RECORDATION REQUESTED BY:
Premier Bank Doylestown Office
Corporate Address 379 North Main Street
Doylestown, PA 18901

WHEN RECORDED MAIL T0:
Premier Bank
Commercial Loan Operations
PO Box 25091
Lehigh Valley, PA 18002-5091

This Mortgage prepared by: /s/Suzanne M. Hartshorne
                           Suzanne M; Hartshorne
                           Premier Bank
                            SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY


                                MORTGAGE

DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Mortgage. Unless specifically stated to
the contrary, a11 references to dollar amounts shall mean amounts in lawful
money of the United States of America. Words and terms used in the singular
shall include the plural, and the plural shall include the singular, as the
context may require. Words and terms not otherwise defined in this Mortgage
shall have the meanings attributed to such terms in the Uniform Commercial
Code:

Borrower. The word "Borrower" means Dynasil Corporation of America A/K/A
Dynasil Corporation and includes all co-signers and co-makers signing the
Note.

Default. The word "Default" means the Default set forth in this Mortgage in
the section titled "Default".

Environmental Laws. The words "Environmental Laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. Section 9601, et seq. I"CERCLA"1, the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., ,
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
the New Jersey Industrial Site Recovery Act, NJSA Section 13:1 K-6 ("ISRA"),
the New Jersey Spill Compensation and Control Act, NJSA 58;10-23.11, et seq.,
or other applicable state or federal laws, rules, or regulations adopted
pursuant thereto.

Event of Default. The words "Event of Default" section of this Mortgage. mean
any of the events of default set forth in this Mortgage in the events of
default.

Grantor. The word "Grantor" means Dynasil Corporation of America.

Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser,
surety, or accommodation party to Lender, including without limitation a
guaranty of all or part of the Note.

Hazardous Substances. The words "Hazardous Substances" mean materials that,
because of their quantity, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to human
health or the environment when improperly used, treated, stored, disposed of,
generated, manufactured, transported or otherwise handled. The words
"Hazardous Substances" are used in their very broadest sense and include
without limitation any and all hazardous or toxic substances, materials or
waste as defined by or listed under the Environmental Laws, The term
"Hazardous Substances" also includes, without limitation, petroleum and
petroleum by- products or any fraction thereof and asbestos.

Improvements. The word "Improvements" means all existing and future
improvements, buildings, structures, mobile homes affixed on the Real
Property, facilities, additions, replacements and other construction on the
Real Property.

Indebtedness. The word "Indebtedness " means all principal, interest, and
other amounts, costs and expenses payable under the Note or Related
Documents, together with all renewals of, extensions of, modifications of,
consolidations of and substitutions for the Note or Related Documents and any
amounts expended or advanced by Lender to discharge Grantor's obligations or
expenses incurred by Lender to enforce Grantor's obligations under this
Mortgage, together with interest on such amounts as provided in this
Mortgage.

Lender. The word "Lender" means Premier Bank, its successors and assigns.

Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender.

Note. The word "Note" means the promissory note dated April 15, 2004, in the
original principal amount of $708,889.04 from Borrower to Lender, together
with all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for the promissory note or agreement.

NOTICE TO GRANTOR: THE NOTE CONTAINS A VARIABLE INTEREST RATE.

Personal Property. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter owned by
Grantor, and now or hereafter attached or affixed to the Real Property;
together with all accessions, parts, and additions to, all replacements of,
and all substitutions for, any of such property; and together with all
proceeds (including without limitation all insurance proceeds 'and refunds of
premiums) from any sale or other disposition of the Property.

Property. The word "Property" means collectively the Real Property and the
Personal Property.

Real Property. The words "Real Property" mean the real property, interests
and rights, as further described in this Mortgage.

Related Documents. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.

Rents. The word "Rents" -means all present and future rents, revenues,
income, issues, royalties, profits, and other benefits derived from the
Property.

MAXIMUM LIEN. The lien of this Mortgage shall not exceed at any one
time$708,889.04.

THIS MORTGAGE dated April 15, 2004, is made and executed between Dynasil
Corporation of America, whose address is 385 Cooper Road, West Berlin, NJ
08091 (referred to below as "Grantor") and Premier Bank, whose address is
Corporate Address, 379 North Main Street, Doylestown, PA 18901 (referred to
below as "Lender").

GRANT OF MORTGAGE, For valuable consideration, Grantor mortgages and conveys
to Lender all of Grantor's right, title, and interest in and to the following
described real property, together with all existing or subsequently erected
or affixed buildings, improvements and fixtures; all easements, rights of
way, and appurtenances; all water, water rights, watercourses and ditch
rights (including stock in utilities with ditch or irrigation rights); and
all other rights, royalties, and profits relating to the real property,
including without limitation all minerals, oil, gas, geothermal and similar
matters, (the "Real Property") located in Camden County, State of New Jersey:

See Exhibit A, which is attached to this Mortgage and made a part of this
Mortgage as if fully set forth herein.

The Real Property or its address is commonly known as 385 Cooper Road, Berlin
Township, NJ.

Grantor presently assigns to Lender all of Grantor's right, title, and
interest in and to all present and future leases of the Property and all
Rents from the Property. In addition, Grantor grants to Lender a Uniform
Commercial Code security interest in the Personal Property and Rents.

THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN
THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE
INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE,
THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED
ON THE FOLLOWING TERMS:

<PAGE>

                                 MORTGAGE

 Loan No:                      (Continued.)                         Page 2



GRANTOR'S WAIVERS. Grantor waives all rights or defenses arising by reason of
any "one action" or' "anti-deficiency" law, or any other law which may
prevent Lender from bringing any action against Grantor, including a claim
for deficiency to the extent Lender is otherwise entitled to a claim for
deficiency, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale.

GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this
Mortgage is executed at Borrower's request and not at the request of Lender;
(b) Grantor has the full power, right, and authority to enter into this
Mortgage and to hypothecate the Property; (c) the provisions of this Mortgage
do not conflict with, or result in a default under any agreement or other
instrument binding upon Grantor and do not result in a violation of any law,
regulation, court decree or order applicable to Grantor; (d) Grantor has
established adequate means of obtaining from Borrower on a continuing basis
information about Borrower's financial condition; and (e) Lender has made no
representation to Grantor' about Borrower (including without limitation the
creditworthiness of Borrower).

PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage,
Borrower shall pay to Lender all Indebtedness secured by this Mortgage as it
becomes due, and Borrower and Grantor shall strictly perform all Borrower's
and Grantor's obligations under this Mortgage.

POSSESSION AND MAINTENANCE OF THE PROPERTY. Borrower and Grantor agree that
Borrower's and Grantor's possession and use of the Property shall be governed
by the following provisions;

  Possession and Use. Until the occurrence of an Event of Default, Grantor
may (1) remain in possession and control of the Property; (2) use, operate or
manage the Property; and (3) collect the Rents from the Property.

  Duty to Maintain. Grantor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.

  Compliance With Environmental Laws. Grantor represents and warrants to
Lender that: (1) During the period of Grantor's ownership of the Property,
there has been no use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any Hazardous Substance by any person on,
under, about or from the Property; (2) Grantor has no knowledge of, or reason
to believe that there has been, except as previously disclosed to and
acknowledged by Lender in writing, (a) any breach or violation of any
Environmental Laws, (b) any use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance on, under,
about or from the Property by any prior owners or occupants of the Property,
or (c) any actual or threatened litigation or claims of any kind by any
person relating to such matters; and (3) Except as previously disclosed to
and acknowledged by Lender in writing, (a) neither Grantor nor any tenant,
contractor, agent or other authorized user of the Property shall use,
generate, manufacture, store, treat, dispose of or release any Hazardous
Substance an, under, about or from the Property; and (b) any such activity
shall be conducted in compliance with all applicable federal, state, and
local laws, regulations and ordinances, including without limitation all
Environmental Laws. Grantor authorizes Lender and its agents to enter upon
the Property to make such inspections and tests, at Grantor's expense, as
Lender may deem appropriate to determine compliance of the Property with this
section of the Mortgage. Any inspections or tests made by Lender shall be for
Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Grantor or to any other
person. The representations and warranties contained herein are based on
Grantor's due diligence in investigating the Property for Hazardous
Substances. Grantor hereby (1) releases and waives any future claims against
Lender for indemnity or contribution in, the event Grantor becomes liable for
cleanup or other costs under any such laws; and (2) agrees to indemnify and
hold harmless Lender against any and all claims, losses, liabilities,
damages, penalties, and expenses which Lender may directly or indirectly
sustain or suffer resulting from a breach of this section of the Mortgage or
as a consequence of any use, generation, manufacture, storage, disposal,
release or threatened release occurring prior to Grantor's ownership or
interest in the Property, whether or not the same was or should have been
known to Grantor. The provisions of this section of the Mortgage, including
the obligation to indemnify, shall survive the payment of the Indebtedness
and the satisfaction and reconveyance of the lien of this Mortgage and shall
not be affected by Lender's acquisition of any interest in the Property,
whether by foreclosure or otherwise.

  Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the Property
or any portion of the Property. Without limiting the generality of the
foregoing, Grantor will not remove, or grant to any other party the right to
remove, any timber, minerals (including oil and gas), coal, clay, scoria,
soil, gravel or rock products without Lender's prior written consent.

  Removal of Improvements. Grantor shall not demolish or remove any
Improvements from the Real Property without Lender's prior written consent.
As a condition to the removal of any Improvements, Lender may require Grantor
to make arrangements satisfactory to Lender to replace such Improvements with
Improvements of at least equal value.

  Lender's Right to Enter. Lender and Lender's agents and representatives may
enter upon the Real Property at all reasonable times to attend to Lender's
interests and to inspect the Real Property for purposes of Grantor's
compliance with the terms and conditions of this Mortgage.

  Compliance with Governmental Requirements. Grantor shall promptly comply
with all laws, ordinances, and regulations, now or hereafter in effect, of
all governmental authorities applicable to the use or occupancy of the
Property, including without limitation, the Americans With Disabilities Act.
Grantor may contest in good faith any such law, ordinance, or regulation and
withhold compliance during any proceeding, including appropriate appeals, so
long as Grantor has notified Lender in writing prior to doing so and so long
as, in Lender's sole opinion, Lender's interests in the Property are not
jeopardized. Lender may require Grantor to post adequate security or a surety
bond, reasonably satisfactory to Lender, to protect Lender's interest.

  Duty to Protect. Grantor agrees neither to abandon or leave unattended the
Property. Grantor shall do all other acts, in addition to those acts set
forth above in this section, which from the character and use of the Property
are reasonably necessary to protect and preserve the Property.

DUE ON SALE - CONSENT BY. LENDER. Lender may, at Lender's option, declare
immediately due and payable all sums secured by this Mortgage upon the sale
or transfer, without Lender's prior written consent, of all or any part of
the Real Property, or any interest in the Real Property. A "sale or transfer"
means the conveyance of Real Property or any right, title or interest in the
Real Property; whether legal, beneficial or equitable; whether voluntary or
involuntary; whether by outright sale, deed, installment sale contract, land
contract, contract for deed, leasehold interest with a term greater than
three (3) years, lease-option contract, or by sale, assignment, or transfer
of any beneficial interest in or to any land trust holding title to the Real
Property, or by any other method of conveyance of an interest in the Real
Property. If any Grantor is a corporation, partnership or limited liability
company, transfer also includes any change in ownership of more than
twenty-five percent (25%) of the voting stock, partnership interests or
limited liability company interests, as the case may be, of such Grantor.
However, this option shall not be exercised by Lender if such exercise is
prohibited by federal law or by New Jersey law.

TAXES AND LIENS. The following provisions relating to the taxes and liens on
the Property are part of this Mortgage:

 Payment. Grantor shall pay when due (and in all events prior to delinquency)
all taxes, payroll taxes, special taxes, assessments, water charges and sewer
service charges levied against or on account of the Property, and shall pay
when due all claims for work done on or for services rendered or material
furnished to the Property. Grantor shall maintain the Property free of any
liens having priority over or equal to the interest of Lender under this
Mortgage, except for those liens specifically agreed to in writing by Lender,
and except for the lien of taxes and assessments not due as further specified
in the Right to Contest paragraph.

  Right to Contest. Grantor may withhold payment of any tax, assessment, or
claim in connection with a good faith dispute over the obligation to pay, so
long as Lender's interest in the Property is not jeopardized. If a lien
arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen (15)
days after Grantor has notice of the filing, secure the discharge of the
lien, or if requested by Lender, deposit with Lender cash or a sufficient
corporate surety band or other security satisfactory to Lender in an amount
sufficient to discharge the lien plus any costs and attorneys' fees, or other
charges that could accrue as a result of a foreclosure or sale under the
lien. In any contest, Grantor shall defend itself and Lender and shall
satisfy any adverse judgment before enforcement against the Property. Grantor
shall name Lender as an additional obligee under any surety bond furnished in
the contest proceedings.

 Evidence of Payment. Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any
time a written statement of the taxes and assessments against the Property.

 Notice of Construction. Grantor shall notify Lender at least fifteen (15)
days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien, materialmen's
lien, or other lien could be asserted on account of the work, services, or
materials. Grantor will upon request of Lender furnish to Lender advance
assurances satisfactory to Lender that Grantor can and will pay the cost of
such improvements.

 No Claim for Credit for Taxes. Borrower or Grantor shall not make. deduction
from or claim credit on the principal or interest secured by this Mortgage by
reason of any governmental taxes, assessments or charges. Borrower or Grantor
shall not claim any deduction from the taxable value of the Property by
reason of this Mortgage.

PROPERTY DAMAGE INSURANCE

<PAGE>

                                MORTGAGE
Loan No:                      (Continued)                        Page 3



 Maintenance of Insurance. Grantor shall procure and maintain policies of
fire insurance with standard extended coverage endorsements on a replacement
basis for the full insurable value covering all Improvements on the Real
Property in an amount sufficient to avoid application of any. coinsurance
clause, and with a standard mortgagee clause in favor of Lender. Grantor
shall also procure and maintain comprehensive general liability insurance in
such coverage amounts as Lender may request with Lender being named as
additional insureds in such liability insurance policies. Additionally,
Grantor shall maintain such other insurance, including but not limited to
hazard, business interruption and boiler insurance as Lender may require.
Policies shall be written by such 'insurance companies and in such form as
may be reasonably acceptable to Lender, Grantor shall deliver to Lender
certificates of coverage from each insurer containing a stipulation that
coverage will not be cancelled or diminished without a minimum of thirty (30)
days' prior written notice to Lender and not containing any disclaimer of the
insurer's liability for failure to give such notice. Each insurance policy
also shall include an endorsement providing that coverage in favor of Lender
will not be impaired in any way by any act, omission or default of Grantor or
any other person. Should the Real Property be located in an area designated
by the Director of the Federal Emergency Management Agency as a special flood
hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance,
if available, within 45 days after notice is given by Lender that the
Property is located in a special flood hazard area, for the full unpaid
principal balance of the loan and any prior liens on the property securing
the loan, up to the maximum policy limits set under the National Flood
Insurance Program, or as otherwise required by Lender, and to maintain such
insurance for the term of the loan.

 Application of Proceeds. Grantor shall promptly notify Lender of any loss or
damage to the Property. Lender may make proof of loss if Grantor fails to do
so within fifteen (15) days of the casualty. Whether or not Lender's security
is impaired, Lender may, at Lender's election, receive and retain the
proceeds of any insurance and apply the proceeds to the reduction of the
Indebtedness, payment of any lien affecting the Property, or the restoration
and repair of the Property, If Lender elects to apply the proceeds to
restoration and repair, Grantor shall repair or replace the damaged or
destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon
satisfactory proof of such expenditure, pay or reimburse Grantor from the
proceeds for the reasonable cost of repair or restoration if Grantor is not
in default under this Mortgage. Any proceeds which have not been disbursed
within 180 days after their receipt and which Lender has not committed to the
repair or restoration of the Property shall be used first to pay any amount
owing to Lender under this Mortgage, then to pay accrued interest, and the
remainder, if any, shall be applied to the principal balance of the
Indebtedness. If Lender holds any proceeds after payment in full of the
Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests
may appear.

 Grantor's Report on Insurance. Upon request of Lender, however not more than
once a year, Grantor shall furnish to Lender a report on each existing policy
of insurance showing; (1) the, name of the insurer; (2) the risks insured;
(3) the amount of the policy; (4) the property insured, the then current
replacement value of such property, and the manner of determining that value;
and (5) the expiration date of the policy. Grantor shall, upon request of
Lender, have an independent appraiser satisfactory to Lender determine the
cash value replacement cost of the Property.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Property or if Grantor fails to
comply with any provision of this Mortgage or any Related Documents,
including but not limited to Grantor's failure to discharge or pay when due
any amounts Grantor is required to discharge or pay under this Mortgage or
any Related Documents, Lender on Grantor's behalf may (but shall not be
obligated to) take any action that Lender deems appropriate, including but
not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on the Property
and paying all costs for insuring, maintaining and preserving the Property.
All such expenditures incurred or paid by Lender for such purposes will then
bear interest at the rate charged under the Note from the date incurred or
paid by Lender to the date of repayment by Grantor. All such expenses will
become a part of the Indebtedness and, at Lender's option, will (A) be
payable on demand; (B) be added to the balance of the Note and be apportioned
among and be payable with any installment payments to become due during
either (1) the term of any applicable insurance policy; or (2) the remaining
term of the Note; or (C) be treated as a balloon payment which will be due
and payable at the Note's maturity. The Mortgage also will secure payment of
these amounts. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon Default.

WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Mortgage:

 Title. Grantor warrants that: (a) Grantor holds good and marketable title of
record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description or
in any title insurance policy, title report, or final title opinion issued in
favor of, and accepted by, Lender in connection with this Mortgage, and (b)
Grantor has the full right, power, and authority to execute and deliver this
Mortgage to Lender.

 Defense of Title. Subject to the exception in the paragraph above, Grantor
warrants and will forever defend the title to the Property against the lawful
claims of all persons. In the event any action or proceeding is commenced
that questions Grantor's title or the interest of Lender under this Mortgage,
Grantor shall defend the action at Grantor's expense, Grantor may be the
nominal party in such proceeding, but Lender shall be entitled to participate
in the proceeding and to be represented in the proceeding by counsel of
Lender's own choice, and Grantor will deliver, or cause to be delivered, to
Lender such instruments as Lender may request from time to time to permit
such participation.

 Compliance With Laws. Grantor warrants that the Property and Grantor's use
of the Property complies with all existing applicable laws, ordinances, and
regulations of governmental authorities.

 Survival of Representations and Warranties. All representations, warranties,
and agreements made by Grantor in this Mortgage shall survive the execution
and delivery of this Mortgage, shall be continuing in nature, and shall
remain in full force and effect until such time as Borrower's Indebtedness
shall be paid in full.

CONDEMNATION. The following provisions relating to condemnation proceedings
are a part of this Mortgage:

 Proceedings. If any proceeding in condemnation is filed, Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such steps
as may be necessary to defend the action and obtain the award. Grantor may be
the nominal party in such proceeding, but Lender shall be entitled to
participate in the proceeding and to be represented in the proceeding by
counsel of its own choice, and Grantor will deliver or cause to be delivered
to Lender such instruments and documentation as may be requested by Lender
from time to time to permit such participation.

 Application of Net Proceeds. If all or any part of the Property is condemned
by eminent domain proceedings or by any proceeding or purchase in lieu of
condemnation, Lender may at its election require that all or any portion of
the net proceeds of the award be applied to the Indebtedness or the repair or
restoration of the Property. The net proceeds of the award shall mean the
award after payment of all reasonable costs, expenses, and attorneys' fees
incurred by Lender in connection with the condemnation.

IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The
following provisions relating to governmental taxes, fees and charges are a
part of this Mortgage;

 Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall
execute such documents in addition to this Mortgage and take whatever other
action is requested by Lender to perfect and continue Lender's lien on the
Real Property. Grantor shall reimburse Lender for all taxes, as described
below, together with all expenses incurred in recording, perfecting or
continuing this Mortgage, including without limitation all taxes, fees,
documentary stamps, and other charges for recording or registering this
Mortgage.

 Taxes. The following shall constitute taxes to which this section applies:
(1) a specific tax upon this type of Mortgage or upon all or any part of the
Indebtedness secured by this Mortgage; (2) a specific tax on Borrower which
Borrower is authorized or required to deduct from payments or the
indebtedness secured by this type of Mortgage; (3) a tax on this type of
Mortgage chargeable against the Lender or the holder of the Note; and (4) a
specific tax on all or any portion of the Indebtedness or on payments of
principal and interest made by Borrower.

 Subsequent Taxes. If any tax to which this section applies is enacted
subsequent to the date of this Mortgage, this event shall have the same
effect as an Event of Default, and Lender may exercise any or all of its
available remedies for an Event of Default as provided below unless Grantor
either (1) pays the tax before it 'becomes delinquent, or (2) contests the
tax as provided above in the Taxes and Liens section and deposits with Lender
cash or a sufficient corporate surety bond or other security satisfactory to
Lender.

SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating
to this Mortgage as a security agreement are a part of this Mortgage:

 Security Agreement. This instrument shall constitute a Security Agreement to
the extent any of the Property constitutes fixtures, and Lender shall have
all of the rights of a secured party under the Uniform Commercial Code as
amended from time to time.

 Security Interest. Upon request by Lender, Grantor shall execute financing
statements and take whatever other action is requested by Lender to perfect
and continue Lender's security interest in the Rents and Personal Property.
In addition to recording this Mortgage in the real property records, Lender
may, at any time and without further authorization from Grantor, file
executed counterparts, copies or reproductions of this Mortgage as a
financing statement. Grantor shall reimburse Lender for all expenses incurred
in perfecting or continuing this security interest, Upon default, Grantor
shall not remove, sever or detach the Personal Property from the Property.
Upon default, Grantor shall assemble any Personal Property not affixed to the
Property in a manner and at a place reasonably convenient to Grantor and
Lender and make it available to Lender within three (3) days after receipt of
written demand from Lender to the extent

<PAGE>

                               MORTGAGE
Loan No:                      (Continued)                 Page 4



permitted by applicable law.

 Addresses. The mailing addresses of Grantor (debtor) and Lender (secured
party) from which information concerning the security interest granted by
this Mortgage may be obtained (each as required by the Uniform Commercial
Code) are as stated on the first page of this Mortgage

FURTHER ASSURANCES;. ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Mortgage:

 Further Assurances. At any time, and from time to time, upon request of
Lender, Grantor will make, execute and deliver, or will cause to be made,
executed or delivered, to Lender or to Lender's designee, and when requested
by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case
may be, at such times and in such offices and places as Lender may deem
appropriate, any and all such mortgages, deeds of trust, security deeds,
security agreements, financing statements, continuation statements,
instruments of further assurance, certificates, and other documents as may,
in the sole opinion of Lender, be necessary or desirable in order to
effectuate, complete, perfect, continue, or preserve (1) Borrower's and
Grantor's obligations under the Note, this Mortgage, and the Related
Documents, and (2) the liens and security interests created by this Mortgage
on the Property, whether now owned or hereafter acquired by Grantor. Unless
prohibited by law or Lender agrees to the contrary in writing, Grantor shall
reimburse Lender for all costs and expenses incurred in connection with the
matters referred to in this paragraph.

  Attorney-in-Fact. If Grantor fails to do any of the things referred to in
the preceding paragraph, Lender may do so for and in the name of Grantor and
at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints
Lender as Grantor's attorney-in-fact for the purpose of making, executing,
delivering, filing, recording, and doing all other things as may be necessary
or desirable, in Lender's sole opinion, to accomplish the matters referred to
in the preceding paragraph.

FULL PERFORMANCE. If Borrower pays all the Indebtedness when due, and
otherwise performs all the obligations imposed upon Grantor under this
Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction
of this Mortgage and suitable statements of termination of any financing
statement on file evidencing Lender's security interest in the Rents and the
Personal Property. Grantor will pay, if permitted by applicable law, any
reasonable termination fee as determined by Lender from time to time.

EVENTS OF DEFAULT. Each of the following, at Lender's option, shall
constitute an Event of Default under this Mortgage:

 Payment Default. Borrower fails to make any payment when due under the
Indebtedness.

 Default on Other Payments. Failure of Grantor within the time required by
this Mortgage to make any payment for taxes or insurance, or any other
payment necessary to prevent filing of or to effect discharge of any lien,

 Other Defaults. Borrower or Grantor fails to comply with or to perform any
other term, obligation, covenant or condition contained in this Mortgage or
in any of the Related Documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower or Grantor.

 Default in Favor of Third Parties. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's or any Grantor's property or
Borrower's ability to repay the Indebtedness or Borrower's or Grantor's
ability to perform their respective obligations under this Mortgage or any
related document.

  False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or Grantor or on Borrower's or Grantor's
behalf under this Mortgage or the Related Documents is false or misleading in
any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.

 Defective Collateralization. This Mortgage or any of the Related Documents
ceases to be in full force and effect (including failure of any Related
Documents to create a valid and perfected security interest or lien) at any
time and for any reason. .

 Insolvency. The dissolution or termination of Borrower's or Grantor's
existence as a going business, the insolvency of Borrower or Grantor, the
appointment of a receiver for any part of Borrower's or Grantor's property,
any assignment for the benefit of creditors, any type. of creditor workout,
or the commencement of any proceeding under any bankruptcy or insolvency laws
by or against Borrower or Grantor.

  Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self- help,
repossession or any other method, by any creditor of Borrower or Grantor or
by any governmental agency against any property securing the Indebtedness.
This includes a garnishment of any of Borrower's or Grantor's accounts,
including deposit accounts, with Lender. However, this Event of Default shall
not apply if there is a good faith dispute by Borrower or Grantor as to the
validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower or Grantor gives Lender written notice
of the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve or
bond for the dispute.

  Breach of Other Agreement. Any breach by Borrower or Grantor under the
terms of any other agreement between Borrower or Grantor and Lender that is
not remedied within any grace period provided therein, including without
limitation any agreement concerning any indebtedness or other obligation of
Borrower or Grantor to Lender, whether existing now or later.

  Events Affecting Guarantor, Any of the preceding events occurs with respect
to any guarantor, endorser, surety, or accommodation party of any of the
Indebtedness or any guarantor, endorser, surety, or accommodation party dies
or becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the Indebtedness. In the event of a death, Lender, at
its option, may, but shall not be required to, permit the guarantor's estate
to assume unconditionally the obligations arising under the guaranty in a
manner satisfactory to Lender, and, in doing so, cure any Event of Default.

  Adverse Change. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.

 Insecurity. Lender in good faith believes itself insecure.

  Right to Cure. If such a failure is curable and if Borrower or Grantor has
not been given a notice of a breach of the same provision of this Mortgage
within the preceding twelve (12) months, it may be cured (and no Event of
Default will have occurred) if Borrower or Grantor, after Lender sends
written notice demanding cure of such failure: (a) cures the failure within
fifteen (15) days; or (b) if the cure requires more than fifteen (15) days,
immediately initiates steps sufficient to cure the failure and thereafter
continues and completes all reasonable and necessary steps sufficient to
produce compliance as soon as reasonably practical:

RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default
and at any time thereafter, Lender, at Lender's option, may exercise any one
or more of the following rights and remedies, in addition to any other rights
or remedies provided by law:

  Accelerate Indebtedness. Lender shall have the right at its option without
notice to Grantor to declare the entire Indebtedness immediately due and
payable, including any prepayment penalty which Grantor would be required to
pay.

  UCC Remedies. With respect to all or any part of the Personal Property,
Lender shall have all the rights and remedies of a secured party under the
Uniform Commercial Code.

  Lender In Possession. Upon acceleration of the Indebtedness or abandonment
of the Property, Lender (in person, by agent or by judicially appointed
receiver) shall be entitled to enter upon, take possession of and manage the
Property and to collect the Rents, including those past due. Any Rents
collected by Lender or the receiver shall be applied first to payment of the
costs of management of the Property and collection of Rents, including but
not limited to receiver's fees, premiums on the receiver's bonds and
reasonable attorneys' fees and then to the other Indebtedness secured by this
Mortgage,

  Appoint Receiver. Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Leases and Rents from the Property
and apply the proceeds, over and above the cost of the receivership, against
the Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Property exceeds the Indebtedness by a substantial
amount. Employment by Lender shall not disqualify a person from serving as a
receiver.

  Judicial Foreclosure. Lender may obtain a judicial decree foreclosing
Grantor's interest in all or any part of the Property,

  Nonjudicial Sale. If permitted by applicable law, Lender may foreclose
Grantor's interest in all or in any part of the Personal Property or the Real
Property by non-judicial sale.

  Tenancy at Sufferance, If Grantor remains in possession of the Property
after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Grantor, Grantor shall
become a tenant at sufferance of Lender or the purchaser of the Property and
shall, at Lender's Option

<PAGE>

                                   MORTGAGE
Loan No;                          (Continued)                     Page 5


 Other Remedies. Lender shall have all other rights and remedies provided in
this Mortgage or the Note or available at law or in equity.

 Sale of the Property. To the extent permitted by applicable law, Borrower
and Grantor hereby waives any and all right to have the Property marshalled.
In exercising its rights and remedies, Lender shall be free to sell all or
any part of the Property together or separately, in one sale or by separate
sales. Lender shall be entitled to bid at any public sale on all or any
portion of the Property.

 Notice of Sale. Lender shall give Grantor reasonable notice of the time and
place of any public sale of the Personal Property or of the time after which
any private sale or other intended disposition of the Personal Property is to
be made. Reasonable notice shall mean notice given at least ten (10) days
before the time of the sale or disposition. Any sale of the Personal Property
may be made in conjunction with any sale of the Real Property.

 Election of Remedies. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or
to take action to perform an obligation of Grantor under this Mortgage, after
Grantor's failure to perform, shall not affect Lender's right to declare a
default and exercise its remedies. Nothing under this Mortgage or otherwise
shall be construed so as to limit or restrict the rights and remedies
available to Lender following an Event of Default, or in any way to limit or
restrict the rights and ability of Lender to proceed directly against Grantor
and/or Borrower and/or against any other co-maker, guarantor, surety or
endorser and/or to proceed against any other collateral directly or
indirectly securing the Indebtedness.

  Attorneys' Fees; Expenses. If Lender institutes any suit or action to
enforce any of the terms of this Mortgage, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at
trial and upon any appeal. Whether or not any court action is involved, and
to the extent not prohibited by law, all reasonable expenses Lender incurs
that in Lender's opinion are necessary at any time for the protection of its
interest or the enforcement of its rights shall become a part of the
Indebtedness payable on demand and shall bear interest at the Note rate from
the date of the expenditure until repaid. Expenses covered by this paragraph
include, without limitation, however subject to any limits under applicable
law, Lender's attorneys' fees and Lender's legal expenses, whether or not
there is a lawsuit, including attorneys' fees and expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services,
the cost of searching records, obtaining title reports (including foreclosure
reports), surveyors' reports, and appraisal fees and title insurance, to the
extent permitted by applicable law. Grantor also will pay any court costs, in
addition to all other sums provided by law.

NOTICES. Any notice required to be given under this Mortgage, including
without limitation any notice of default and any notice of sale shall be
given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or, if mailed, when
deposited in the United States mail, as first class, certified or registered
mail postage prepaid, directed to the addresses shown near the beginning of
this Mortgage. All copies of notices of foreclosure from the holder of any
lien which has priority over this Mortgage shall be sent to Lender's address,
as shown near the beginning of this Mortgage. Any party may change its
address for notices under this Mortgage by giving formal written notice to
the other parties, specifying that the purpose of the notice is to change the
party's address. For notice purposes, Grantor agrees to keep Lender informed
at all times of Grantor's current address. Unless otherwise provided or
required by law, if there is more than one Grantor, any notice given by
Lender to any Grantor is deemed to be notice given to all Grantors.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part
of this Mortgage:

 Amendments. This Mortgage, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Mortgage. No alteration of or amendment to this Mortgage shall
be effective unless given in writing and signed by the party or parties
sought to be charged or bound by the alteration or amendment,

  Annual Reports. If the Property is used for purposes other than Grantor's
residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating income received from the Property during Grantor's
previous fiscal year in such form and detail as Lender shall require. "Net
operating income" shall mean all cash receipts from the Property less all
cash expenditures made in connection with the operation of the Property.

 Caption Headings. Caption headings in this Mortgage are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Mortgage.

  Governing Law. This Mortgage will be governed by, construed and enforced in
accordance with federal law and the laws of the Commonwealth of Pennsylvania,
except and only to the extent of procedural matters related to the perfection
and enforcement of Lender's rights and remedies against the Property, which
matters shall be governed by the laws of the State of New Jersey. However, in
the event that the enforceability or validity of any provision of this
Mortgage is challenged or questioned, such provision shall be governed by
whichever applicable state or federal law would uphold or would enforce such
challenged or questioned provision. The loan transaction which is evidenced
by the Note and this Mortgage has been applied for, considered, approved and
made, and all necessary loan documents have been accepted by Lender in the
Commonwealth of Pennsylvania.

  Joint and Several Liability. All obligations of Borrower and Grantor under
this Mortgage shall be joint and several, and all references to Grantor shall
mean each and every Grantor, and all references to Borrower shall mean each
and every Borrower. This means that each Borrower and Grantor signing below
is responsible for all obligations in this Mortgage. Where any one or more of
the parties is a corporation, partnership, limited liability company or
similar entity, it is not necessary for Lender to inquire into the powers of
any of the officers, directors, partners, members, or other agents acting or
purporting to act on the entity's behalf, and any obligations made or created
in reliance upon the professed exercise of such powers shall be guaranteed
under this Mortgage.

  No Waiver by Lender. Lender shall not be deemed to have waived any rights
under this Mortgage unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Mortgage shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Mortgage. No prior waiver by Lender,
nor any course of dealing between Lender and Grantor, shall constitute a
waiver of any of Lender's rights or of any of Grantor's obligations as to any
future transactions. Whenever the consent of Lender is required under this
Mortgage, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the sole
discretion of Lender.

  Severability. If a court of competent jurisdiction finds any provision of
this Mortgage to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal,
invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Mortgage. Unless otherwise required by
law, the illegality, invalidity, or unenforceability of any provision of this
Mortgage shall not affect the legality, validity or enforceability of any
other provision of this Mortgage.

  Non-Liability of Lender. The relationship between Borrower and Grantor and
Lender created by this Mortgage is strictly a debtor and creditor
relationship and not fiduciary in nature, nor is the relationship to be
construed as creating any partnership or joint venture between Lender and
Borrower and Grantor.

  Merger. There shall be no merger of the interest or estate created by this
Mortgage with any other interest or estate in the Property at any time held
by or for the benefit of Lender in any capacity, without the written consent
of Lender.

  Successors and Assigns. Subject to any limitations stated in this Mortgage
on transfer of Grantor's interest, this Mortgage shall be binding upon and
inure to the benefit of the parties, their successors and assigns. If
ownership of the Property becomes vested in a person other than Grantor,
Lender; without notice to Grantor, may deal with Grantor's successors with
reference to this Mortgage and the Indebtedness by way of forbearance or
extension without releasing Grantor from the obligations of this Mortgage or
liability under the Indebtedness.

 Time is of the Essence. Time is of the essence in the performance of this
Mortgage.

  Waive Jury. All parties to this Mortgage hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by any party against
any other party.


                                 MORTGAGE
Loan No:                       (Continued)                 Page 6

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND
GRANTOR AGREES TO ITS TERMS, GRANTOR ACKNOWLEDGES RECEIPT, WITHOUT CHARGE, OF
A TRUE AND CORRECT COPY OF THIS MORTGAGE.

GRANTOR:

DYNASIL CORPORATION OF AMERICA A/K/A DYNASIL CORPORATION

/S/ John Kane
John Kane, President





CORPORATE ACKNOWLEDGMENT



COMMONWEALTH OF PENNSYLVANIA

COUNTY OF BUCKS SS:



 BE IT REMEMBERED that on this 15th day April, 2004, before me, the
subscriber, personally appeared John Kane, President of Dynasil Corporation
who, I am satisfied, is the person who signed the within instrument, and he
or she acknowledged that he or she signed, sealed with the corporate seal and
delivered the same as such officer aforesaid, and that the within instrument
is the voluntary act and deed of such corporation, made by virtue of a
resolution of the board of directors.

COMMONWEALTH OF PENNSYLVANIA

 Notarial Seal



Carolyn D, Jeanquart, Notary Public Doylestown Boro, Bucks County

My Commission Expires July 31, 2004