<PAGE>
                             AMENDED AND RESTATED
                           JOINT SECURITY AGREEMENT

    AGREEMENT made as of this 1st day of October, 1997, by and among STARMET 
CORPORATION, a Massachusetts corporation (f/k/a Nuclear Metals, Inc.) 
("StarMet"), STARMET POWDERS, LLC, a Delaware limited liability corporation 
("Powders"), STARMET AEROCAST, LLC, a Delaware limited liability corporation 
("AeroCast"), STARMET COMCAST, LLC, a Delaware limited liability corporation 
("ComCast"), STARMET NMI CORPORATION, a Massachusetts corporation ("NMI"), 
STARMET CMI CORPORATION, a Delaware corporation (f/k/a Carolina Metals, Inc.) 
("CMI"), STARMET HOLDINGS CORPORATION, a Massachusetts corporation 
("Holdings"), NMI FOREIGN SALES CORPORATION, a U.S. Virgin Islands 
corporation ("FSC", and together with StarMet, Powders, AeroCast, ComCast, 
NMI, CMI and Holdings, the "Borrowers") and STATE STREET BANK AND TRUST 
COMPANY, a Massachusetts chartered trust company ("Bank").

                                     WITNESSETH:

    WHEREAS, StarMet, CMI and the Bank are parties to an Amended and Restated 
Credit Agreement dated as of March 31, 1995, as amended by a First Amendment 
to Credit Agreement dated as of June 30, 1995, a Second Amendment to Credit 
Agreement dated as of December 24, 1996 and a Third Amendment to Credit 
Agreement dated as of August 7, 1997 (the "Original Credit Agreement"); 

    WHEREAS, StarMet is engaged in a restructuring where certain of its 
business lines will be transferred to newly organized subsidiaries as 
described in a proxy statement dated August 26, 1997 (the "Proxy Statement");

    WHEREAS, pursuant to the terms of that certain Joint Security Agreement 
dated as of March 31, 1995, executed by StarMet and CMI in favor of Bank (the 
"Original Security Agreement"), StarMet and CMI have previously granted to 
the Bank a security interest in the Collateral (as hereinafter defined) to 
secure StarMet and CMI's obligations under the Original Credit Agreement;

    WHEREAS, the Borrowers and the Bank have agreed to amend and restate the 
Original Credit Agreement so as to, among other things, add Powders, 
AeroCast, ComCast, NMI, and Holdings as "Borrowers" under the Original Credit 
Agreement and continue to provide for revolving credit facilities to the 
Borrowers;

    WHEREAS, the Borrowers and the Bank executed the Amended and Restated 
Credit Agreement dated as of the date hereof (as amended and in effect from 
time to time, the "Credit Agreement"); and

    WHEREAS, it is a condition precedent to the agreement of the Bank to 
enter into the Credit Agreement and to extend credit to the Borrowers 
thereunder that the Borrowers execute 

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and deliver this Amended and Restated Joint Security Agreement to secure the 
obligations of the Borrowers under the Credit Agreement and restate the 
Original Security Agreement in its entirety on the terms set forth herein.

    NOW, THEREFORE, for good and valuable consideration, the receipt and 
sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

    1.   Security Interest.  The Borrowers grant Bank a security interest 
("Security Interest") in all personal property and fixtures of the Borrowers, 
of every kind and description, tangible or intangible all wherever located 
and whether now existing or hereafter acquired or arising, including without 
limitation, all accounts, inventory, equipment and other goods, documents, 
instruments, chattel paper and general intangibles (as such terms are defined 
by the Uniform Commercial Code), and the proceeds therefrom (including 
without limitation, proceeds of insurance and proceeds in deposit accounts) 
and accessions thereto all as more particularly described in the attached 
Exhibit A (the "Collateral").

    2.   Obligations.  The Security Interest shall secure the following, 
obligations (herein the "Obligations"):

         (a)  The prompt and complete payment when due (whether by 
acceleration otherwise) of the Revolving Credit (as defined in the Credit 
Agreement);

          (b)  The prompt and complete payment when due of all obligations of 
the Borrowers with respect to L/C's (as defined in the Credit Agreement);

          (c)  Any and all other obligations of the Borrowers under the 
Credit Agreement or under any other document, agreement or instrument 
executed in connection with the Credit Agreement;

          (d)  Any and all obligations of any Borrower in connection with, 
related to or arising from that certain Indenture dated as of September 27, 
1984 between Barnwell County, South Carolina and Bank; and

          (e)  Any and all other liabilities and obligations of every name 
and nature whatsoever of any Borrower to Bank whether such liabilities and 
obligations be direct or indirect, absolute or contingent, secured or 
unsecured, now existing or hereafter arising, or acquired, due or to become 
due including, without limitation and without regard as to whether or not 
contemplated at the time of this Agreement, any extensions of credit 
hereinafter made by Bank to any Borrower (including any such extension 
pursuant to a foreign exchange line of credit or any liability or obligation 
of any Borrower to Bank arising from any foreign exchange transaction), any 
obligations of any Borrower acquired by Bank, and any Guaranties by any 
Borrower of obligations owed by others to Bank.

    3.   Financing Statements and Other Action.  The Borrowers agree to do 
all acts which Bank deems necessary or desirable to protect and enforce the 
Security Interest including, but not limited to, the execution of financing, 
continuation, amendment and termination statements and similar instruments. 
Each Borrower hereby irrevocably appoints Bank as its attorney-in-fact (which 
power is coupled with an interest) to execute financing, continuation, 

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amendment and termination statements and similar instruments; provided, that 
Bank shall exercise this power only after Bank has requested that such 
Borrower execute such statements and instruments and such Borrower does not 
so execute and deliver to Bank the subject statements and instruments within 
two days of such request.

    4.   Borrowers Places of Business.  The Borrowers jointly and severally 
represent and warrant that their respective places of business, chief 
executive office, the location where the records concerning their respective 
accounts and contract rights are located and the record owners of any real 
estate on which any of the Collateral is located are as set forth on Exhibit 
B attached hereto. The Borrowers agree to notify Bank of the addition or 
discontinuance of any place of business, chief executive office or any chance 
in the information contained on Exhibit B.  None of the Collateral shall be 
removed from the locations specified on Exhibit B other than sales in the 
ordinary course of business unless Bank is given thirty (30) days prior 
written notice of such removal, which notice shall state the location or 
locations to which the Collateral will be removed.  The Borrowers jointly 
represent and warrant that all of the Collateral presently is located at the 
locations set forth on Exhibit B and agrees that the Collateral will remain 
at such locations and at such other locations of which Bank receives notice 
in accordance with this Paragraph 4.

    5.   Name.  The Borrowers jointly represent and warrant that their 
precise legal names are set forth in the introduction to this Agreement and 
agree to notify Bank immediately of any change in such legal names.

    6.   Encumbrances.  Each Borrower represents and warrants that it has 
title to the Collateral in which it has rights and that there are no sums 
owed or claims, liens, security interests or other encumbrances against the 
Collateral other than those permitted by the Credit Agreement.  The Borrowers 
agree to notify Bank of any lien (except inchoate liens arising by the 
operation of law), security interest or other encumbrance securing, an 
obligation in excess of $50,000 against the Collateral (even though permitted 
by the Credit Agreement). Borrowers shall defend the Collateral against any 
claim, lien, security interest or other encumbrance adverse to Bank, except 
for liens permitted by the Credit Agreement.

    7.   Maintenance of Collateral.  The Borrowers shall preserve the 
Collateral for the benefit of Bank.  Without limiting the generality of the 
foregoing, the Borrowers shall:

         (a)  sell inventory only in the ordinary course of business;
         (b)  preserve all beneficial contract rights to the extent
commercially reasonable;
         (c)  take commercially reasonable steps to collect all accounts; and
         (d)  pay all taxes, assessments or other charges on the Collateral
when due, except to the extent otherwise permitted by the Credit Agreement.

    8.   Collection.  Bank may communicate with account debtors in order to
verify the existence, amount and terms of any accounts or contract rights.  The
Borrowers will maintain 

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such lockbox or blocked accounts as Bank shall specify.  All proceeds of 
Collateral in the possession of the officers, employees or agents of the 
Borrowers shall be held in trust for the benefit of Bank.  All proceeds of 
Collateral including, without limitation, collections from accounts and 
proceeds from cash sales of Collateral shall be deposited into such lockbox 
or blocked accounts or remitted directly to Bank.

    At any time after the occurrence and during the continuance of an Event 
of Default, Bank (a) may notify account debtors of the Security Interest and 
require that payments on .accounts and returns of goods be made directly to 
Bank; (b) may require the Borrowers to notify their respective account 
debtors and indicate on all billings that payments and returns are to be made 
directly to Bank; and (c) may collect, compromise, endorse, sell or otherwise 
deal with the accounts or proceeds thereof in its own name or in the name of 
any Borrower.

    If any of the Borrowers' accounts or contract rights arise out of 
contracts with a governmental body subject to the Federal Assignment of 
Claims Act or a similar statute, upon request of Bank, the Borrowers shall 
execute any instruments and take any action required by law to ensure that 
all monies due and to become due under such contract shall be paid directly 
to Bank.

    9.   Insurance.  The Borrowers shall maintain insurance covering the 
Collateral as provided in the Credit Agreement.  All such insurance policies 
with respect to Collateral shall be written so as to be payable in the event 
of loss directly to Bank, shall provide for thirty (30) days prior written 
notice to Bank of cancellation or modification, and shall contain an 
endorsement providing that the insurer cannot withhold payment to Bank on 
account of any action by the Borrowers.  Bank is hereby irrevocably appointed 
as attorney-in-fact (which power is coupled with an interest) to collect the 
proceeds of such insurance, to settle any claims with the insurers in the 
event of loss or damage, to endorse settlement drafts, to cancel, assign or 
surrender any insurance policies; provided, however, that Bank will not 
exercise the foregoing power of attorney except after the occurrence and 
during the continuance of an Event of Default.

    10.  Additional Provisions Concerning the Collateral.
         (a)  Each Borrower hereby irrevocably appoints Bank its 
attorney-in-fact (which such power of attorney is coupled with an interest) 
with full authority in the place and stead of such Borrower and in the name 
thereof, from time to time after the occurrence and during the continuation 
of an Event of Default, to take any of the following actions or execute any 
of the following instruments which Bank may deem necessary or advisable to 
accomplish the purposes of this Agreement: (i) to ask, demand, collect, sue 
for, recover, compound, receive, and give acquittance and receipts for moneys 
due and to become due under or in respect of any of the Collateral; (ii) to 
receive, endorse, and collect any checks, drafts, letters of credit, or other 
instruments, documents, and chattel paper in connection with clause (i) 
above; (iii) to sign each such Borrower's name on any invoice or bill of 
lading relating, to any account, on drafts against customers, on schedules 
and assignments of accounts, on notices of assignment, financing statements 
and other public records, on verification of accounts and on 

                                      4
<PAGE>

notices to customers (including notices directing customers to make payment 
directly to Bank); (iv) to notify the post office authorities to change the 
address for delivery of its mail to an address designated by Bank; (v) to 
receive, open and process all mail addressed to any Borrower; (vi) to send 
requests for verification of accounts to customers; and (vii) to file any 
claims or take any action or institute any Proceedings which Bank may deem 
necessary or desirable for the collection of any of the Collateral or 
otherwise to enforce the rights of Bank with respect to any of the 
Collateral.  Bank agrees that it will exercise the foregoing power of 
attorney in a commercially reasonable manner.

         (b)  If any Borrower fails to perform any agreement contained 
herein, Bank may itself perform, or cause performance of, such agreement or 
obligation, and the reasonable costs and expenses of Bank incurred in 
connection therewith shall be payable by the Borrowers on demand and shall be 
secured by the Collateral.  All such expenditures shall bear interest at the 
Prime Rate (as defined in the Credit Agreement) plus five percent (5%).

         (c)  The powers conferred on Bank under this Agreement are solely to 
protect its interest in the Collateral and shall not impose any duty upon 
Bank 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 hereunder, Bank shall have no duty as to any Collateral or as to the 
taking of any necessary steps to preserve rights against prior parties or any 
other rights pertaining to any Collateral.

    11.  Default.  If any one or more of the following events (herein 
referred to as "Events of Default") shall occur:

         (a)  Any Borrower shall fail to perform or observe any provision of
this Agreement and such default shall continue for a period of seven (7) days
after written notice from Bank; or
         (b)  An Event of Default shall have occurred under Article V of the
Agreement;

    then, Bank shall have (a) the right to accelerate any or all of the 
Obligations, and (b) all of the rights and remedies set forth in Section 12 
below.

    12.  Remedies.  Bank shall have all of the rights and remedies of a 
secured party under the Uniform Commercial Code and shall have full power and 
authority to sell or otherwise dispose of the Collateral or any part thereof. 
 Any such sale or other disposition, subject to the provisions of applicable 
law, may be by public or private proceedings and may be made by one or more 
contracts, as a unit or in parcels, at such time and place, by such method, 
in such manner and on such terms as Bank may determine.  Except as required 
by law, such sale or other disposition may be made without advertisement or 
notice of any kind or to any person.  Where reasonable notification of the 
time or place of such sale or other disposition is required by law, such 
requirement shall have been met if such notice is delivered as provided in 
the Agreement, at least ten (10) days before the time of such sale or other 

                                      5
<PAGE>

disposition.  Upon notice from Bank, the Borrowers shall assemble the 
Collateral at a time and place specified by Bank.  To the extent permitted by 
law, Bank or any other holder of the Obligations may buy any or all of the 
Collateral upon any sale thereof.  To the extent permitted by law, upon any 
such sale or sales, the Collateral so purchased shall be held by the 
purchaser absolutely free from any claims or rights of whatsoever kind or 
nature, including any equity of redemption or any similar rights, all such 
equity of redemption and any similar rights being hereby expressly waived and 
released by the Borrowers.  In the event any consent, approval or 
authorization of any governmental agency shall be necessary to effectuate any 
such sale or sales, the Borrowers shall execute, as necessary, all 
applications or other instruments as may be required.

    At any time after the occurrence of an Event of Default, Bank may 
commence proceedings in any court of competent jurisdiction for the 
appointment of a receiver (which term shall include a receiver-manager) of 
the Collateral or of any part thereof.  At any time after the occurrence of 
an Event of Default, Bank may, if permitted without the commencement of a 
proceeding, appoint any person to be a receiver of the Collateral or any part 
thereof and may remove any receiver so appointed and appoint another in his 
stead.  Any such receiver appointed by Bank, or a court at the request of 
Bank, shall have power (i) to take possession of the Collateral or any part 
thereof; (ii) to carry on the business of the Borrowers; (iii) to borrow 
money on the security of the Collateral for the maintenance, preservation or 
protection of the Collateral or any part thereof or for the carrying on of 
the business of the Borrowers; and (iv) to sell, lease or otherwise dispose 
of the whole or any part of the Collateral at public auction, by public 
tender or by private sale, either for cash or upon credit, at such time and 
upon such terms and conditions as the receiver may determine; provided that 
Bank shall not be in any way responsible for any misconduct or negligence of 
any such receiver.

    Upon written notice to the Borrowers, the Borrowers shall execute and 
deliver to Bank a written assignment or assignments of all of their 
respective rights under any lease of Collateral.  If the consent of the 
lessor is required with respect to any assignment or hereunder, such 
assignment shall not be effective until such consent is obtained.  Each 
Borrower hereby irrevocably appoints Bank its attorney-in-fact (which power 
is coupled with an interest) to execute assignments and subleases in favor of 
Bank, provided that Bank shall exercise this power only after Bank has 
requested that such Borrower execute such assignment and it does not so 
execute and deliver to Bank the subject assignment within two days of such 
request.

    13.  Proceeds.  After deducting all reasonable costs and expenses of 
collection, custody, sale or other disposition or delivery (including legal 
costs and reasonable attorneys' fees) and all other charges due against the 
Collateral, the residue of the proceeds of any such sale or other disposition 
shall be applied to the payment of the Obligations and any surplus shall be 
returned to the Borrowers, except as otherwise provided by law.  The 
Borrowers shall be liable for any deficiency in payment of the Obligations, 
including all reasonable costs and expenses of collection, custody, sale or 
other disposition or delivery and all other charges due against the 
Collateral, as hereinbefore enumerated.

                                      6

<PAGE>

    14.  Waivers.  To the extent permitted by law, the Borrowers and any 
third party providing credit enhancement with respect to the Obligations 
("Secondary Party") hereby waive demand for payment, notice of dishonor or 
protest, rights of redemption, prior notice of the appointment of a receiver 
and all other notices of any kind except notices specifically required hereby 
or by the Credit Agreement.  Bank may modify the liability of any Secondary 
Party and release any Collateral provided by such Secondary Party without 
giving, notice to the Borrowers or any other Secondary Party.  Such 
modifications, changes, renewals, releases or other actions shall in no way 
affect the obligations of the Borrowers or any Secondary Party hereunder.

    15.  Expenses.  The Borrowers agree to pay, indemnify and hold harmless 
Bank and the nominees of Bank from and against all costs and expenses 
(including, taxes, if any) arising out of or incurred in connection with the 
administration and sale of Collateral and all reasonable costs and expenses 
(including reasonable legal fees) incurred by Bank in connection with the 
negotiation, preparation, execution, amendment, interpretation, termination 
or enforcement of this Agreement.

    16.  Setoff.  Any sums due from Bank to any Borrower or any property of 
any Borrower in the possession of Bank may be held and treated as Collateral 
and, after the occurrence of an Event of Default, may be applied to the 
payment of the Obligations regardless of the adequacy of the Collateral.

    17.  Modification. This Agreement may be modified or amended only in 
writing signed by each of the parties hereto.

    18.  Notices.  All notices and other communications hereunder shall be 
deemed to have been sufficiently given if delivered as provided in the Credit 
Agreement.

    19.  Waivers.  No course of dealing between the Borrowers and Bank, nor 
any delay in exercising, on the part of Bank, any right, power or privilege 
hereunder, shall operate as a waiver thereof; nor shall any single or partial 
exercise of any right, power or privilege hereunder preclude any other or 
further exercise thereof or the exercise of any other right, power or 
privilege. The rights and remedies hereunder are cumulative and are in 
addition to, and not exclusive of, any rights or remedies provided by law.

    20.  Governing Law; Binding Effect; Counterparts.  This Agreement shall 
be construed in accordance with and governed by the laws of the Commonwealth 
of Massachusetts.  This Agreement shall be binding upon and inure to the 
benefit of the parties hereto and their respective successors and assigns, 
including any other holder or holders of any Obligations and may be executed 
in two or more counterparts, each of which shall together constitute one and 
the same agreement.

    21.  Severability.  The invalidity or unenforceability of any provision 
hereof shall way affect the validity or enforceability of any other provision 
hereof.

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<PAGE>

    IN WITNESS WHEREOF, the parties hereto have executed this Security 
Agreement  the date first above written.

                                       STARMET CORPORATION


                                       By: /s/James M. Spiezio
                                          ---------------------------
                                       Name: James M. Spiezio
                                       Title: Vice President Finance


                                       STARMET POWDERS, LLC


                                       By: /s/James M. Spiezio
                                          ---------------------------
                                       Name: James M. Spiezio
                                       Title: Treasurer


                                       STARMET AEROCAST, LLC


                                       By: /s/James M. Spiezio
                                          ---------------------------
                                       Name: James M. Spiezio
                                       Title: Treasurer

                                       STARMET COMCAST, LLC


                                       By: /s/James M. Spiezio
                                          ---------------------------
                                       Name:James M. Spiezio
                                       Title: Treasurer



                                       STARMET NMI CORPORATION


                                       By: /s/ James M. Spiezio
                                          ---------------------------
                                       Name: James M. Spiezio
                                       Title: Treasurer




                                      8

<PAGE>

                                       STARMET CMI CORPORATION


                                       By: /s/ James M. Spiezio
                                          ---------------------------
                                       Name: James M. Spiezio
                                       Title: Treasurer


                                       STARMET HOLDINGS CORPORATION


                                       By: /s/ James M. Spiezio
                                          ---------------------------
                                       Name: James M. Spiezio
                                       Title: Treasurer


                                       NMI FOREIGN SALES CORPORATION


                                       By: /s/ James M. Spiezio
                                          ---------------------------
                                       Name: James M. Spiezio
                                       Title: Treasurer



                                       STATE STREET BANK AND TRUST 
                                       COMPANY


                                       By: /s/ William R. Dewey, IV
                                          ---------------------------
                                       Name: William R. Dewey, IV
                                       Title: Vice President


                                      9

<PAGE>

                                      EXHIBIT A


    A continuing security interest in:

    (a)  accounts including without limitation all accounts receivable, sums 
due from factors, contracts, contract rights, notes, bills, drafts, 
acceptances, instruments, documents, chattel paper, choses in action, and all 
other debts, obligations and liabilities in whatever form, owing to Borrowers 
from any person, firm or corporation or any other legal entity, whether now 
existing or hereafter arising, now or hereafter received by or belonging or 
owing to Borrowers, for goods sold by it or for services rendered by it, or 
however otherwise same may have been established or created, all guaranties 
and securities therefor, all right, title and interest of Borrowers in the 
merchandise or services which gave rise thereto, including the rights of 
reclamation and stoppage in transit and all rights of an unpaid seller of 
merchandise or services;

    (b)  inventory including, without limitation, all goods, merchandise, raw 
materials, goods and work in process, finished goods, and other tangible 
personal property now owned or hereafter acquired and held for sale or lease 
or furnished or to be furnished under contracts of service or consumed in 
Borrowers' business;

    (c)  equipment including without limitation all fixtures, machinery, 
equipment, molds, tools, dies, motor vehicles, trailers, boats and other 
goods (as defined in the Uniform Commercial Code) whether now owned or 
hereafter acquired by Borrowers and wherever located, all replacements and 
substitutions therefor or accessions thereto;

    (d)  general intangibles including without limitation, tax refunds, 
insurance premium rebates, pension refunds, trademarks, copyrights, patents, 
the corporate name, trade names, trade styles and all products names, 
catalogs, product literature, reports, computer programs and information on 
electronic media, blueprints, drawings, customer lists, rate lists, purchase 
orders, contract rights, rights to payment under royalty or license agreement 
infringement claims and choses in action; and

    (e)  all products and proceeds from any of the foregoing including 
without limitation all proceeds of credit, fire or other insurance and 
deposit accounts.

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