This is not a unique post. You may find this post in many weblogs and websites, but I am putting this code here for my own reference. In this code I break the security inheritance for a list item and provide contribute permission for a group that has been already created in SharePoint site.

            SPListItem myItem = properties.ListItem;
//This line detaches the item security from the list
            myItem.BreakRoleInheritance(false);
            myItem.Update();
            SPWeb myWeb = properties.OpenWeb();
// Creates an object of type SPMember to represent a group
            SPMember member = myWeb.SiteGroups["TestGroup"];
// We can simply cast a SPMember object into a SPPrincipal variable
            SPPrincipal principal = (SPPrincipal)member;
// A role definition is required to represent a permission level in SharePoint site
            SPRoleDefinition roledefinition =
                myWeb.RoleDefinitions.GetByType(SPRoleType.Contributor );
            SPRoleAssignment myRoleAssignment = new SPRoleAssignment(principal);
            myRoleAssignment.RoleDefinitionBindings.Add(roledefinition);
            myItem.RoleAssignments.Add(myRoleAssignment);
            myItem.Update();

 Enjoy the code.
Alireza