necessary to the business
of Borrower is in good repair, ordinary wear and tear excepted.

     (15) Accounts. All Accounts have been originated by Borrower. None of the
Accounts have either been sold to another party or otherwise transferred or
delivered to any party for the purpose of collecting such Account. Borrower is
duly qualified in all states where required to enable Borrower to enforce
collection of its Accounts due from customers residing in that state.

     (16) Contracts. All of the Contracts material to the operation of the
business of Borrower are in full force and effect and Borrower has performed in
all material respects its obligations under each such Contract, and to the
knowledge of Borrower the other parties to each such Contract have performed in
all material respects their respective obligations under each such Contract.

     (17) Farm Products. None of the Collateral constitutes, or is the proceeds
of, farm products.

     Section 10. Covenants. Borrower agrees that:

     (1) Reporting Requirements. Borrower shall immediately notify Bank if (a)
any claim, including any attachment, levy, execution or other legal process, is
made against any or all of the Collateral, (b) any representation and warranty
included in this Security Agreement would no longer be true if made on such
date, (c) there is any material loss or

                                        5

damage to, or material decline in the value of, or material change in the nature
of, any of the Collateral or (d) there is a redemption or exchange of any or all
of the Collateral. Borrower will furnish to Bank from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with such Collateral as Bank may request, all in
reasonable detail.

     (2) Records. At the location(s) specified on the Perfection Certificate
Borrower will keep and maintain at its expense complete and accurate records
related to the Collateral, including records of all payments made, all credits
granted and all other documentation related to the Collateral.

     (3) Inspection. Upon reasonable notice to Borrower and during normal
business hours Borrower will allow Bank or its designees to visit its offices
and each location where any Collateral is located to inspect its books and
records, make copies thereof, and inspect the Collateral.

     (4) Restrictions on Collateral. Borrower will not enter into any agreement
or undertaking that restricts or limits the right or ability of Borrower or Bank
to sell, assign or transfer any of the Collateral.

     (5) Defense of Collateral. Borrower will defend the Collateral against all
claims and demands of all parties, other than Bank or any other party listed on
the Perfection Certificate (if any), claiming an interest in any of the
Collateral.

     (6) No Security Interest or Claims. Borrower will not create, permit or
suffer to exist, any security interest on any of the Collateral other than the
security interests under this Security Agreement and those (if any) specified on
the Perfection Certificate. Borrower will discharge or cause to be discharged
all security interests and claims on any or all of the Collateral, except for
the security interest under this Security Agreement and those (if any) specified
on the Perfection Certificate. Borrower will pay promptly when due all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies) against the
Collateral.

     (7) Transfer and Other Security Interests. Borrower shall not sell, assign
(by operation of law or otherwise), transfer or otherwise dispose of any of the
Collateral except for (1) sales, assignments and transfers of Collateral in the
ordinary course of business and (2) the transfer of Collateral to third parties
for preparation or processing of such Collateral.

     (8) Compliance with Law. Borrower will comply in all material respects with
all laws applicable to any or all of the Collateral, except to the extent the
failure to comply will not have a material adverse effect on the rights of Bank
under this Security Agreement, the priority of the security interest of Bank in
the Collateral or the value of the Collateral.

                                        6

     (9) Insurance. Borrower shall, at its own expense, maintain insurance with
respect to all the Equipment and all the Inventory in such amounts, against such
risks, in such form and with such insurers as are usually carried by companies
engaged in the same or similar business as Borrower and such other insurance as
reasonably required by Bank. Each policy for liability insurance shall (a)
designate Bank as an additional insured and (b) provide for all losses to be
paid on behalf of Bank and Borrower as their respective interests may appear.
Reimbursement under any liability insurance maintained by Borrower may be paid
directly to the party who shall have incurred liability covered by such
insurance. Each policy for property damage insurance shall (a) designate Bank as
the sole loss payee and (b) provide for all losses to be paid directly to Bank.

     In addition, each such policy shall (a) name Bank as an insured party under
such policy (without any representation or warranty by or obligation upon Bank),
(b) contain the agreement by the insurer that any loss under such policy shall
be payable to Bank notwithstanding any action, inaction or breach of
representation or warranty by Borrower, (c) provide that there shall be no
recourse against Bank for payment of premiums or other amounts with respect to
such policy and (d) provide that at least 30 days prior written notice of
amendment to, cancellation of or lapse shall be given to Bank by the insurer.

     If requested by Bank, Borrower shall deliver to Bank (a) original or
duplicate policies of such insurance policies, (b) a report of a reputable
insurance broker with respect to such insurance and (c) duly executed
instruments of assignment of such insurance policies to perfect Bank's security
interest in such policy, including without limitation, acknowledgments of such
assignments from the respective insurers.

     In case of any loss involving damage to Equipment or Inventory, Bank will
determine whether such insurance proceeds shall be used (a) to make or cause to
be made the necessary repairs to or replacements of such Equipment or Inventory
or (b) to pay the Secured Obligations, and if there are any contingent Secured
Obligations, to provide cash collateral to cover such Secured Obligations.

     (10) Equipment. Borrower shall cause the Equipment necessary for the
conduct of its business to be maintained and preserved in good working order,
repair and condition, ordinary wear and tear excepted, and shall forthwith, or
in the case of any loss or damage to any of its Equipment as quickly as
practicable after the occurrence thereof, make or cause to be made all repairs,
replacements, and other improvements in connection therewith which are necessary
or desirable to so maintain and preserve such Equipment.

     (11) Inventory. In accordance with reasonable business practice, Borrower
will maintain all Inventory in good saleable or useable condition, Borrower will
(c) not sell, assign, lease, mortgage, transfer or otherwise dispose of any
interest in any Inventory other than sales of Inventory in the ordinary course
of business and (d) not use or knowingly permit any of the Inventory to be used
for any unlawful purpose or in violation of any law, or for hire.

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     (12) Accounts. Borrower will remain duly qualified in all states where
required to enable Borrower to enforce collection of the Accounts due from
account debtors in that state. Except as otherwise provided in this Security
Agreement, Borrower shall continue to collect, at its own expense, all amounts
due or to become due to Borrower under the Accounts. In connection with such
collections, Borrower may take (and, after the occurrence of an Event of
Default, at Bank's discretion, shall take) such action, as Borrower or Bank may
deem necessary or advisable to enforce collection of the Accounts.

     (13) Contracts. Borrower will perform all of its duties and obligations
under each contract material to the operation of its business. Borrower will
require that all other parties to each such contract perform all of their
respective duties and obligations.

     Section 11. Rights and Remedies. If Borrower fails to perform any agreement
contained in this Security Agreement, Bank may itself perform, or cause
performance of, such agreement.

     Upon the occurrence of an Event of Default Bank may exercise in respect of
any or all of the Collateral each of the following rights, remedies and powers
and Borrower agrees that each of the following rights, remedies and powers is
commercially reasonable:

     (1) General Remedies. Bank may exercise in respect of any or all of the
Collateral all rights, remedies and powers provided for in this Security
Agreement, by law, in equity or otherwise available to it, including all the
rights and remedies of a secured party under the UCC (whether or not the UCC
applies to the affected Collateral).

     (2) Right to Accelerate Obligations Owed to Borrower. To the extent that
any obligation to make payment on any Collateral is not then due or a demand for
payment has not been made and Borrower has the right, in accordance with the
term of such Collateral, to require or make a demand for payment on such
Collateral, Bank has the right to require and to make a demand for payment on
such Collateral.

     (3) Accounts, Contracts, and Other Collateral. Bank has the right to notify
the account debtors or obligors under any Accounts, Contracts and other
Collateral of the security interest of Bank in such Account, Contract or other
Collateral and to direct such account debtors or obligors to make payment of all
amounts due or to become due to Borrower thereunder directly to Bank or to an
account designated by Bank and, upon such notification, to enforce collection of
any such Accounts, Contracts and other Collateral, and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as Borrower might have done. After receipt by Borrower of such notice
from Bank, (a) all amounts and proceeds (including wire transfers, checks and
other instruments) received by Borrower in respect of any Accounts, Contracts,
or other Collateral shall be received in trust for the benefit of Bank under
this Security Agreement, shall be segregated from other funds of Borrower and
shall be forthwith deposited to such account or paid over or delivered to Bank
in the same

                                        8

form as so received (with any necessary endorsement or assignment) to be held as
Collateral, or be applied as provided by this Section, as determined by Bank and
(b) Borrower shall not adjust, settle or compromise the amount or payment of any
such Account, Contract, or other Collateral or release wholly or partly any
account debtor or obligor thereof, or allow any discount thereon, other than any
discount allowed for prompt payment.

     (6) Assembly of Collateral. Bank may require Borrower to, and Borrower
hereby agrees that it will at its expense and upon the request of Bank
forthwith, assemble all or any part of the Collateral as directed by Bank and
make it available to Bank at a place to be designated by Bank that is reasonably
convenient to both Bank and Borrower.

     (7) Entering Premises. Bank or its designated agents may enter, with or
without judicial process, upon any premises of Borrower and take possession of
all or any part of the Collateral, and remove such Collateral to a location
specified by Bank.

     (8) Deposit Accounts. Bank may notify any or all depository institutions
with which any Deposit Accounts are maintained to remit and transfer all monies,
securities and other property on deposit in such Deposit Accounts or deposited
or received for deposit thereafter to Bank, for deposit in an account as may be
designated by Bank, for application to the Secured Obligations then due and
payable as provided herein. Bank may apply the balance of any Deposit Account
maintained with Bank to pay the Secured Obligations.

     (9) Use of Premises. Bank shall have the right to enter and remain upon
each and every location of Borrower without cost or charge to Bank, and use the
same together with materials, supplies, books and records of Borrower for the
purpose of collecting and liquidating the Collateral, or for preparing for sale
and conducting the sale of the Collateral, whether by foreclosure, auction or
otherwise.

     (10) Sale or Other Disposition of Collateral. Bank may, without notice,
except as specified below, sell, lease, license or otherwise dispose of and
grant options to purchase, lease, license or otherwise acquire, any or all of
the Collateral in one or more parcels at public or private sale or other
disposition, for cash, on credit, for future delivery or otherwise and upon such
other terms, including price, as Bank may deem commercially reasonable in the
exercise of its reasonable business judgment.

     (11) Notice of Sale or Other Disposition of Collateral. Borrower agrees
that, to the extent notice of sale shall be required by law, at least ten (10)
days notice to Borrower of the time and place of any public or private sale is
to be made shall constitute reasonable notification. Bank shall not be obligated
to make any sale of any or all of the Collateral after any notice of sale has
been given. Bank may adjourn any public or private sale from time to time by
announcement at the time and place fixed for such sale, and such sale may,
without further notice, be made at the time and to the place to which it was so
adjourned.

                                        9

     (12) Commercially Reasonable Sale. Borrower agrees that it is not
commercially unreasonable for Bank (a) to restrict the prospective bidders on or
purchasers of any of the investment property to a limited number of
sophisticated investors who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
sale of any of such investment property, (b) to fail to incur expenses
reasonably deemed significant by Bank to prepare Collateral for disposition or
otherwise to fail to complete raw material or work in process into finished
goods or other finished products for disposition, (c) to fail to obtain third
party consents for access to Collateral to be disposed of, or to obtain or, if
not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or
disposed of, (d) to fail to exercise collection remedies against account debtors
or other persons obligated on Collateral or to fail to remove liens or
encumbrances on or any adverse claims against Collateral, (e) to exercise
collection remedies against account debtors and other persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (f) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (g) to contact other persons, whether or not in the
same business as Borrower, for expressions of interest in acquiring all or any
portion of the Collateral, (h) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the Collateral is of a
specialized nature, (i) to dispose of Collateral by utilizing Internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers and
sellers of assets, (j) to dispose of assets in wholesale rather than retail
markets, (k) to disclaim disposition warranties, including disclaimers of
warranties of title, possession, quiet enjoyment and the like, (l) to purchase
insurance or credit enhancements to insure Bank against risk of loss, collection
or disposition of Collateral or to provide to Bank a guaranteed return from the
collection or disposition of Collateral, or (m) to the extent deemed appropriate
by Bank, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist Bank in the collection or
disposition of any of the Collateral. Borrower agrees that the purpose of this
Section is to provide non-exhaustive indications of what actions or omissions by
Bank would fulfill the duties of Bank under the UCC of the State or any other
relevant jurisdiction in the exercise by Bank of remedies against the Collateral
and that other actions or omissions by Bank shall not be deemed to fail to
fulfill such duties solely on account of not being indicated in this Section.
Without limitation upon the foregoing, nothing contained in this Section shall
be construed to grant any rights to Borrower or to impose any duties on Bank
that would not have been granted or imposed by this Security Agreement or by
applicable law in the absence of this Section.

     (13) Proceeds. If any of the Collateral is sold by Bank upon credit or for
future delivery, Bank shall not be liable for the failure of the purchaser to
purchase or pay for the same and, in the event of any such failure, Bank may
resell such Collateral. In no event shall Borrower be credited with any part of
the proceeds of sale of any Collateral until and to the extent cash payment in
respect thereof has actually been received by Bank. To the extent any of the
Secured Obligations are contingent, cash proceeds received by Bank in respect of
any sale of, collection from, or other realization upon all

                                       10

or any part of the Collateral may, in the discretion of Bank, be held by Bank as
collateral for such contingent Secured Obligations. Any cash held by Bank as
Collateral and all cash proceeds received by Bank in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Bank, be applied, first, to pay all costs and expenses
incurred by Bank in connection with or incident to the custody, preservation,
use or operation of, or the sale of, collection from, or other realization upon,
any and all of the Collateral, second, to pay all reasonable attorney's fees and
legal expenses incurred by Bank in connection with or incident to the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any and all of the Collateral, third, to pay all matured and
unpaid Secured Obligations, in whole or in part by Bank against, all or any part
of the Secured Obligations in such order as Bank shall elect, fourth, if and to
the extent any of the Secured Obligations are unmatured or contingent, to
provide cash collateral for all such Secured Obligations, and fifth, in
accordance with applicable law. If the proceeds of the sale of the Collateral
are insufficient to pay all of the Secured Obligations, Borrower agrees to pay
upon demand any deficiency to Bank.

     Bank shall not by any act, delay, omission or otherwise be deemed to have
waived any of its rights or remedies under this Security Agreement. A waiver by
Bank of any right or remedy under this Security Agreement on any one occasion,
shall not be construed as a bar to or waiver of any such right or remedy which
Bank would have had on any future occasion nor shall Bank be liable for
exercising or failing to exercise any such right or remedy.

     (14) Grant of License. Borrower hereby grants to Bank an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to Borrower) to use, license or sublicense any intellectual
property now owned or licensed or hereafter acquired or licensed by Borrower,
wherever the same may be located throughout the world, for such term or terms,
on such conditions and in such manner as Bank shall determine, whether general,
special or otherwise, and whether on an exclusive or nonexclusive basis, and
including in such license access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license or sublicense by Bank
shall be exercised at the option of Bank.

     Section 12. Appointment of Bank Attorney-in-Fact. Borrower hereby
irrevocably appoints Bank attorney-in-fact, with full authority in the place and
stead of Borrower and in the name of Borrower, Bank or otherwise (1) to take any
and all action and exercise all rights and remedies granted to Bank under this
Security Agreement and (2) execute any instrument which Bank may deem necessary
or advisable to accomplish the purpose of this Security Agreement.

     Borrower hereby ratifies and approves all acts of Bank as its attorney
in-fact pursuant to this Section, and Bank, as its attorney in-fact, will not be
liable for any acts of commission or omission, nor for any error of judgment or
mistake of fact or law, other than those which result from Bank's gross
negligence or willful misconduct. This power,

                                       11

being coupled with an interest, is irrevocable so long as this Security
Agreement remains in effect.

     Section 13. Borrower Remains Liable. In all events, including the exercise
by Bank of any of the rights under this Security Agreement, Borrower remains
liable to perform all of its duties and obligations under the contracts and
agreements included in the Collateral to which it is a party to the same extent
as if this Security Agreement had not been executed. Bank shall not have any
obligation or liability under any such contracts and agreements by reason of
this Security Agreement, nor shall Bank be obligated to perform any of the
obligations or duties of Borrower under, or to take any action to collect or
enforce any claim or rights under, any such contract or agreement.

     The powers conferred on Bank under this Security Agreement are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it under this
Security Agreement, Bank shall not have any duty as to any such Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any such Collateral.

     Section 14. Indemnity and Expenses. Borrower agrees to indemnify Bank and
each of its directors, officers, employees, agents and affiliates from and
against any and all claims, losses and liabilities growing out of or resulting
from this Security Agreement or the transactions contemplated by this Security
Agreement (including, without limitation, enforcement of this Security
Agreement), except claims, losses or liabilities resulting from the gross
negligence or willful misconduct of the person to be indemnified. Borrower will
upon demand pay to Bank the amount of any and all expenses, including the
reasonable fees and out of pocket disbursements of its counsel and of any
experts and agents, which Bank may incur in connection with (1) any amendment to
this Security Agreement, (2) the administration of this Security Agreement, (3)
filing or recording fees incurred with respect to or in connection with this
Security Agreement, (4) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any of the Collateral, (5)
the exercise or enforcement of any of the rights of Bank under this Security
Agreement, or (6) the failure by Borrower to perform or observe any of the
provisions of this Security Agreement.

     Section 15. Amendments. No amendment or waiver of any provision of this
Security Agreement nor consent to any departure by Borrower from this Security
Agreement shall in any event be effective unless the same shall be in writing
and signed by Bank and Borrower, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

     Section 16. Addresses for Notices. All notices and other communications
provided for under this Security Agreement shall be given in accordance with the
terms of the Revolving Credit Agreement.

                                       12

     Section 17. Continuing Security Interest, Transfer of Secured Obligations.
Notwithstanding the fact that there may be no Secured Obligations outstanding
from time to time, this Security Agreement shall create a continuing security
interest in all of the Collateral. This Security Agreement shall be binding upon
Borrower, its successors and assigns, and inure to Bank and its successors,
transferees and assigns. Borrower may not transfer or assign its obligations
under this Security Agreement. Bank may assign or otherwise transfer all or a
portion of its rights or obligations with respect to the Secured Obligations to
any other party, and such other party shall then become vested with all the
benefits in respect of such transferred Secured Obligations and the security
interest granted to Bank pursuant to this Security Agreement or otherwise.
Borrower agrees that Bank can provide information regarding Borrower to any
prospective or actual successor, transferee or assign.

     Section 18. Submission to Jurisdiction. Borrower hereby irrevocably submits
to the jurisdiction of any federal or state court sitting in the County of
Nassau in the State of New York over any action or proceeding arising out of or
related to this Security Agreement and agrees with Bank that personal
jurisdiction over Borrower rests with such courts for purposes of any action on
or related to this Security Agreement. Borrower hereby waives personal service
by manual delivery and agrees that service of process may be made by mail
(certified mail, return receipt requested) directed to Borrower at the address
of Borrower for notices under this Security Agreement or at such other address
as may be designated in writing by Borrower to Bank, and that upon mailing of
such process such service will be effective as if Borrower was personally
served. Borrower agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any manner provided by law. Borrower further waives any objection
to venue in any such action or proceeding on the basis of inconvenient forum.
Borrower agrees that any action on or proceeding brought against Bank shall only
be brought in such courts.

     Section 19. Set-off. Borrower agrees that, in addition to, and without
limiting, any right of setoff, banker's lien or counterclaim Bank may otherwise
have, Bank shall be entitled, at its option, to offset balances (general or
special, time or demand, provisional or final) held by it for the account of
Borrower, at any of the offices of Bank, in Dollars or any other currency,
against any amount payable by Borrower to Bank under this Security Agreement
which is not paid when demanded (regardless of whether such balances are then
due to Borrower), in which case Bank shall promptly notify Borrower; provided
that Bank's failure to give such notice shall not affect the validity of such
offset.

     Section 20. Governing Law. This Security Agreement shall be governed by and
construed in accordance with the laws of New York without regard to its conflict
of law principles, except to the extent that the validity or perfection of the
security interest under this Security Agreement, or remedies under this Security
Agreement, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than New York.

     Section 21. Miscellaneous. This Security Agreement is in addition to and
not in limitation of any other rights and remedies Bank may have by virtue of
any other

                                       13

instrument or agreement heretofore, contemporaneously herewith or hereafter
executed by Borrower or by law or otherwise. If any provision of this Security
Agreement is contrary to applicable law, such provision shall be deemed
ineffective without invalidating the remaining provisions of this Security
Agreement. The Perfection Certificate is a part of this Security Agreement as if
fully set forth in this Security Agreement. The headings in this Security
Agreement are for convenience of reference only, and shall not affect the
interpretation or construction of this Security Agreement.

     Section 22. WAIVER OF JURY TRIAL. BORROWER EXPRESSLY WAIVES ANY AND EVERY
RIGHT TO A TRIAL BY JURY IN ANY ACTION ON OR RELATED TO THIS SECURITY AGREEMENT.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       14

     IN WITNESS WHEREOF, Borrower has caused this Security Agreement to be duly
executed and delivered as of the date of this Security Agreement.

                                        CPI Aerostructures, Inc.

                                        By: /S/ Edward J. Fred
                                            ------------------------------------
                                        Name: Edward J. Fred
                                        Title: Chief Executive Officer,
                                               President and Secretary

                                       15

                             PERFECTION CERTIFICATE
                                       for
                            CPI Aerostructures, Inc.
NAMES

The exact legal name of CPI Aerostructures, Inc. as it appears in its
organizational documents is: CPI Aerostructures, Inc.

The following lists any other legal name that CPI Aerostructures, Inc. has had
in the last five (5) years and the dates such name(s) were in effect:

The following lists all other names, including trade names or similar
appellations, that CPI Aerostructures, Inc. has used in the last five (5) years
in the conduct of its business:

CHANGE IN STRUCTURE

Except as set fort below, CPI Aerostructures, Inc. has not been a party to a
merger, consolidation or an acquisition of assets in the last five (5) years.

Except as set forth below, CPI Aerostructures, Inc. has not had a change in
structure, including a change in legal form, nature or jurisdiction of
organization, in the last five (5) years.

JURISDICTION OF FORMATION

The jurisdiction of formation of CPI Aerostructures, Inc. is: New York.

TYPE OF ENTITY

The type of legal entity of CPI Aerostructures, Inc. is: corporation.

IDENTIFICATION NUMBERS

The federal taxpayer identification number for CPI Aerostructures, Inc. is:
_______________

The organizational identification number (if applicable) for CPI Aerostructures,
Inc. is: _____________

CERTAIN LOCATIONS

The current chief executive office of CPI Aerostructures, Inc. is located at:

Street   City   State   ZIP Code

                                       16

The following lists each location at which records relating to the Collateral
are maintained:

Street   City   State   ZIP Code

The following lists each location not specified above at which CPI
Aerostructures, Inc. conducts business:

Street   City   State   ZIP Code

LANDLORDS

The following lists each site leased by Borrower and the name and address of the
landlord for such site:

LETTERS OF CREDIT:

The following lists each Letter of Credit with Borrower as the beneficiary, the
name of issuing bank of such Letter of Credit and the number of each such Letter
of Credit:

Name of Issuing Bank   Letter of Credit Number

COMMERCIAL TORT CLAIMS

The following lists each Commercial Tort Claim of CPI Aerostructures, Inc. and
provides a description of such Claim, including the parties involved, the court
in which the claim was commenced (if applicable), the docket number assigned to
the case (if applicable) and a detailed explanation of the events giving rise to
such claim:

OTHER UCC FILINGS

The following lists each financing statement, other than the financing statement
of Bank, on file with respect to any or all of the Collateral, the secured party
on such statement, the filing office of such statement and the Collateral
covered by such statement:

Secured Party   Filing Office   Collateral Covered

PERFECTION OF SECURITY INTEREST

With respect to any item of Collateral in which a security interest can be
perfected by the filing of a UCC financing statement, the filing of such a
statement in the following jurisdiction will perfect the security interest of
Bank in such Collateral: New York

                                       17

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