SECURITY AGREEMENT

This SECURITY AGREEMENT (this “ Agreement ”), dated as of September 4, 2009, among the Grantor(s) listed on the signature pages hereof and those additional entities that hereafter become parties hereto by executing the form of Supplement attached hereto as Annex 1 (collectively, jointly and severally, the “ Grantors ” and each, individually, a “ Grantor ”), and DMRJ GROUP, LLC (together with its successors and assigns, the “ Secured Party ”).

WHEREAS , the Secured Party is the holder of that certain Promissory Note bearing even date herewith in the principal amount of $3,000,000 (as amended or modified, the “ Note ”) issued or to be issued by the Implant Sciences Corporation (“ Company ”) pursuant to the terms of the Credit Agreement bearing even date herewith (as may be amended, restated, supplemented, replaced or otherwise modified from time to time, the “ Credit Agreement ”) by and between the Company, as borrower, the Secured Party, as lender, and C Acquisition Corp., Accurel Systems International Corporation, and IMX Acquisition Corp. as guarantors (collectively, the “ Guarantors ”) and

WHEREAS , pursuant to the terms and conditions of the Credit Agreement, the Secured Party has agreed to extend a loan to the Company, repayment of which is evidenced by the Note, and

WHEREAS , in order to induce Secured Party to enter into the Credit Agreement and other Transaction Documents and to extend the loans pursuant to the Credit Agreement, each of the Guarantors have agreed to jointly and severally guaranty the obligations of the Company to the Secured Party pursuant to that certain Guaranty (as amended, restated, supplemented or replaced from time to time, the “ Guaranty ”) dated of even date herewith executed by the Guarantors in favor of the Secured Party, and

WHEREAS , in order to induce Secured Party to enter into the Credit Agreement and other Transaction Documents and to extend the loans pursuant to the Credit Agreement, the Grantors have agreed to execute and deliver to the Secured Party this Agreement and other collateral documents and to grant the Secured Party a continuing security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, the Secured Obligations, and

NOW, THEREFORE , for and in consideration of the recitals made above and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1.   Defined Terms . All capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Note or the Credit Agreement.  Any terms used in this Agreement that are defined in the Code (whether or not capitalized) shall be construed and defined as set forth in the Code unless otherwise defined herein or in Note or the Credit Agreement; provided , however , that if the Code is used to define any term used herein and if such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern. In addition to those terms defined elsewhere in this Agreement, as used in this Agreement, the following terms shall have the following meanings:

(a)   “ Account ” means an account (as that term is defined in the Code).

(b)   “ Account Debtor ” means an account debtor (as that term is defined in the Code).

(c)    “ Books ” means books and records (including each Grantor’s Records indicating, summarizing, or evidencing such Grantor’s assets (including the Collateral) or liabilities, each Grantor’s Records relating to such Grantor’s business operations or financial condition, and each Grantor’s goods or General Intangibles related to such information).

(d)   “ Chattel Paper ” means chattel paper (as that term is defined in the Code) and includes tangible chattel paper and electronic chattel paper.

(e)   “ Closing Date ” has the meaning specified therefor in the Purchase Agreement.

(f)   “ Code ” means the New York Uniform Commercial Code, as in effect from time to time; provided , however , that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies with respect to Secured Party’s Liens on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies.

(g)   “ Collateral ” has the meaning specified therefor in Section 2 .

(h)   “ Commercial Tort Claims ” means commercial tort claims (as that term is defined in the Code), and includes those commercial tort claims listed on Schedule 10 attached hereto.

(i)   “ Company ” has the meaning specified therefor in the recitals to this Agreement.

(j)   “ Controlled Foreign Corporation ” shall mean “controlled foreign corporation” as defined in the IRC.

(k)   “ Copyrights ” means copyrights and copyright registrations, and also includes (i) the copyright registrations and applications listed on Schedule 2 attached hereto and made a part hereof (as the same may be amended or modified from time to time), (ii) all extensions or renewals thereof, (iii) all income, royalties, damage awards and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements thereof, (iv) the right to sue for past, present and future infringements thereof, and (v) all of each Grantor’s rights corresponding thereto throughout the world.

(l)   “ Copyright Security Agreement ” means each Copyright Security Agreement among Grantors, or any of them, and Secured Party in substantially the form of Exhibit A attached hereto, pursuant to which Grantors have granted to Secured Party a security interest in all their respective Copyrights.

(m)   “ Credit Agreement ” has the meaning specified therefor in the recitals to this Agreement.

(n)   “ Deposit Account ” means a deposit account (as that term is defined in the Code).

(o)   “ Equipment ” means equipment (as that term is defined in the Code).

(p)   “ Event of Default ” has the meaning specified therefor in the Note.

(q)   “ General Intangibles ” means general intangibles (as that term is defined in the Code), and, in any event, includes payment intangibles, contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill (including the goodwill associated with any Trademark), Patents, Trademarks, Copyrights, URLs and domain names, industrial designs and other Intellectual Property or rights therein or applications therefor, whether under license or otherwise, programs, programming materials, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, including Intellectual Property Licenses, infringement claims, computer programs, information contained on computer disks or tapes, software, literature, reports, catalogs, pension plan refunds, pension plan refund claims, insurance premium rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability company which do not constitute a security under Article 8 of the Code, and any other personal property other than Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related Property, Negotiable Collateral, and oil, gas, or other minerals before extraction.

(r)   “ Governmental Authority ” means any federal, state, local, or other governmental or administrative body, instrumentality, board, department, or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.

(s)   “ Grantor ” and “ Grantors ” have the meanings specified therefor in the recitals to this Agreement.

(t)   “ Guarantor ” has the meaning specified therefor in the recitals to this Agreement.

(u)   “ Guaranty ” has the meaning specified therefor in the recitals to this Agreement.

(v)   “ Insolvency Proceeding ” means any proceeding commenced by or against any Person under any provision of title 11 of the United States Code, as in effect from time to time, or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement of other similar relief.

(w)   “ Intellectual Property ” means Patents, Copyrights, Trademarks, the goodwill associated with such Trademarks, trade secrets and confidential and proprietary customer lists, and Intellectual Property Licenses.

(x)   “ Intellectual Property Licenses ” means rights under or interests in any patent, trademark, copyright or other intellectual property, including software license agreements with any other party, whether the applicable Grantor is a licensee or licensor under any such license agreement, including the license agreements listed on Schedule 3 attached hereto and made a part hereof.

(y)   “ Inventory ” means inventory (as that term is defined in the Code).

(z)   “ Investment Related Property ” means (i) investment property (as that term is defined in the Code), and (ii) all of the following (regardless of whether classified as investment property under the Code):  all Pledged Interests, Pledged Operating Agreements, and Pledged Partnership Agreements.

(aa)    “ Negotiable Collateral ” means letters of credit, letter-of-credit rights, instruments, promissory notes, drafts, and documents.

(bb)   “ Obligations ” means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become due, or that are now or may be hereafter contracted or acquired, or owing, of any Grantor to the Secured Party under this Agreement, the Note, the Credit Agreement, the Guaranty, the other Transaction Documents, and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from the Secured Party as a preference, fraudulent transfer or otherwise as such obligations may be

(cc)   “ Organizational Documents ” means, with respect to each Grantor, the documents by which such Grantor was organized (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Grantor (such as bylaws, a partnership agreement or an operating, limited liability or members agreement).

(dd)   “ Patents ” means patents and patent applications, and also includes (i) the patents and patent applications listed on Schedule 4 attached hereto and made a part hereof (as the same may be amended or modified from time to time), (ii) all divisions, continuations, continuations-in-part, reissues and extensions thereof, (iii) all income, royalties, damage awards and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements thereof, (iv) the right to sue for past, present and future infringements thereof, and (v) all of each Grantor’s rights corresponding thereto throughout the world.

(ee)   “ Patent Security Agreement ” means each Patent Security Agreement among Grantors, or any of them, and Secured Party in substantially the form of Exhibit B attached hereto, pursuant to which Grantors have granted to Secured Party a security interest in all their respective Patents.

(ff)   “ Permitted Encumbrances ” has the meaning specified therefor in the Credit Agreement.

(gg)   “ Person ” has the meaning specified therefor in the Credit Agreement.

(hh)   “ Pledged Companies ” means, each Person listed on Schedule 5 hereto as a “Pledged Company”, together with each other Person, all or a portion of whose Stock, is acquired or otherwise owned by a Grantor after the Closing Date.

(ii)   “ Pledged Interests ” means all of each Grantor’s right, title and interest in and to all of the Stock now or hereafter owned by such Grantor, regardless of class or designation, including all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto, also including any certificates representing the Stock, the right to receive any certificates representing any of the Stock, all warrants, options, share appreciation rights and other rights, contractual or otherwise, in respect thereof, and the right to receive dividends, distributions of income, profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and cash, instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange for any or all of the foregoing.  Notwithstanding anything to the contrary contained herein, in no event shall the Pledged Interests include more than 65% of the voting Stock of any Controlled Foreign Corporation if and only for so long as a pledge of more than 65% of the voting Stock of such Controlled Foreign Corporation would have adverse United States federal income tax consequences to any Grantor.

(jj)   “ Pledged Interests Addendum ” means a Pledged Interests Addendum substantially in the form of Exhibit C to this Agreement.

(kk)   “ Pledged Operating Agreements ” means all of each Grantor’s rights, powers, and remedies under the limited liability company operating agreements of each of the Pledged Companies that are limited liability companies.

(ll)   “ Pledged Partnership Agreements ” means all of each Grantor’s rights, powers, and remedies under the partnership agreements of each of the Pledged Companies that are partnerships.

(mm)   “ Proceeds ” has the meaning specified therefor in Section 2 .

(nn)   “ Real Property ” means any estates or interests in real property now owned or hereafter acquired by any Grantor and the improvements thereto.

(oo)   “ Records ” means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

(pp)   “ Security Interest ” has the meaning specified therefor in Section 2 .

(qq)   “ Secured Obligations ” means each and all of the following: (a) all of the present and future obligations of Grantors arising from this Agreement, the Note, the Credit Agreement, the Guaranty or the other Transaction Documents, and (b) all Obligations of the Company or any Guarantor, including, in the case of each of clauses (a) and (b), reasonable attorneys fees and expenses and any interest, fees, or expenses that accrue after the filing of an

(rr)   “ Secured Party’s Liens ” means the Liens granted by the Grantors to Secured Party under the Transaction Documents.

(ss)   “ Securities Account ” means a securities account (as that term is defined in the Code).

(tt)   “ Stock ” means all shares, options, warrants, interests, participations, or other equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting, including common stock, preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Commission under the Exchange Act).

(uu)   “ Supporting Obligations ” means supporting obligations (as such term is defined in the Code).

(vv)   “ Trademarks ” means trademarks, trade names, trademark applications, service marks, service mark applications, and also includes (i) the registered or applied for trade names, trademarks, trademark applications, service marks, and service mark applications listed on Schedule 6 attached hereto and made a part hereof (as the same may be amended or modified from time to time), and (ii) all renewals thereof, (iii) all income, royalties, damage awards and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future (A) infringements and dilutions thereof and (B) injury to the goodwill associated therewith, (iv) the right to sue for past, present and future (A) infringements and dilutions thereof and (B) injury to the goodwill associated therewith, (v) the goodwill of each Grantor’s business symbolized by the foregoing or connected therewith, and (v) all of each Grantor’s rights corresponding thereto throughout the world.

(ww)   “ Trademark Security Agreement ” means each Trademark Security Agreement among Grantors, or any of them, and Secured Party in substantially the form of Exhibit D attached hereto, pursuant to which Grantors have granted to Secured Party a security interest in all their respective Trademarks.

(xx)   “ Transaction Documents ” has the meaning specified therefor in the Credit Agreement.

(yy)   “ URL ” means “uniform resource locator,” an internet web address.

2.   Grant of Security .  Each Grantor hereby unconditionally grants, assigns, and pledges to Secured Party a continuing security interest (herein referred to as the “ Security Interest ”) in all personal property, tangible or intangible, of such Grantor whether now owned or hereafter acquired or arising and wherever located, including such Grantor’s right, title, and

(a)   all of such Grantor’s Accounts;

(b)   all of such Grantor’s Books;

(c)   all of such Grantor’s Chattel Paper;

(d)   all of such Grantor’s Deposit Accounts;

(e)   all of such Grantor’s Equipment and fixtures;

(f)   all of such Grantor’s General Intangibles;

(g)   all of such Grantor’s Inventory;

(h)   all of such Grantor’s Investment Related Property;

(i)   all of such Grantor’s Negotiable Collateral;

(j)   all of such Grantor’s rights in respect of Supporting Obligations;

(k)   all of such Grantor’s Commercial Tort Claims;

(l)   all of such Grantor’s money, cash equivalents, or other assets of each such Grantor that now or hereafter come into the possession, custody, or control of Secured Party;

(m)   all of the proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance or Commercial Tort Claims covering or relating to any or all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts, Equipment, General Intangibles, Inventory, Investment Related Property, Negotiable Collateral, Supporting Obligations, money, or other tangible or intangible property resulting from the sale, lease, license, exchange, collection, or other disposition of any of the foregoing, the proceeds of any award in condemnation with respect to any of the foregoing, any rebates or refunds, whether for taxes or otherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein, and the proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above, whether insured or not insured, and, to the extent not otherwise included, any indemnity, warranty, or guaranty payable by reason of loss or damage to, or otherwise with respect to any of the foregoing (the “ Proceeds ”).  Without limiting the generality of the foregoing, the term “Proceeds” includes whatever is receivable or received when Investment Related Property or proceeds are sold, exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes proceeds of any indemnity or guaranty payable to any Grantor or Secured Party from time to time with respect to any of the Investment Related Property.

3.   Security for Obligations .  This Agreement and the Security Interest created hereby secures the payment and performance of the Secured Obligations, whether now existing or arising hereafter.  Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Secured Obligations and would be owed by Grantors, or any of them, to Secured Party but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Grantor.

4.   Grantors Remain Liable .  Anything herein to the contrary notwithstanding, (a) each of the Grantors shall remain liable under the contracts and agreements included in the Collateral, including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform all of the duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Secured Party of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under such contracts and agreements included in the Collateral, and (c) Secured Party shall not have any obligation or liability under such contracts and agreements included in the Collateral by reason of this Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of any Grantors thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.  Until an Event of Default shall occur and be continuing, except as otherwise provided in this Agreement, the Note, the Credit Agreement, or other Transaction Documents, Grantors shall have the right to possession and enjoyment of the Collateral for the purpose of conducting the ordinary course of their respective businesses, subject to and upon the terms hereof and of the Note, the Credit Agreement and the other Transaction Documents.  Without limiting the generality of the foregoing, it is the intention of the parties hereto that record and beneficial ownership of the Pledged Interests, including all voting, consensual, and dividend rights, shall remain in the applicable Grantor until Secured Party, after the occurrence and during the continuance of an Event of Default, shall exercise its voting, consensual, or dividend rights with respect to the Pledged Interests pursuant to Section 15 hereof.

5.   Representations and Warranties .  Each Grantor hereby represents and warrants as follows:

(a)   The exact legal name, jurisdiction of incorporation, organization or formation, organizational identification number, if any, and chief executive officer of each of the Grantors is set forth on Schedule 1   attached hereto.  No Grantor has trade names except as set forth on Schedule 1 attached hereto.  No Grantor has used any name other than that as set forth on Schedule 1 for the preceding five years.  No entity has merged into any Grantor or been acquired by any Grantor within the past five years except as set forth on Schedule 1 .

(b)   Schedule 7 attached hereto sets forth all Real Property owned or leased by Grantors as of the Closing Date.

(c)   As of the Closing Date, no Grantor has any interest in, or title to, any Patents except as set forth on Schedule 4 , or material Copyrights, Intellectual Property Licenses, or Trademarks except as set forth on Schedules 2 , 3 , and 6 , respectively, attached hereto.  This Agreement is effective to create a valid and continuing Lien on such Copyrights, Intellectual Property Licenses, Patents and Trademarks and, upon filing of the Copyright Security

(d)   Each Grantor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement and the other Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Grantor of this Agreement and the filings contemplated herein and the other Transaction Documents to which it is a party have been duly authorized by all necessary action on the part of such Grantor and no further action is required by such Grantor.  This Agreement and the other Transaction Documents to which it is a party has been duly executed by each Grantor.  This Agreement and the other Transaction Documents to which it is a party constitutes the legal, valid and binding obligation of each Grantor, enforceable against such Grantor in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors and by general principles of equity.

(e)   No written claim has been received by any Grantor that any Collateral or any Grantor’s use of any Collateral violates the rights of any third party. There has been no adverse decision to any Grantor’s claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction or to such Grantor’s right to keep and maintain such Collateral in full force and effect, and there is no proceeding involving said rights pending or, to the best knowledge of such Grantor, threatened before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority.

(f)   Each Grantor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business (except when temporarily kept at the offices of its attorneys or accountants) and its Collateral at the locations set forth on Schedule 7 attached hereto and may not relocate such books of account and records or tangible Collateral unless it delivers to Secured Party at least thirty (30) days prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements under the Code and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interests to create in favor of Secured Party, subject to Permitted Encumbrances, a valid, perfected and continuing perfected first priority lien in the Collateral.

(g)   The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party by each Grantor do not (i) violate any of the provisions of the Organizational Documents of any Grantor or any judgment, decree, order or

(h)   This Agreement creates a valid security interest in the Collateral of each of Grantors, to the extent a security interest therein can be created under the Code, securing the payment of the Secured Obligations.  Except to the extent a security interest in the Collateral cannot be perfected by the filing of a financing statement under the Code,  all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken or will have been taken upon the filing of financing statements listing each applicable Grantor, as a debtor, and Secured Party, as secured party, in the jurisdictions listed next to such Grantor’s name on Schedule 8 attached hereto.  Upon the making of such filings, Secured Party shall have, subject to Permitted Encumbrances, a first priority perfected security interest in the Collateral of each Grantor to the extent such security interest can be perfected by the filing of a financing statement.  All action by any Grantor necessary to protect and perfect such security interest on each item of Collateral has been duly taken.

(i)    (i) Except for the Security Interest created hereby, each Grantor is and will at all times be the sole holder of record and the legal and beneficial owner, free and clear of all Liens other than Permitted Encumbrances, of the Pledged Interests indicated on Schedule 5 as being owned by such Grantor and, when acquired by such Grantor, any Pledged Interests acquired after the Closing Date; (ii) all of the Pledged Interests are duly authorized, validly issued, fully paid and nonassessable and the Pledged Interests constitute or will constitute the percentage of the issued and outstanding Stock of the Pledged Companies of such Grantor identified on Schedule 5 hereto as supplemented or modified by any Pledged Interests Addendum or any Supplement to this Agreement; (iii) such Grantor has the right and requisite authority to pledge th