ASSET PURCHASE AGREEMENT

BY AND AMONG

DYNASIL CORPORATION OF AMERICA

RMD INSTRUMENTS CORP.,

RMD INSTRUMENTS, LLC

AND

GERALD ENTINE 1988 FAMILY TRUST

FRITZ WALD AND DORIS WALD, HUSBAND AND WIFE

JACOB H. PASTER

JULY 1, 2008

TABLE OF CONTENTS

                                                             Page


SECTION 1.    PURCHASE OF THE PURCHASED ASSETS AND PURCHASE PRICE     1

     1.1  PURCHASE OF ASSETS AND PURCHASE PRICE.                1
     1.2  LIABILITIES.                                          2
     1.3  EXCLUDED ASSETS.                                      2
     1.4  PURCHASE PRICE; ALLOCATION OF PURCHASE PRICE.         2

SECTION 2.                                           THE CLOSING.     4

     2.1  THE CLOSING.                                          4

SECTION 3.REPRESENTATIONS AND WARRANTIES OF SELLER AND PRINCIPAL
MEMBERS.  4

     3.1  DUE ORGANIZATION; SUBSIDIARIES.                       4
     3.2  AUTHORITY; BINDING NATURE OF AGREEMENT.               4
     3.3  NO CONFLICT.                                          5
     3.4  LITIGATION.                                           5
     3.5  PURCHASED ASSETS.                                     5
     3.6  UNDISCLOSED LIABILITIES.                              5
     3.7  NO MATERIAL ADVERSE CHANGE.                           6
     3.8  TAX MATTERS.                                          6
     3.9  CONTRACTS.                                            6
     3.10 ERISA.                                                8
     3.11 EMPLOYEES.                                            9
     3.12 ENVIRONMENTAL MATTERS.                                9
     3.13 LICENSES AND PERMITS.                                10
     3.14 COMPLIANCE WITH LAWS.                                10
     3.15 PROPRIETARY ASSETS.                                  10
     3.16 FINDER'S FEE.                                        12
     3.17 CUSTOMERS, SUPPLIERS AND SERVICE PROVIDERS.          12
     3.18 DISCLOSURE.                                          12
     3.19 NO DISCLOSURE.                                       12
     3.20 DEBTS.                                               12
     3.21 INVESTIGATION.                                       13
     3.22 SCHEDULES.                                           13
     3.23 RELIANCE.                                            13

SECTION 3A.         REPRESENTATIONS AND WARRANTIES OF THE MEMBERS     13

     3A.1 AUTHORIZATION; TITLE                                 13

SECTION 4.REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION
SUB 13

     4.1  DUE ORGANIZATION; SUBSIDIARIES.                      14
     4.2  AUTHORITY; BINDING NATURE OF AGREEMENT.              14
     4.3  CAPITALIZATION, ETC.                                 14
     4.4  NON-CONTRAVENTION; CONSENTS.                         15
     4.5  SEC FILINGS; FINANCIAL STATEMENTS.                   16
     4.6  ABSENCE OF CHANGES.                                  17
     4.7  CONTRACTS.                                           19
     4.8  LIABILITIES.                                         19
     4.9  LEGAL PROCEEDINGS; ORDERS.                           19
     4.10 FOREIGN CORRUPT PRACTICES ACT.                       20
     4.11 FINANCIAL ADVISOR.                                   20
     4.12 PROPRIETARY ASSETS.                                  20

SECTION 5.              COVENANTS OF SELLER AND PRINCIPAL MEMBERS     21

     5.1  FURTHER ASSURANCES.                                  22
     5.2  POST-CLOSING ASSURANCES.                             22
     5.3  EMPLOYEES.                                           22

SECTION 6.                             RETAINED EARNING RECAPTURE     22


SECTION 7.                    CONDITIONS PRECEDENT TO THE CLOSING     23

     7.1  CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS TO
          COMPLETE THE CLOSING.                                23
     7.2  CONDITIONS PRECEDENT TO SELLER'S AND PRINCIPAL
          MEMBERS' OBLIGATIONS TO COMPLETE THE CLOSING.        24

SECTION 8.                                        INDEMNIFICATION     24

     8.1  SURVIVAL; INDEMNITY.                                 24
     8.2  INDEMNIFICATION OF BUYER.                            25
     8.3  INDEMNIFICATION OF SELLER AND PRINCIPAL MEMBERS.     26
     8.4  MISCELLANEOUS INDEMNIFICATION PROVISIONS.            26
     8.5  NOTIFICATION OF CLAIMS.                              27
     8.6  THIRD PARTY CLAIMS.                                  27
     8.7  SELLER PARTY INDEMNIFICATION PAYMENT.                28

SECTION 9.                                               EXPENSES     28

     9.1  EXPENSES.                                            28

SECTION 10.                                         MISCELLANEOUS     29

     10.1 AMENDMENT.                                           29
     10.2 WAIVER.                                              29
     10.3 ENTIRE AGREEMENT; COUNTERPARTS.                      29
     10.4 APPLICABLE LAW; JURISDICTION.                        29
     10.5 ATTORNEYS' FEES.                                     30
     10.6 ASSIGNABILITY; THIRD PARTY BENEFICIARIES.            30
     10.7 NOTICES.                                             30
     10.8 SEVERABILITY.                                        31
     10.9 SPECIFIC PERFORMANCE.                                32
     10.10                                          CONSTRUCTION.     32

EXHIBIT A - CERTAIN DEFINITIONS

EXHIBIT B - CLOSING ALLOCATION SCHEDULE

EXHIBIT C - BILL OF SALE

EXHIBIT D - SELLER'S CERTIFICATE

EXHIBIT E - BUYER'S CERTIFICATE

EXHIBIT F - RETAINED EARNINGS EXTRACTION

APPENDIX I - INVESTMENT LETTER



                    Asset Purchase Agreement

THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into on July 1, 2008, by and among DYNASIL CORPORATION OF AMERICA, a Delaware corporation ("Buyer"), RMD Instruments Corp., a Delaware corporation and wholly-owned subsidiary of Buyer ("Acquisition Sub"), RMD Instruments, LLC, a Massachusetts limited liability company ("Seller") and Gerald Entine 1988 Family Trust, Fritz Wald and Doris Wald, husband and wife, and Jacob H. Paster, the Members of Seller (the "Principal Members"). Certain capitalized terms used in this Agreement are defined in Exhibit A.

Recitals:

WHEREAS, Seller owns a business for engaged in the design, manufacture, marketing and sale of instruments and components (the "Business"); and

WHEREAS, Seller wishes to sell, and Buyer wishes to purchase, substantially all of the assets of the Business, subject to the terms and conditions set forth herein;

WHEREAS, the Principal Members own a majority of the issued and outstanding Membership interests of Seller; and

WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to Buyer's willingness to enter into this Agreement, Buyer, Radiation Monitoring Devices, Inc. ("RMD, Inc."), and the stockholders of RMD, Inc. (the "Stockholders") are entering into that certain Agreement and Plan of Merger (the "Merger Agreement").

NOW THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements hereinafter set forth, the parties to this Agreement, intending to be legally bound, agree as follows:

SECTION 1. PURCHASE OF THE PURCHASED ASSETS AND PURCHASE PRICE

1.1 PURCHASE OF ASSETS AND PURCHASE PRICE.

Subject to the terms and conditions set forth herein, Seller and Principal Members agree that, at the Closing, as hereinafter defined, Seller shall sell, transfer, assign, convey and deliver to Acquisition Sub, free and clear of any and all Encumbrances, and Buyer agrees that on the Closing date, Buyer shall purchase, acquire and accept from Seller, free and clear of any and all Encumbrances, all of Seller's right, title and interest in and to the assets owned, used or held by Seller in the conduct of the Business (the "Purchased Assets") including, without limitation:

(a) Seller's entire inventory, relating to the Business, wherever located (the "Inventory").

(b) All of Seller's equipment, motor vehicles, office furnishings and office equipment, phone systems, computers, copiers and fixtures used by the Seller in the conduct of the Business (the "Equipment").

(c) All Proprietary Assets.

(d) All licenses, sales agreements and other contracts relating to the Business (the "Contracts") including, without limitation, promissory notes and/or written promises to pay Seller.

(e) All of the goodwill relating to the Business (the "Goodwill").

(f) All of Seller's operating data, books and records, and current customer lists and records, financial, accounting and credit records of customers, vendors and suppliers, reference catalogs, product sales training materials, video tapes, discs, reference books and other similar documents and records, phone numbers, internet domain names, websites and all other intellectual property and other proprietary rights of Seller (collectively "Miscellaneous Property").

(g) All licenses, permits, approvals, qualifications, registrations and other consents issued by any government or agency to the Seller relating to the Business, and any applications therefor (collectively, the "Licenses").

(h) All prepaid expenses.

(i) All rights and interests under all unfilled customer orders (collectively, "Orders").

(j) Any remaining accounts receivable or other assets in the Buyer column after the Retained Earnings Extraction which shall be defined, calculated and administered as per
Section 2.1(e).

1.2 LIABILITIES.

Other than as set forth in Schedule 1.2 hereof, Buyer does not assume or agree to pay, perform, or discharge any debt, obligation, liability, indebtedness, contract, tax or liability, known or unknown, contingent or otherwise, of Seller or Seller's members of any kind or nature whatsoever that have accrued or become due on or prior to the Closing (including, without limitation, accounts payable, long-term debt, accrued expenses, capitalized leases, wages, salaries, fees, accrued income and payroll taxes, accrued payroll and vacation pay, notes due to officers, bank debt, employee benefits, contributions and premiums for employee benefits, commissions and bonuses, and other indebtedness for borrowed money) (collectively, "Liabilities"). Subject to the foregoing, Seller and Principal Members acknowledge that Buyer assumes no Liabilities whatsoever and all Liabilities shall remain the respective responsibilities of Seller and Members, as appropriate. All liabilities and obligations of the Business and/or the Purchased Assets that first accrue or become due following the Closing (including, without limitation the Contracts and the Orders) shall be the sole responsibility of Buyer.

1.3 EXCLUDED ASSETS.

Buyer is acquiring no right, title or interest in or to the assets set forth on Schedule 1.3 hereto (collectively, the "Excluded Assets").

1.4 PURCHASE PRICE; ALLOCATION OF PURCHASE PRICE.

(A) The cumulative price to be paid by Buyer to Seller for the Purchased Assets (the "Purchase Price") shall be (i) Twelve Million Five Hundred Thousand Dollars ($12,500,000) payable in case in same-day funds (the "Purchase Cash"); and (ii) One Million (1,000,000) shares of the Common Stock of the Buyer (the "Purchase Stock", and collectively, with the Purchase Cash, the "Consideration").

(b) The Purchase Stock shall be unregistered, and any and all certificates representing Purchase Stock, or issued in replacement thereof or in exchange therefor shall bear the following legend or one substantially similar thereto:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE IN RELIANCE ON EXEMPTIONS THEREFROM AND, THEREFORE, MAY NOT BE RESOLD UNLESS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

(c) Each Member of Seller, upon no less than ninety (90) days' prior notice to Buyer, and surrender of certificates representing the subject Purchase Stock, shall have the right to require Buyer to purchase all or any portion of the Purchase Stock held by such Member for a repurchase price of Two Dollars ($2.00) per share, at any time and from time to time during a period beginning twenty-four (24) months after the Closing Date and ending forty- eight (48) months after the Closing Date; provided that each Member shall exercise this right (i) no more frequently than two
(2) times in any six (6) month period; and (ii) for no less than fifty thousand (50,000) shares per exercise (or the balance of their Purchase Stock if such balance is less than 50,000 shares). The closing of a Buyer repurchase of Member Purchase Stock pursuant to the exercise by the Member of his or its rights under this Section 1.4(c) shall occur, subject to the provisions of this Section 1.4(c), at the principal office of the Buyer on the ninetieth (90th) day following delivery to Buyer by such Member of written notice (or, if such date shall not be a regular business day, on the first business day following such date). At such closing, Buyer shall deliver the aggregate repurchase price to such Member in cash in same-day funds against delivery by such Principal Member of the certificate(s) representing the Purchase Stock being repurchased at such closing, duly endorsed for transfer on the books of Buyer or accompanied by a duly executed stock power. If less than all shares of Purchase Stock evidenced by any such certificate are being repurchased at such closing, Buyer shall also deliver to such Member a new certificate representing the balance of the Purchase Stock not so purchased. If at any such closing Buyer shall fail or be unable to consummate such repurchase in the manner required hereunder, for any reason or no reason, the amount due to such Member at such closing and unpaid thereat shall bear interest from such date at an interest rate equal to the greater of (x) ten percent (10%) or
(y) the prime interest rate published by the Wall Street Journal on the date of such failure to consummate the repurchase, plus five percent (5%), payable on demand by such Member, until paid in full, and Buyer shall deliver to such Member at such closing Buyer's promissory note in aggregate principal amount equal to the aggregate Purchase Stock repurchase price not paid by Buyer at such closing, which promissory note shall have a maturity of, and amortize over, three (3) years, shall bear interest at the aforesaid rate payable quarterly in arrears (together with amortizing principal payments) and shall be secured by such Member's Purchase Stock not repurchased at such closing. The right set forth in herein shall be subject to Member's compliance with all applicable laws, rules and regulations. The right set forth in this Section 1.4(c) is not prohibited by Buyer's bank financing arrangements.

(d) The Purchase Price shall be allocated among the Purchased Assets, as determined above, as set forth on Exhibit B hereto (the "Closing Allocation Schedule"). Seller, Principal Members and Buyer agree to jointly complete all required reports and returns under Federal and state tax laws, rules and/or regulations. The parties hereby covenant and agree with each other that none of them will take a position on any tax return or other document or instrument before any Governmental or Regulatory Body charged with the collection of any tax, or in any judicial proceeding, that is in any way inconsistent with the allocation set forth in the Closing Allocation Schedule.

SECTION 2. THE CLOSING.

2.1 THE CLOSING.

(A) The consummation of the purchase and sale contemplated hereby (the "Closing") shall take place concurrently with the Merger Agreement (such date, the "Closing Date"), or such other time as Buyer and the Seller shall mutually agree.

(b) At the Closing, Seller and Principal Members shall deliver, or cause to be delivered to Buyer, duly executed or certified to the reasonable satisfaction of Buyer's attorney, each of the agreements, documents, certificates, consents and instruments referred to in Section 7.1(D) herein.

(c) At the Closing, Buyer shall deliver or cause to be delivered to Seller and Principal Members, duly executed or certified to the reasonable satisfaction of Seller's attorney, each of the agreements, documents, certificates, consents and instruments referred to in Section 7.2(D) herein.
(d) Buyer shall deliver the Purchase Price, as set forth in
Section 1.4.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER AND PRINCIPAL MEMBERS.

Subject to, and except as disclosed in the schedules to this Agreement, Seller represents and warrants to Buyer, as follows:

3.1 DUE ORGANIZATION; SUBSIDIARIES.

The Seller is duly organized, validly existing and in good standing under the Legal Requirements of the jurisdiction of its incorporation. The Seller has all necessary power and authority: (a) to conduct its business in the manner in which its business is currently being conducted; (b) to own and use its assets in the manner in which its assets are currently owned and used; and (c) to perform its material obligations under all Contracts. The Seller is qualified to do business as a foreign corporation, and is in good standing, under the Legal Requirements of all jurisdictions where the failure to be so qualified would have a Material Adverse Effect on the Seller. The Seller has delivered or made available to Parent accurate and complete copies of the organizational documents of the Seller, including all amendments thereto (collectively, the "Seller Organization Documents"). The Seller has no Subsidiaries.

3.2 AUTHORITY; BINDING NATURE OF AGREEMENT.

The Seller has all requisite power and authority to enter into and to perform its obligations under this Agreement, including unanimous Principal Member approval and adoption of this Agreement. This Agreement constitutes the legal, valid and binding obligation of the Principal Members and the Seller, enforceable against the Principal Members and the Seller in accordance with its terms, subject to (a) Legal Requirements of general application relating to bankruptcy, insolvency and the relief of debtors, (b) rules of law governing specific performance, injunctive relief and other equitable remedies and
(c) the approval of Members of the Seller. The Principal Members hereby represent that they have (i) determined that the transactions contemplated hereby are in the best interests of the Seller and its Members, (ii) approved, adopted and declared advisable this Agreement, and (iii) approved the transactions contemplated by this Agreement.

3.3 NO CONFLICT.

Except as set forth on Schedule 3.3, neither the execution and delivery of this Agreement nor the performance by Seller and/or Principal Members of those acts and things required of them in advance of Closing, nor the consummation of any and all of the transactions contemplated hereby, will (a) violate or conflict with, result in the acceleration of or entitle any party to accelerate the maturity or the cancellation of the performance of any obligation under, or result in the creation or imposition of any Encumbrance upon any of the Purchased Assets, any of the properties or other assets of Seller, or constitute a default (or an event which might, with the passage of time or the giving of notice, or both, constitute a default) under any mortgage, indenture, deed of trust, lease, contract, loan or credit agreement, license or other instrument or any order, judgment, regulation or ruling of any Governmental Body to which Seller is a party, or by which any of their respective property or assets, particularly the Purchased Assets, may be bound or affected; (b) violate or conflict with any provision of any law, rule, regulation, order, judgment, decree or ruling of any Governmental Body applicable to Seller; or (c) require any consent, approval, filing or notice on any provision of any law, rule, regulation, order, judgment, decree or judgment of any Governmental Body.

3.4 LITIGATION.

Except as set forth on Schedule 3.4, there is no pending Legal Proceeding and within the past 24 months no Person has threatened in writing to commence any Legal Proceeding, that involves the Seller or any of the Purchased Assets, in each case which would be reasonably likely to have a Material Adverse Effect to the Seller; and there is no Order to which the Seller, or any of the Purchased Assets, is subject.

3.5 PURCHASED ASSETS.

The Purchased Assets being assigned, sold and transferred to Buyer pursuant to this Agreement constitute substantially all of the assets used, owned and/or occupied by Seller for the conduct of the Business (with the exception of the Excluded Assets). Seller owns, or will on the Closing Date own outright and have good and marketable title to, the Purchased Assets, free and clear of any Encumbrances. The Bill of Sale and such other conveyancing documents as shall be executed and delivered to Buyer, will convey to Buyer good and marketable title to the Purchased Assets free and clear of any and all Encumbrances. All Equipment (except motor vehicles) is now, and will be on the Closing Date, in good operating condition and working order, reasonable wear and tear excepted. All accounts, books, ledgers and other official records of Seller are accurate and complete, and there are no discrepancies therein of any kind which would give rise to monetary liability to Buyer after the Closing, or which could have an adverse effect on the Purchased Assets and/or the Business or the contemplated business of Buyer after the Closing.

3.6 UNDISCLOSED LIABILITIES.

(a) Seller does not have any direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise that is not fully and adequately reflected or reserved against on its financial statements or covered in full by insurance, which will create an Encumbrance upon the Purchased Assets and/or upon the contemplated Business of Buyer on or on and after the Closing Date. Seller and Principal Members have furnished to Buyer complete and accurate copies of Seller's financial statements for the calendar years June 30, 2007, 2006 and 2005 and for the six months ended December 31, 2007 (the "Financial Statements"). Buyer may fully rely upon the contents of the Financial Statements as being complete and accurate in all material respects and prepared in accordance with Seller's prior practice, consistently applied and as being reflective of the operation of the Business for the period noted thereon. For purposes of this Agreement "Seller Balance Sheet" means that balance sheet of Seller as of December 31, 2007, and the "Seller Balance Sheet Date" means December 31, 2007

(b) Since the Seller Balance Sheet Date, the Seller has not accrued any contingent or other liabilities of any nature, either mature or unmatured (whether due or to become due) required to be reflected in financial statements, except for normal and recurring liabilities that have been incurred by Seller since the Seller Balance Sheet Date in the ordinary course of business consistent with prior practice.

3.7 NO MATERIAL ADVERSE CHANGE.

Since the Seller Balance Sheet Date there has been no material adverse change in the Business, operations or financial condition of Seller, and Seller and Principal Members do not have any knowledge of any such change that is threatened, nor has there been any damage, destruction or loss which could materially and adversely affect the Business or the Purchased Assets, whether or not covered by insurance, not fully disclosed in the Financial Statements.

3.8 TAX MATTERS.

All Tax Returns (except those not yet due or not yet due because there are properly filed extensions) required to be filed with respect to the Business have been duly filed. All such Tax Returns were in all material respects true, complete and correct and filed on a timely basis. Seller (i) has paid all Taxes that are due, or claimed or assessed by the Internal Revenue Service or any other domestic or foreign taxing authority (each constituting a "Taxing Authority") to be due, from Seller for the periods covered by such Tax Returns, or (ii) has duly and fully provided reserves adequate to pay all Taxes in the Financial Statements.

Seller does not have a negative balance in its unemployment insurance account with any Governmental Body, or any similar liability that would cause Buyer, as a result of the transactions contemplated by this Agreement, to be burdened subsequent to the Closing, with any material adverse consequence.

3.9 CONTRACTS.

Schedule 3.9 sets forth all of the following Contracts, written or oral, between the Seller and any other party:

(i) any commitment for the delivery by the Seller of assets, materials, supplies or services which commitment (A) involves or is likely to involve more than $5,000 or (B) is not cancelable upon no more than thirty (30) days' notice, without penalty;

(ii) any employment or consulting agreement, any plan or agreement providing for bonuses, commissions, pensions, options, stock purchases, deferred compensation, retirement payments or profit sharing, or any collective bargaining agreement;

(iii) any loan agreement, mortgage, indenture or other obligation for borrowed money or which creates a Encumbrance on any Purchased Asset;

(iv) any contract or agreement for the purchase by the Seller of any commodity, material, service or equipment, which contract or agreement (A) involves or is likely to involve more than $5,000 or (B) is not cancelable upon no more than thirty (30) days' notice, without penalty;

(v) any contract or agreement with any dealer, sales agent or distributor of products;

(vi) any license agreement (whether as licensor or licensee) (other than click-wrap, shrink-wrap, box-top and similar license for commercially available software);
(vii) any guaranty or indemnification agreement;
(viii) any written contract with any officer, director or partner of Seller or with any persons or organizations controlled by or affiliated with Seller;

(ix) any supply agreement, sale agreement, purchase order or other contract to sell or lease products or services to a customer that is not capable of being fully performed within sixty (60) days;
(x) any contract creating or relating to any partnership or joint venture or any sharing of revenues, profits, losses, costs or liabilities, under which the Seller has continuing material obligations; or

(xi) any contract or agreement that adversely affects the Seller or for which Seller may be liable in an amount in excess of Twenty Five Thousand Dollars ($25,000).

Each Contract is valid and in full force and effect, and is enforceable in accordance with its terms subject to (A) Legal Requirements of general application relating to bankruptcy, insolvency and the relief of debtors, and (B) rules of law governing specific performance, injunctive relief and other equitable remedies, except to the extent they have expired in accordance with their terms and except where the failure to be in full force and effect, individually or in the aggregate, would not reasonably be expected to be material to the Seller. The Seller has delivered to or made available to Buyer true and complete copies of each Contract, except in the case of a Contract which is derived from a standard form agreement of the Seller, the Seller has delivered to or made available to Buyer a form or forms of such agreement. In each case where a Contract is derived from a standard form agreement, all of the terms, conditions and provisions of such Contract are substantially similar with respect to material terms to the form agreement from which such agreement derived.

The Seller has not violated or breached, or committed any material default under, any Contract. To the Seller's knowledge, no other Person has materially violated or breached, or committed any material default under, any Contract.

Except as set forth on Schedule 3.9, no event has occurred, and no circumstance or condition exists, including, without limitation, the transactions and events contemplated hereby, that (with or without notice or lapse of time) could reasonably be expected to (i) result in a material violation or breach of any provision of any Contract by the Seller; (ii) give any Person the right to declare a material default or exercise any remedy under any Contract; (iii) give any Person the right to accelerate the maturity or performance of any Contract; or (iv) give any Person the right to cancel or terminate, or modify in any material respect, any Contract.

3.10 ERISA.

(A) Except as disclosed on Schedule 3.10, neither Seller nor any ERISA Affiliate (as hereinafter defined) maintains any Employee Benefit Plan. "Employee Benefit Plan" means any "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, and any interpretive rulings, regulations and notices ("ERISA") and any other plan, policy, program, practice, agreement, understanding or arrangement (whether written or unwritten) providing compensation or other benefits to any current or former director, officer, employee, contractor or consultant (or to any dependent or beneficiary thereof), of Seller or any ERISA Affiliate, which are now, or were within the past six years, maintained by Seller or any ERISA Affiliate, or under which Seller or any ERISA Affiliate has or could have any obligation or liability, whether actual or contingent (and including, without limitation, any liability arising out of an indemnification, guarantee, hold harmless or similar agreement), including, without limitation, all incentive, bonus, deferred compensation, vacation, holiday, cafeteria, medical, disability, severance, change in control, stock purchase, stock option, stock appreciation, phantom stock, restricted stock or other stock-based compensation plans, policies, programs, practices or arrangements. "ERISA Affiliate" means any entity (whether or not incorporated) other than Seller that, together with Seller, is or was a member of (i) a controlled group of corporations within the meaning of Internal Revenue Code ("Code") Section 414(b), (ii) a group of trades or businesses under common control within the meaning of Section 414(c) of the Code, or (iii) an affiliated service group within the meaning of Section 414(m) of the Code.

(b) Neither Seller nor any ERISA Affiliate maintains or has ever maintained, contributed to or had an obligation to contribute to or could have any obligation in respect of a plan subject to Title IV of ERISA or to Section 412 of the Code. Neither Seller nor any ERISA Affiliate has ever contributed to, or withdrawn in a partial or complete withdrawal from, any "multiemployer plan" (as defined in Section 3(37) of ERISA) or has any fixed or contingent liability under Section 4204 of ERISA. No Employee Benefit Plan is a "multiple employer plan" as described in
Section 3(40) of ERISA or Section 413(c) of the Code.

(c) As of and including the Closing date, Seller shall have made all contributions required to be made by it up to and including the Closing date with respect to each Employee Benefit Plan, or adequate accruals therefor have been provided for and been reflected on the balance sheet of Seller as provided to the Buyers by Seller. All notices, filings and disclosures required by ERISA or the Code (including notices under Section 4980B of the Code) have been timely made.

(d) No Employee Benefit Plan provides for medical or health benefits, or life insurance or other death benefits (through insurance or otherwise) or provides for the continuation of such benefits or coverage for any employee or any dependent or beneficiary of any employee after such employee's retirement or other termination of employment except as may be required by Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code ("COBRA"), and there has been no communication to any employee that could reasonably be expected to promise or guarantee any such benefits. Seller shall retain any and all responsibility for compliance with the COBRA requirements of the Code as they apply to Seller's former employees and to Seller's employees who are not hired by Buyer.

(e) The consummation of the transactions contemplated by this Agreement, either alone or in combination with another event (including, without limitation, the termination of employment of any person), will not result in (i) Buyer liability under or with respect to any Employee Benefit Plan, (ii) any payment (including, without limitation, severance, unemployment compensation, golden parachute or bonus payments or otherwise) becoming due to any director, officer, employee or consultant of Seller, (iii) any increase in the amount of compensation or benefits payable in respect of any director, officer, employee or consultant of Seller, or (iv) acceleration of the vesting or timing of payment of any benefits or compensation payable in respect of any director, officer, employee or consultant of Seller, in each case under any Employee Benefit Plan or otherwise.

3.11 EMPLOYEES.

Schedule 3.11 sets forth all employees of Seller, which list shall set forth the names, job titles, tenure and compensation arrangement for each employee. Seller is in compliance in all material respects with its obligations under all Legal Requirements and common law governing employment practices. During the past three (3) years, Seller has not suffered or sustained any labor dispute resulting in any work stoppage and no such work stoppage is thereunder, to the knowledge of Seller and Members. During the past three (3) years, Seller has not suffered or sustained any charge by any employee of any form of harassment in violation of any Federal and/or state law, rule and/or regulation. Seller's employees are not represented by any labor organization or union and, to the knowledge of Seller and Principal Members, there are no attempts being made by any labor organization or union to organize any employees employed by Seller. Notwithstanding anything to the contrary contained herein, Buyer shall not be obligated to hire any of Seller's employees. Neither Seller nor Principal Members have made any statements or representations or distributed any written material to any of Seller's employees regarding future operating plans of Seller or Buyer after the Closing or Seller's or Buyer's continued employment of Seller's employees subsequent to the Closing, other than any such statements, representations or written material expressly authorized in writing by Buyer.

3.12 ENVIRONMENTAL MATTERS.

The Seller is in compliance with, and has conducted its activities in compliance with, all applicable Environmental Laws, which compliance includes the possession of all material permits and other Governmental Authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof, except where the failure to so comply would not result in a material liability or clean up obligation on the Seller. Except as set forth on Schedule 3.12 The consummation of the transactions contemplated by this Agreement will not affect the validity of such material permits and Governmental Authorizations held by the Seller, and will not require any filing, notice, or remediation under any Environmental law. To the knowledge of the Seller (including as set forth in that certain ASTM Screen/Limited Assessment of 44 Hunt Street, Watertown, MA Project #708-520 dated May 16, 2008, performed by IES, Inc., a copy of which has been provided to Buyer (the "IES Report")), there are no past or present events, conditions, activities, or practices which would reasonably be expected to prevent the Seller's compliance in all material respects with any Environmental Law, or which would reasonably be expected to give rise to any material liability of the Seller under any Environmental Law. Other than as set forth in the IES Report, within the past seven years, the Seller has not received written notice, or to its knowledge, other communication (in writing or otherwise) that alleges that the Seller is not in compliance with any Environmental Law, and the Seller has no knowledge of any circumstances that would reasonably be expected to result in such claims or communications. To the Seller's knowledge, no current or prior owner of any property owned, leased or controlled by any of the Seller has received any written notice or other communication (in writing or otherwise) that alleges that such current or prior owner or any of the Seller is not in compliance with any Environmental Law in such a manner as would be reasonably likely to result in a material liability or clean up obligation. The Seller has not assumed by contract, agreement or otherwise any liabilities or obligations arising under any Environmental Law, or is currently performing any required investigation, response or other corrective action under any Environmental Law. Except as set forth in the IES Report, there are no underground storage tanks or related piping on any property owned, leased, controlled by or used by the Seller, and any former such tanks and piping have been removed or closed in accordance with applicable Environmental Laws. Except as set forth in the IES Report, to the Seller's knowledge, all property that is owned by, leased to, controlled by or used by the Seller is free of any friable asbestos or asbestos-containing material.

3.13 LICENSES AND PERMITS.

Schedule 3.13 sets forth all permits, licenses, approvals, qualifications, registrations and other governmental consents, if any, which are necessary in connection with the use of the Purchased Assets and/or the operation of the Business (collectively, the "Permits"), and no others are required. All Permits have been obtained, are in full force and effect and in good standing, and will be so on the Closing date, and, subject to the preparation and filing of any necessary transfer application(s) and payment of required fees, shall be transferred to Buyer immediately following Closing. Except as set forth on Schedule 3.13, no consents are required for transfer of any Permit. Neither Seller nor Members have received any notice of any claim of revocation or has knowledge of any event which might give rise to such a claim with respect to such Permits.

3.14 COMPLIANCE WITH LAWS.

Except as otherwise disclosed herein, Seller has complied in all material respects with all applicable Federal, state and local laws, regulations and ordinances or any requirement of any Governmental Body affecting the Business and/or the Purchased Assets and have complied with the terms of all permits, licenses, registrations, consents, trademark and patent continuances, with respect to which the failure to comply could materially and adversely affect the Business.

3.15 PROPRIETARY ASSETS.

(A) Schedule 3.15(a) sets forth as of the date of this Agreement
(i) all U.S. and foreign patents, patent applications, registered trademarks, material unregistered trademarks, trademark applications, copyright registrations and copyright applications, Internet domain names, computer software (other than third party software generally available for sale to the public) and fictitious name and assumed name registrations owned by the Seller; (ii) all patent applications and other Proprietary Assets that are currently in the name of inventors or other Persons and for which the Seller has the right to receive an assignment; and
(iii) all material third party licenses for Proprietary Assets to which the Seller is the licensee party. Seller has good, valid and marketable title to, or has a valid right to use, license or otherwise exploit, all of the material Proprietary Assets necessary for the conduct of the Business, free and clear of all Encumbrances. Seller has not developed jointly with any other Person any material Proprietary Asset with respect to which such other Person has any rights. There is no contract pursuant to which any Person has any right (whether or not currently exercisable) to use, license or otherwise exploit any Proprietary Asset owned or exclusively licensed by any Seller (except to the extent that use of any such Proprietary Asset is incidental to the use of any Seller Product).

(b) (i) All Proprietary Assets owned by Seller are, subsisting and in effect and, valid and enforceable; (ii) none of the Proprietary Assets and no Proprietary Asset that is currently being developed or reduced to practice or which is the subject of a current invention disclosure by the Seller (either by itself or with any other Person) infringes, misappropriates, conflicts with or otherwise violates any Proprietary Asset owned or used by any other Person; (iii) none of the products or services that is or has been designed, created, developed, assembled, performed, manufactured, sold, marketed or licensed by the Seller is infringing, misappropriating or making any unlawful or unauthorized use of any Proprietary Asset owned or used by any other Person, and, none of such products or services has at any time infringed, misappropriated or made any unlawful or unauthorized use of, and the Seller has not received in the past three (3) years any written, or to the Seller's knowledge, oral notice of any actual, alleged, possible or potential infringement, misappropriation or unlawful or unauthorized use of, any Proprietary Asset owned or used by any other Person; (iv) the operation of the business of Seller as it currently is conducted does not and will not when conducted in substantially the same manner following the Closing, infringe or misappropriate or make any unlawful or unauthorized use of any Proprietary Asset of any other Person; and (v) to the Seller's knowledge, no other Person is infringing, misappropriating or making any unlawful or unauthorized use of, and no Proprietary Asset owned or used by any other Person infringes or conflicts with, any Proprietary Asset, and no such claims have been asserted or threatened against any Person by the Seller or, to the knowledge of the Seller, any other Person, in the past three (3) years. The Proprietary Assets constitute all the Proprietary Assets necessary to enable the Seller to conduct its business in the manner in which such business is currently being conducted. Upon the consummation of the transactions contemplated hereby, Seller shall have good, valid, and enforceable title, or license (if the applicable Proprietary Asset is licensed to Seller) to all Proprietary Assets, free and clear of all Encumbrances and on, and subject to, the same terms and conditions as in effect immediately prior to the Closing. Seller has not entered into any covenant not to compete or any Contract limiting its ability to exploit fully any Proprietary Assets owned or licensed by Seller or to transact business in any market or geographical area or with any Person.

(c) Seller has taken all reasonable steps that are required to protect Seller's rights in confidential information and trade secrets of the Seller or provided by any other Person to the Seller. Set forth on Schedule 3.15(c) is a list of each employee, consultant and contractor of the Seller that has executed a proprietary information and confidentiality agreement.

(d) Neither this Agreement nor the transactions contemplated by this Agreement, including any assignment to Buyer by operation of law, will result in (i) Buyer or any of its affiliates granting to any third party any incremental right to or with respect to or non-assertion under any Proprietary Assets owned by, or licensed to, any of them; (ii) Buyer or any of its affiliates being bound by, or subject to, any incremental non-compete or other incremental material restriction on the operation or scope of their respective businesses; or (iii) Buyer or any of its affiliates being obligated to pay any incremental royalties or other material amounts, or offer any incremental discounts, to any third party. As used in this Section 3.15(d), an "incremental" right, non-compete, restriction, royalty or discount refers to a right, non-compete, restriction, royalty or discount, as applicable, in excess, whether in terms of contractual term, contractual rate or scope, of those that would have been required to be offered or granted, as applicable, had the parties to this Agreement not entered into this Agreement or consummated the transactions contemplated hereby.

(e) With respect to the use of software in the Business as such business is currently conducted, to the knowledge of the Seller, no such software contains defects in its operation or any device or feature designed to disrupt, disable, or otherwise impair the functioning of any software. Such software has been validated for its use. There have been no material security breaches in any of the Seller's information technology systems, and there have been no disruptions in any of the Seller's information technology systems that materially adversely affected the Business or operations.

(f) All products of the Seller ("Seller Product") conform in all material respects with all applicable contractual commitments and all express and implied warranties, the Seller's published product specifications and with all regulations, certification standards and other requirements of any applicable Governmental Body or third party. The channel activities of the Seller related to sales or distribution of Seller Products conform in all material respects with all applicable contractual commitments. Except as set forth in the Seller Financial Statements, the Seller has no liability (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due or otherwise) for replacement or modification of any Seller Product or other damages in connection therewith other than in the ordinary course of business. There are no known material defects in the design or technology embodied in any Seller Product which impair or are likely to impair the intended use of such Seller Product. There is no presently pending, or, to the knowledge of the Seller, threatened, and, to the knowledge of the Seller, there is no basis for, any civil, criminal or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, proceedings or demand letters relating to any alleged hazard or alleged defect in design, manufacture, materials or workmanship, including any failure to warn or alleged breach of express or implied warranty or representation, relating to any Seller Product. The Seller has not extended to any of its customers any written product warranties, indemnifications or guarantees that deviate in any material respect from the standard product warranties, indemnification arrangements or guarantees of the Seller.

3.16 FINDER'S FEE.

Seller has not employed any broker, finder or representative or incurred any liability for brokerage fees, commissions or finders' fees in connection with the transactions contemplated herein to any broker, finder or representative.

3.17 CUSTOMERS, SUPPLIERS AND SERVICE PROVIDERS.

Schedule 3.17 lists the customers of the Seller for the last completed fiscal year (in decreasing order of gross sales). Except as disclosed in Schedule 3.17, Seller has not received any written notice, or to the knowledge of the Seller, any verbal notice or threats by such customers with respect to termination, cancellation or limitation of, or adverse modification or change in, the business relationship of the Seller, or Seller's business with any customer or customers whose purchases are individually or in the aggregate material to the Seller.

3.18 DISCLOSURE.

No representation or warranty made by Seller or Principal Members, nor any information or statement contained in any exhibit or schedule hereto or in any certificate to be delivered by Principal Members or Seller pursuant hereto, contains or will contain any untrue statement of a material fact, or omits or will omit a material fact necessary to make the statements of fact herein or therein not misleading in light of the circumstances under which they were made.

3.19 NO DISCLOSURE.

Until the Closing or the termination of this Agreement, Seller agrees not to disclose the existence of this Agreement and/or any of the transactions contemplated hereby to any third party except their attorneys, accountants and other confidential advisors, and shall require the same confidentiality of their attorneys, accountants and other financial advisors.

3.20 DEBTS.

Seller shall be responsible for payment of all purchases and debts (collectively, the "Business Debts") which incurred prior to the Closing Date, whether or not the invoice was received prior to the purchase date, unless specifically assumed by Buyer. Seller shall be responsible to pay any costs which are required to wrap up the Seller's business activities such as the A-133 audit. Seller has no outstanding Bank loans. Payment of Business Debts shall be handled as described in Sections 1.1(j) and 2.1 (e).

3.21 INVESTIGATION.

Except as set forth in Section 8.1, no due diligence or investigation by Buyer shall diminish or obviate any of the representations, warranties, covenants or agreements of Seller and/or Principal Members under this Agreement.

3.22 SCHEDULES.

All schedules furnished or delivered by or on behalf of Seller pursuant to this Agreement are correct and complete, and all information required to be furnished or delivered pursuant thereto has been furnished or delivered to Buyer. No schedule contains an untrue statement of material fact or omits to state a material fact necessary to make the statements not misleading.

3.23 RELIANCE.

The foregoing representations and warranties are made severally and not jointly by Seller and Principal Members with the knowledge, understanding and expectation that Buyer is entering into this Agreement, and intends to consummate the transactions contemplated herein, in full and complete reliance upon said representations and warranties and the documentation and/or information called for therein to the provided by Seller and Principal Members to Buyer. All representations and warranties made by Seller and Principal Members shall survive the Closing, for the respective periods set forth in Section 8.1.

SECTION 3A. REPRESENTATIONS AND WARRANTIES OF THE MEMBERS

Except as disclosed in the Schedules hereto prior to the execution and delivery of this Agreement, each Principal Member, severally and not jointly represents and warrants to Buyer, as follows.

SECTION 3A.1 AUTHORIZATION; TITLE.

The Principal Member is authorized to enter into this Agreement, to perform his obligations hereunder and to consummate the transactions contemplated hereby, without violating any agreement by which Principal Member or the Seller is bound.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION SUB

Except as disclosed in Buyer SEC Documents filed prior to the date hereof or the Disclosure Letter delivered by Buyer and Acquisition Sub to the Seller prior to the execution and delivery of this Agreement (the "Buyer Disclosure Letter") and referred to in the section of the Buyer Disclosure Letter corresponding to the section(s) of this Section 3 to which such disclosure applies (unless it is reasonably apparent from the face of such disclosure that the disclosure or statement in one section of the Buyer Disclosure Letter should apply to one or more sections thereof), Buyer and Acquisition Sub represent and warrant to the Seller as follows:

4.1 DUE ORGANIZATION; SUBSIDIARIES.

Buyer is a corporation duly organized, validly existing and in good standing under the Legal Requirements of the jurisdiction of its incorporation, and each of the other Dynasil Corporations which is a "significant subsidiary" (as defined in Regulation S-X) of Buyer is a corporation duly organized, validly existing and in good standing under the Legal Requirements of the jurisdiction of its incorporation or formation. Each of the Dynasil Corporations has all necessary power and authority: (a) to conduct its business in the manner in which its business is currently being conducted; (b) to own and use its assets in the manner in which its assets are currently owned and used; and (c) to perform its material obligations under all Buyer Material Contracts. Each of the Dynasil Corporations is qualified to do business as a foreign corporation, and is in good standing, under the Legal Requirements of all jurisdictions where the failure to be so qualified would have a Material Adverse Effect on the Dynasil Corporations. Buyer has delivered or made available to the Seller accurate and complete copies of the certificate of incorporation, bylaws and other charter or organizational documents of each of the Dynasil Corporations, including all amendments thereto (collectively, the "Buyer Organization Documents"). Buyer has no Subsidiaries, except for the corporations identified in Schedule 4.1 of the Buyer Disclosure Letter. Buyer and each of its Subsidiaries are collectively referred to herein as the "Dynasil Corporations". None of the Dynasil Corporations has any equity interest or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any Entity, other than the Dynasil Corporations' interests in their Subsidiaries identified in Schedule 4.1 of the Buyer Disclosure Letter.

4.2 AUTHORITY; BINDING NATURE OF AGREEMENT.

Each of Buyer and Acquisition Sub has all requisite corporate power and authority to enter into and to perform its obligations under this Agreement. This Agreement constitutes the legal, valid and binding obligation of Buyer and Acquisition Sub, enforceable against Buyer and Acquisition Sub in accordance with its terms, subject to (a) Legal Requirements of general application relating to bankruptcy, insolvency and the relief of debtors, (b) rules of law governing specific performance, injunctive relief and other equitable remedies and (c) the approval of the stockholders of Buyer. Buyer hereby represents that its Board of Directors, at a meeting duly called and held on or prior to the date hereof, has by unanimous vote approved, adopted and declared advisable this Agreement and the other transactions contemplated by this Agreement. Acquisition Sub hereby represents that its Board of Managers, by unanimous written consent, approved and adopted this Agreement and the other transactions contemplated by this Agreement, and recommended that the Buyer adopt this Agreement. Buyer hereby represents that it, as the sole stockholder of Acquisition Sub, will approve and adopt this Agreement and the other transactions contemplated by this Agreement immediately after the execution and delivery of this Agreement by the parties hereto.

4.3 CAPITALIZATION, ETC.

(A) The authorized capital stock of Buyer consists of: (i)
25,000,000 shares of Buyer Common Stock and (ii) 10,000,000 shares of Buyer Preferred Stock. As of June 17, 2008, 6,478,507 shares of Buyer Common Stock have been issued or are outstanding (excluding 810,160 shares of treasury stock) and 710,000 shares of Series B Preferred Stock, par value $0.001 per share (the "Buyer Preferred Stock") are outstanding, convertible into 944,300 shares of Buyer Common Stock are outstanding. 810,160 shares of Buyer Common Stock are held in Buyer's treasury and none are held by any of Buyer's Subsidiaries. All of the outstanding shares of Buyer Common Stock have been duly authorized and validly issued, and are fully paid and nonassessable. None of the outstanding shares of Buyer Common Stock is entitled or subject to any preemptive right, right of participation, right of maintenance or any similar right or subject to any right of first refusal in favor of Buyer. There is no contract to which Buyer is a party and, to Buyer's knowledge, there is no contract between other Persons, relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of, any shares of Buyer Common Stock. None of the Dynasil Corporations is under any obligation, or is bound by any contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding shares of Buyer Common Stock, other than those relating to the transactions contemplated hereby and the sale of Series C Preferred Stock to provide funds.

(b) Buyer has delivered or made available to Seller accurate and complete copies of the Buyer ESPP, all stock option plans pursuant to which Buyer has granted Buyer Options, and the forms of all stock option agreements evidencing such options. There have been no repricings of any Buyer Options through amendments, cancellation and reissuance or other means during the current or prior two calendar years. None of the Buyer Options have been granted in contemplation of the Merger or the transactions contemplated in this Agreement and no Buyer Options have been granted since June 11, 2008, after which grant there were 411,459 Buyer Options outstanding. Approximately 120,000 options are anticipated to be issued to Jacob Paster as part of the transactions contemplated hereby. None of the Buyer Options were granted with exercise prices below or deemed to be below fair market value on the date of grant. All grants of Buyer Options were validly made and properly approved by the board of directors of Buyer (or a duly authorized committee or subcommittee thereof) in compliance with all applicable law and recorded on the Buyer Financial Statements in accordance with GAAP, and no such grants involved any "back dating," "forward dating" or similar practices with respect to such grants.

(c) Except as set forth in Section 4.3(a) or Section 4.3(b) above, there is no: (i) outstanding commitment, subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of any of the Dynasil Corporations; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of any of the Dynasil Corporations;
(iii) rights agreement, stockholder rights plan or similar plan commonly referred to as a "poison pill"; or (iv) Contract under which any of the Dynasil Corporations are or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities ("Buyer Rights Agreements") (items (i) through
(iv) above, collectively, "Buyer Stock Rights").

(d) All outstanding shares of Buyer Common Stock, all outstanding Buyer Options and all outstanding shares of capital stock of each Subsidiary of Buyer have been issued and granted in compliance with (i) all applicable securities laws and other applicable Legal Requirements, and (ii) all requirements set forth in Contracts applicable to the issuance of Buyer Common Stock, granting Buyer Options and/or the issuance of shares of capital stock of any Buyer Subsidiary. All of the outstanding shares of capital stock of each of the Buyer's Subsidiaries have been duly authorized and are validly issued, are fully paid and nonassessable and, except as required by Legal Requirements applicable to each of the Dynasil Corporations which is formed or incorporated under the laws of a foreign jurisdiction, are owned beneficially and of record by Buyer, free and clear of any Encumbrances. Schedule 4.3(d) of the Buyer Disclosure Letter sets forth all entities (other than Subsidiaries) in which any of the Dynasil Corporations has any ownership interest and the amount of such interest.

(e) Buyer directly owns all of the equity interests of Acquisition Sub.

4.4 NON-CONTRAVENTION; CONSENTS.

Neither the execution, delivery or performance of this Agreement nor the consummation of the Merger, or any of the other transactions contemplated by this Agreement, will directly or indirectly (with or without notice or lapse of time):

(a) contravene, conflict with or result in a violation of any of the provisions of the Buyer Organization Documents or any resolution adopted by the stockholders, the Board of Directors or any committee of the Board of Directors of any of the Dynasil Corporations;

(b) contravene, conflict with or result in a violation of, or give any Governmental Body the right to challenge any of the transactions contemplated by this Agreement or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which any of the Dynasil Corporations, or any of the material assets owned or used by any of the Dynasil Corporations, is subject;

(c) contravene, conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any material Governmental Authorization that is held by any of the Dynasil Corporations or that is otherwise material to the business of any of the Dynasil Corporations or to any of the assets owned or used by any of the Dynasil Corporations; or

(d) contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Buyer Material Contract (except for any such violation or breach which by its terms can be cured and is so cured within the applicable cure period or where the non-breaching party has no right to accelerate or terminate as a result of such violation or breach), or give any Person the right to (i) declare a default or exercise any remedy under any Buyer Material Contract; (ii) accelerate the maturity or performance of any Buyer Material Contract; or (iii) cancel, terminate or modify any term of any Buyer Material Contract.

Except as may be required by the Securities Act, the Exchange Act, the DGCL and the rules and regulations of the Nasdaq required under any Buyer Material Contract, none of the Dynasil Corporations was, is or will be required to make any filing with or give any notice to, or obtain any Consent from, any Person in connection with the execution, delivery or performance of this Agreement except where the failure to make such filing, give such notice or obtain any such consent would not have a Material Adverse Effect on the Dynasil Corporations.

4.5 SEC FILINGS; FINANCIAL STATEMENTS.

(A) All statements, reports, schedules, forms, exhibits and other documents required to have been filed by Buyer with the SEC since October 1, 2004 (the "Buyer SEC Documents") have been so filed. As of their respective dates (or, if amended, supplemented or superseded by a filing prior to the date of this Agreement, then on the date of such amendment, supplement or superseding filing): (i) each of the Buyer SEC Documents complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act (as the case may be); and (ii) none of the Buyer SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(b) The Buyer SEC Documents include all certifications and statements required of it, if any, by (i) Rule 13a-14 or 15d-14 under the Exchange Act, and (ii) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

(c) The financial statements (including related notes, if any) contained in the Buyer SEC Documents (the "Buyer Financial Statements"): (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements or, in the case of unaudited statements, as permitted by Form 10-QSB of the SEC, and except that the unaudited financial statements may not have contained footnotes and were subject to normal and recurring year-end adjustments which were not, or are not reasonably expected to be, individually or in the aggregate, material); and
(iii) fairly presented in all material respects the consolidated financial position of Buyer and its consolidated subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows of Buyer and its consolidated subsidiaries for the periods covered thereby. For purposes of this Agreement, "Buyer Balance Sheet" means that consolidated balance sheet of Buyer and its consolidated subsidiaries as of September 30, 2007 set forth in the Buyer's Annual Report on Form 10-KSB filed with the SEC on December 20, 2007 (the "Buyer 10- KSB") and the "Buyer Balance Sheet Date" means September 30, 2007.

(d) Buyer maintains a system of internal controls sufficient to provide reasonable assurance that (i) transactions are executed with management's authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's authorization; (iv) the recorded amount for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; (v) all information (both financial and non-financial) required to be disclosed by Buyer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC; and (vi) all such information is accumulated and communicated to Buyer's management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the Chief Executive Officer and Chief Financial Officer of Buyer required under the Exchange Act with respect to such reports. There are no significant deficiencies or material weaknesses in the design or operation of Buyer's internal controls, and Buyer has not been informed by its independent auditors, accountants, consultants or others involved in the review of internal controls that any such significant deficiencies or material weaknesses exist, which could adversely affect Buyer's ability to record, process, summarize and report financial data. There is no fraud in connection with the Buyer Financial Statements, whether or not material, that involves management or other employees who have a significant role in Buyer's internal controls.

4.6 ABSENCE OF CHANGES.

(A) Since the Buyer Balance Sheet Date (except as disclosed in the Buyer SEC Documents),

(i) none of the Dynasil Corporations has made any material changes in its pricing polices or payment or credit practices or failed to pay any creditor any material amount owed to such creditor when due or granted any extensions or credit other than in the ordinary course of business consistent with prior practice;

(ii) none of the Dynasil Corporations has terminated or closed any material facility, business or operation;

(iii) none of the Dynasil Corporations has written up or written down any of its material assets; and
(iv) there has been no material loss, destruction or damage to any item of property of the Dynasil Corporations, whether or not insured.

(b) Except as set forth in Schedule 4.6(b) of the Buyer Disclosure Letter or in the Buyer SEC Documents, since the Buyer Balance Sheet Date and through the date of this Agreement:

(i) there has not been any event that has had a Material Adverse Effect on the Dynasil Corporations, and no fact, event, circumstance or condition exists or has occurred that could reasonably be expected to have a Material Adverse Effect on the Dynasil Corporations;

(ii) each of the Dynasil Corporations has operated its respective business in the ordinary course consistent with prior practice;

(iii) none of the Dynasil Corporations has (A) declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of capital stock (other than in connection with the Buyer Preferred Stock); (B) repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities; (C) made any capital expenditure which, when added to all other capital expenditures made on behalf of the Dynasil Corporations since the Buyer Balance Sheet Date, exceeds $150,000, in the aggregate; (D) made any material Tax election; (E) settled any Legal Proceedings involving amounts in excess of $100,000; or (F) entered into or consummated any transactions with any affiliate;

(iv) none of the Dynasil Corporations has (A) sold or otherwise disposed of, or acquired, leased, licensed, waived or relinquished any material right or other material asset to, from or for the benefit of, any other Person except for rights or other assets sold, disposed of, acquired, leased, licensed, waived or relinquished in the ordinary course of business consistent with prior practice; (B) mortgaged, pledged or subjected to any Encumbrance any of their respective property, business or assets; (C) entered into or amended any lease of real property (whether as lessor or lessee); or (D) canceled or compromised any debt or claim other than accounts receivable in the ordinary course of business consistent with prior practice;
(v) none of the Dynasil Corporations has (A) amended or waived any of its material rights under, or permitted the acceleration of vesting under, any provision of any of the Buyer Employee Plans or any provision of any agreement or Buyer Stock Option Plan evidencing any outstanding Buyer Option; (B) caused or permitted any Buyer Employee Plan to be amended in any material respect; or (C) paid any bonus or other incentive or equity compensation or made any profit-sharing or similar payment to, or materially increased the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or consultants;

(vi) there has been no material labor dispute (including any work slowdown, stoppage or strike) involving the Dynasil Corporations;

(vii) none of the Dynasil Corporations has made any material change in its methods of accounting or accounting practices;

(viii) none of the Dynasil Corporations has made any loan, advance or capital contributions to, or any other investment in, any Person;

(ix) none of the Dynasil Corporations has terminated or amended, or suffered a termination of, any Buyer Material Contract;

(x) none of the Dynasil Corporations has entered into any contractual obligation to do any of the things referred to elsewhere in this Section 4.6; and

(xi) there has been no material development in any Legal Proceeding described in a Buyer SEC Document.

4.7 CONTRACTS.

(A) Each Buyer Material Contract is valid and in full force and effect, and is enforceable in accordance with its terms subject to (A) Legal Requirements of general application relating to bankruptcy, insolvency and the relief of debtors, and (B) rules of law governing specific performance, injunctive relief and other equitable remedies, except to the extent they have expired in accordance with their terms and except where the failure to be in full force and effect, individually or in the aggregate, would not reasonably be expected to be material to the Dynasil Corporations. Buyer has delivered to or made available to the Seller true and complete copies of each Buyer Material Contract, except in the case of a Buyer Material Contract which is derived from a standard form agreement of the Dynasil Corporations, Buyer has delivered to or made available to the Seller a form or forms of such agreement. In each case where a Buyer Material Contract is derived from a standard form agreement, all of the terms, conditions and provisions of such Buyer Material Contract are substantially similar with respect to material terms to the form agreement from which such agreement derived.

(b) None of the Dynasil Corporations has materially violated or breached, or committed any material default under, any Buyer Material Contract. To Buyer's knowledge, no other Person has materially violated or breached, or committed any material default under, any Buyer Material Contract.

(c) To Buyer's knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) could reasonably be expected to (i) result in a material violation or breach of any provision of any Buyer Material Contract by any of the Dynasil Corporations; (ii) give any Person the right to declare a material default or exercise any remedy under any Buyer Material Contract; (iii) give any Person the right to accelerate the maturity or performance of any Buyer Material Contract; or (iv) give any Person the right to cancel or terminate, or modify in any material respect, any Buyer Material Contract

4.8 LIABILITIES.

Except as disclosed in Buyer SEC Documents, since the Buyer Balance Sheet Date, none of the Dynasil Corporations has any accrued, contingent or other liabilities of any nature, either matured or unmatured (whether due or to become due) required to be reflected in financial statements prepared in accordance with GAAP, except for: (a) liabilities that are reflected in the "Liabilities" column of the Buyer Balance Sheet and the notes thereto; (b) normal and recurring liabilities that have been incurred by the Dynasil Corporations since the Buyer Balance Sheet Date in the ordinary course of business consistent with prior practice; and (c) liabilities incurred in connection with the transactions contemplated by this Agreement.

4.9 LEGAL PROCEEDINGS; ORDERS.

Except as set forth in the Buyer SEC Documents, there is no pending Legal Proceeding and, to Buyer's knowledge, within the past 24 months no Person has threatened in writing to commence any Legal Proceeding, that involves any of the Dynasil Corporations or any of the assets owned or used by any of the Dynasil Corporations, in each case which would be reasonably likely to be material to the Dynasil Corporations; and there is no Order to which any of the Dynasil Corporations, or any of the material assets owned or used by any of the Dynasil Corporations, is subject.

4.10 FOREIGN CORRUPT PRACTICES ACT.

Neither Buyer, any other Dynasil Corporation, any of the Dynasil Corporation's officers, directors, nor, to Buyer's knowledge, any employees or agents, distributors, representatives or other persons acting on the express, implied or apparent authority of any Dynasil Corporation, have paid, given or received or have offered or promised to pay, give or receive, any bribe or other unlawful payment of money or other thing of value, any unlawful discount, or any other unlawful inducement, to or from any person or Governmental Body in the United States or elsewhere in connection with or in furtherance of the business of any of the Dynasil Corporations (including any unlawful offer, payment or promise to pay money or other thing of value (a) to any foreign official, political party (or official thereof) or candidate for political office for the purposes of influencing any act, decision or omission in order to assist any Dynasil Corporation in obtaining business for or with, or directing business to, any person, or (b) to any person, while knowing that all or a portion of such money or other thing of value will be offered, given or promised unlawfully to any such official or party for such purposes). Neither the business of Buyer nor of any other Dynasil Corporation is in any manner dependent upon the making or receipt of such unlawful payments, discounts or other inducements. Neither Buyer nor any other Dynasil Corporation has otherwise taken any action that could cause Buyer or any other Dynasil Corporation to be in violation of the Foreign Corrupt Practices Act of 1977, as amended, the regulations thereunder, or any applicable Legal Requirements of similar effect.

4.11 FINANCIAL ADVISOR.

No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the any of the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Dynasil Corporations.

4.12 PROPRIETARY ASSETS.

(A) Schedule 4.12 (a) of the Buyer Disclosure Letter sets forth as of the date of this Agreement (i) all U.S. and foreign patents, patent applications, registered trademarks, material unregistered trademarks, trademark applications, copyright registrations and copyright applications, Internet domain names, computer software (other than third party software generally available for sale to the public) and fictitious name and assumed name registrations owned by Buyer; (ii) all patent applications and other Proprietary Assets that are currently in the name of inventors or other Persons and for which Buyer has the right to receive an assignment; and (iii) all material third party licenses for Proprietary Assets to which Buyer is the licensee party. Buyer has good, valid and marketable title to, or has a valid right to use, license or otherwise exploit, all of the material Buyer Proprietary Assets necessary for the conduct of the Buyer's business as presently conducted, free and clear of all Encumbrances. Buyer has not developed jointly with any other Person any material Proprietary Asset with respect to which such other Person has any rights. There is no Buyer Material Contract pursuant to which any Person has any right (whether or not currently exercisable) to use, license or otherwise exploit any Buyer Proprietary Asset owned or exclusively licensed by the Buyer.

(b) Except as would not, individually or in the aggregate, have a Material Adverse Effect on the Buyer, (i) to the knowledge of the Buyer, all Buyer Proprietary Assets owned by Buyer are subsisting and in effect and valid and enforceable; (ii) none of the Buyer Proprietary Assets and no Proprietary Asset that is currently being developed or reduced to practice or which is the subject of a current invention disclosure by the Buyer (either by itself or with any other Person) to the knowledge of the Buyer infringes, misappropriates, conflicts with or otherwise violates any Proprietary Asset owned or used by any other Person; (iii) none of the products or services that is or has been designed, created, developed, assembled, performed, manufactured, sold, marketed or licensed by the Buyer is to the knowledge of the Buyer infringing, misappropriating or making any unlawful or unauthorized use of any Proprietary Asset owned or used by any other Person, and, none of such products or services has at any time infringed, misappropriated or made any unlawful or unauthorized use of, and the Buyer has not received in the past three (3) years any written, or to the Buyer's knowledge, oral notice of any actual, alleged, possible or potential infringement, misappropriation or unlawful or unauthorized use of, any Proprietary Asset owned or used by any other Person; (iv) the operation of the business of the Buyer as it currently is conducted does not and will not when conducted by the Surviving Entity in substantially the same manner following the Closing, infringe or misappropriate or make any unlawful or unauthorized use of any Proprietary Asset of any other Person; and (v) to the Buyer's knowledge, no other Person is infringing, misappropriating or making any unlawful or unauthorized use of, and no Proprietary Asset owned or used by any other Person infringes or conflicts with, any Buyer Proprietary Asset, and no such claims have been asserted or threatened against any Person by the Buyer or, to the knowledge of the Buyer, any other Person, in the past three (3) years. The Buyer Proprietary Assets constitute all the Proprietary Assets necessary to enable the Buyer to conduct its business in the manner in which such business is currently being conducted.

(c) The Buyer has taken all reasonable steps to protect its rights in confidential information and trade secrets of the Buyer or provided by any other Person to the Buyer.

(d) With respect to the use of software in the business of the Buyer as such business is currently conducted, to the knowledge of the Buyer, no such software contains defects in its operation or any device or feature designed to disrupt, disable, or otherwise impair the functioning of any software. Such software has been validated for its use. There have been no material security breaches in the Buyer's information technology systems, and there have been no disruptions in the Buyer's information technology systems that materially adversely affected such Buyer's business or operations.

(e) All products of the Buyer ("Buyer Product") conform in all material respects with all applicable contractual commitments and all express and implied warranties, the Buyer's published product specifications and with all regulations, certification standards and other requirements of any applicable governmental entity or third party. Except as set forth in the Buyer's SEC Documents, no claims against the Buyer are pending or have been asserted for liability for replacement or modification of any Buyer Product or other damages in connection therewith other than in the ordinary course of business. There are no known material defects in the design or technology embodied in any Buyer Product which impair or are likely to impair the intended use of such Buyer Product. There is no presently pending, or, to the knowledge of the Buyer, threatened, and, to the knowledge of the Buyer, there is no basis for, any civil, criminal or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, proceedings or demand letters relating to any alleged hazard or alleged defect in design, manufacture, materials or workmanship, including any failure to warn or alleged breach of express or implied warranty or representation, relating to any Buyer Product. The Buyer has not extended to any of its customers any written product warranties, indemnifications or guarantees that deviate in any material respect from the standard product warranties, indemnification arrangements or guarantees of the Buyer.

SECTION 5. COVENANTS OF SELLER AND PRINCIPAL MEMBERS

Seller and Principal Members, jointly and severally, hereby covenant and agree with Buyer, that Seller and Principal Members shall do, cooperate in doing, and/or refrain from doing, as the case may be, the following:

5.1 FURTHER ASSURANCES.

Seller and Principal Members each agree that, prior to the Closing, they will take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement, including releasing or causing the release of any and all Encumbrances on the Purchased Assets and obtaining all necessary waivers, consents and approvals relating to the licenses, permits, registrations, approval and consents necessary for the conduct of the Business and the transfer of same to Buyer and/or as otherwise required under this Agreement, all immediately prior to or contemporaneously with the Closing.

5.2 POST-CLOSING ASSURANCES.

At any time, and from time to time after the Closing, and without further consideration, Seller and Principal Members will, at the request of Buyer, execute and deliver, or cause the execution and delivery of, such other instruments of sale, transfer, conveyance, assignment and confirmation or take or cause to be taken such other action as Buyer may reasonably deem necessary or desirable in order to transfer, convey and assign more effectively to Buyer or to put Buyer in actual possession and operating control of, the Purchased Assets and the Business of the Seller and to assist Buyer in exercising all rights with respect thereto.

5.3 EMPLOYEES.

Seller shall pay each of its employees on or before the Closing, all amounts due and payable to such employee, including satisfaction of all accrued, unused vacation and/or sick time through the Closing date.

5.4 PURCHASE STOCK

Seller shall deliver Purchase Stock to a party only (i) incompliance with all applicable laws, rules, regulations and court orders, and (ii) only after such party has executed and delivered to Dynasil an Investment Letter in substantially the form attached as Appendix I hereto.

SECTION 6. RETAINED EARNING RECAPTURE

(A) As per the methodology in Exhibit F, the Seller shall be entitled to extract a net amount of assets less liabilities (retained by the Seller) which equals the retained earnings as of the date of the sale less the net book value of fixed assets and inventory (the "Retained Earnings Extraction"). The Retained Earnings Extraction shall be estimated as of the Closing Date with assets and liabilities divided at that time between Buyer and Seller using the Exhibit F methodology. At seventy five (75) days following closing, Buyer and Seller shall calculate the final Retained Earnings Extraction and any balance owned by one of the parties would be paid in cash within five (5) days except as outlined in the balance of this section.,

(b) During the seventy five day period, with oversight from Dr. Gerald Entine, Buyer shall set-up separate accounts, held in trust for Seller, and administer extracted assets and liabilities on behalf of the Seller (collectively, "Seller's Extraction Account"). If accounts receivable must be divided between Buyer and Seller, specific receivables shall be identified for Seller's Extraction Account and Buyer shall have the right to allocate any questionable and international receivables to Seller's Extraction Account. Buyer shall credit payments received for Seller's retained assets such as accounts receivable to Seller's Extraction Account as well as to pay Seller's Business Debts from Seller's Extraction Account as presented from available Seller funds. Seller shall be entitled to withdraw funds from Seller's Extraction Account so long as the net value of the account remains at a minimum value of $1 million with a minimum of $500,000 of cash, under this Agreement and the Merger Agreement. The Seller's Extraction Account shall contain and be applied toward amounts relating to this Agreement and the Merger Agreement. At the end of the seventy five day period, Seller can withdraw all remaining cash in the Seller's Extraction Account if only cash remains in such account. If non-cash assets and liabilities remain open in the Seller's Extraction Account at the end of the seventy five day period, Seller retains responsibility for such items and Buyer may require Seller to maintain a reasonable balance in the Seller's Extraction Account and will assist in the administration as reasonably requested by Seller.

(c) With prior written notice to Seller, Buyer shall be entitled to use up to $500,000 from Seller's Extraction Account if reasonably required for Buyer working capital needs during the seventy five day period.

(d) Any disputes regarding the calculation provided for herein shall be resolved pursuant to Section 5.7 of the Merger Agreement.

SECTION 7. CONDITIONS PRECEDENT TO THE CLOSING

7.1 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS TO COMPLETE THE CLOSING.

The obligations of Buyer to enter into and complete the Closing are subject to the occurrence of the following conditions with respect to Buyer and the fulfillment by Seller and/or Principal Members, as the case may be, on or prior to the Closing, of the following conditions, any one or more of which may be waived by Buyer in its sole discretion, in writing:

(a) The Seller shall have performed or complied in all material respects with all of its covenants, obligations or agreements required to be performed or complied with under the Agreement prior to the Effective Time;

(b) The representations and warranties of the Seller contained in this Agreement shall be accurate, as of the date of this Agreement, and on and as of the Closing, except, for those representations and warranties which address matters only as of a particular date (which shall remain true and correct on and as of such particular date), with the same force and effect as if made on and as of the Closing;

(c) At the Closing, there shall not be any judgment, decree, injunction, restraining order, ruling or order of any Governmental Body outstanding against any party hereto that prevents or makes financially impractical the consummation of the transactions contemplated by this Agreement or any of the conditions to the consummation of the transactions contemplated by this Agreement.

(d) Since December 31, 2007, there shall not have been any material adverse change in the condition (financial or otherwise), results of operations, Business or performance of Seller.

(e) Delivery by Seller and Principal Members, as appropriate, of the following documents, duly executed or certified to the reasonable satisfaction of Buyer:

(i) A Bill of Sale (or Bills of Sale, at Buyer's request) in substantially the form attached hereto as Exhibit C, dated the Closing date.

(ii) A Certificate in substantially the form attached hereto as Exhibit D hereto, executed by Seller and Principal Members, dated the Closing date, confirming the matters set forth in Sections 7.1(a), (b) and (c).
(iii) A Certificate, executed by Seller and Principal Members, dated the Closing date, stating that the copies of UCC-1 financing statements (if any) attached to the certificate are all of the financing statements that, as of the Closing date, have been filed against the Purchased Assets in each of the jurisdictions in which Seller maintains a place of business or maintains any of the Purchased Assets.

(iv) The Closing Allocation Schedule.

(f) The consummation of the transactions contemplated by the Merger.

7.2 CONDITIONS PRECEDENT TO SELLER'S AND PRINCIPAL MEMBERS' OBLIGATIONS TO COMPLETE THE CLOSING.

The obligations of Seller and Principal Members, respectively, to complete the Closing are subject to the fulfillment, on or prior to the Closing date, of the following conditions, any one or more of which may be waived by Seller and/or Principal Members:

(a) Buyer shall have performed or complied in all material respects with all of its covenants, obligations or agreements required to be performed or complied with under the Agreement prior to the Closing;

(b) The representations and warranties of Buyer contained in this Agreement shall be materially true, complete and correct as of the Closing with the same force and effect as though made on and as of the Closing.

(c) At the Closing, there shall not be any judgment, decree, restraining order, injunction, ruling or order of any Governmental Body outstanding against any party hereto that prevents consummation of the transactions contemplated by this Agreement or any of the conditions to the consummation of the transactions contemplated by this Agreement.

(d) At the closing, Buyer shall deliver, or cause to be delivered, to Seller and Principal Members the following documents, duly executed or certified to the reasonable satisfaction of Seller's attorney:
(i) A Certificate, in substantially the form attached hereto as Exhibit E, executed by Buyer, dated the Closing date, confirming the matters set forth in Sections 7.2(a) and (b).

(ii) The Closing Allocation Schedule.

SECTION 8. INDEMNIFICATION

8.1 SURVIVAL; INDEMNITY.

The representations and warranties of the parties shall survive the Closing for a period of two (2) years; provided, however, that (i) representations and warranties contained in
Section 3.8 shall survive until the expiration of the applicable statute of limitations under the Code; (ii) all representations and warranties relating to claims on SBIR contracts shall survive until the expiration of the respective periods of government audit and/or adjustment thereunder, plus ninety (90) days; and
(iii) the representations and warranties in Sections 3.1, 3.2, and 3.3 and Article 3A.1 shall survive for a period of six (6) years from the Closing Date (as applicable, the "Survival Date"). Nothing contained in the foregoing sentence shall prevent recovery under this Article 8 (A) in the event of fraud or intentional misrepresentation or (B) after the applicable Survival Date so long as the party making a claim or seeking recovery complies with the provisions of clause (1) and (2) of the following sentence. No party shall have any claim or right of recovery for any breach of a representation, warranty, covenant or agreement unless (1) written notice is given in good faith by that party to the other party of the representation, warranty, covenant or agreement pursuant to which the claim is made or right of recovery is sought, setting forth in reasonable detail the breach of the representation, warranty, covenant or agreement, the amount or nature of the claim being made, if then ascertainable, and the general basis therefor and (2) such notice is given prior to the Survival Date. For any such claim relating to Environmental Matters, Taxes and/or SBIR contracts, the representations and warranties contained in this Agreement, or any exhibit or schedule to this Agreement or any certificate delivered pursuant to this Agreement shall survive any audit or investigation by any party hereto and shall not be affected or deemed waived by reason of the fact that any such party or his or its Representatives knew or should have known that any such representation or warranty is or might be inaccurate in any respect. The covenants and agreements set forth in this Agreement shall survive until performed in full.

8.2 INDEMNIFICATION OF BUYER.

(a) Subject to the other provisions of this Article 8, Seller and Principal Members agree, severally (based on their Pro Rata Share) and not jointly to defend and indemnify the Buyer, Acquisition Sub and their officers, directors, stockholders, employees, affiliates (including without limitation the Parent and Merger Sub), attorneys, accountants and agents (collectively, the "Buyer Parties"), and hold them harmless from and against, any and all damages, losses, liabilities, costs and expenses (including, without limitation, reasonable expenses of investigation and reasonable attorneys' fees and expenses in connection with any action, suit or proceeding) (collectively, "Damages") incurred or suffered by any of the Buyer Parties arising out of or related to (i) any breach or alleged breach of any representation, warranty, covenant or agreement of Seller contained in this Agreement, or any exhibit or schedule to this Agreement or any certificate delivered by Seller pursuant to this Agreement, (ii) any Liability (and/or any other obligation not expressly assumed by Buyer herein) and/or (iii) any breach of any representation, warranty, covenant or agreement of any of the Principal Members contained herein. In addition, each Principal Member shall, severally and not jointly, indemnify, defend and hold Buyer parties harmless from and against all damages arising out of or related to a breach of such Principal Member of any representation or warranty in Article 3A, or any covenant or agreement of such Principal Member.

(b) Subject to Section 8.2(c) below, Seller's, Members', Stockholders' and Company's (collectively, the "Seller Parties") obligations under this Section 8.2 and under the Merger Agreement (i) shall in no event exceed $2,000,000 in aggregate (the "Seller Cap"); and shall not apply unless and until the aggregate amount of all such Damages exceed $100,000 in the aggregate (the "Seller Basket"), in which case the appropriate Seller Party shall be liable for all such Damage amounts, regardless of the Seller Basket, subject to the Seller Cap.

(c) Notwithstanding anything to the contrary contained herein or in the Merger Agreement, (i) the Seller Basket shall not apply to any claims for indemnification which are attributable to any breach of (x) Sections 2.1, 2.2, 2.3, 2.14 or 2A.1 of the Merger Agreement or Sections 3.1, 3.2, 3.3, 3.12 or Article 3A of this Agreement (collectively, the "Fundamental Representations") (y) any representation or warranty which constitutes fraud by a Seller Party; and (ii) the Seller Cap shall not apply to any claims for indemnification which are attributable to (x) any breach of a Fundamental Representation,
(y) any breach of a representation or warranty which constitutes fraud by a Seller Party or (z) any claim relating to Environmental Matters, Taxes and/or SBIR contracts. Notwithstanding anything to the contrary in this Agreement or the Merger Agreement to the contrary, in no event shall a Seller Party's total aggregate liability to a Buyer Party under this Agreement and/or the Merger Agreement exceed such Seller Party's Pro Rata Share.

(d) Notwithstanding anything to the contrary contained herein or in the Merger Agreement, Seller Parties shall indemnify, defend and hold the Buyer Parties harmless against any Damages arising from, relating to or constituting any liability, for investigative, remedial or response actions or otherwise, under Environmental Laws, arising out of the ownership, operation or condition of the Business and/or its properties on or prior to the Closing (notwithstanding the disclosure of the possibility of such event in the IES Report or otherwise).

8.3 INDEMNIFICATION OF SELLER AND PRINCIPAL MEMBERS.

(a) Subject to the other provisions of this Article 8, Buyer agrees to indemnify and to hold the Seller and Principal Members harmless from and against, any and all Damages incurred or suffered by the Seller arising out of any breach or alleged breach of any representation, warranty, covenant or agreement of Buyer.

(b) Subject to Section 8.2(c) below, Buyer's and Parent's obligations under this Section 8.3 and under the Merger Agreement (i) shall in no event exceed $1,000,000 in the aggregate (the "Buyer Cap"); and (b) shall not apply unless and until the aggregate amount of all such Damages exceed $50,000 in the aggregate (the "Buyer Basket"), in which case Buyer shall be liable for all amounts regardless of the Buyer Basket, subject to the Buyer Cap.

(c) Notwithstanding anything to the contrary contained herein or in the Merger Agreement (i) the Buyer Basket shall not apply to any claims for indemnification which are attributable to any breach of (x) Sections 3.1, 3.2, 3.3 or 3.5 of the Merger Agreement or Sections 4.1, 4.2, 4.3 or 4.5 of this Agreement (collectively, the "Buyer Fundamental Representations") (y) any representation or warranty that constitutes fraud by a Buyer Party or (z) any default of Buyer's obligations pursuant to
Section 1.4(c) of this Agreement; and (ii) the Buyer Cap shall not apply to any claims for indemnification which are attributable to any (y) breach of a Buyer Fundamental Representation or (z) breach of a representation or warranty which constitutes fraud by a Buyer Party.

(d) Notwithstanding anything to the contrary contained herein or in the Merger Agreement, Buyer Parties shall indemnify, defend and hold the Seller Parties harmless against any Damages arising from, relating to or constituting any liability, for investigative, remedial or response actions or otherwise, under Environmental Laws, arising out of the ownership, operation or condition of the Business subsequent to the Closing.

8.4 MISCELLANEOUS INDEMNIFICATION PROVISIONS.

Notwithstanding anything to the contrary contained in this Agreement, from and after the Closing date:

(a) For purposes of determining the amount of any Damages under
Section 8.2 or 8.3, (i) such amount shall be reduced by the amount of any insurance proceeds received by the Indemnified Party in respect of the Damages; and (ii) such amount shall exclude all consequential or special damages suffered by the Indemnified Party and all punitive damages awarded against the Indemnifying Party.

(b) Notwithstanding anything in this Agreement or any statute or the common law to the contrary, the parties acknowledge and agree that the indemnification rights set forth in this Article 8 shall be the sole and exclusive remedy of the parties to this Agreement and the Merger Agreement for Damages of any kind or nature arising under this Agreement, any statute or the common law.

(c) Each party agrees to use commercially reasonable efforts to mitigate any Damages or potential Damages for which the other party or parties is or may be obligated to indemnify such party under this Article 8.

(d) Other than as set forth in Section 8.1, neither the Seller nor any Principal Member shall be liable to any Buyer Party for Damages with respect to or in connection with any breach of any representation or warranty of the Seller and/or the Principal Members for which any of the Buyer Parties had actual knowledge, based on a writing delivered by or on behalf of the Seller, on and/or before the Closing Date.

8.5 NOTIFICATION OF CLAIMS.

Upon any party (the "Indemnified Party") becoming aware of a fact, condition or event that constitutes a basis for a claim for Damages in respect thereof against any other party (the "Indemnifying Party") under Section 8.2 or 8.3, if such a claim is to be made, the Indemnified Party will with reasonable promptness notify the Indemnifying Party or Parties in writing of such fact, condition or event, but in any event within sufficient time to permit the Indemnifying Party or Parties to respond timely to any complaint or other process served on the Indemnified Party. The failure to notify the Indemnifying Party or Parties under this Section 8.5 shall not relieve any Indemnifying Party of any liability that it may have to the Indemnified Party except to the extent that such failure to notify shall have resulted in a waiver of any lawful and valid affirmative defense to any third-party claim or otherwise materially prejudices the Indemnifying Party or Parties in connection with the administration or defense of such third-party claim.

8.6 THIRD PARTY CLAIMS.

(a) Upon receipt by the Indemnifying Party or Parties of any notice of claim for indemnification hereunder arising from a third-party claim, the Indemnifying Party or Parties shall assume the administration and defense of such third-party claim with counsel that is reasonably satisfactory to the Indemnified Party and shall proceed with the administration and defense of such third-party claim diligently and in good faith; provided, however, that any Indemnifying Party shall be entitled to assume the administration and defense of such third-party claim only if it agrees in writing with the Indemnified Party that it is obligated to indemnify the Indemnified Party pursuant to this Article 8 with respect to such third-party claim; and provided, further that no Indemnifying Party shall be entitled to assume the administration and defense of any third-party claim that (i) seeks an injunction or other equitable relief that might materially and adversely affect the Buyer, or (ii) involves any criminal action or any claim that could reasonably be expected to result in a criminal action against the Buyer. The Indemnified Party shall be fully consulted by the Indemnifying Party or Parties and shall have the right to participate, at its own expense, in the investigation, administration and defense of such third-party claim. Any party hereto receiving notice of any proposed settlement of any such third-party claim shall promptly provide a copy of such notice to the other parties hereto. The Indemnifying Party or Parties shall not have the right to settle or compromise any third-party claim for which indemnification is being sought hereunder without the consent of the Indemnified Party unless as a result of such settlement or compromise the Indemnified Party is fully discharged and released from any and all liability with respect to such third-party claim. The Indemnified Party shall make available to the Indemnifying Party or Parties and its counsel all books, records, documents and other information relating to any third-party claim for which indemnification is sought hereunder, and the parties to this Agreement shall render to each other reasonable assistance in the defense of any such third-party claim.

(b) In the event more than one party is an Indemnifying Party, a majority in interest of such Indemnifying Parties shall assume the administration and defense of such third- party claim and appoint counsel reasonably satisfactory to the Indemnified Party and proceed with the administration and defense of such third-party claim diligently and in good faith. All decisions and other actions that are taken by such majority in interest of the Indemnifying Parties in connection with the appointment of such counsel and the administration and defense of such third-party claim shall be final, binding and conclusive on all other Indemnifying Parties, and none of such other Indemnifying Parties obligations under this Article 8 shall be diminished as a result of such administration and defense of such third-party claim.

(c) Notwithstanding any other provision of this Agreement, the Indemnified Party shall have the absolute right, at its election (to be exercised in its sole discretion by written notice to the Indemnifying Party or Parties) to assume from the Indemnifying Party or Parties the administration and defense of any third-party claim against the Indemnified Party. In such event, the Indemnifying Party or Parties shall be responsible for the costs and expenses of the administration and defense of such claim incurred prior to the Indemnified Party or Parties' assumption of the administration and defense of such claim and shall not be responsible for costs and expenses incurred after such assumption.

8.7 SELLER PARTY INDEMNIFICATION PAYMENT.

Seller Parties shall have the right, but not the obligation, to pay indemnification obligations by the return of the Purchase Stock, valued at Two Dollars ($2.00) per share. If Seller Parties have not paid any indemnification obligation within thirty (30) days of (i) the entry of a final court order or (ii) a written stipulation by the parties establishing a liquidated amount of Damages, the Buyer may call the Purchase Stock to the extent then owned by a Principal Member, valued at Two Dollars ($2.00) per share, to satisfy such amount, in whole or in part.

SECTION 9. EXPENSES

9.1 EXPENSES.

(A) Except as set forth in this Section, fees and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement ("Transaction Expenses") shall be paid by the party incurring such expenses, whether or not the Closing is consummated.

(b) Any transfer fee, real estate or otherwise, incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the Seller and/or the Principal Members.

SECTION 10. MISCELLANEOUS

10.1 AMENDMENT.

This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

10.2 WAIVER.

(A) No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.

(b) No party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

10.3 ENTIRE AGREEMENT; COUNTERPARTS.

This Agreement (and the exhibits and schedules hereto) constitutes the entire agreement among the parties hereto and supercedes all other prior agreements and understandings, both written and oral, among or between any of the parties hereto with respect to the subject matter hereof. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.

10.4 APPLICABLE LAW; JURISDICTION.

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws. The parties hereto hereby declare that it is their intention that this Agreement shall be regarded as made under the laws of the State of Delaware and that the laws of said State shall be applied in interpreting its provisions in all cases where legal interpretation shall be required. Each of the parties hereto agrees that any action, suit or proceeding arising out of the transactions contemplated by this Agreement (a "Proceeding") shall be commenced and conducted exclusively in the federal or state courts of the State of Delaware, and each of the parties hereby irrevocably and unconditionally: (i) consents to submit to the exclusive jurisdiction of the federal and state courts in the State of Delaware for any Proceeding (and each party agrees not to commence any Proceeding, except in such courts); (ii) waives any objection to the laying of venue of any Proceeding in the federal or state courts of the State of Delaware; (iii) waives, and agrees not to plead or to make, any claim that any Proceeding brought in any federal or state court of the State of Delaware has been brought in an improper or otherwise inconvenient forum; and (iv) waives, and agrees not to plead or to make, any claim that any Proceeding shall be transferred or removed to any other forum. Each of the parties hereto hereby irrevocably and unconditionally agrees: (1) to the extent such party is not otherwise subject to service of process in the State of Delaware, to appoint and maintain an agent in the State of Delaware as such party's agent for acceptance of legal process, and (2) that service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service, and that service made pursuant to clause (1) or (2) above shall have the same legal force and effect as if served upon such party personally within the State of Delaware.

10.5 ATTORNEYS' FEES.

In any action at law or suit in equity to enforce this Agreement or the rights of any of the parties hereunder, the prevailing party in such action or suit shall be entitled to reasonable attorneys' fees and all other reasonable costs and expenses incurred in such action or suit.

10.6 ASSIGNABILITY; THIRD PARTY BENEFICIARIES.

This Agreement shall be binding upon, and shall be enforceable by and inure solely to the benefit of, the parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the Seller's, Principal Members' or Buyer's rights hereunder may be assigned without the prior written consent of the other parties, as the case may be, and any attempted assignment of this Agreement or any of such rights without such consent shall be void and of no effect. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person (other than the parties hereto) any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement except for
(i) the rights, benefits and remedies granted to the Indemnified Persons under Section 8.6; and (ii) the rights of the Principal Members to receive Consideration in accordance with the provisions of this Agreement.

10.7 NOTICES.

Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received (i) on the date of delivery if delivered personally, or
(ii) on the date of confirmation of receipt (or the first business day following such receipt if the date is not a business day) if delivered by a nationally recognized overnight courier service. All notices hereunder shall be delivered to the address set forth beneath the name of such party below (or to such other address as such party shall have specified in a written notice given to the other parties hereto):

If to Buyer:

Dynasil Corporation of America
385 Cooper Road
West Berlin, New Jersey 08091

Facsimile No.:
Attention: Craig Dunham

with a copy to (which copy shall not constitute notice hereunder):

Bond, Schoeneck & King, PLLC
One Lincoln Center
Syracuse, New York 13202-1355 Facsimile No.: (315) 218-8100 Attention: J.P. Paraschos, Esq.

If to the Seller:

RMD Instruments, LLC
44 Hunt Street
Watertown, Massachusetts 02472 Facsimile No.: (617) 926-9980 Attention: Gerald Entine

with a copy to (which copy shall not constitute notice hereunder):

Riemer & Braunstein LLP
Three Center Plaza
Boston, Massachusetts 02108
Facsimile No. (617) 692-3513
Attention: Adam W. Jacobs, Esq.

If to a Principal Member:

Gerald Entine 1988 Family Trust

c/o Gerald Entine
300 Boylston Street
Boston, Massachusetts 02116

Jacob H. Paster
20 Navesink Road
Red Bank, New Jersey 07701

Fritz and Doris Wald
4 Blossom Lane
Wayland, Massachusetts 01778

10.8 SEVERABILITY.

If any provision of this Agreement or any part of any such provision is held under any circumstances to be invalid or unenforceable in any jurisdiction, then (a) such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be deemed amended to conform to applicable Legal Requirements so as to be valid and enforceable to the fullest possible extent, (b) the invalidity or unenforceability of such provision or part thereof under such circumstances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other circumstances or in any other jurisdiction, and (c) the invalidity or unenforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this Agreement; provided, however, that the economic or legal substance of the transactions contemplated hereby is not affected in a materially adverse manner to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith in general fashion to modify this Agreement so as to effect the original interest of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the maximum extent possible.

10.9 SPECIFIC PERFORMANCE.

The parties agree that irreparable damage would occur in the event that any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached. The parties agree that, in the event of any breach by the other party of any covenant or obligation contained in this Agreement, the other party shall be entitled (in addition to any other remedy that may be available to it, including monetary damages) to seek (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an injunction restraining such breach. The parties further agree that no party to this Agreement shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 10.9, and each party waives any objection to the imposition of such relief or any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

     10.10     CONSTRUCTION.

          (A)  For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and  vice

versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include masculine and feminine genders.

(b) The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

(c) As used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words "without limitation."

(d) Except as otherwise indicated, all references in this Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement and Exhibits to this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

DYNASIL CORPORATION OF AMERICA

By
:
Name: Craig Dunham
Title: President

RMD INSTRUMENTS, LLC

By
:
Name: Gerald Entine
Title: President

PRINCIPAL MEMBERS

By _______________________________
: __________
Gerald Entine, as Trustee of
Gerald Entine 1988 Family Trust

By _______________________________
: _______
Fritz Wald

By _______________________________
: _______
Doris Wald

By _______________________________
: _______
Jacob H. Paster

[Signature Page to Asset Purchase Agreement]

          "Allocation Schedule" is defined in Section  1.4(d)  of
this Agreement.

          "Business  Debts" is defined in Section  3.20  of  this
Agreement.

          "Buyer  Cap"  is  defined  in Section  8.3(b)  of  this
Agreement.

"Buyer Basket" is defined in Section 8.3(b) of this Agreement.

"Buyer Balance Sheet" is defined in Section 4.5(c) of this Agreement.

"Buyer Balance Sheet Date" is defined in Section 4.5(c) of this Agreement.

"Buyer Financial Statements" is defined in Section 4.5(c) of this Agreement.

"Buyer Material Contract" means a Dynasil Corporation Contract required by the rules and regulations of the SEC to be filed as an exhibit to the Buyer SEC Documents.

"Buyer Parties" is defined in Section 8.2(a) of this Agreement.

"Buyer Product" is defined in Section 4.12(e) of this Agreement.

"Buyer SEC Documents" is defined in Section 4.5(a) of this Agreement.

"Closing" is defined in Section 2.1(a) of this Agreement.

"Closing Allocation Schedule" is defined in Section 1.4(d) of this Agreement.

"Closing Date" is defined in Section 2.1(a) of this Agreement.

"Code" is defined in Section 3.10(a) of this Agreement.

"COBRA" is defined in Section 3.10(d) of this Agreement.

          "Consideration" is defined in Section  1.4(a)  of  this
Agreement.

          "Contracts"  is  defined  in  Section  1.1(d)  of  this
Agreement.

"Damages" is defined in Section 8.2(a) of this Agreement.

"Dynasil Corporation Contract" shall mean any contract:
(a) to which any of the Dynasil Corporations is a party; (b) by which any of the Dynasil Corporations or any asset of any of the Dynasil Corporations is or may become bound or under which any of the Dynasil Corporations has, or may become subject to, any obligation; or (c) under which Buyer has or may acquire any right or interest.

          "Dynasil  Corporations" is defined in  Section  4.1  of
this Agreement.

          "Employee  Benefit Plan" is defined in Section  3.10(a)
of this Agreement.

"Encumbrance" shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim, infringement, interference, option, right of first refusal, preemptive right or community property interest (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset); provided that the term Encumbrance shall not be deemed to include (a) liens for current Taxes or income Taxes not yet due and payable or that are being contested in good faith, in each case, and for which adequate reserves have been recorded, (b) liens for assessments or other governmental charges or liens of landlords, carriers, warehousemen, mechanics or materialmen securing obligations incurred in the ordinary course of business consistent with prior practice that are not yet due and payable or due but not delinquent or being contested in good faith, (c) liens incurred in the ordinary course of business consistent with prior practice in connection with workers' compensation, unemployment insurance and other types of social security or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and similar obligations, (d) purchase money or similar security interests granted in connection with the purchase of equipment or supplies in the ordinary course of business consistent with prior practice in an amount not to exceed $10,000 in the aggregate, (e) liens arising as a matter of law in the ordinary course of business with respect to Seller's obligations incurred after December 31, 2003, provided that the obligations secured by such liens are not delinquent, (f) such title defects and liens, if any, as individually or in the aggregate are not reasonably likely to have a Material Adverse Effect on the Seller, (g) licenses or other agreements relating to Proprietary Assets which are not intended to secure an obligation; or (h) with respect to the agreements of Seller and Principal Members in Section 1.1 hereof and the representations and warranties set forth in Article 3 hereof, liens or other encumbrances of any type imposed by this Agreement, the Merger Agreement and/or the transactions contemplated herein and therein.

"Environmental Law" shall mean any foreign, federal, state or local statute, law, rule, regulation, ordinance, treaty, code, policy or rule of common law now or from time to time in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, natural resources, health, safety or Hazardous Materials, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; the Resource Conservation and Recovery Act, as amended; the Hazardous Materials Transportation Act, as amended; the Clean Water Act, as amended; the Toxic Substances Control Act, as amended; the Clean Air Act, as amended; the Safe Drinking Water Act, as amended; the Atomic Energy Act, as amended; the Federal Insecticide, Fungicide and Rodenticide Act, as amended; and the Occupational Safety and Health Act, as amended.

"Equipment" is defined in Section 1.1(b) of this Agreement.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

"ERISA Affiliate" as defined in Section 3.10(a) of this Agreement.

"Excluded Assets" is defined in Section 1.3 of this Agreement.

"Financial Statements" is defined in Section 3.6 of this Agreement.

"Goodwill" is defined in Section 1.1(e) of this Agreement.

"Governmental Authorization" shall mean any: (a) permit, license, certificate, franchise, permission, variance, clearance, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement; or (b) right under any Contract with any Governmental Body.

"Governmental Body" shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi- governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, organization, unit or body and any court or other tribunal); or (d) the National Association of Securities Dealers, Inc. (including the rules and regulations of the Nasdaq).

"IES Report" is defined in Section 3.12 of this Agreement.

"Indemnified Party" is defined in Section 8.5 of this Agreement.

"Indemnifying Party" is defined in Section 8.5 of this Agreement.

"Inventory" is defined in Section 1.1(a) of this Agreement.

"knowledge" with respect to any party hereto shall mean the actual knowledge, after due inquiry, of such party, such party's manager, director and/or executive officers.

"Legal Requirement" shall mean any applicable federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (or under the authority of NASD or the Nasdaq), including any Environmental Law.

          "Liabilities"  is  defined  in  Section  1.2  of   this
Agreement.

          "Licenses"  is  defined  in  Section  1.1(g)  of   this
Agreement.

An event, violation, inaccuracy, circumstance or other matter will be deemed to have a "Material Adverse Effect" on, or shall be deemed to be "material" to, the Business or the Purchased Assets if such event, violation, in accuracy, circumstance or other matter had or could reasonably be expected to have a material adverse effect on the business, condition, assets, operations or financial performance of the Business taken as a whole, or materially impede the consummation of the transactions contemplated herein.

"Merger Agreement" is defined in the Recitals of this Agreement.

"Miscellaneous Property" is defined in Section 1.1(f) of this Agreement.

"Order" shall mean any: (a) order, judgment, injunction, edict, decree, ruling, pronouncement, determination, decision, opinion, verdict, sentence, subpoena, writ or award issued, made, entered, rendered or otherwise put into effect by or under the authority of any court, administrative agency or other Governmental Body or any arbitrator or arbitration panel; or (b) Contract with any Governmental Body entered into in connection with any Legal Proceeding.

"Person" means any individual, entity or Governmental Body.

"Permits" is defined in Section 3.13 of this Agreement.

"Pro-Rata Share" means the pro rata share of each Principal Member based on their relative ownership of the Seller immediately prior to the Closing, equal to 92.8773% for Gerald Entine 1988 Family Trust, 4.9175% for Jacob H. Paster and 2.2052% for Fritz and Doris Wald under this Agreement and the pro rata Share of each of the Stockholders based on their relative ownership of the Company prior to the consummation of the Merger under the Merger Agreement, equal to 95.8773% for Gerald Entine 1988 Family Trust, 1.9175% for Jacob H. Paster and 2.2052% for Fritz and Doris Wald.

"Proceeding" is defined is Section 10.5 of this Agreement.

"Proprietary Asset" shall mean any: (a) patent, patent application, trademark (whether registered or unregistered), trademark application, trade name, fictitious business name, service mark (whether registered or unregistered), service mark application, copyright (whether registered or unregistered), database rights, design rights, moral rights, domain name, assumed and fictitious name registrations, copyright application, copyright registration, mask work right, mask work right application, trade secret, or any other intellectual or industrial or intangible property right, know-how, customer lists, computer software, source code, algorithm, invention, engineering drawing, and technology; and (b) right to use or exploit any of the foregoing.

"Purchased Assets" is defined is Section 1.1 of this Agreement.

"Purchase Cash" is defined in Section 1.4(a) of this Agreement.

"Purchase Price" in defined in Section 1.4(a) of this Agreement.

"Purchase Stock" is defined in Section 1.4(a) of this Agreement.

"Representatives" shall mean officers, directors, employees, agents, attorneys, accountants, advisors, consultants and representatives of the Person and its Subsidiaries.

"Retained Earnings Extraction" is defined in Section 2.1(e) of this Agreement.

"Securities Act" shall mean the Securities Act of 1933, as amended and the regulations promulgated thereunder.

"Seller Basket" is defined in Section 8.2(b) of this Agreement.

"Seller Cap" is defined in Section 8.2(b) of this Agreement.

"Seller Organization Documents" is defined in Section 3.1 of this Agreement.

"Seller Parties" is defined in Section 8.2(b) of this Agreement.

"Seller Product" is defined in Section 3.16(f) of this Agreement.

"Seller's Extraction Account" is defined in Section 2.1(e) of this Agreement.

"Stockholders" is defined in the Recitals of this Agreement.

"Stock Merger Consideration" is defined in Section 1.5(a) of this Agreement.

"Survival Date" is defined in Section 8.1 of this Agreement.

"Tax" shall mean all taxes, assessments, charges, duties, fees, levies or other governmental charges, including, without limitation, all Federal, state, local, foreign and other income, franchise, profits, gross receipts, capital gains, capital stock, transfer, net proceeds, alternative or add-on minimum, ad valorem, turnover, personal property (tangible and intangible), leasing, lease, user, employment, fuel, excess profits, interest equalization, property, sales, use, value- added, occupation, property, excise, severance, windfall profits, stamp, license, payroll, social security, withholding and other taxes, assessments, charges, duties, fees, levies or other governmental charges of any kind whatsoever (whether payable directly or by withholding and whether or not requiring the filing of a Tax return), all estimated taxes, deficiency assessments, additions to tax, penalties and interest and shall include any liability for such amounts as a result either of being a member of a combined, consolidated, unitary or affiliated group or of a contractual obligation to indemnify any person or other entity.

"Taxing Authority" is defined in Section 3.8 of this Agreement.

"Tax Return" shall mean any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax.

"Transaction Expenses" is defined in Section 9.3(a) of this Agreement.

* * *
EXHIBIT B

CLOSING ALLOCATION SCHEDULE

EXHIBIT C

BILL OF SALE

EXHIBIT D

SELLER'S CERTIFICATE

EXHIBIT E

BUYER'S CERTIFICATE

EXHIBIT F

RETAINED EARNINGS EXTRACTION

APPENDIX I

INVESTMENT LETTER

[Member's Letterhead]

Dynasil Corporation of America
385 Cooper Road
West Berlin, New Jersey 08091
Attention: President

AS A CONDITION PRECEDENT TO RECEIVING SHARES (THE "PURCHASE STOCK") OF DYNASIL CORPORATION OF AMERICA ("DYNASIL") IN CONSIDERATION FOR THE PURCHASE OF THE ASSETS OF RMD INSTRUMENTS, LLC (THE "ACQUISITION"), I HEREBY REPRESENT AND WARRANT THE FOLLOWING:

(a) I am purchasing the Purchase Stock for the my own account and with no intention of distributing or reselling the Purchase Stock in any transaction which would be in violation of the securities laws of the United States of America or any state thereof, or in any transaction that would subject the issuance and sale of the Purchase Stock pursuant to the Acquisition to the registration requirements of the Securities Act and applicable state securities laws. I understand that the Purchase Stock has not been registered under the Securities Act or the securities laws of any state by reason of a specific exemption from the registration or qualification provisions of the Securities Act or said securities laws, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the representations as expressed herein. I understand that Dynasil has no obligation to register the Purchase Stock under the Securities Act or any state securities laws.

(b) I acknowledge that, subject to the terms of the Acquisition, the Purchase Stock must be held indefinitely unless the Purchase Stock is so registered or an exemption from such registration is available.

(c) I have had an opportunity to discuss the business, management and financial affairs of Dynasil and the terms and conditions of an investment in the Purchase Stock with, and have had access to, the management of Dynasil and have had the opportunity to review the information set forth in Dynasil's public filings and any other information requested by RMD Instruments, LLC.

(d) I understand and acknowledge that Dynasil will be relying upon the representations and warranties set forth herein in offering and selling the Purchase Stock in connection with the Acquisition.

(e) I represent that the offering to me of the Purchase Stock was made only through direct, personal communication between me and a representative of Dynasil and/or RMD Instruments, LLC and not through public solicitation or advertising.

(f) I did not retain or consult any "Purchaser Representative", as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

(g) I have such knowledge, experience and skill in evaluating and investing in securities, based on actual participation in financial, investment and business matters such that I am capable of evaluating the merits and risks of an investment in the Purchase Stock, and have such knowledge, experience and skill in financial and business matters that I am capable of evaluating the merits and risks of the prospective investment in Dynasil and the suitability of the Purchase Stock as an investment for myself.

(h) I have not received, and am not relying on, any representations or warranties from Dynasil or any other person, other than those contained in the Acquisition agreement and those set forth in statements, reports, schedules, forms, exhibits and other documents filed by Dynasil with the United States Securities and Exchange Commission.

(i) I am able to bear the economic risk of an investment in the Purchase Stock and have an adequate income independent of any income produced from an investment in the Purchase Stock and have sufficient net worth to sustain a loss of all of my investment in the Purchase Stock without economic hardship if such a loss should occur.

(j) I am an "accredited investor" as defined in Rule 501(a) under the Securities Act.

I understand that Dynasil is relying upon the representations and warranties I make herein, and will indemnify, defend and hold Dynasil and its affiliates, officers, directors and agents harmless against any costs, fees or damages of any kind arising out of the inaccuracy of any statement made herein.

WITNESS:

Date:

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

DYNASIL CORPORATION OF AMERICA

RMD ACQUISITION SUB, INC.

RADIATION MONITORING DEVICES, INC.

AND

GERALD ENTINE 1988 FAMILY TRUST

FRITZ WALD AND DORIS WALD, HUSBAND AND WIFE

JACOB H. PASTER

JULY 1, 2008

TABLE OF CONTENTS

                                                             Page


SECTION 1.                                            THE MERGER.     1

     1.1  MERGER OF THE COMPANY INTO MERGER SUB.                1
     1.2  EFFECT OF THE MERGER.                                 1
     1.3  CLOSING; EFFECTIVE TIME.                              1
     1.4  MERGER SUB CONSTITUTIVE DOCUMENT.                     2
     1.5  EFFECT OF THE MERGER.                                 2
     1.6  CLOSING OF THE COMPANY'S TRANSFER BOOKS.              2
     1.7  EXCHANGE OF CERTIFICATES.                             3
     1.8  FURTHER ACTION.                                       3
     1.9  TAX CONSEQUENCES.                                     4

SECTION 2.         REPRESENTATIONS AND WARRANTIES OF THE COMPANY.     4

     2.1  DUE ORGANIZATION; SUBSIDIARIES.                       4
     2.2  AUTHORITY; BINDING NATURE OF AGREEMENT.               4
     2.3  CAPITALIZATION, ETC.                                  4
     2.4  NON-CONTRAVENTION; CONSENTS.                          5
     2.5  FINANCIAL STATEMENTS.                                 6
     2.6  ABSENCE OF CHANGES.                                   6
     2.7  PROPRIETARY ASSETS.                                   7
     2.8  CONTRACTS.                                            9
     2.9  LIABILITIES.                                         11
     2.10 COMPLIANCE WITH LEGAL REQUIREMENTS.                  11
     2.11 GOVERNMENTAL AUTHORIZATIONS.                         12
     2.12 TAX MATTERS.                                         12
     2.13 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS.           13
     2.14 ENVIRONMENTAL MATTERS.                               16
     2.15 LEGAL PROCEEDINGS; ORDERS.                           17
     2.16 VOTE REQUIRED.                                       17
     2.17 FOREIGN CORRUPT PRACTICES ACT.                       17
     2.18 REAL PROPERTY.                                       18
     2.19 INSURANCE POLICIES.                                  18
     2.20 FINANCIAL ADVISOR.                                   18
     2.21 AFFILIATE TRANSACTIONS.                              18
     2.22 CUSTOMERS.                                           19
     2.23 DISCLOSURE.                                          19

SECTION 2A.    REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
19


SECTION 2A.1                                AUTHORIZATION; TITLE.     19


SECTION 2A.2                                   INVESTMENT INTENT.     19


SECTION 3.REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
 20

     3.1  DUE ORGANIZATION; SUBSIDIARIES.                      20
     3.2  AUTHORITY; BINDING NATURE OF AGREEMENT.              21
     3.3  CAPITALIZATION, ETC.                                 21
     3.4  NON-CONTRAVENTION; CONSENTS.                         22
     3.5  SEC FILINGS; FINANCIAL STATEMENTS.                   23
     3.6  ABSENCE OF CHANGES.                                  24
     3.7  CONTRACTS.                                           26
     3.8  LIABILITIES.                                         26
     3.9  LEGAL PROCEEDINGS; ORDERS.                           26
     3.10 FOREIGN CORRUPT PRACTICES ACT.                       27
     3.11 FINANCIAL ADVISOR.                                   27
     3.12 PROPRIETARY ASSETS.                                  27

SECTION 4.                                             [RESERVED]     28


SECTION 5.                    ADDITIONAL COVENANTS OF THE PARTIES     29

     5.1  ADDITIONAL AGREEMENTS.                               29
     5.2  PUBLIC DISCLOSURE.                                   29
     5.3  RESIGNATION OF DIRECTORS.                            29
     5.4  TAKEOVER LAWS.                                       29
     5.5  SECTION 16.                                          30
     5.6  LITIGATION.                                          30
     5.7  STOCKHOLDERS' CAPITAL.                               30
     5.8  TAX-FREE REORGANIZATION.                             31

SECTION 6.                               CONDITIONS TO THE MERGER     32

     6.1  CONDITIONS TO EACH PARTY'S OBLIGATION.               32
     6.2  ADDITIONAL CONDITIONS TO PARENT'S AND MERGER SUB'S
          OBLIGATIONS.                                         32
     6.3  ADDITIONAL CONDITIONS TO THE COMPANY'S
          OBLIGATIONS.                                         33

SECTION 7.                                              EXPENSES.     34

     7.1  EXPENSES.                                            34

SECTION 8.                                        INDEMNIFICATION     34

     8.1  SURVIVAL; INDEMNITY.                                 34
     8.2  INDEMNIFICATION BY STOCKHOLDERS.                     34
     8.3  INDEMNIFICATION BY PARENT.                           35
     8.4  MISCELLANEOUS INDEMNITY PROVISIONS.                  35
     8.5  NOTIFICATION OF CLAIMS.                              36
     8.6  THIRD-PARTY CLAIMS.                                  36

SECTION 9.                               MISCELLANEOUS PROVISIONS     37

     9.1  AMENDMENT.                                           37
     9.2  WAIVER.                                              37
     9.3  ENTIRE AGREEMENT; COUNTERPARTS.                      37
     9.4  APPLICABLE LAW; JURISDICTION.                        38
     9.5  ATTORNEYS' FEES.                                     38
     9.6  ASSIGNABILITY; THIRD PARTY BENEFICIARIES.            38
     9.7  NOTICES.                                             38
     9.8  SEVERABILITY.                                        39
     9.9  SPECIFIC PERFORMANCE.                                40
     9.10 CONSTRUCTION.                                        40
     9.11 STOCKHOLDERS' AGENT.                                 40



EXHIBIT A - CERTAIN DEFINITIONS

EXHIBIT B -  COMPANY'S CERTIFICATE

EXHIBIT C -  PARENT'S CERTIFICATE

EXHIBIT D - RETAINED EARNINGS EXTRACTION

Appendix I - Lease

                  Agreement and Plan of Merger

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered into on July 1, 2008, by and among DYNASIL CORPORATION OF AMERICA, a Delaware corporation ("Parent"), RMD ACQUISITION SUB, INC., a Delaware corporation and a direct, wholly-owned subsidiary of Parent ("Merger Sub"), RADIATION MONITORING DEVICES, INC., a Massachusetts corporation (the "Company"), and Gerald Entine 1988 Family Trust, Fritz Wald and Doris Wald, husband and wife, and Jacob H. Paster (collectively, "Stockholders"). Certain capitalized terms used in this Agreement are defined in Exhibit A.

Recitals

WHEREAS, Parent, Merger Sub and the Company intend to effect a merger (the "Merger") of the Company with and into Merger Sub in accordance with this Agreement and the General Corporate Law of the State of Delaware (the "DGCL");

WHEREAS, it is intended that the Merger shall qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code") and this Agreement shall constitute the plan of reorganization;

WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to Parent's willingness to enter into this Agreement, Parent and RMD Instruments, LLC are entering into that certain asset purchase agreement (the "Asset Purchase Agreement").

WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the Merger.

NOW THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements hereinafter set forth, the parties to this Agreement, intending to be legally bound, agree as follows:

SECTION 1. THE MERGER.

1.1 MERGER OF THE COMPANY INTO MERGER SUB.

Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time (as defined in Section 1.3), the Company shall be merged with and into Merger Sub, and the separate corporate existence of the Company shall cease. Merger Sub will continue as the surviving entity in the Merger (the "Surviving Entity") and will be a wholly-owned subsidiary of Parent.

1.2 EFFECT OF THE MERGER.

The Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL and Chapter 156D of the Massachusetts General Laws (Massachusetts Business Corporation Act).

1.3 CLOSING; EFFECTIVE TIME.

The consummation of the Merger (the "Closing") shall take place at the offices of Capehard & Scatchard, P.A., 8000 Midlantic Drive, Suite 300S, Mount Laurel, New Jersey 08054 at 10:00 a.m. on a date to be mutually agreed upon by Parent and the Company (the "Closing Date"), which date shall be no later than the third business day after the conditions set forth in
Section 6 shall have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), or such other time as Parent and the Company shall mutually agree. Subject to the provisions of this Agreement, the parties shall cause the Merger to become effective by causing Merger Sub to execute and file in accordance with the DGCL a certificate of merger with the Secretary of State of the State of Delaware (the "Certificate of Merger"). The Merger shall become effective upon such filing, or at such later date and time set forth in the Certificate of Merger (the "Effective Time") and the filing of Articles of Merger with the Secretary of the Commonwealth of Massachusetts in accordance with Chapter 156D of the Massachusetts General Laws (Massachusetts Business Corporation Act).

1.4 MERGER SUB CONSTITUTIVE DOCUMENT.

(a) The Certificate of Incorporation and By-Laws of the Merger Sub in effect as of immediately prior to the Effective Time will be the Certificate of Incorporation and By-Laws of the Surviving Entity following the Effective Time; provided, however, that the Certificate of Incorporation shall be amended to change the name of the Surviving Entity to "Radiation Monitoring Devices, Inc."

(b) The managers and officers of the Surviving Entity shall be the respective individuals who are the managers and officers of Merger Sub immediately prior to the Effective Time.

1.5 EFFECT OF THE MERGER.

(a) At the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company or any Company stockholder, subject to Section 1.5(b), Section 1.5(c), Section 1.5(d), and Section 1.9 each share of Company Common Stock then issued and outstanding, shall be converted into the right to receive 3,582,000 fully paid and nonassessable shares of Parent Common Stock (the "Stock Merger Consideration").

(b) If, on or after the date of this Agreement and prior to the Effective Time, the outstanding shares of Company Common Stock or Parent Common Stock are changed into a different number or class of shares by reason of any stock split, stock dividend, reverse stock split, reclassification, recapitalization or other similar transaction, including any such transaction with a record date between the date of this Agreement and the Effective Time, then the Merger Consideration shall be appropriately adjusted to the extent the record date for any such event is between the date of this Agreement and the Effective Time, so as to provide the holders of Company Common Stock and Parent the same economic effect as contemplated prior to such stock split, stock dividend, reverse stock split, reclassification, recapitalization or other similar transaction.

1.6 CLOSING OF THE COMPANY'S TRANSFER BOOKS.

At the Effective Time: (a) all shares of Company Common Stock ("Shares") outstanding immediately prior to the Effective Time shall automatically be canceled and shall cease to exist, each share of Company Common Stock shall represent only the right to receive the Merger Consideration and all holders of certificates representing Shares that were outstanding immediately prior to the Effective Time shall cease to have any rights as stockholders of the Company; and (b) the stock transfer books of the Company shall be closed with respect to all Shares outstanding immediately prior to the Effective Time. No further transfer of any such Shares shall be made on such stock transfer books after the Effective Time. If, after the Effective Time, a valid certificate previously representing any Shares (a "Company Stock Certificate") is presented to the Surviving Entity or Parent, such Company Stock Certificate shall be canceled and shall be exchanged as provided in this Section 1.

1.7 EXCHANGE OF CERTIFICATES.

(a) At the Closing, the Stockholders shall surrender all Company Stock Certificates to the Parent, together with duly executed stock powers, and the Parent shall instruct its transfer agent to issue and deliver such Merger Consideration as such holder is entitled to receive under this Article 1. The holder of such Company Stock Certificate shall be entitled to receive in exchange therefor the Merger Consideration, and the Company Stock Certificate so surrendered shall be immediately canceled. Until surrendered as contemplated by this Section 1.7, each Company Stock Certificate shall be deemed, from and after the Effective Time, to represent only the right to receive the Merger Consideration and any distribution or dividend the record date for which is after the Effective Time. If any Company Stock Certificate shall have been lost, stolen or destroyed, the Surviving Entity will issue in exchange for such lost, stolen or destroyed Company Stock Certificates, the Merger Consideration; provided, however, that Parent may, in its discretion and as a condition precedent to the issuance of any certificate representing Parent Common Stock, require the owner of such lost, stolen or destroyed Company Stock Certificate to provide an appropriate affidavit and to deliver a bond (in such reasonable sum as Parent may reasonably direct) as indemnity against any claim that may be made against the Parent or the Surviving Entity with respect to such Company Stock Certificate.

(b) No dividends or other distributions declared or made with respect to Parent Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Company Stock Certificate with respect to the Merger Consideration that such holder has the right to receive hereunder until such holder surrenders such Company Stock Certificate in accordance with this Section 1.7.

(c) Neither Parent nor the Surviving Entity shall be liable to any holder or former holder of Company Common Stock or to any other Person with respect to any shares of Parent Common Stock (or dividends or distributions with respect thereto), or for any cash amounts, properly delivered to any public official in compliance with any applicable abandoned property law, escheat law or similar Legal Requirement.

(d) Any and all certificates representing the Stock Merger Consideration and any and all certificates issued in replacement thereof or in exchange therefor shall bear the following legend or one substantially similar thereto:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE IN RELIANCE ON EXEMPTIONS THEREFROM AND, THEREFORE, MAY NOT BE RESOLD UNLESS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

1.8 FURTHER ACTION.

If, at any time after the Effective Time, any further action is determined by Parent to be necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Entity with full right, title and possession of and to all rights and property of Merger Sub and the Company, the officers and directors of the Surviving Entity and Parent shall be fully authorized (in the name of Merger Sub, in the name of the Company and otherwise) to take such action.

1.9 TAX CONSEQUENCES.

For federal income tax purposes, the Merger is intended to constitute a reorganization within the meaning of Section 368 of the Code. The parties to this Agreement hereby adopt this Agreement as a "plan of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations. Each of Parent and Merger Sub (as the Surviving Entity) shall report the Merger for income tax purposes as a reorganization and will take no position in any Tax Return or Tax proceeding inconsistent with treatment of the Merger as a reorganization.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

Except as disclosed in the Disclosure Letter delivered by the Company to Parent and Merger Sub prior to the execution and delivery of this Agreement (the "Company Disclosure Letter") and referred to in the section of the Company Disclosure Letter corresponding to the section(s) of this Section 2 to which such disclosure applies, the Company hereby represents and warrants to Parent and Merger Sub as follows:

2.1 DUE ORGANIZATION; SUBSIDIARIES.

The Company is a corporation duly organized, validly existing and in good standing under the Legal Requirements of the jurisdiction of its incorporation. The Company has all necessary power and authority: (a) to conduct its business in the manner in which its business is currently being conducted; (b) to own and use its assets in the manner in which its assets are currently owned and used; and (c) to perform its material obligations under all Company Material Contracts. The Company is qualified to do business as a foreign corporation, and is in good standing, under the Legal Requirements of all jurisdictions where the failure to be so qualified would have a Material Adverse Effect on the Company. The Company has delivered or made available to Parent accurate and complete copies of the certificate of incorporation, bylaws and other charter or organizational documents of the Company, including all amendments thereto (collectively, the "Company Organization Documents"). The Company has no Subsidiaries.

2.2 AUTHORITY; BINDING NATURE OF AGREEMENT.

The Company has all requisite corporate power and authority to enter into and to perform its obligations under this Agreement, including unanimous Stockholder approval and adoption of this Agreement. This Agreement constitutes the legal, valid and binding obligation of the Stockholders and the Company, enforceable against the Stockholders and the Company in accordance with its terms, subject to (a) Legal Requirements of general application relating to bankruptcy, insolvency and the relief of debtors, (b) rules of law governing specific performance, injunctive relief and other equitable remedies and
(c) the approval of stockholders of the Company. The Company hereby represents that its Board of Directors, at a meeting duly called and held on or prior to the date hereof, has by unanimous vote (i) determined that the Merger is in the best interests of the Company and its stockholders, (ii) approved, adopted and declared advisable this Agreement, and (iii) approved the Merger and the other transactions contemplated by this Agreement.

2.3 CAPITALIZATION, ETC.

(a) The authorized capital stock of the Company consists of 12,500 shares of Company Common Stock. The Company has not authorized any other class of capital stock other than the Company Common Stock and the Company Preferred Stock. As of July 1, 2008, 1,043 shares of Company Common Stock have been issued or are outstanding. No shares of Company Common Stock are held in the Company's treasury or are held by any of the Company's Subsidiaries. All of the outstanding shares of Company Common Stock have been duly authorized and validly issued, and are fully paid and nonassessable. None of the outstanding shares of Company Common Stock is entitled or subject to any preemptive right, right of participation, right of maintenance or any similar right or subject to any right of first refusal in favor of the Company. There is no Contract to which the Company is a party and there is no Contract between other Persons, relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of, any shares of Company Common Stock. The Company is not under any obligation, or is bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding shares of Company Common Stock.

(b) Except as set forth in Schedule 2.3(b) of the Company Disclosure Letter, there is no: (i) outstanding commitment, subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of the Company; (iii) rights agreement, stockholder rights plan or similar plan commonly referred to as a "poison pill"; or (iv) Contract under which the Company is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities ("Company Rights Agreements") (items (i) through (iv) above, collectively, "Company Stock Rights").

(c) All outstanding shares of Company Common Stock and all outstanding shares of capital stock of each Subsidiary of the Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable Legal Requirements, and (ii) all requirements set forth in Contracts applicable to the issuance of Company Common Stock and/or the issuance of shares of capital stock of any Company Subsidiary. Schedule 2.3(c) of the Company Disclosure Letter sets forth all entities (other than Subsidiaries) in which Company has any ownership interest and the amount of such interest.

2.4 NON-CONTRAVENTION; CONSENTS.

Except as set forth in Schedule 2.4 of the Company Disclosure Letter, neither the execution, delivery or performance of this Agreement nor the consummation of the Merger, or any of the other transactions contemplated by this Agreement, will directly or indirectly (with or without notice or lapse of time):

(a) contravene, conflict with or result in a violation of any of the provisions of the Company Organization Documents or any resolution adopted by the Stockholders, the Board of Directors or any committee of the Board of Directors;

(b) contravene, conflict with or result in a violation of, or give any Governmental Body the right to challenge the Merger or any of the other transactions contemplated by this Agreement or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which the Company, or any of the material assets owned or used by the Company, is subject;

(c) contravene, conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any material Governmental Authorization that is held by the Company or that is otherwise material to the business of Company or to any of the assets owned or used by the Company; or
(d) contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Company Material Contract (except for any such violation or breach which by its terms can be cured and is so cured within the applicable cure period or where the non-breaching party has no right to accelerate or terminate as a result of such violation or breach).
Except as set forth in Schedule 2.4 of the Company Disclosure Letter or otherwise provided or set forth in this Agreement, the Company is not, and will not be required to make any filing with or give any notice to, or obtain any Consent from, any Person in connection with (x) the execution, delivery or performance of this Agreement, or (y) the consummation of the Merger or any of the other transactions contemplated by this Agreement.

2.5 FINANCIAL STATEMENTS.

(a) Financial statements of the Company for the fiscal years ended June 30, 2007, 2006 and 2005 and the financial statements of the Company for the six (6) months ended December 31, 2007, provided to Parent by the Company, are true and correct in all material respects and accurately reflects the financial condition of Company as of the end of the relevant periods. The financial statements of the Company described in this Section 2.5 are collectively referred to as the "Company Financial Statements". For purposes of this Agreement, "Company Balance Sheet" means that consolidated balance sheet of the Company and its consolidated subsidiaries as of June 30, 2007 and the "Company Balance Sheet Date" means June 30, 2007.

(b) The Company maintains a system of internal controls sufficient to provide reasonable assurance that (i) transactions are executed with management's authorization, (ii) access to assets is permitted only in accordance with management's authorization, and (iii) the recorded amount for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. There is no fraud in connection with the Company Financial Statements, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls.

2.6 ABSENCE OF CHANGES.

(a) Except as set forth in Schedule 2.6 of the Company Disclosure Letter or otherwise provided or set forth in this Agreement, since the Company Balance Sheet Date:

(i) the Company has not made any changes in its pricing polices or payment or credit practices or failed to pay any creditor any material amount owed to such creditor when due or granted any extensions or credit other than in the ordinary course of business consistent with prior practice;

(ii) the Company has not terminated or closed any material facility, business or operation;
(iii) the Company has not written up or written down any of its assets; and
(iv) there has been no material loss, destruction or damage to any item of property of the Company, whether or not insured.
(b) Except as set forth in Schedule 2.6(b) of the Company Disclosure Letter, since the Company Balance Sheet Date and through the date of this Agreement:

(i) there has not been any event that has had a Material Adverse Effect on the Company, and no fact, event, circumstance or condition exists or has occurred that could reasonably be expected to have a Material Adverse Effect on the Company;

(ii) the Company has operated its business in the ordinary course consistent with prior practice;
(iii) the Company has not (A) declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of capital stock; (B) repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities; (C) made any capital expenditure which, when added to all other capital expenditures made on behalf of the Company since the Company Balance Sheet Date, exceeds $50,000, in the aggregate; (D) made any material Tax election; (E) settled any Legal Proceedings involving amounts in excess of $10,000; or (F) entered into or consummated any transactions with any affiliate;
(iv) the Company has not (A) sold or otherwise disposed of, or acquired, leased, licensed, waived or relinquished any material right or other material asset to, from or for the benefit of, any other Person except for rights or other assets sold, disposed of, acquired, leased, licensed, waived or relinquished in the ordinary course of business consistent with prior practice; (B) mortgaged, pledged or subjected to any Encumbrance any of their respective property, business or assets; (C) entered into or amended any lease of real property (whether as lessor or lessee); or (D) canceled or compromised any debt or claim other than accounts receivable in the ordinary course of business consistent with prior practice;
(v) the Company has not paid or promised to pay any bonus or other incentive or equity compensation or made any profit-sharing or similar payment to, or materially increased the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or consultants;
(vi) there has been no labor dispute (including any work slowdown, stoppage or strike) involving the Company;
(vii) the Company has not made any change in its methods of accounting or accounting practices;
(viii) the Company has not made any loan, advance or capital contributions to, or any other investment in, any Person;
(ix) the Company has not terminated or amended, or suffered a termination of, any Company Material Contract; and
(x) the Company has not entered into any contractual obligation to do any of the things referred to elsewhere in this Section 2.6.
2.7 PROPRIETARY ASSETS.

(a) Schedule 2.7(a) of the Company Disclosure Letter sets forth as of the date of this Agreement (i) all U.S. and foreign patents, patent applications, registered trademarks, material unregistered trademarks, trademark applications, copyright registrations and copyright applications, Internet domain names, computer software (other than third party software generally available for sale to the public) and fictitious name and assumed name registrations owned by Company; (ii) all patent applications and other Proprietary Assets that are currently in the name of inventors or other Persons and for which the Company has the right to receive an assignment; and (iii) all material third party licenses for Proprietary Assets to which the Company is the licensee party. The Company has good, valid and marketable title to, or has a valid right to use, license or otherwise exploit, all of the material Company Proprietary Assets necessary for the conduct of the Company's business as presently conducted, free and clear of all Encumbrances. The Company has not developed jointly with any other Person any material Proprietary Asset with respect to which such other Person has any rights. There is no Company Contract pursuant to which any Person has any right (whether or not currently exercisable) to use, license or otherwise exploit any Company Proprietary Asset owned or exclusively licensed by the Company.

(b) Except as would not, individually or in the aggregate, have a Material Adverse Effect on the Company, (i) to the knowledge of the Company, all Company Proprietary Assets owned by Company are subsisting and in effect and valid and enforceable; (ii) none of the Company Proprietary Assets and no Proprietary Asset that is currently being developed or reduced to practice or which is the subject of a current invention disclosure by the Company (either by itself or with any other Person) to the knowledge of the Company infringes, misappropriates, conflicts with or otherwise violates any Proprietary Asset owned or used by any other Person;
(iii) none of the products or services that is or has been designed, created, developed, assembled, performed, manufactured, sold, marketed or licensed by the Company is to the knowledge of the Company infringing, misappropriating or making any unlawful or unauthorized use of any Proprietary Asset owned or used by any other Person, and, none of such products or services has at any time infringed, misappropriated or made any unlawful or unauthorized use of, and the Company has not received in the past three (3) years any written, or to the Company's knowledge, oral notice of any actual, alleged, possible or potential infringement, misappropriation or unlawful or unauthorized use of, any Proprietary Asset owned or used by any other Person; (iv) the operation of the business of the Company as it currently is conducted does not and will not when conducted by the Surviving Entity in substantially the same manner following the Closing, infringe or misappropriate or make any unlawful or unauthorized use of any Proprietary Asset of any other Person; and (v) to the Company's knowledge, no other Person is infringing, misappropriating or making any unlawful or unauthorized use of, and no Proprietary Asset owned or used by any other Person infringes or conflicts with, any Company Proprietary Asset, and no such claims have been asserted or threatened against any Person by the Company or, to the knowledge of the Company, any other Person, in the past three (3) years. The Company Proprietary Assets constitute all the Proprietary Assets necessary to enable the Company to conduct its business in the manner in which such business is currently being conducted. Upon the consummation of the Merger, the Surviving Entity shall have good, valid, and enforceable title, or license (if the applicable Company Proprietary Asset is licensed to the Company) to all Company Proprietary Assets, free and clear of all Encumbrances and on, and subject to, the same terms and conditions as in effect immediately prior to the Closing. The Company has not entered into any covenant not to compete or any Contract limiting its ability to exploit fully any Company Proprietary Assets owned or licensed by the Company or to transact business in any market or geographical area or with any Person.

(c) The Company has taken all reasonable steps to protect its rights in confidential information and trade secrets of the Company or provided by any other Person to the Company.
(d) Neither this Agreement nor the transactions contemplated by this Agreement, including any assignment to Parent by operation of law as a result of the Merger of any Contracts to which the Company is a party, will result in (i) Parent, any of its affiliates or the Surviving Entity granting to any third party any incremental right to or with respect to or non-assertion under any Proprietary Assets owned by, or licensed to, any of them; (ii) Parent, any of its affiliates or the Surviving Entity, being bound by, or subject to, any incremental non-compete or other incremental material restriction on the operation or scope of their respective businesses; (iii) Parent, any of its affiliates or the Surviving Entity being obligated to pay any incremental royalties or other material amounts, or offer any incremental discounts, to any third party; or (iv) the Company being required under a Contract to procure or attempt to procure from Parent or any of its subsidiaries a license grant to or covenant not to assert in favor of any Person. As used in this
Section 2.7(d), an "incremental" right, non-compete, restriction, royalty or discount refers to a right, non-compete, restriction, royalty or discount, as applicable, in excess, whether in terms of contractual term, contractual rate or scope, of those that would have been required to be offered or granted, as applicable, had the parties to this Agreement not entered into this Agreement or consummated the transactions contemplated hereby.

(e) With respect to the use of software in the business of the Company as such business is currently conducted, to the knowledge of the Company, no such software contains defects in its operation or any device or feature designed to disrupt, disable, or otherwise impair the functioning of any software. Such software has been validated for its use. There have been no material security breaches in the Company's information technology systems, and there have been no disruptions in the Company's information technology systems that materially adversely affected such Company's business or operations.

(f) All products of the Company ("Company Product") conform in all material respects with all applicable contractual commitments and all express and implied warranties, the Company's published product specifications and with all regulations, certification standards and other requirements of any applicable governmental entity or third party. Except as set forth in the Company Financial Statements, no claims against the Company are pending or have been asserted for liability for replacement or modification of any Company Product or other damages in connection therewith other than in the ordinary course of business. There are no known material defects in the design or technology embodied in any Company Product which impair or are likely to impair the intended use of such Company Product. There is no presently pending, or, to the knowledge of the Company, threatened, and, to the knowledge of the Company, there is no basis for, any civil, criminal or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, proceedings or demand letters relating to any alleged hazard or alleged defect in design, manufacture, materials or workmanship, including any failure to warn or alleged breach of express or implied warranty or representation, relating to any Company Product. The Company has not extended to any of its customers any written product warranties, indemnifications or guarantees that deviate in any material respect from the standard product warranties, indemnification arrangements or guarantees of the Company.
2.8 CONTRACTS.

(a) For purposes of this Agreement, each of the following shall be deemed to constitute a "Company Material Contract", which Company Material Contracts and all amendments thereto, in each case as of the date of this Agreement are listed on Schedule 2.8 of the Company Disclosure Letter:

(i) any Company Contract relating to (A) the employment of any employee or the services of any independent contractor or consultant and pursuant to which any of the Company is or may become obligated to make any severance or termination payment in excess of $25,000 or (B) any bonus, relocation or other payment in excess of a material amount to any current or former employee, independent contractor, consultant, officer or director (other than payments, in the case of (A) and (B) above, in respect of salary or pursuant to standard severance policies, existing bonus plans or standard relocation policies of the Company which are listed on Schedule 2.8 or Schedule 2.13(a) of the Company Disclosure Letter);

(ii) any Company Contract relating to the acquisition, transfer, development, sharing or license of any material Proprietary Asset (except for any Company Contract pursuant to which (A) any Proprietary Asset is licensed to the Company under any third party software license generally available for sale to the public ("Material Company IP Contract"), or (B) any material Proprietary Asset is licensed by the Company to any customer in connection with the sale of any product in the ordinary course of business consistent with prior practice);
(iii) any Company Contract with any officer, director or affiliate of the Company;
(iv) any Company Contract creating or relating to any partnership or joint venture or any sharing of revenues, profits, losses, costs or liabilities, under which the Company has continuing material obligations;
(v) any Company Contract that involves the payment or expenditure by the Company in excess of $25,000 that may not be terminated by such the Company (without penalty) within 30 days after the delivery of a termination notice by the Company, without cost or other liability;

(vi) any Company Contract contemplating or involving the payment or delivery of cash or other consideration to the Company in excess of $25,000;
(vii) any Company Contract imposing any restriction on the right or ability of the Company to (A) compete with any other Person, (B) acquire any material product or other material asset or any services from any other Person, sell any material product or other material asset to or perform any services for any other Person or transact business or deal in any other manner with any other Person, or (C) develop or distribute any material technology;

(viii) any Company Contract granting or receiving manufacturing rights, "most favored" pricing provisions or exclusive marketing or distribution rights relating to any product, service or territory;

(ix) any lease or other Company Contract relating to real property;
(x) any indenture, mortgage, promissory note, loan agreement, guarantee or other agreement or commitment for the borrowing of money, for a line of credit of for a leasing transaction of a type required to be capitalized in accordance with Statement of Financial Accounting Standards No. 13 of the Financial Accounting Standards Board; and

(xi) any other Company Contract, if a breach of such Company Contract could reasonably be expected to have a Material Adverse Effect on the Company.

(b) Each Company Material Contract is valid and in full force and effect, and is enforceable in accordance with its terms subject to (A) Legal Requirements of general application relating to bankruptcy, insolvency and the relief of debtors, and (B) rules of law governing specific performance, injunctive relief and other equitable remedies, except to the extent they have expired in accordance with their terms and except where the failure to be in full force and effect, individually or in the aggregate, would not reasonably be expected to be material to the Company. The Company has delivered to or made available to Parent true and complete copies of each Company Material Contract, except in the case of a Company Material Contract which is derived from a standard form agreement of the Company, the Company has delivered to or made available to Parent a form or forms of such agreement. In each case where a Company Material Contract is derived from a standard form agreement, all of the terms, conditions and provisions of such Company Material Contract are substantially similar with respect to material terms to the form agreement from which such agreement derived.

(c) The Company has not materially violated or breached, or committed any material default under, any Company Material Contract. To the Company's knowledge, no other Person has materially violated or breached, or committed any material default under, any Company Material Contract.
(d) To the Company's knowledge, no event has occurred, and no circumstance or condition exists, including, without limitation, the transactions and events contemplated hereby, that (with or without notice or lapse of time) could reasonably be expected to
(i) result in a material violation or breach of any provision of any Company Material Contract by the Company; (ii) give any Person the right to declare a material default or exercise any remedy under any Company Material Contract; (iii) give any Person the right to accelerate the maturity or performance of any Company Material Contract; or (iv) give any Person the right to cancel or terminate, or modify in any material respect, any Company Material Contract.
2.9 LIABILITIES.

Since the Company Balance Sheet Date, the Company has not any accrued, contingent or other liabilities of any nature, either matured or unmatured (whether due or to become due) required to be reflected in financial statements prepared in accordance with GAAP, except for: (a) normal and recurring liabilities that have been incurred by the Company since the Company Balance Sheet Date in the ordinary course of business consistent with prior practice; and (b) liabilities incurred in connection with the transactions contemplated by this Agreement.

2.10 COMPLIANCE WITH LEGAL REQUIREMENTS.

(a) The Company is in compliance in all material respects with all applicable Legal Requirements. Within the past three years, the Company has not received any written notice or, to the Company's knowledge, other communication from any Governmental Body regarding any actual or possible material violation of, or failure to comply in any material respect with, any Legal Requirement.

(b) Except as would not, individually or in the aggregate, have a Material Adverse Effect on the Company, the Company is in possession of all franchises, grants, authorizations, licenses, establishment registrations, product listings, permits, easements, variances, exceptions, consents, certificates, clearances, approvals and orders of any Government Body necessary for the Company to own, lease and operate its properties or to develop, produce, store, distribute, promote and sell Company Products or otherwise to carry on its business as it is now being conducted (collectively, the "Company Permits"), and, as of the date of this Agreement, such Company Permits are in full force and effect and no suspension or cancellation of any of the Company Permits is pending or, to the knowledge of the Company, threatened, except where the failure to have, or the suspension or cancellation of, any of the Company Permits would not, individually or in the aggregate, have a Material Adverse Effect on the Company. Except for conflicts, defaults or violations which, individually or in the aggregate, would not have a Material Adverse Effect on the Company, the Company is not in conflict with, or in violation or default of, (i) any law applicable to the Company or by which any property, asset, operation, or product of the Company is bound or affected, or
(ii) any Company Permit.

(c) Except as would not, individually or in the aggregate, have a Material Adverse Effect on the Company:

(i) all necessary clearances or approvals from governmental agencies for all Company Products have been obtained, and the Company is in substantial compliance with the most current form of each applicable clearance, approval, or regulatory standards applicable to devices for which no clearance or approval is required, with respect to the development, design, manufacture, labeling, storage, distribution, promotion and sale by the Company of such products; and

(ii) the Company has not received any written notice within the past three years that any Governmental Body (including non-U.S. regulatory agencies) has commenced, or threatened to initiate, any action to withdraw its clearance or approval, or to request the recall of, any product of the Company, or commenced, or overtly threatened to initiate any action to enjoin production at any facility of the Company.
2.11 GOVERNMENTAL AUTHORIZATIONS.

The Company holds all Governmental Authorization necessary to enable it to conduct its business in the manner in which such business is currently being conducted except where the failure to hold such Governmental Authorizations would not be reasonably likely to have a Material Adverse Effect on the Company. All such Governmental Authorizations are valid and in full force and effect subject to (A) Legal Requirements of general application relating to bankruptcy, insolvency and the relief of debtors, and (B) rules of law governing specific performance, injunctive relief and other equitable remedies, except to the extent they have expired in accordance with their terms and except where the failure to be in full force and effect, individually or in the aggregate, would not reasonably be expected to be material to the Company. The Company is in compliance in all material respects with the terms and requirements of such Governmental Authorizations. Except as set forth in Schedule 2.11 of the Company Disclosure Letter, the consummation of the transactions contemplated by this Agreement will not affect the validity of any Governmental Authorization held by the Company. The Company has received any notice or other communication from any Governmental Body regarding (a) any actual or possible violation of or failure to comply in any material respect with any term or requirement of any Governmental Authorization; or (b) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any Governmental Authorization.

2.12 TAX MATTERS.

(a) The Company has paid or provided adequate reserves for all Taxes, due and payable for or with respect to all periods up to and including the Effective Date, whether or not such Taxes were shown on any Tax Return, and without regard to whether such Taxes are or were disputed.

(b) The Company has filed on a timely basis (taking into account any extensions of time granted) all Tax Returns that each was required to file and all such returns are complete in all respects. The Company is not currently the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made to the Company by an authority in a jurisdiction where the Company does not file Tax Returns that s or may be subject to taxation by that jurisdiction nor is there a reasonable basis to expect such a claim. Schedule 2.12(b) contains a list of all jurisdictions in which the Company files Tax Returns. The Company has not given any currently effective waiver of any statute of limitations in respect of Taxes or agreed to any currently effective extension of time with respect to a Tax assessment or deficiency. The Company has not granted to any Person any power of attorney that is currently in force with respect to any Tax matter. There are no Encumbrances for Taxes on any of the assets of the Company (other than liens for Taxes not yet due and payable).

(c) The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.
(d) There has been no dispute or claim concerning any liability for Taxes of the Company (i) claimed or raised by any authority for which notice has been given or (ii) as to which such Company, or any of its directors or offices has knowledge, and there is no reasonable basis to suspect any such claim or dispute might arise. Schedule 2.12 to the Company Disclosure Letter sets forth as of the date of this Agreement a complete and accurate list of current open audits of Tax Returns filed by or on behalf of the Company with any Governmental Body.
(e) The unpaid Taxes of the Company (i) did not, as of the date of the most recent Company Financial Statements, exceed the reserve for Tax Liability (as opposed to any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth in the Company Balance Sheet and (ii) will not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Company and in filing its Tax Returns. The Company is not a party to any Tax allocation or sharing agreement. The Company has not been a "distributing corporation" or a "controlled corporation" as those terms are defined in
Section 355(a)(1) of the Code. The Company (i) has not been a member of an "affiliated group."

2.13 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS.

(a) Schedule 2.13(a) of the Company Disclosure Letter lists as of the date of this Agreement (i) all employee pension benefit plans (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), (ii) all employee welfare benefit plans (as defined in Section 3(1) of ERISA), (iii) all other pension, bonus, commission, stock option, stock purchase, incentive, deferred compensation, supplemental retirement, severance, fringe benefits and other similar benefit plans (including any fringe benefit under Section 132 of the Code and any foreign plans), programs, Contracts, arrangements or policies, and (iv) any employment, executive compensation or severance agreements, whether written or otherwise, as amended, modified or supplemented, of the Company or any other Entity (whether or not incorporated) which is a member of a controlled group which includes Company or which is under common control with Company within the meaning of Sections 414(b), (c), (m) or
(o) of the Code or Section 4001(a) (14) or (b) of ERISA (each a "Company ERISA Affiliate") for the benefit of, or relating to, any former or current employee, independent contractor, officer or director (or any of their beneficiaries) of the Company or any other Company ERISA Affiliate (all such plans, programs, Contracts, agreements, arrangements or policies as described in this Section 2.13(a) shall be collectively referred to as the "Company Employee Plans"). The Company has made available to Parent, true and complete copies of (i) each such written Company Employee Plan (or a written description of any Company Employee Plan which is not written) and all related trust agreements, insurance and other contracts (including policies), summary plan descriptions, summaries of material modifications, registration statements (including all attachments), prospectuses and communications distributed to plan participants, (ii) the three most recent annual reports on Form 5500 series, with accompanying schedules and attachments (including accountants' opinions, if applicable), filed with respect to each Company Employee Plan required to make such a filing, (iii) the most recent actuarial valuation for each Company Employee Plan subject to Title IV of ERISA, and (iv) the most recent favorable determination letters issued for each Company Employee Plan and related trust which is intended to be qualified under Section 401(a) of the Code (and, if an application for such determination is pending, a copy of the application for such determination).

(b) (i) None of the Company Employee Plans promises or provides post-termination or retiree medical or other post-termination or retiree welfare benefits to any person (other than continuation coverage to the extent required by law, whether pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 or otherwise); (ii) none of the Company Employee Plans is a "Multiple Employer Welfare Arrangement" (as defined in Section 3(40) of ERISA), a "Multiple Employer Plan" (as defined in
Section 413(c) of the Code), or a "Multiemployer Plan" (as defined in Section 3(37) of ERISA), and neither the Company nor any Company ERISA Affiliate has ever contributed to, been required to contribute to, or otherwise had any obligation or liability in connection with a Multiple Employer Plan or a Multiemployer Plan; (iii) no party in interest or disqualified person (as defined in Section 3(14) of ERISA and Section 4975 of the Code, respectively) has at any time engaged in a transaction with respect to any Company Employee Plan which could subject Company, directly or indirectly, to any material tax, material penalty or other material liability for prohibited transactions under ERISA or Section 4975 of the Code; (iv) no fiduciary of any Company Employee Plan has breached any of the responsibilities or obligations imposed upon fiduciaries under Title I of ERISA which shall subject Company, directly or indirectly, to any material penalty or liability for breach of fiduciary duty; (v) all Company Employee Plans have been established, maintained and operated in accordance with their terms and have been established, maintained and operated in substantial compliance with all applicable Legal Requirements, including good faith compliance with Section 409A of the Code; (vi) all Company Employee Plans may by their terms be amended and/or terminated at any time without the consent of any other Person subject to applicable Legal Requirements and the terms of each Company Employee Plan; (vii) the Company has performed all obligations required to be performed by them under, and are not in any respect in default under or in violation of, the terms and conditions of any Company Employee Plan; (viii) the Company has no knowledge of any default or violation by any other Person with respect to any of the Company Employee Plans; (ix) each Company Employee Plan which is intended to be qualified under Section 401(a) of the Code and each trust intended to qualify under
Section 501(a) of the Code is the subject of a favorable determination letter from the Internal Revenue Service as to its qualified status under Section 401(a) of the Code (or comparable letter, such as an opinion or notification letter as to the form of plan adopted by the Company), or has time remaining under applicable Treasury guidance to seek such a determination, and to the Company's knowledge nothing has occurred prior to or since the issuance of such letter (or could reasonably be expected to occur) which might impair such favorable determination or otherwise impair the qualified status of such plan; (x) the Company is not currently subject to any penalty or tax with respect to any Company Employee Plan under Section 502(i) of ERISA or 4975 through 4980F of the Code or has any outstanding liability for any penalty or tax which is not otherwise reserved for or reflected in the Company Financial Statements; (xi) all material contributions required to be made or reserved, and all material premiums required to be paid by the Company, with respect to any Company Employee Plan pursuant to the terms of the Company Employee Plan, any Legal Requirements or any collective bargaining agreement, have been made, paid or reserved on or before their due dates (including any extensions thereof); (xii) all Company Employee Plans required to be insured or funded are either fully insured or funded by a related trust, and for each Company Employee Plan that is funded by a related trust, the fair market value of the assets of the related trust are at least equal to the liabilities of such Company Employee Plan; (xiii) there are no audits, inquiries or proceedings pending or threatened by the Internal Revenue Service or the Department of Labor with respect to any Company Employee Plan; and (xiv) no Company Employee Plan other than a Company Employee Plan intended to qualify under Section 401(a) of the Code provides for post- employment or retiree benefits.
(c) Neither the Company nor any other Company ERISA Affiliate currently maintains, sponsors or participates in, or has maintained, sponsored or participated in, or has any liability, contingent or otherwise, to, any "Employee Benefit Plan" (as defined in Section 3(3) of ERISA) that is subject to Section 412 of the Code or Title IV of ERISA or that is or may be a "multi- employer plan" (as defined in Section 3(37) of ERISA).

(d) There are no Legal Proceedings pending or, to the knowledge of the Company, threatened in respect of or relating to any Company Employee Plan. To the Company's knowledge, there are no facts or circumstances which could reasonably be expected to give rise to any such Legal Proceeding (other than routine benefit claims) in respect of or relating to any Company Employee Plan.

(e) The Company has never maintained an employee stock ownership plan (within the meaning of Section 4975(e)(7) of the Code) or any other Company Employee Plan that invests in Company capital stock. Since December 31, 2006, the Company has not proposed or agreed to any increase in benefits under any Company Employee Plan (or the creation of new benefits) or change in employee coverage which would increase the expense of maintaining any Company Employee Plan. Except for the anticipated acceleration of vesting of Company Options as described in Schedule 2.3(b) of the Company Disclosure Letter, no person will be entitled to any severance benefits, acceleration of vesting of any the Company Options or the extension of any period during which any Company Options may be exercised, under the terms of any Company Employee Plan as a result of the consummation of the transactions contemplated by this Agreement (either solely as a result thereof or as a result of such transactions in conjunction with another event).
(f) There are no controversies pending or, to the knowledge of the Company, threatened, between Company and any of their respective foreign or domestic former or current employees, officers, directors, independent contractors or consultants (or any of their beneficiaries), (ii) there is no labor strike, dispute, slowdown, work stoppage or lockout actually pending or, to the knowledge of the Company, threatened against or affecting the Company, (iii) the Company is not a party to or bound by any collective bargaining or similar agreement with any labor organization, or work rules or practices agreed to with any labor organization or employee association applicable to employees of the Company, (iv) none of the employees of the Company are represented by a labor organization or group that was either certified or voluntarily recognized by any labor relations board and no union organizing campaign or other attempt to organize or establish a labor union, employee organization or labor organization involving employees of the Company has occurred, is in progress or, to the knowledge of the Company, is threatened,
(v) the Company has at all times been in compliance in all material respects with all applicable Legal Requirements governing or concerning labor relations, conditions of employment, employment discrimination or harassment, wages, hours, or occupational safety and health, and with any collective bargaining agreements (both foreign and domestic), (vi) there is no unfair labor practice charge or complaint against Company pending or, to the knowledge of the Company, threatened before the National Labor Relations Board or any similar state or foreign agency, (vii) there is no grievance or arbitration demand or proceeding arising out of any collective bargaining agreement or other grievance procedure relating to the Company pending, or to the knowledge of the Company, threatened, against the Company,
(viii) the Company is not a federal or state contractor, (ix) to the Company's knowledge, neither the Occupational Safety and Health Administration nor any corresponding state or foreign agency is threatening to file any citation or complaint, and there are no pending citations or complaints, relating to the Company, and (x) there are no complaints, charges or claims against the Company pending or, to the knowledge of the Company, threatened, which could be brought or filed with any Governmental Body, court or arbitrator based on, arising out of, in connection with, or otherwise relating to the employment of, termination of employment of, or failure of the Company to employ any individual. To the knowledge of the Company, there are no pending, threatened or reasonably anticipated claims against Company under any workers' compensation disability policy or long- term policy.
(g) No amount required to be paid or payable to or with respect to current or former employee of Company in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other event) will be an "excess parachute payment" within the meaning of Section 280G of the Code or will not be deductible under Sections 162(a)(1) or 404 of the Code.
(h) Set forth on Schedule 2.13(l) of the Company Disclosure Letter is a list of all employees of the Company as of the date of this Agreement together with respect to each such employee (i) the employee's base salary and (ii) any severance that would be due upon termination with or without cause of such employee (other than pursuant to (A) severance or bonus policies or employment or change of control agreements in each case as in effect on the date of this Agreement and listed on Schedule 2.8(a) or Schedule 2.13(a) of the Company Disclosure Letter, or (B) Legal Requirements applicable to the Company which is formed or incorporated under the laws of a foreign jurisdiction). Schedule 2.13(l) of the Company Disclosure Letter also sets forth with respect to each Company employee accrued paid time off payable to each such employee as of December 31, 2007.
(i) The Company has not taken any action that would constitute a "mass layoff," "mass termination" or "plant closing" within the meaning of the United States Worker Adjustment and Retraining Notification Act ("WARN Act") or otherwise trigger notice requirements or liability under any federal, local, state, or foreign plant closing notice or collective dismissal law.

(j) The Company is in compliance with all immigration and naturalization Legal Requirements relating to employment and employees, the Company has properly completed and maintained in all material respects all applicable forms (including I-9 forms), there are no citations, investigations, enforcement proceedings or formal complaints concerning immigration or naturalization Legal Requirements pending or, to the knowledge of the Company, threatened before the United States Citizenship and Immigration Services or any related federal, state, foreign or administrative agency or court, involving or against the Company, and the Company has not received notice of any violation of any immigration and naturalization Legal Requirement.

(k) The classification by the Company or a Company ERISA Affiliate of individuals as employees or independent contractors has been made in compliance with all applicable Legal Requirements. Neither the Company nor any of its Company ERISA Affiliates has (i) used the services or workers provided by third party contract labor suppliers, temporary employees, "leased employees" (as that term is defined in Section 414(n) of the Code), or individuals who have provided services as independent contractors to an extent that would reasonably be expected to result in the disqualification of any of the Company Employee Plans or the imposition of penalties or excise taxes with respect to the Company Employee Plans by the IRS, the Department of Labor, or the Pension Benefit Guaranty Corporation.
2.14 ENVIRONMENTAL MATTERS.

The Company is in compliance with all applicable Environmental Laws, which compliance includes the possession by the Company of all material permits and other Governmental Authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof, except where the failure to so comply would not result in a material liability or clean up obligation on the Company. Except as set forth on Schedule 2.14 of the Company Disclosure Letter, the consummation of the transactions contemplated by this Agreement will not affect the validity of such material permits and Governmental Authorizations held by the Company, and will not require any filing notice, or remediation under any Environmental Law. To the knowledge of the Company (including as set forth in that certain ASTM Screen/Limited Assessment of 44 Hunt Street, Watertown, MA Project #708-520 dated May 16, 2008, performed by IES, Inc., a copy of which has been provided to Buyer (the "IES Report")), there are no past or present events, conditions, activities, or practices which would reasonably be expected to prevent the Company's or the Surviving Entity's compliance in all material respects with any Environmental Law, or which would reasonably be expected to give rise to any material liability of the Company under any Environmental Law. Other than as set forth within the IES Report, within the past seven years, the Company has not received any written notice, or to its knowledge, other communication (in writing or otherwise) that alleges that the Company is not in compliance with any Environmental Law, and the Company has no knowledge of any circumstances that would reasonably be expected to result in such claims or communications. To the Company's knowledge, no current or prior owner of any property owned, leased or controlled by the Company has received any written notice or other communication (in writing or otherwise) that alleges that such current or prior owner or the Company is not in substantial compliance with any Environmental Law in such a manner as would be reasonably likely to result in a material liability or clean up obligation on the Company. The Company has not assumed by contract, agreement or otherwise any liabilities or obligations arising under any Environmental Law, or is currently performing any required investigation, response or other corrective action under any Environmental Law. To the knowledge of the Company, there are no underground storage tanks or related piping on any real property leased or controlled by or used by the Company, and any former such tanks and piping have been removed or closed in accordance with applicable Environmental Laws. To the Company's knowledge, all real property that is owned by, leased to, controlled by or used by the Company is free of any friable asbestos or asbestos- containing material.

2.15 LEGAL PROCEEDINGS; ORDERS.

Except as set forth in Schedule 2.15 of the Company Disclosure Letter, there is no pending Legal Proceeding and within the past 24 months no Person has threatened in writing to commence any Legal Proceeding, that involves the Company or any of the assets owned or used by the Company, in each case which would be reasonably likely to be material to the Company; and there is no Order to which the Company, or any of the material assets owned or used by the Company, is subject.

2.16 VOTE REQUIRED.

The holders of the shares of Company Common Stock outstanding as of the date hereof have voted unanimously to approve this Agreement and otherwise approve and consummate the Merger as set forth herein.

2.17 FOREIGN CORRUPT PRACTICES ACT.

Neither the Company, any of the Company's officers, directors, nor, to the Company's knowledge, any employees or agents, distributors, representatives or other persons acting on the express, implied or apparent authority of the Company, have paid, given or received or have offered or promised to pay, give or receive, any bribe or other unlawful payment of money or other thing of value, any unlawful discount, or any other unlawful inducement, to or from any person or Governmental Body in the United States or elsewhere in connection with or in furtherance of the business of the Company (including any unlawful offer, payment or promise to pay money or other thing of value (a) to any foreign official, political party (or official thereof) or candidate for political office for the purposes of influencing any act, decision or omission in order to assist the Company in obtaining business for or with, or directing business to, any person, or (b) to any person, while knowing that all or a portion of such money or other thing of value will be offered, given or promised unlawfully to any such official or party for such purposes). The business of the Company is not in any manner dependent upon the making or receipt of such unlawful payments, discounts or other inducements. The Company has not otherwise taken any action that could cause the Company or the Company to be in violation of the Foreign Corrupt Practices Act of 1977, as amended, the regulations thereunder, or any applicable Legal Requirements of similar effect.

2.18 REAL PROPERTY.

Except as set forth in Schedule 2.18 of the Company Disclosure Letter, the Company has good and marketable title to, or a valid leasehold interest in, all of its real properties, in each case free and clear of all Encumbrances. Schedule 2.18 of the Company Disclosure Letter sets forth a true, correct and complete list of all real property owned by the Company at any time during the past five years and a true and correct list of all real property currently leased by the Company identifying, with respect to each lease of such real property, the date of, the parties to, and any amendments, modifications, extensions or other supplements to such lease. The Company has not sent or received any written notice of any default under any of the leases of real property to which it is party. The Company is not in material breach of, or in default in any material respect under, any covenant, agreement, term or condition of or contained in any lease of real property to which it is a party and there has not occurred any event that with the lapse of time or the giving of notice or both could constitute such a default or breach.

2.19 INSURANCE POLICIES.

The Company has delivered to Parent prior to the date hereof a complete and accurate list of all insurance policies in force naming the Company or any director, officer or employee thereof as an insured or beneficiary or as a loss payable payee or for which the Company has paid or is obligated to pay all or part of the premiums. The Company has not received notice of any pending or threatened cancellation or premium increase (retroactive or otherwise) with respect thereto, the Company is in compliance in all material respects with all conditions contained therein. There are no material pending claims against such insurance policies by the Company as to which insurers are defending under reservation of rights or have denied liability, and there exists no material claim under such insurance policies that has not been properly filed by the Company. Except for the self-insurance retentions or deductibles set forth in the policies contained in the aforementioned list, the policies are adequate in scope and amount to cover all prudent and reasonably foreseeable risks which may arise in the conduct of the business of the Company that would reasonably be expected to have a Material Adverse Effect on the Company.

2.20 FINANCIAL ADVISOR.

No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the Merger or any of the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

2.21 AFFILIATE TRANSACTIONS.

Schedule 2.21 of the Company Disclosure Letter contains a complete and correct list, as of the date of this Agreement, of all agreements, contracts, transfers of assets or liabilities or other commitments or transactions, whether or not entered into in the ordinary course of business, to or by which the Company, on the one hand, and any of its respective officers or directors (or any of their respective Affiliates, other than the Company) on the other hand, are or have been a party or otherwise bound or affected, and that (a) are currently pending, in effect or have been in effect during the past 12 months, (b) involve continuing liabilities and obligations that, individually or in the aggregate, have been, are or will be material to the Company, taken as a whole and (c) are not Company Employee Plans disclosed in Schedule 2.13(a) of the Company Disclosure Letter.

2.22 CUSTOMERS.

Schedule 2.22 of the Company Disclosure Letter lists the customers of the Company for the last completed fiscal year (in decreasing order of gross sales). Except as disclosed in Schedule 2.22, the Company has not received any written notice, or to the knowledge of the Company, any verbal notice or threats by such customers with respect to termination, cancellation or limitation of, or adverse modification or change in, the business relationship of the Company or any business with any customer or customers whose purchases are individually or in the aggregate material to the Company.

2.23 DISCLOSURE.

No representation or warranty made by the Company or the Stockholder, nor any information or statement contained on the Company Disclosure Letter or in any exhibit or schedule hereto or in any certificate to be delivered by Stockholder or the Company pursuant hereto, contains or will contain any untrue statement of a material fact, or omits or will omit a material fact necessary to make the statements of fact herein or therein not misleading in light of the circumstances under which they were made.

SECTION 2A. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

Except as disclosed in the Company Disclosure Letter to Parent and Merger Sub prior to the execution and delivery of this Agreement, each Stockholder severally, but not jointly, hereby represents and warrants to Parent and Merger Sub, as follows.

SECTION 2A.1 AUTHORIZATION; TITLE.

The Stockholder is authorized to enter into this Agreement, to perform his obligations hereunder and to consummate the transactions contemplated hereby, without violating any agreement by which Stockholder or the Company is bound. The Stockholder has good, marketable, unencumbered title to the Company Common Stock that it owns, and will transfer such stock free and clear of any Encumbrance.

SECTION 2A.2 INVESTMENT INTENT.

(a) The Stockholder is purchasing the Parent Common Stock for the Stockholder's own account and with no intention of distributing or reselling the Parent Common Stock in any transaction which would be in violation of the securities laws of the United States of America or any state thereof, or in any transaction that would subject the issuance and sale of the Parent Common Stock pursuant to this Agreement to the registration requirements of the Securities Act and applicable state securities laws. The Stockholder understands that the Shares have not been registered under the Securities Act or the securities laws of any state by reason of a specific exemption from the registration or qualification provisions of the Securities Act or said securities laws, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the representations as expressed herein. The Stockholder understands that the Company has no obligation to register the Shares under the Securities Act or any state securities laws.

(b) The Stockholder acknowledges that the Shares must be held indefinitely unless the Shares are so registered or an exemption from such registration is available.

(c) The Stockholder has had an opportunity to discuss the business, management and financial affairs of the Parent and the terms and conditions of an investment in the Parent Common Stock with, and has had access to, the management of the Parent and he has had the opportunity to review the information set forth in the Parent's public filings and any other information requested by the Stockholder.

(d) The Stockholder understands and acknowledges that the Parent will be relying upon the Stockholder's representations and warranties set forth herein in offering and selling the Parent Common Stock to him.

(e) The Stockholder represents that the offering to him of the Parent Common Stock was made only through direct, personal communication between the undersigned Stockholder and a representative of the Parent and not through public solicitation or advertising.

(f) The Stockholder did not retain or consult any "Purchaser Representative", as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

(g) The Stockholder has such knowledge, experience and skill in evaluating and investing in securities, based on actual participation in financial, investment and business matters such that he is capable of evaluating the merits and risks of an investment in the Parent Common Stock, and has such knowledge, experience and skill in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment in the Parent and the suitability of the Parent Common Stock as an investment for himself.

(h) The Stockholder has not received, and is not relying on, any representations or warranties from the Parent or any other person, other than those contained in this Agreement.

(i) The Stockholder is able to bear the economic risk of an investment in the Parent Common Stock and has an adequate income independent of any income produced from an investment in the Parent Common Stock and has sufficient net worth to sustain a loss of all of his investment in the Parent Common Stock without economic hardship if such a loss should occur. Other than Fritz Wald and Doris, the Stockholder is an "accredited investor" as defined in Rule 501(a) under the Securities Act.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Except as disclosed in Parent SEC Documents filed prior to the date hereof or the Disclosure Letter delivered by Parent and Merger Sub to the Company prior to the execution and delivery of this Agreement (the "Parent Disclosure Letter") and referred to in the section of the Parent Disclosure Letter corresponding to the section(s) of this Section 3 to which such disclosure applies (unless it is reasonably apparent from the face of such disclosure that the disclosure or statement in one section of the Parent Disclosure Letter should apply to one or more sections thereof), Parent and Merger Sub represent and warrant to the Company as follows:

3.1 DUE ORGANIZATION; SUBSIDIARIES.

Parent is a corporation duly organized, validly existing and in good standing under the Legal Requirements of the jurisdiction of its incorporation, and each of the other Dynasil Corporations which is a "significant subsidiary" (as defined in Regulation S-X) of Parent is a corporation duly organized, validly existing and in good standing under the Legal Requirements of the jurisdiction of its incorporation or formation. Each of the Dynasil Corporations has all necessary power and authority: (a) to conduct its business in the manner in which its business is currently being conducted; (b) to own and use its assets in the manner in which its assets are currently owned and used; and (c) to perform its material obligations under all Parent Material Contracts. Each of the Dynasil Corporations is qualified to do business as a foreign corporation, and is in good standing, under the Legal Requirements of all jurisdictions where the failure to be so qualified would have a Material Adverse Effect on the Dynasil Corporations. Parent has delivered or made available to the Company accurate and complete copies of the certificate of incorporation, bylaws and other charter or organizational documents of each of the Dynasil Corporations, including all amendments thereto (collectively, the "Parent Organization Documents"). Parent has no Subsidiaries, except for the corporations identified in Schedule 3.1 of the Parent Disclosure Letter. Parent and each of its Subsidiaries are collectively referred to herein as the "Dynasil Corporations". None of the Dynasil Corporations has any equity interest or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any Entity, other than the Dynasil Corporations' interests in their Subsidiaries identified in Schedule 3.1 of the Parent Disclosure Letter.

3.2 AUTHORITY; BINDING NATURE OF AGREEMENT.

Each of Parent and Merger Sub has all requisite corporate power and authority to enter into and, subject to the receipt of the stockholder approval contemplated by Section 5.2, to perform its obligations under this Agreement. This Agreement constitutes the legal, valid and binding obligation of Parent and Merger Sub, enforceable against Parent and Merger Sub in accordance with its terms, subject to (a) Legal Requirements of general application relating to bankruptcy, insolvency and the relief of debtors, (b) rules of law governing specific performance, injunctive relief and other equitable remedies and
(c) the approval of the stockholders of Parent. Parent hereby represents that its Board of Directors, at a meeting duly called and held on or prior to the date hereof, has by unanimous vote
(i) determined that the Merger is in the best interests of Parent and its stockholders, and (ii) approved, adopted and declared advisable this Agreement, the Merger and the other transactions contemplated by this Agreement. Merger Sub hereby represents that its Board of Managers, by unanimous written consent, approved and adopted this Agreement, declared it advisable and approved the Merger and the other transactions contemplated by this Agreement, and recommended that the Parent adopt this Agreement. Parent hereby represents that it, as the sole member of Merger Sub, will approve and adopt this Agreement, the Merger and the other transactions contemplated by this Agreement immediately after the execution and delivery of this Agreement by the parties hereto.

3.3 CAPITALIZATION, ETC.

(a) The authorized capital stock of Parent consists of: (i) 25,000,000 shares of Parent Common Stock and (ii) 10,000,000 shares of Parent Preferred Stock. As of As of June 17, 2008, 6,478,507 shares of Parent Common Stock have been issued or are outstanding (excluding 810,160 shares of treasury stock) and 710,000 shares of Series B Preferred Stock, par value $0.001 per share (the "Parent Preferred Stock") are outstanding, convertible into 944,300 shares of Parent Common Stock are outstanding. 810,160 shares of Parent Common Stock are held in Parent's treasury and none are held by any of Parent's Subsidiaries. All of the outstanding shares of Parent Common Stock have been duly authorized and validly issued, and are fully paid and nonassessable. None of the outstanding shares of Parent Common Stock is entitled or subject to any preemptive right, right of participation, right of maintenance or any similar right or subject to any right of first refusal in favor of Parent. There is no Contract to which Parent is a party and, to Parent's knowledge, there is no Contract between other Persons, relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of, any shares of Parent Common Stock. None of the Dynasil Corporations is under any obligation, or is bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding shares of Parent Common Stock, other than those relating to the transactions contemplated hereby and the sale of Series C Preferred Stock to provide funds.

(b) Parent has delivered or made available to Company accurate and complete copies of the Parent ESPP, all stock option plans pursuant to which Parent has granted Parent Options, and the forms of all stock option agreements evidencing such options. There have been no repricings of any Parent Options through amendments, cancellation and reissuance or other means during the current or prior two calendar years. None of the Parent Options have been granted in contemplation of the Merger or the transactions contemplated in this Agreement and no Parent Options have been granted since June 11, 2008, after which grant there were 411,459 Parent Options outstanding. Approximately 120,000 options are anticipated to be issued to Jacob Paster as part of the transactions contemplated hereby.. None of the Parent Options were granted with exercise prices below or deemed to be below fair market value on the date of grant. All grants of Parent Options were validly made and properly approved by the board of directors of Parent (or a duly authorized committee or subcommittee thereof) in compliance with all applicable law and recorded on the Parent Financial Statements in accordance with GAAP, and no such grants involved any "back dating," "forward dating" or similar practices with respect to such grants.

(c) Except as set forth in Section 3.3(a) or Section 3.3(b) above, there is no: (i) outstanding commitment, subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of any of the Dynasil Corporations; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of any of the Dynasil Corporations;
(iii) rights agreement, stockholder rights plan or similar plan commonly referred to as a "poison pill"; or (iv) Contract under which any of the Dynasil Corporations are or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities ("Parent Rights Agreements") (items (i) through
(iv) above, collectively, "Parent Stock Rights").
(d) All outstanding shares of Parent Common Stock, all outstanding Parent Options and all outstanding shares of capital stock of each Subsidiary of Parent have been issued and granted in compliance with (i) all applicable securities laws and other applicable Legal Requirements, and (ii) all requirements set forth in Contracts applicable to the issuance of Parent Common Stock, granting Parent Options and/or the issuance of shares of capital stock of any Parent Subsidiary. All of the outstanding shares of capital stock of each of the Parent's Subsidiaries have been duly authorized and are validly issued, are fully paid and nonassessable and, except as required by Legal Requirements applicable to each of the Dynasil Corporations which is formed or incorporated under the laws of a foreign jurisdiction, are owned beneficially and of record by Parent, free and clear of any Encumbrances. Schedule 3.3(d) of the Parent Disclosure Letter sets forth all entities (other than Subsidiaries) in which any of the Dynasil Corporations has any ownership interest and the amount of such interest.
(e) Parent directly owns all of the equity interests of Merger Sub.
3.4 NON-CONTRAVENTION; CONSENTS.

Neither the execution, delivery or performance of this Agreement nor the consummation of the Merger, or any of the other transactions contemplated by this Agreement, will directly or indirectly (with or without notice or lapse of time):

(a) contravene, conflict with or result in a violation of any of the provisions of the Parent Organization Documents or any resolution adopted by the stockholders, the Board of Directors or any committee of the Board of Directors of any of the Dynasil Corporations;

(b) contravene, conflict with or result in a violation of, or give any Governmental Body the right to challenge the Merger or any of the other transactions contemplated by this Agreement or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which any of the Dynasil Corporations, or any of the material assets owned or used by any of the Dynasil Corporations, is subject;
(c) contravene, conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any material Governmental Authorization that is held by any of the Dynasil Corporations or that is otherwise material to the business of any of the Dynasil Corporations or to any of the assets owned or used by any of the Dynasil Corporations; or
(d) contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Parent Material Contract (except for any such violation or breach which by its terms can be cured and is so cured within the applicable cure period or where the non-breaching party has no right to accelerate or terminate as a result of such violation or breach), or give any Person the right to (i) declare a default or exercise any remedy under any Parent Material Contract; (ii) accelerate the maturity or performance of any Parent Material Contract; or
(iii) cancel, terminate or modify any term of any Parent Material Contract. Except as may be required by the Securities Act, the Exchange Act, the DGCL and the rules and regulations of the Nasdaq required under any Parent Material Contract, none of the Dynasil Corporations was, is or will be required to make any filing with or give any notice to, or obtain any Consent from, any Person in connection with (x) the execution, delivery or performance of this Agreement, or (y) the consummation of the Merger or any of the other transactions contemplated by this Agreement, except in the case of subsections (x) and (y), where the failure to make such filing, give such notice or obtain any such consent would not have a Material Adverse Effect on the Dynasil Corporations.

3.5 SEC FILINGS; FINANCIAL STATEMENTS.

(a) All statements, reports, schedules, forms, exhibits and other documents required to have been filed by Parent with the SEC since October 1, 2004 (the "Parent SEC Documents") have been so filed. As of their respective dates (or, if amended, supplemented or superseded by a filing prior to the date of this Agreement, then on the date of such amendment, supplement or superseding filing): (i) each of the Parent SEC Documents complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act (as the case may be); and (ii) none of the Parent SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(b) The Parent SEC Documents include all certifications and statements required of it, if any, by (i) Rule 13a-14 or 15d-14 under the Exchange Act, and (ii) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

(c) The financial statements (including related notes, if any) contained in the Parent SEC Documents (the "Parent Financial Statements"): (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements or, in the case of unaudited statements, as permitted by Form 10-QSB of the SEC, and except that the unaudited financial statements may not have contained footnotes and were subject to normal and recurring year-end adjustments which were not, or are not reasonably expected to be, individually or in the aggregate, material); and
(iii) fairly presented in all material respects the consolidated financial position of Parent and its consolidated subsidiaries as of the respective dates thereof and the consolidated results of operations and cash flows of Parent and its consolidated subsidiaries for the periods covered thereby. For purposes of this Agreement, "Parent Balance Sheet" means that consolidated balance sheet of Parent and its consolidated subsidiaries as of September 30, 2007 set forth in the Parent's Annual Report on Form 10-KSB filed with the SEC on December 20, 2007 (the "Parent 10-KSB") and the "Parent Balance Sheet Date" means September 30, 2007.
(d) Parent maintains a system of internal controls sufficient to provide reasonable assurance that (i) transactions are executed with management's authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's authorization; (iv) the recorded amount for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; (v) all information (both financial and non-financial) required to be disclosed by Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC; and (vi) all such information is accumulated and communicated to Parent's management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the Chief Executive Officer and Chief Financial Officer of Parent required under the Exchange Act with respect to such reports. There are no significant deficiencies or material weaknesses in the design or operation of Parent's internal controls, and Parent has not been informed by its independent auditors, accountants, consultants or others involved in the review of internal controls that any such significant deficiencies or material weaknesses exist, which could adversely affect Parent's ability to record, process, summarize and report financial data. There is no fraud in connection with the Parent Financial Statements, whether or not material, that involves management or other employees who have a significant role in Parent's internal controls.
3.6 ABSENCE OF CHANGES.

(a) Since the Parent Balance Sheet Date (except as disclosed in the Parent SEC Documents),

(i) none of the Dynasil Corporations has made any material changes in its pricing polices or payment or credit practices or failed to pay any creditor any material amount owed to such creditor when due or granted any extensions or credit other than in the ordinary course of business consistent with prior practice;

(ii) none of the Dynasil Corporations has terminated or closed any material facility, business or operation;
(iii) none of the Dynasil Corporations has written up or written down any of its material assets; and

(iv) there has been no material loss, destruction or damage to any item of property of the Dynasil Corporations, whether or not insured.

(b) Except as set forth in Schedule 3.6(b) of the Parent Disclosure Letter or in the Parent SEC Documents, since the Parent Balance Sheet Date and through the date of this Agreement:

(i) there has not been any event that has had a Material Adverse Effect on the Dynasil Corporations, and no fact, event, circumstance or condition exists or has occurred that could reasonably be expected to have a Material Adverse Effect on the Dynasil Corporations;

(ii) each of the Dynasil Corporations has operated its respective business in the ordinary course consistent with prior practice;
(iii) none of the Dynasil Corporations has (A) declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of capital stock (other than in connection with the Parent Preferred Stock); (B) repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities; (C) made any capital expenditure which, when added to all other capital expenditures made on behalf of the Dynasil Corporations since the Parent Balance Sheet Date, exceeds $150,000, in the aggregate; (D) made any material Tax election; (E) settled any Legal Proceedings involving amounts in excess of $100,000; or (F) entered into or consummated any transactions with any affiliate;
(iv) none of the Dynasil Corporations has (A) sold or otherwise disposed of, or acquired, leased, licensed, waived or relinquished any material right or other material asset to, from or for the benefit of, any other Person except for rights or other assets sold, disposed of, acquired, leased, licensed, waived or relinquished in the ordinary course of business consistent with prior practice; (B) mortgaged, pledged or subjected to any Encumbrance any of their respective property, business or assets; (C) entered into or amended any lease of real property (whether as lessor or lessee); or (D) canceled or compromised any debt or claim other than accounts receivable in the ordinary course of business consistent with prior practice;
(v) none of the Dynasil Corporations has (A) amended or waived any of its material rights under, or permitted the acceleration of vesting under, any provision of any of the Parent Employee Plans or any provision of any agreement or Parent Stock Option Plan evidencing any outstanding Parent Option; (B) caused or permitted any Parent Employee Plan to be amended in any material respect; or (C) paid any bonus or other incentive or equity compensation or made any profit-sharing or similar payment to, or materially increased the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or consultants;
(vi) there has been no material labor dispute (including any work slowdown, stoppage or strike) involving the Dynasil Corporations;
(vii) none of the Dynasil Corporations has made any material change in its methods of accounting or accounting practices;
(viii) none of the Dynasil Corporations has made any loan, advance or capital contributions to, or any other investment in, any Person;
(ix) none of the Dynasil Corporations has terminated or amended, or suffered a termination of, any Parent Material Contract;
(x) none of the Dynasil Corporations has entered into any contractual obligation to do any of the things referred to elsewhere in this Section 3.6; and

(xi) there has been no material development in any Legal Proceeding described in a Parent SEC Document.

3.7 CONTRACTS.

(a) Each Parent Material Contract is valid and in full force and effect, and is enforceable in accordance with its terms subject to (A) Legal Requirements of general application relating to bankruptcy, insolvency and the relief of debtors, and (B) rules of law governing specific performance, injunctive relief and other equitable remedies, except to the extent they have expired in accordance with their terms and except where the failure to be in full force and effect, individually or in the aggregate, would not reasonably be expected to be material to the Dynasil Corporations. Parent has delivered to or made available to the Company true and complete copies of each Parent Material Contract, except in the case of a Parent Material Contract which is derived from a standard form agreement of the Dynasil Corporations, Parent has delivered to or made available to the Company a form or forms of such agreement. In each case where a Parent Material Contract is derived from a standard form agreement, all of the terms, conditions and provisions of such Parent Material Contract are substantially similar with respect to material terms to the form agreement from which such agreement derived.

(b) None of the Dynasil Corporations has materially violated or breached, or committed any material default under, any Parent Material Contract. To Parent's knowledge, no other Person has materially violated or breached, or committed any material default under, any Parent Material Contract.
(c) To Parent's knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) could reasonably be expected to (i) result in a material violation or breach of any provision of any Parent Material Contract by any of the Dynasil Corporations; (ii) give any Person the right to declare a material default or exercise any remedy under any Parent Material Contract; (iii) give any Person the right to accelerate the maturity or performance of any Parent Material Contract; or (iv) give any Person the right to cancel or terminate, or modify in any material respect, any Parent Material Contract
3.8 LIABILITIES.

Except as disclosed in Parent SEC Documents, since the Parent Balance Sheet Date, none of the Dynasil Corporations has any accrued, contingent or other liabilities of any nature, either matured or unmatured (whether due or to become due) required to be reflected in financial statements prepared in accordance with GAAP, except for: (a) liabilities that are reflected in the "Liabilities" column of the Parent Balance Sheet and the notes thereto; (b) normal and recurring liabilities that have been incurred by the Dynasil Corporations since the Parent Balance Sheet Date in the ordinary course of business consistent with prior practice; and (c) liabilities incurred in connection with the transactions contemplated by this Agreement.

3.9 LEGAL PROCEEDINGS; ORDERS.

Except as set forth in the Parent SEC Documents, there is no pending Legal Proceeding and, to Parent's knowledge, within the past 24 months no Person has threatened in writing to commence any Legal Proceeding, that involves any of the Dynasil Corporations or any of the assets owned or used by any of the Dynasil Corporations, in each case which would be reasonably likely to be material to the Dynasil Corporations; and there is no Order to which any of the Dynasil Corporations, or any of the material assets owned or used by any of the Dynasil Corporations, is subject.

3.10 FOREIGN CORRUPT PRACTICES ACT.

Neither Parent, any other Dynasil Corporation, any of the Dynasil Corporation's officers, directors, nor, to Parent's knowledge, any employees or agents, distributors, representatives or other persons acting on the express, implied or apparent authority of any Dynasil Corporation, have paid, given or received or have offered or promised to pay, give or receive, any bribe or other unlawful payment of money or other thing of value, any unlawful discount, or any other unlawful inducement, to or from any person or Governmental Body in the United States or elsewhere in connection with or in furtherance of the business of any of the Dynasil Corporations (including any unlawful offer, payment or promise to pay money or other thing of value (a) to any foreign official, political party (or official thereof) or candidate for political office for the purposes of influencing any act, decision or omission in order to assist any Dynasil Corporation in obtaining business for or with, or directing business to, any person, or (b) to any person, while knowing that all or a portion of such money or other thing of value will be offered, given or promised unlawfully to any such official or party for such purposes). Neither the business of Parent nor of any other Dynasil Corporation is in any manner dependent upon the making or receipt of such unlawful payments, discounts or other inducements. Neither Parent nor any other Dynasil Corporation has otherwise taken any action that could cause Parent or any other Dynasil Corporation to be in violation of the Foreign Corrupt Practices Act of 1977, as amended, the regulations thereunder, or any applicable Legal Requirements of similar effect.

3.11 FINANCIAL ADVISOR.

No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the Merger or any of the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Dynasil Corporations.

3.12 PROPRIETARY ASSETS.

(a) Schedule 3.12(a) of the Parent Disclosure Letter sets forth as of the date of this Agreement (i) all U.S. and foreign patents, patent applications, registered trademarks, material unregistered trademarks, trademark applications, copyright registrations and copyright applications, Internet domain names, computer software (other than third party software generally available for sale to the public) and fictitious name and assumed name registrations owned by Parent; (ii) all patent applications and other Proprietary Assets that are currently in the name of inventors or other Persons and for which Parent has the right to receive an assignment; and (iii) all material third party licenses for Proprietary Assets to which Parent is the licensee party. Parent has good, valid and marketable title to, or has a valid right to use, license or otherwise exploit, all of the material Parent Proprietary Assets necessary for the conduct of the Parent's business as presently conducted, free and clear of all Encumbrances. Parent has not developed jointly with any other Person any material Proprietary Asset with respect to which such other Person has any rights. There is no Parent Material Contract pursuant to which any Person has any right (whether or not currently exercisable) to use, license or otherwise exploit any Parent Proprietary Asset owned or exclusively licensed by the Parent.

(b) Except as would not, individually or in the aggregate, have a Material Adverse Effect on the Parent, (i) to the knowledge of the Parent, all Parent Proprietary Assets owned by Parent are subsisting and in effect and valid and enforceable; (ii) none of the Parent Proprietary Assets and no Proprietary Asset that is currently being developed or reduced to practice or which is the subject of a current invention disclosure by the Parent (either by itself or with any other Person) to the knowledge of the Parent infringes, misappropriates, conflicts with or otherwise violates any Proprietary Asset owned or used by any other Person;
(iii) none of the products or services that is or has been designed, created, developed, assembled, performed, manufactured, sold, marketed or licensed by the Parent is to the knowledge of the Parent infringing, misappropriating or making any unlawful or unauthorized use of any Proprietary Asset owned or used by any other Person, and, none of such products or services has at any time infringed, misappropriated or made any unlawful or unauthorized use of, and the Parent has not received in the past three (3) years any written, or to the Parent's knowledge, oral notice of any actual, alleged, possible or potential infringement, misappropriation or unlawful or unauthorized use of, any Proprietary Asset owned or used by any other Person; (iv) the operation of the business of the Parent as it currently is conducted does not and will not when conducted by the Surviving Entity in substantially the same manner following the Closing, infringe or misappropriate or make any unlawful or unauthorized use of any Proprietary Asset of any other Person; and (v) to the Parent's knowledge, no other Person is infringing, misappropriating or making any unlawful or unauthorized use of, and no Proprietary Asset owned or used by any other Person infringes or conflicts with, any Parent Proprietary Asset, and no such claims have been asserted or threatened against any Person by the Parent or, to the knowledge of the Parent, any other Person, in the past three (3) years. The Parent Proprietary Assets constitute all the Proprietary Assets necessary to enable the Parent to conduct its business in the manner in which such business is currently being conducted.

(c) The Parent has taken all reasonable steps to protect its rights in confidential information and trade secrets of the Parent or provided by any other Person to the Parent.

(d) With respect to the use of software in the business of the Parent as such business is currently conducted, to the knowledge of the Parent, no such software contains defects in its operation or any device or feature designed to disrupt, disable, or otherwise impair the functioning of any software. Such software has been validated for its use. There have been no material security breaches in the Parent's information technology systems, and there have been no disruptions in the Parent's information technology systems that materially adversely affected such Parent's business or operations.

(e) All products of the Parent ("Parent Product") conform in all material respects with all applicable contractual commitments and all express and implied warranties, the Parent's published product specifications and with all regulations, certification standards and other requirements of any applicable governmental entity or third party. Except as set forth in the Parent's SEC Documents, no claims against the Parent are pending or have been asserted for liability for replacement or modification of any Parent Product or other damages in connection therewith other than in the ordinary course of business. There are no known material defects in the design or technology embodied in any Parent Product which impair or are likely to impair the intended use of such Parent Product. There is no presently pending, or, to the knowledge of the Parent, threatened, and, to the knowledge of the Parent, there is no basis for, any civil, criminal or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, proceedings or demand letters relating to any alleged hazard or alleged defect in design, manufacture, materials or workmanship, including any failure to warn or alleged breach of express or implied warranty or representation, relating to any Parent Product. The Parent has not extended to any of its customers any written product warranties, indemnifications or guarantees that deviate in any material respect from the standard product warranties, indemnification arrangements or guarantees of the Parent.
SECTION 4. [RESERVED]

SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES

5.1 ADDITIONAL AGREEMENTS.

Each of Parent and the Company shall use its commercially reasonable efforts to take, or cause to be taken, all actions necessary to carry out the intent and purposes of this Agreement and to consummate the Merger and make effective the other transactions contemplated by this Agreement. Without limiting the generality of the foregoing, each party to this Agreement (i) shall cooperate fully with the other party, shall execute and deliver such further documents, certificates, agreements and instruments and shall take such other actions as may be reasonably requested by the other party to evidence or reflect the transactions contemplated by this Agreement (including the execution and delivery of all documents, certificates, agreements and instruments reasonably necessary for all filings hereunder), (ii) give all notices (if any) required to be made and given by such party in connection with the Merger and the other transactions contemplated by this Agreement; (iii) shall use its commercially reasonable efforts to obtain each Consent (if any) required to be obtained (pursuant to any applicable Legal Requirement or Contract, or otherwise) by such party in connection with the Merger or any of the other transactions contemplated by this Agreement; and (iv) shall use its commercially reasonable efforts to lift any restraint, injunction or other legal bar to the Merger; provided, however, that Parent or the Company shall not be required to sell, divest or otherwise dispose of any material assets of the Company or Company or any assets of Parent or any of the Dynasil Corporations. Each of the Company and Parent shall promptly deliver to the other party a copy of each such filing made, each such notice given and each such Consent obtained by it during the Pre-Closing Period.

5.2 PUBLIC DISCLOSURE.

The initial press release relating to this Agreement shall be a joint press release and thereafter Parent and the Company shall consult with each other and shall agree upon the text of any press release or public statement before issuing any press release or otherwise making any public statements with respect to the transactions contemplated hereunder and shall not issue any such press release or make any such public statement prior to such consultation and agreement, except as may be required by Legal Requirements or any listing agreement with, or the rules of the NASD, in which case commercially reasonable efforts to consult with the other party shall be made prior to such release or public statement.

5.3 RESIGNATION OF DIRECTORS.

To the extent requested by Parent, the Company shall deliver to Parent upon the execution and delivery of this Agreement the resignations of the directors of the Company from the board of directors of the Company, effective as of the Effective Time.

5.4 TAKEOVER LAWS.

If any Takeover Law may become, or may purport to be, applicable to the transactions contemplated in this Agreement, each of Parent and the Company and the members of their respective Boards of Directors, to the extent permissible under applicable Legal Requirements, will grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as practicable, and in any event prior to the Termination Date, on the terms and conditions contemplated hereby and otherwise, to the extent permissible under applicable Legal Requirements, act to eliminate the effect of any Takeover Law on any of the transactions contemplated by this Agreement.

5.5 SECTION 16.

(a) Parent shall, prior to the Effective Time, cause Parent's Board of Directors to approve the issuance of Parent equity securities (including derivative securities) in connection with the Merger with respect to any employees of the Company who, as a result of their relationship with Dynasil as of or following the Effective Time, are subject or will become subject to the reporting requirements of Section 16 of the Exchange Act to the extent necessary for such issuance to be an exempt acquisition pursuant to SEC Rule 16b-3. Prior to the Effective Time, the Board of Directors of the Company shall approve the disposition of Company equity securities (including derivative securities) in connection with the Merger by those directors and officers of the Company subject to the reporting requirements of Section 16 of the Exchange Act to the extent necessary for such disposition to be an exempt disposition pursuant to SEC Rule 16b-3. Such actions shall be consistent with all current applicable rules, interpretation and guidance of the SEC, including the No-Action Letter, dated January 12, 1999, issued by the SEC to Skadden, Arps, Slate, Meagher & Flom llp and SEC Rule 16b-3(d) and (e).

5.6 LITIGATION.

The Company shall give Parent the opportunity to participate in the defense of any stockholder litigation against the Company and/or its directors relating to the transactions contemplated by this Agreement. Parent shall give the Company the opportunity to participate in the defense of any stockholder litigation against Parent and/or its directors relating to the transactions contemplated by this Agreement, provided, however, that the Company shall not enter into any settlement or compromise any such stockholder litigation without Parent's prior written consent.

5.7 STOCKHOLDERS' CAPITAL.

(a) As per the methodology in Exhibit D, immediately prior to Closing the Seller shall be entitled to extract a net amount of assets less liabilities (retained by the Seller) which equals the retained earnings as of the date of Closing less the net book value of fixed assets and inventory (the "Retained Earnings Extraction"). The Retained Earnings Extraction shall be estimated as of the Closing date with assets and liabilities divided at that time between Buyer and Seller using the Exhibit D methodology. In the extraction of assets and liabilities, Seller shall retain all tax related items excluding sales tax. Seventy five (75) days following Closing as per Section 5.9(c) and 5.9(d), Parent and Stockholders' Agent shall calculate the final Retained Earnings Extraction and any balance owed by one of the parties will be paid in cash by wire transfer within five (5) days except as outlined in the balance of this section. Seller shall be responsible for payment of all purchases and debts (collectively, the "Business Debts") which were incurred prior to the Closing Date which are not reflected in the balance sheet liabilities assumed by the Buyer, whether or not the invoice was received prior to the purchase date and the final retained earnings calculation shall incorporate the impact of these. Seller shall be responsible to pay any costs which are required to wrap up the Seller's business activities such as the A-133 audit.

(b) During the seventy five day period, with oversight from the Stockholders' Agent, Parent shall set-up separate accounts to administer extracted assets and liabilities on behalf of the Company (collectively, "Company Extraction Account"). If accounts receivable and/or Progress Billings must be divided between Surviving Entity and Company, specific receivables shall be identified for Company Extraction Account and Parent shall have the right to allocate any questionable or undesirable receivables to Company Extraction Account. Surviving Company shall credit payments received for Company's retained assets such as accounts receivable and Progress Billings to Company Extraction Account as well as to pay Company's Business Debts from Company Extraction Account as presented from available Company funds. Stockholders shall be entitled to withdraw funds from Company Extraction Account so long as the net value of the account remains at a minimum value of $1 million with a minimum of $500,000 of cash in aggregate, for the combination of this Agreement and the Asset Purchase Agreement. The Company Extraction Account shall contain and be applied toward amounts relating to this Agreement and the Asset Purchase Agreement. At the end of the seventy five day period, Stockholders can withdraw all remaining cash in the Company Extraction Account if only cash remains in such account. If non-cash assets and liabilities remain open in the Company Extraction Account at the end of the seventy five day period, Stockholders retain responsibility for such items and Parent and/or Surviving Entity may require a reasonable balance to be maintained in the Company Extraction Account and will assist in the administration as reasonably requested by Stockholders.

(c) Within seventy five (75) days after the Closing Date, Parent shall prepare and deliver to the Stockholders' Agent a calculation of the Company's retained earnings, less the net book value of inventory and equipment as of the Closing Date using the same methodology applied in calculating the Retained Earnings Extraction Estimate. The Parent shall make available to the Stockholders' Agent the work papers and materials used to determine the final amount.
(d) If Parent or Stockholders' Agent has any objections to the final Retained Earnings Extraction amount, Parent or Stockholders' Agent, as appropriate, will deliver a detailed statement describing such objections to the other party, within ten (10) business days after receiving the Retained Earnings Extraction computation. If Parent or Stockholders' Agent, as appropriate, fails to deliver objections to the final Retained Earnings Extraction calculation within such period, the party failing to deliver such objections will be deemed to have accepted the calculation. The Parent and Stockholders' Agent will attempt in good faith to resolve any objections. If Parent and Stockholders' Agent do not reach a resolution of all objections within thirty (30) days after the recipient has received the statement of objections, Parent and Stockholders' Agent will select a mutually acceptable accounting firm to resolve any remaining objections. If Parent and Stockholders' Agent are unable to agree on the choice of an accounting firm, they will select a nationally recognized accounting firm by lot. The accounting firm will resolve any such objections and determine, in accordance with the methodology used to calculate the Retained Earnings Extraction amount. The parties will provide the accounting firm, within ten (10) days of its selection, with a definitive statement of the position of each party with respect to each unresolved objection and will advise the accounting firm that the parties accept the accounting firm as the appropriate Person to calculate the Retained Earnings Extraction amount for all purposes relevant to the resolution of the unresolved objections. Parent will provide the accounting firm access to the books and records of the Surviving Entity. The accounting firm will have thirty (30) days to carry out a review of the unresolved objections and prepare a written statement of its determination regarding each unresolved objection. The determination of any accounting firm so selected will be set forth in writing and will be conclusive and binding upon the parties. The cost of the accounting firm will be split equally between the parties.

5.8 TAX-FREE REORGANIZATION.

Neither Parent nor Merger Sub will take any action or refrain from taking any action which would cause the Merger to fail to qualify as a tax-free reorganization under Section 368
(a)(1)(A) of the Code, unless such action is typically taken or not taken by a surviving corporation in a tax-free merger or its parent. Neither Parent nor Merger Sub shall be liable to the Company or the Stockholders if the Merger does not qualify as a tax-free reorganization, except to the extent Parent or Merger Sub violate the covenants in the previous sentence.

SECTION 6. CONDITIONS TO THE MERGER

6.1 CONDITIONS TO EACH PARTY'S OBLIGATION.

The respective obligations of the Company, Parent and Merger Sub to consummate the Merger are subject to the satisfaction or, to the extent permitted by Legal Requirements, the waiver by each party on or prior to the Effective Time of each of the following conditions:

(a) No provision of any applicable Legal Requirements and no Order shall be in effect that prohibits the consummation of the Merger or the other transactions contemplated by this Agreement, provided, however, that each of Parent, Merger Sub and the Company shall have used its commercially reasonable efforts to
(i) prevent the application of any Legal Requirement; and (ii) prevent the entry of any Order that prohibits the consummation of the Merger or the other transactions contemplated by this Agreement; and

(b) The Parent and Stockholders' Agent shall have agreed to a Stockholders' Capital amount.

6.2 ADDITIONAL CONDITIONS TO PARENT'S AND MERGER SUB'S OBLIGATIONS.

The respective obligations of Parent and Merger Sub to consummate the Merger are subject to the satisfaction or, to the extent permitted by Legal Requirements, the waiver by Parent and Merger Sub on or prior to the Effective Time of each of the following conditions:

(a) The Company shall have performed or complied in all material respects with all of its covenants, obligations or agreements required to be performed or complied with under the Agreement prior to the Effective Time;

(b) The representations and warranties of the Company contained in this Agreement shall be accurate, as of the date of this Agreement, and on and as of the Effective Time, except, for those representations and warranties which address matters only as of a particular date (which shall remain true and correct on and as of such particular date), with the same force and effect as if made on and as of the Effective Time;
(c) Parent shall have received a certificate from an executive officer of the Company certifying as to the matters set forth in paragraphs (a) and (b) of this Section 6.2 in substantially the form attached hereto as Exhibit B;
(d) Since the Company Balance Sheet Date, there shall not have been a Material Adverse Effect on the Company;
(e) Parent shall have secured financing, on terms reasonably acceptable to it, for the Asset Purchase Agreement no later than July 1, 2008;
(f) Parent shall have completed its due diligence to its satisfaction;
(g) The Stockholders shall have surrendered certificates representing all Shares;

(h) Gerald Entine and Jack Paster shall have agreed to employment agreements with the Surviving Entity on mutually agreeable terms;

(i) Charles River Realty LLC, d/b/a "Bachrach, Inc." shall have executed and delivered the Lease, in substantially the form attached hereto as Appendix I; and
(j) The consummation of the Asset Purchase Agreement and the transactions contemplated thereby.

6.3 ADDITIONAL CONDITIONS TO THE COMPANY'S OBLIGATIONS.

The obligations of the Company to consummate the Merger are subject to the satisfaction or, to the extent permitted by Legal Requirements, the waiver by the Company on or prior to the Effective Time of each of the following conditions:

(a) Parent or Merger Sub shall have performed or complied in all material respects with all of their respective covenants, obligations or agreements required to be performed or complied with under the Agreement prior to the Effective Time;

(b) The representations and warranties of Parent contained in this Agreement not qualified by Material Adverse Effect shall be accurate, except where the failure to be accurate would not, in the aggregate, reasonably be expected to have a Material Adverse Effect and the representations and warranties of Parent contained in this Agreement which are qualified by Material Adverse Effect shall be accurate, in the case of each, as of the date of this Agreement, and on and as of the Effective Time, except, in each case, for those representations and warranties which address matters only as of a particular date (which (i) if not qualified by Material Adverse Effect shall remain true and correct on and as of such particular date, except where the failure to be accurate would not, in the aggregate, reasonably be expected to have a Material Adverse Effect and (ii) if qualified by Material Adverse Effect shall remain true and correct on and as of such particular date), with the same force and effect as if made on and as of the Effective Time;
(c) Since the Parent Balance Sheet Date, there shall not have been a Material Adverse Effect on the Dynasil Corporations;
(d) The Company shall have received a certificate from an executive officer of Parent certifying as to the matters set forth in paragraphs (a), (b) and (c) of this Section 6.3 in substantially the form attached hereto as Exhibit C;

(e) The Surviving Entity shall have executed and delivered the Lease, in substantially the form attached hereto as Appendix I; and

(f) The consummation of the Asset Purchase Agreement and the transactions contemplated thereby.

The foregoing conditions are for the sole benefit of the Company and may, subject to the terms of the Agreement, be waived by the Company, in whole or in part at any time and from time to time, in the sole discretion of the Company. The failure by the Company at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time prior to the Effective Time.

SECTION 7. EXPENSES.

7.1 EXPENSES.

(a) Expenses. Except as set forth in this Section, fees and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement ("Transaction Expenses") shall be paid by the party incurring such expenses, whether or not the Merger is consummated.

(b) Transfer Taxes. Any transfer fee, real estate or otherwise, incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the Company and/or its Subsidiaries.

SECTION 8. INDEMNIFICATION

8.1 SURVIVAL; INDEMNITY.

The representations and warranties of the parties shall survive the Closing for a period of two (2) years; provided, however, that (i) representations and warranties contained in
Section 2.12 shall survive until the expiration of the applicable statute of limitations under the Code; (ii) all representations and warranties relating to claims on SBIR contracts shall survive until the expiration of the respective periods of government audit and/or adjustment thereunder, plus ninety (90) days; and
(iii) the representations and warranties in Sections 2.1, 2.2, 2.3, 2.13, 2.14 and Section 2A.1 shall survive until the expiration of the applicable statutes of limitations (as applicable, the "Survival Date"). Nothing contained in the foregoing sentence shall prevent recovery under this Section 8
(A) in the event of fraud or intentional misrepresentation or (B) after the applicable Survival Date so long as the party making a claim or seeking recovery complies with the provisions of clause
(1) and (2) of the following sentence. No party shall have any claim or right of recovery for any breach of a representation, warranty, covenant or agreement unless (1) written notice is given in good faith by that party to the other party of the representation, warranty, covenant or agreement pursuant to which the claim is made or right of recovery is sought, setting forth in reasonable detail the breach of the representation, warranty, covenant or agreement, the amount or nature of the claim being made, if then ascertainable, and the general basis therefor and
(2) such notice is given prior to the Survival Date. For any claim relating to Taxes, Environmental Matters and/or SBIR contracts, the representations and warranties contained in this Agreement, in the Company Disclosure Letter, the Parent Disclosure Letter, any exhibit or schedule to this Agreement or any certificate delivered pursuant to this Agreement shall survive any audit or investigation by any party hereto and shall not be affected or deemed waived by reason of the fact that any such party or his or its representatives knew or should have known that any such representation or warranty is or might be inaccurate in any respect. The covenants and agreements set forth in this Agreement shall survive until performed in full.

8.2 INDEMNIFICATION BY STOCKHOLDERS.

Subject to the other provisions of this Section 8, each Stockholder agrees, severally and not jointly (based on such Stockholder's Pro Rata Share), to defend, indemnify Parent and Merger Sub and their respective officers, directors, stockholders, employees, affiliates (including without limitation the Surviving Corporation), attorneys, accountants and agents (the "Parent Parties"), and hold them harmless from and against, any and all damages, losses, liabilities, costs and expenses (including, without limitation, reasonable expenses of investiga tion and reasonable attorneys' fees and expenses in connection with any action, suit or proceeding) (collectively, "Damages") incurred or suffered by any of the Parent Parties arising out of
(i) any breach or alleged breach of any representation, warranty, covenant or agreement of Company contained in this Agreement, the Company Disclosure Letter or any exhibit or schedule to this Agreement or any certificate delivered by Company pursuant to this Agreement, and (ii) any breach of any representation, warranty, covenant or agreement of any of the Stockholders contained herein. From and after the Effective Time, Company and Stockholder indemnification obligations under this Section 8.2 shall be satisfied pursuant to the limits set forth in the Asset Purchase Agreement.

8.3 INDEMNIFICATION BY PARENT.

Subject to the other provisions of this Section 8, Parent agrees to indemnify, and to hold the Stockholders and the Company harmless from and against, any and all Damages incurred or suffered by the Company arising out of any breach or alleged breach of any representation, warranty, covenant or agreement of Parent. From and after the Effective Time, Parent indemnification obligations under this Section 8.3 shall be satisfied pursuant to the limits set forth in the Asset Purchase Agreement.

8.4 MISCELLANEOUS INDEMNITY PROVISIONS.

Notwithstanding anything to the contrary contained in this Agreement, from and after the Effective Time:

(a) To the extent that any of the Parent Parties has any claim for Damages arising out of this Agreement, the sole and exclusive remedy for such Parent Party shall be to make a claim for indemnification under, from the consideration, and pursuant to the limits set forth in, the Asset Purchase Agreement.

(b) To the extent that the Stockholder or the Company has any claim against Parent for Damages arising out of this Agreement, the sole and exclusive remedy for such Stockholder shall be to make a claim for indemnification under, from the consideration, and pursuant to the limits set forth in, the Asset Purchase Agreement.
(c) For purposes of determining the amount of any Damages under
Section 8.2 or 8.3, (A) such amount shall be reduced by the amount of any insurance proceeds received by the Indemnified Party in respect of the Damages; and (B) such amount shall exclude all consequential or special damages suffered by the Indemnified Party and all punitive damages awarded against the Indemnifying Party.
(d) Notwithstanding anything in this Agreement or any statute or the common law to the contrary, the parties acknowledge and agree that the indemnification rights set forth in this Article 8 shall be the sole and exclusive remedy of the Indemnified Parties for Damages of any kind or nature arising under this Agreement, any statute or the common law.
(e) Each party agrees to use commercially reasonable efforts to mitigate any Damages or potential Damages for which the other party or parties is or may be obligated to indemnify such party under this Article 8.

(f) Other than as set forth in Section 8.1, no Stockholder shall be liable to any Parent Party for Damages with respect to or in connection with any breach of any representation or warranty of the Company and/or the Stockholders for which any of the Parent Parties had actual knowledge, based on a writing delivered by or on behalf of the Company, on and/or before the Closing Date.

8.5 NOTIFICATION OF CLAIMS.

Upon any party (the "Indemnified Party") becoming aware of a fact, condition or event that constitutes a basis for a claim for Damages in respect thereof against any other party (the "Indemnifying Party") under Section 8.2 or 8.3, if such a claim is to be made, the Indemnified Party will with reasonable promptness notify the Indemnifying Party or Parties in writing of such fact, condition or event, but in any event within sufficient time to permit the Indemnifying Party or Parties to respond timely to any complaint or other process served on the Indemnified Party. The failure to notify the Indemnifying Party or Parties under this Section 8.5 shall not relieve any Indemnifying Party of any liability that it may have to the Indemnified Party except to the extent that such failure to notify shall have resulted in a waiver of any lawful and valid affirmative defense to any third-party claim or otherwise materially prejudices the Indemnifying Party or Parties in connection with the administration or defense of such third-party claim.

8.6 THIRD-PARTY CLAIMS.

(a) Upon receipt by the Indemnifying Party or Parties of any notice of claim for indemnification hereunder arising from a third-party claim, the Indemnifying Party or Parties shall assume the administration and defense of such third-party claim with counsel that is reasonably satisfactory to the Indemnified Party and shall proceed with the administration and defense of such third-party claim diligently and in good faith; provided, however, that any Indemnifying Party shall be entitled to assume the administration and defense of such third-party claim only if it agrees in writing with the Indemnified Party that it is obligated to indemnify the Indemnified Party pursuant to this
Section 8 with respect to such third-party claim; and provided, further that no Indemnifying Party shall be entitled to assume the administration and defense of any third-party claim that (i) seeks an injunction or other equitable relief that might materially and adversely affect any Parent Party, or (ii) involves any criminal action or any claim that could reasonably be expected to result in a criminal action against any Parent Party. The Indemnified Party shall be fully consulted by the Indemnifying Party or Parties and shall have the right to participate, at its own expense, in the investigation, administration and defense of such third-party claim. Any party hereto receiving notice of any proposed settlement of any such third-party claim shall promptly provide a copy of such notice to the other parties hereto. The Indemnifying Party or Parties shall not have the right to settle or compromise any third-party claim for which indemnification is being sought hereunder without the consent of the Indemnified Party unless as a result of such settlement or compromise the Indemnified Party is fully discharged and released from any and all liability with respect to such third-party claim. The Indemnified Party shall make available to the Indemnifying Party or Parties and its counsel all books, records, documents and other information relating to any third-party claim for which indemnification is sought hereunder, and the parties to this Agreement shall render to each other reasonable assistance in the defense of any such third- party claim.

(b) In the event more than one party is an Indemnifying Party, a majority in interest of such Indemnifying Parties shall assume the administration and defense of such third- party claim and appoint counsel reasonably satisfactory to the Indemnified Party and proceed with the administration and defense of such third-party claim diligently and in good faith. All decisions and other actions that are taken by such majority in interest of the Indemnifying Parties in connection with the appointment of such counsel and the administration and defense of such third-party claim shall be final, binding and conclusive on all other Indemnifying Parties, and none of such other Indemnifying Parties obligations under this Section 8 shall be diminished as a result of such administration and defense of such third-party claim.

(c) Notwithstanding any other provision of this Agreement, the Indemnified Party shall have the absolute right, at its election (to be exercised in its sole discretion by written notice to the Indemnifying Party or Parties) to assume from the Indemnifying Party or Parties the administration and defense of any third-party claim against the Indemnified Party; provided, however, in the event of an Internal Revenue Service or state income tax audit of the Company (and/or the Merger Sub) which involves any tax years and income tax returns of the Company for which the Company filed income tax returns as an S corporation, the Merger Sub agrees (i) to fully cooperate with the Indemnifying Party(ies) in connection with such audit, provided for purposes of this Agreement, all reasonable costs and expenses (including, without limitation, reasonable expenses of investigation and reasonable attorneys' fees and expenses in connection with any action, suit or proceeding) associated with such cooperation and/or any amounts paid and/or liability incurred by the Company or Merger Sub in connection with, related to or otherwise arising out of, such audit shall be considered Damages, (ii) to not take any action contrary to the instructions of the Indemnifying Party(ies) and (iii) to permit the Indemnify Party(ies) to have full control of the audit process. In the event the Indemnified Party exercises the right provided by this Subsection, the Indemnifying Party or Parties shall be responsible for the costs and expenses of the administration and defense of such claim incurred prior to the Indemnified Party or Parties' assumption of the administration and defense of such claim and shall not be responsible for costs and expenses incurred after such assumption.

SECTION 9. MISCELLANEOUS PROVISIONS

9.1 AMENDMENT.

This Agreement may be amended with the approval of the respective Boards of Directors of the Company, Merger Sub and Parent at any time (whether before or after any required approvals by the stockholders of the Company or Parent); provided, however, that after any such required stockholder approval has been obtained, no amendment shall be made which by applicable Legal Requirements requires further approval of the stockholders of either the Company or Parent without the further approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

9.2 WAIVER.

(a) No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.

(b) No party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

9.3 ENTIRE AGREEMENT; COUNTERPARTS.

This Agreement (and the exhibits and schedules hereto) constitutes the entire agreement among the parties hereto and supercedes all other prior agreements and understandings, both written and oral, among or between any of the parties hereto with respect to the subject matter hereof. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.

9.4 APPLICABLE LAW; JURISDICTION.

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws. The parties hereto hereby declare that it is their intention that this Agreement shall be regarded as made under the laws of the State of Delaware and that the laws of said State shall be applied in interpreting its provisions in all cases where legal interpretation shall be required. Each of the parties hereto agrees that any action, suit or proceeding arising out of the transactions contemplated by this Agreement (a "Proceeding") shall be commenced and conducted exclusively in the federal or state courts of the State of Delaware, and each of the parties hereby irrevocably and unconditionally: (i) consents to submit to the exclusive jurisdiction of the federal and state courts in the State of Delaware for any Proceeding (and each party agrees not to commence any Proceeding, except in such courts); (ii) waives any objection to the laying of venue of any Proceeding in the federal or state courts of the State of Delaware; (iii) waives, and agrees not to plead or to make, any claim that any Proceeding brought in any federal or state court of the State of Delaware has been brought in an improper or otherwise inconvenient forum; and (iv) waives, and agrees not to plead or to make, any claim that any Proceeding shall be transferred or removed to any other forum. Each of the parties hereto hereby irrevocably and unconditionally agrees: (1) to the extent such party is not otherwise subject to service of process in the State of Delaware, to appoint and maintain an agent in the State of Delaware as such party's agent for acceptance of legal process, and (2) that service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service, and that service made pursuant to clause (1) or (2) above shall have the same legal force and effect as if served upon such party personally within the State of Delaware.

9.5 ATTORNEYS' FEES.

In any action at law or suit in equity to enforce this Agreement or the rights of any of the parties hereunder, the prevailing party in such action or suit shall be entitled to reasonable attorneys' fees and all other reasonable costs and expenses incurred in such action or suit.

9.6 ASSIGNABILITY; THIRD PARTY BENEFICIARIES.

This Agreement shall be binding upon, and shall be enforceable by and inure solely to the benefit of, the parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the Stockholder's, Company's or Parent's rights hereunder may be assigned without the prior written consent of the other parties, as the case may be, and any attempted assignment of this Agreement or any of such rights without such consent shall be void and of no effect; provided, further, however, that, except for assignments by Merger Sub to a wholly-owned Subsidiary of Parent, neither this Agreement nor any of Parent's or Merger Sub's rights hereunder may be assigned by Parent or Merger Sub without the prior written consent of the Company, and any attempted assignment of this Agreement or any of such rights by Parent or Merger Sub without such consent shall be void and of no effect. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person (other than the parties hereto) any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement except for (i) the rights, benefits and remedies granted to the Indemnified Persons under Section 8.6; and (ii) the rights of the Stockholder to receive Merger Consideration in accordance with the provisions of this Agreement.

9.7 NOTICES.

Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received (i) on the date of delivery if delivered personally,
(ii) on the date of confirmation of receipt (or the first business day following such receipt if the date is not a business day) if delivered by a nationally recognized overnight courier service. All notices hereunder shall be delivered to the address or facsimile telephone number set forth beneath the name of such party below (or to such other address or facsimile telephone number as such party shall have specified in a written notice given to the other parties hereto):

If to Parent or Merger Sub:

Dynasil Corporation of America
385 Cooper Road
West Berlin, New Jersey 08091

Facsimile No.:
Attention: Craig Dunham

with a copy to (which copy shall not constitute notice hereunder):

Bond, Schoeneck & King, PLLC
One Lincoln Center
Syracuse, New York 13202-1355 Facsimile No.: (315) 218-8100 Attention: J. P. Paraschos, Esq.

If to the Company:

Radiation Monitoring Devices, Inc.
44 Hunt Street
Watertown, Massachusetts 02472

Facsimile No.: (617) 926-9980 Attention: Gerald Entine

with a copy to (which copy shall not constitute notice hereunder):

Riemer & Braunstein LLP
Three Center Plaza
Boston, Massachusetts 02108
Facsimile No. (617) 692-3513
Attention: Adam W. Jacobs, Esq.

If to the Stockholders' Agent:

Gerald Entine
300 Boylston Street
Boston, MA 02116

9.8 SEVERABILITY.

If any provision of this Agreement or any part of any such provision is held under any circumstances to be invalid or unenforceable in any jurisdiction, then (a) such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be deemed amended to conform to applicable Legal Requirements so as to be valid and enforceable to the fullest possible extent, (b) the invalidity or unenforceability of such provision or part thereof under such circumstances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other circumstances or in any other jurisdiction, and (c) the invalidity or unenforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this Agreement; provided, however, that the economic or legal substance of the transactions contemplated hereby is not affected in a materially adverse manner to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith in general fashion to modify this Agreement so as to effect the original interest of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the maximum extent possible.

9.9 SPECIFIC PERFORMANCE.

The parties agree that irreparable damage would occur in the event that any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached. The parties agree that, in the event of any breach by the other party of any covenant or obligation contained in this Agreement, the other party shall be entitled (in addition to any other remedy that may be available to it, including monetary damages) to seek (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an injunction restraining such breach. The parties further agree that no party to this Agreement shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 9.9, and each party waives any objection to the imposition of such relief or any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

9.10 CONSTRUCTION.

(a) For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include masculine and feminine genders.

(b) The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

(c) As used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement and Exhibits to this Agreement.

9.11 STOCKHOLDERS' AGENT.

(a) Gerald Entine is hereby appointed as agent and attorney-in- fact for each Stockholder, for and on behalf of each of them, to act as the Stockholders' Agent for the Stockholders as provided for in this Agreement, to give and receive notices, instructions and communications pursuant to this Agreement or such other agreement(s) contemplated hereby, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to claims and to take all actions necessary or appropriate in the judgment of the Stockholders' Agent for the accomplishment of the foregoing in accordance with the terms and provisions of this Agreement or such other agreement(s) contemplated hereby. Any vacancy in the position of the Stockholders' Agent due to death, disability or incapacity shall be promptly filled by Stockholders who owned a majority of the Shares prior to the Closing. No bond shall be required of the Stockholders' Agent, and the Stockholders' Agent shall not receive compensation for his services. Notices, communications or instructions to or from the Stockholders' Agent hereunder or under such other agreement(s) contemplated hereby shall constitute notice to or from each of the Stockholders. The Stockholders hereby agree that the appointment of the Stockholders' Agent pursuant to this Section 9.11 shall be irrevocable except as otherwise provided herein or by applicable law.

(b) The Stockholders' Agent shall not be liable for any act done or omitted hereunder as Stockholders' Agent while acting in good faith and in the exercise of reasonable judgment. The Stockholders shall jointly indemnify the Stockholders' Agent and hold the Stockholders' Agent harmless against any loss, liability or expense incurred without gross negligence or bad faith on the part of the Stockholders' Agent and arising out of or in connection with the acceptance or administration of the Stockholders' Agent's duties hereunder.

(c) A decision, act, consent or instruction of the Stockholders' Agent relating to this Agreement or such other agreement(s) contemplated hereby shall constitute a decision of all the Stockholders and shall be final, binding and conclusive upon each of them, and the Parent may rely upon any such written decision, consent or instruction of the Stockholders' Agent as being the decision, consent or instruction of every Stockholder. The Parent, Merger Sub and Surviving Entity are hereby relieved from any liability to any person for any acts done by it in accordance with such decision, consent or instruction of the Stockholders' Agent.

[Signatures on Following Page]

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written.

DYNASIL CORPORATION OF AMERICA

By
:
Name: Craig Dunham
Title: President

RMD ACQUISITION SUB, INC.

By
:
Name: Craig Dunham
Title: President

RADIATION MONITORING DEVICES, INC.

By
:
Name: Gerald Entine
Title: President

STOCKHOLDER

By _______________________________
: __________
Gerald Entine, as Trustee of
Gerald Entine 1988 Family Trust

By _______________________________
: _______
Fritz Wald

By _______________________________
: _______
Jacob H. Paster

[Signature Page to Agreement and Plan of Merger]

EXHIBIT A

CERTAIN DEFINITIONS

For purposes of the Agreement (including this Exhibit A):

"Agreement" is defined in the Preamble to this Agreement.

"Asset Purchase Agreement" is defined in the Recitals of this Agreement.

"Certificate of Merger" is defined in Section 1.3 to this Agreement.

"Claim" shall mean any and all claims, demands, actions, causes of action, suits, proceedings and administrative proceedings.

"Closing" is defined in Section 1.3 to this Agreement.

"Closing Date" is defined in Section 1.3 to this Agreement.

"Code" is defined in the Recitals to this Agreement.

"Company" is defined in the Preamble to this Agreement.

"Company Balance Sheet" is defined in Section 2.5(d) of this Agreement.

"Company Balance Sheet Date" is defined in Section 2.5(d) of this Agreement.

"Company Common Stock" shall mean the Common Stock, $0.001 par value, of the Company.

"Company Contract" shall mean any Contract: (a) currently in force to which the Company is a party or (b) by which the Company or any asset of the Company is bound or has any continuing obligations or rights.

"Company Disclosure Letter" is defined in Section 2 of this Agreement.

"Company Extraction Account" is defined in Section 5.9(b) of this Agreement

"Company Employee Plans" is defined in Section 2.13(a) of this Agreement.

"Company ERISA Affiliate" is defined in Section 2.13(a) of this Agreement.

"Company Financial Statements" is defined in Section 2.5(a) of this Agreement.

"Company Material Contract" is defined in Section 2.8(a) of this Agreement.

"Company Options" is defined in Section 2.3(b) of this Agreement.

"Company Organization Documents" is defined in Section 2.1 of this Agreement.

"Company Permits" is defined in Section 2.10(b) of this Agreement.

"Company Product" is defined in Section 2.7(f) of this Agreement.

"Company Proprietary Asset" shall mean any Proprietary Asset owned by or licensed to the Company or otherwise used by the Company.

          "Company  Stockholders"  shall  mean  the  holders   of
Company Common Stock.

          "Company  Stock Certificate" is defined in Section  1.6
of this Agreement.

"Company Stock Rights" is defined in Section 2.3(b) of this Agreement.

"Company 401(k) Plan" shall mean the RADIATION
MONITORING DEVICES, INC. 401(k) Plan.

"Consent" shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization).

"Contract" shall mean any legally binding written or oral agreement, contract, subcontract, lease, understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan or commitment or undertaking of any nature.

"Damages" is defined in Section 8.3 of this Agreement.

"Dynasil Corporation Contract" shall mean any Contract:
(a) to which any of the Dynasil Corporations is a party; (b) by which any of the Dynasil Corporations or any asset of any of the Dynasil Corporations is or may become bound or under which any of the Dynasil Corporations has, or may become subject to, any obligation; or (c) under which [Company] has or may acquire any right or interest.

"Dynasil Corporations" is defined in Section 3.1 of this Agreement.

"Effective Time" is defined in Section 1.3 of this Agreement.

"Encumbrance" shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim, infringement, interference, option, right of first refusal, preemptive right or community property interest (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset); provided that the term Encumbrance shall not be deemed to include (a) liens for current Taxes or income Taxes not yet due and payable or that are being contested in good faith, in each case, and for which adequate reserves have been recorded, (b) liens for assessments or other governmental charges or liens of landlords, carriers, warehousemen, mechanics or materialmen securing obligations incurred in the ordinary course of business consistent with prior practice that are not yet due and payable or due but not delinquent or being contested in good faith, (c) liens incurred in the ordinary course of business consistent with prior practice in connection with workers' compensation, unemployment insurance and other types of social security or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and similar obligations, (d) purchase money or similar security interests granted in connection with the purchase of equipment or supplies in the ordinary course of business consistent with prior practice in an amount not to exceed $10,000 in the aggregate, (e) liens, security interests, encumbrances or restrictions which secure indebtedness which are properly reflected in the Parent 10-KSB, as the case may be, (f) liens arising as a matter of law in the ordinary course of business with respect to obligations incurred after December 31, 2003, provided that the obligations secured by such liens are not delinquent, (g) such title defects and liens, if any, as individually or in the aggregate are not reasonably likely to have a Material Adverse Effect on the Company or the Dynasil Corporations, as the case may be, and (h) licenses or other agreements relating to Proprietary Assets which are not intended to secure an obligation.

"Entity" shall mean any corporation (including any non- profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.

"Environmental Law" shall mean any foreign, federal, state or local statute, law, rule, regulation, ordinance, treaty, code, policy or rule of common law now or from time to time in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, natural resources, health, safety or Hazardous Materials, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; the Resource Conservation and Recovery Act, as amended; the Hazardous Materials Transportation Act, as amended; the Clean Water Act, as amended; the Toxic Substances Control Act, as amended; the Clean Air Act, as amended; the Safe Drinking Water Act, as amended; the Atomic Energy Act, as amended; the Federal Insecticide, Fungicide and Rodenticide Act, as amended; and the Occupational Safety and Health Act, as amended; and

"ERISA" is defined in Section 2.13(a) of this Agreement.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder.

"Exchange Agent" is defined in Section 1.7(a) of this Agreement.

"Exchange Fund" is defined in Section 1.7(a) of this Agreement.

"GAAP" is defined in Section 2.3(b) of this Agreement.

"Governmental Authorization" shall mean any: (a) permit, license, certificate, franchise, permission, variance, clearance, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement; or (b) right under any Contract with any Governmental Body.

"Governmental Body" shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi- governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, organization, unit or body and any court or other tribunal); or (d) the National Association of Securities Dealers, Inc. (including the rules and regulations of the Nasdaq).

"Government Contract" shall mean any prime contract, subcontract, letter contract, purchase order or delivery order, task order, or other agreement of any kind executed or submitted to or on behalf of any Governmental Body or any prime contractor or higher-tier subcontractor, or under which any Governmental Body or any such prime contractor otherwise has or may acquire any right or interest.

"Hazardous Materials" shall mean (A) petroleum or petroleum products (including crude oil or any fraction thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas useable for fuel, or any mixture thereof), polychlorinated biphenyls (PCBs), asbestos or asbestos containing materials, urea formaldehyde foam insulation, and radon gas; (B) any substance defined as or included in the definition of "hazardous substance," "hazardous waste," "hazardous material," "extremely hazardous waste," "restricted hazardous waste," "waste," "special waste," "toxic substance," "toxic pollutant," "contaminant" or "pollutant," or words of similar import, under any applicable Environmental Law (as defined below); (C) infectious materials and other regulated medical wastes; (D) any substance which is toxic, explosive, corrosive, flammable, radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by any governmental agency; and (E) any other substance, material or waste the presence of which requires investigation or remediation under any Environmental Law.

"Indemnified Party" is defined in Section 8.5 of this Agreement.

"IES Report" is defined in Section 2.14 of this Agreement.

"knowledge" with respect to any party hereto shall mean the actual knowledge, after due inquiry of such party, such party's directors and/or executive officers.

"Lease" shall mean the Lease for 44 Hunt Street, Watertown, Massachusetts 02472 in substantially the form set forth in Appendix I hereto.

"Legal Proceeding" shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Body or any arbitrator or arbitration panel.

"Legal Requirement" shall mean any applicable federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (or under the authority of NASD or the Nasdaq), including any Environmental Law.

"Liability" shall mean any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

"Material Company IP Contract" is defined in
Section 2.8(a) to this Agreement.

An event, violation, inaccuracy, circumstance or other matter will be deemed to have a "Material Adverse Effect" on, or shall be deemed to be "material" to, the Company, if such event, violation, inaccuracy, circumstance or other matter had or could reasonably be expected to have a material adverse effect on the business, condition, assets, operations or financial performance of the Company taken as a whole or prevent or materially impede consummation of the Merger; provided, however, that no one or more of the following shall be deemed to constitute, in and of itself, or be taken into account in determining, the occurrence of a Material Adverse Effect: (A) changes in national or international economic, political or business conditions generally or the outbreak or escalation of hostilities, including acts of war or terrorism (which changes do not disproportionately affect the Company in any material respect); (B) changes in factors generally affecting the industries or markets in which the Company operates or participates (which changes do not disproportionately affect the Company in any material respect);
(C) changes in any law, rule or regulation or GAAP or the interpretation thereof (which changes do not disproportionately affect the Company in any material respect); (D) any action required to be taken pursuant to or in accordance with this Agreement or taken by or at the request of Parent or its affiliates; (E) changes resulting from the public announcement of the execution of this Agreement or the consummation of the transactions contemplated hereby; or (F) changes or disruptions in financial, banking or securities markets generally. An event, violation, inaccuracy, circumstance or other matter will be deemed to have a "Material Adverse Effect" on, or shall be deemed to be "material" to, the Dynasil Corporations, taken as a whole, if such event, violation, inaccuracy, circumstance or other matter had or could reasonably be expected to have a material adverse effect on the business, condition, assets, operations or financial performance of the Dynasil Corporations taken as a whole or prevent or materially impede consummation of the Merger; provided, however, that no one or more of the following shall be deemed to constitute, in and of itself, or be taken into account in determining, the occurrence of a Material Adverse Effect: (A) changes in national or international economic, political or business conditions generally or the outbreak or escalation of hostilities, including acts of war or terrorism (which changes do not disproportionately affect the Dynasil Corporations in any material respect); (B) changes in factors generally affecting the industries or markets in which the Dynasil Corporations operate or participate (which changes do not disproportionately affect the Dynasil Corporations in any material respect); (C) changes in any law, rule or regulation or GAAP or the interpretation thereof (which changes do not disproportionately affect the Dynasil Corporations in any material respect); (D) any action required to be taken pursuant to or in accordance with this Agreement or taken by or at the request of the Company or its affiliates; (E) any failure by Parent to meet any published estimates of revenues or earnings for any period ending on or after the date of this Agreement and prior to the Closing Date; (F) a decline in the price or trading volume of the Parent Common Stock (for the avoidance of doubt, clauses (E) and (F) shall not preclude Company from asserting that the underlying cause of any such (i) failure to meet any published estimates or (ii) decline in price or trading volume, is a Material Adverse Effect); (G) changes resulting from the public announcement of the execution of this Agreement or the consummation of the transactions contemplated hereby; or (H) changes or disruptions in financial, banking or securities markets generally.

"Merger" is defined in the Recitals of this Agreement.

"Merger Consideration" means the Stock Merger Consideration actually issuable in respect of each Share issued and outstanding as of the Effective Time.

"Merger Sub" is defined in the Preamble of this Agreement.

"Multiemployer Plan" is defined in Section 2.13(b) of this Agreement.

"Multiple Employer Plan" is defined in Section 2.13(b) of this Agreement.

"Multiple Employer Welfare Arrangement" is defined in
Section 2.13(b) of this Agreement.

"NASD" shall mean the National Association of Securities Dealers, Inc.

"Order" shall mean any: (a) order, judgment, injunction, edict, decree, ruling, pronouncement, determination, decision, opinion, verdict, sentence, subpoena, writ or award issued, made, entered, rendered or otherwise put into effect by or under the authority of any court, administrative agency or other Governmental Body or any arbitrator or arbitration panel; or (b) Contract with any Governmental Body entered into in connection with any Legal Proceeding.

"Parent" is defined in the Preamble of this Agreement.

"Parent Balance Sheet" is defined in Section 3.5(c) of this Agreement.

"Parent Balance Sheet Date" is defined in Section 3.5(c) of this Agreement.

"Parent Common Stock" shall mean the Common Stock, $0.005 par value per share, of Parent.

"Parent Disclosure Letter" is defined in Section 3 of this Agreement.

"Parent Financial Statements" is defined in Section 3.5(c) of this Agreement.

"Parent Material Contract" means a Dynasil Corporation Contract required by the rules and regulations of the SEC to be filed as an exhibit to the Parent SEC Documents.

"Parent Organization Documents" is defined in Section 3.1 of this Agreement.

"Parent Preferred Stock" is defined in Section 3.3 of this Agreement.

"Parent Parties" is defined in Section 8.2 of this Agreement.

"Parent Rights Agreements" is defined in Section 3.3(c) of this Agreement.

"Parent SEC Documents" is defined in Section 3.5(a) of this Agreement.

"Parent Stockholders" shall mean the holders of Parent Common Stock.

"Parent Stock Rights" is defined in Section 3.3(c) of this Agreement.

"Parent 10-KSB" is defined in Section 3.5(c) of this Agreement.

"Person" shall mean any individual, Entity or Governmental Body.

"Proceeding" is defined is Section 9.4 of this Agreement.

"Proprietary Asset" shall mean any: (a) patent, patent application, trademark (whether registered or unregistered), trademark application, trade name, fictitious business name, service mark (whether registered or unregistered), service mark application, copyright (whether registered or unregistered), database rights, design rights, moral rights, domain name, assumed and fictitious name registrations, copyright application, copyright registration, mask work right, mask work right application, trade secret, or any other intellectual or industrial or intangible property right, know-how, customer lists, computer software, source code, algorithm, invention, engineering drawing, and technology; and (b) right to use or exploit any of the foregoing.

"Pro Rata Share" means the pro rata share of each of Stockholders based on their relative ownership of the Company immediately prior to the consummation of the Merger, equal to 95.8733 for Gerald Entine 1988 Family Trust, 1.9175% for Jacob H. Paster owning and 2.2052% for Fritz and Doris Wald under this Agreement and the pro rata share of each Principal Member based on their relative ownership of the Seller immediately prior to the Closing under the Asset Purchase Agreement, equal to 92.8773% for Gerald Entine 1988 Family Trust, 4.9175 for Jacob H. Paster and 2.2052% for Fritz and Doris Wald.

"Representatives" shall mean officers, directors, employees, agents, attorneys, accountants, advisors, consultants and representatives of the Person and its Subsidiaries.

"Securities Act" shall mean the Securities Act of 1933, as amended and the regulations promulgated thereunder.

"Shares" is defined in Section 1.6 of this Agreement.

An entity shall be deemed to be a "Subsidiary" of another Person if such Person directly or indirectly owns, beneficially or of record, (a) an amount of voting securities of other interests in such Entity that is sufficient to enable such Person to elect at least a majority of the members of such Entity's Board of Directors or other governing body, or (b) at least 50% of the outstanding equity or financial interests of such Entity.

"Stock Merger Consideration" is defined in Section 1.5(a) of this Agreement.

"Stockholders Agent" is defined in Section 9.11 of this Agreement.

"Survival Date" is defined in Section 8.1 of this Agreement.

"Surviving Entity" is defined in Section 1.1 of this Agreement.

"Takeover Laws" shall mean any "Moratorium," "Control Share Acquisition," "Fair Price," "Supermajority," "Affiliate Transactions," or "Business Combination Statute or Regulation" or other similar state antitakeover laws and regulations.

"Tax" shall mean all taxes, assessments, charges, duties, fees, levies or other governmental charges, including, without limitation, all Federal, state, local, foreign and other income, franchise, profits, gross receipts, capital gains, capital stock, transfer, net proceeds, alternative or add-on minimum, ad valorem, turnover, personal property (tangible and intangible), leasing, lease, user, employment, fuel, excess profits, interest equalization, property, sales, use, value- added, occupation, property, excise, severance, windfall profits, stamp, license, payroll, social security, withholding and other taxes, assessments, charges, duties, fees, levies or other governmental charges of any kind whatsoever (whether payable directly or by withholding and whether or not requiring the filing of a Tax return), all estimated taxes, deficiency assessments, additions to tax, penalties and interest and shall include any liability for such amounts as a result either of being a member of a combined, consolidated, unitary or affiliated group or of a contractual obligation to indemnify any person or other entity.

"Tax Return" shall mean any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax.

"Transaction Expenses" is defined in Section 7.3(a) of this Agreement.

"WARN Act" is defined Section 2.13(m) of this Agreement.

* * *

EXHIBIT B

COMPANY CERTIFICATE

EXHIBIT C

PARENT CERTIFICATE

EXHIBIT D

RETAINED EARNINGS EXTRACTION
APPENDIX I

LEASE

DYNASIL CORPORATION OF AMERICA
FORMER OWNER WORK CONTINUATION AGREEMENT

THIS AGREEMENT is effective as of the closing of the RMD, Inc. Merger Agreement and the RMD Instruments, LLC Asset Purchase sale to Dynasil Corporation of America (the "Closing Date"), by and between DYNASIL CORPORATION OF AMERICA, a Delaware corporation with offices at 385 Cooper Road, West Berlin, New Jersey, 08091, for itself and/or on behalf of any of its wholly-owned subsidiaries (collectively, the "Company") and Gerald Entine ("Employee"), whose address is 300 Boylston Street, Boston, MA 02116.

1. Employment. Effective at the Closing Date (the "Effective Date"), the Company agrees to employ Employee as President of the Company's subsidiary RMD, Inc, with such duties as are customary for such position. Employee shall perform these duties subject to the direction and supervision of the Executive Leadership and Board of Directors of the Company. Employee accepts such employment and agrees to devote his full time, effort and skills to the conduct of the combined Company's businesses, performing to the best of Employee's abilities such duties as may be reasonably requested by the Company. Employee agrees to serve the Company diligently and faithfully so as to advance the Company's best interests and agrees to not take any action in conflict with the Company's best interests.

2. Term.

(a) The initial term of employment of Employee hereunder shall be for a period of eighteen (18) months commencing on the Closing Date, subject to the conditions set forth herein.

(b) This Agreement can be extended at the end of the initial term for and additional term of six (6) months based on mutual agreement.

3. Compensation.

(a) Base Salary. Employee shall receive as base salary, during the Term of this Agreement, of $27,083 per month (which is equivalent to Three hundred and twenty five Thousand Dollars ($325,000 over a twelve month period).

(b) Reimbursement for Expenses. Employee will receive reimbursement from the Company for expenses reasonably incurred by Employee on behalf of the Company in accordance with the Company's normal policies with respect to expense reimbursements. The Company will pay the Employee $750 per month for home office expenses as well as pay for a leased car during the term of this agreement, both of which will be treated as taxable income to the Employee.

(c) Severance. In the event the Company terminates, the Employee's employment for any reason other than "Cause" as set forth in paragraph 5(a) of this Agreement, the Company will make a severance payment to Employee of twenty percent (20%) of his base salary at the time of termination (payable in accordance with the Company's regular payroll schedule). Otherwise, the Company will have no obligation to make any severance payments to or for Employee.

4. Other Benefits During the Employment Period.

(a) Employee shall receive all other benefits substantially similar to those received by other employees of the successor companies to RMD, Inc. and RMD, LLC (collectively called "RMD") (collectively, "Benefits").

(b) The Company shall furnish Employee with such working facilities, support and other services as the Company believes are suitable to Employee's positions and adequate to the performance of his duties under this Agreement.

5. Termination. This Agreement is subject to termination prior to the expiration of its initial term or any extended term for the following reasons:

(a) Termination for Cause. The Company and Employee agree that no future or further salary or other benefits (except for any benefits which are required by law) will be payable to or for the Employee by the Company and the employment relationship between the parties will terminate immediately following the occurrence of any one or more of the following events:

(i) Employee violates any of the terms or conditions of this Agreement in any material respect and such violation is not corrected within fifteen (15) days after notice thereof is provided to Employee;

(ii) Employee commits a felony, gross misdemeanor, act of dishonesty or moral turpitude or violates in any material way any of the rules, regulations or policies of the Company; or

(iii) Employee engages in a general course of conduct of non- cooperation, negligence or other misconduct materially and adversely affecting the welfare, reputation, continuity or future of the Company's business

(b) Death or Disability. If Employee dies or becomes totally and permanently disabled during the term of employment, the parties agree that the employment relationship and this Agreement will terminate automatically. "Total disability" means the inability of Employee, resulting from sickness, disease, injury or physical or mental illness, to perform in all material respects all of the services pertaining to his employment under this Agreement. Such total disability will be deemed "permanent" if Employee has not recovered and returned to render the full services of his employment hereunder within six (6) months of becoming totally disabled.

(c ) Termination by Employee.

(d) Termination by Company without Cause.

6. Confidential Information/Trade Secrets. Employee acknowledges that during the course and as a result of his employment hereunder and previously with RMD, Employee has received or had access to, or contributed to the production of Confidential Information or Trade Secrets. Confidential Information or Trade Secrets means information that is proprietary to or in the unique knowledge of the Company and/or RMD (including information discovered or developed in whole or in part by Employee); or information that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Confidential Information shall also include all terms and conditions of this Agreement.

Employee understands and acknowledges that all such information that he has previously obtained or will obtain in the course of Employee's employment hereunder constitutes Confidential Information or Trade Secrets. In particular, Employee agrees that this information includes among other things, procedures, manuals, confidential reports, lists of clients, customers, suppliers, or products, and information concerning the prices paid by the Company's', and/or RMD's customers to any of them, or by any of them to any of their suppliers.

Employee further acknowledges and appreciates that any Confidential Information or Trade Secrets constitute valuable assets of the Company and RMD and that each of them intends any such information to remain secret and confidential. Employee therefore specifically agrees that except to the extent required by Employee's duties to the Company or as permitted by the express written consent of the Company's President and CEO or its Board of Directors, Employee shall never, either during employment hereunder or for a period of five (5) years thereafter, directly or indirectly use, discuss or disclose any of its Confidential Information or Trade Secrets or otherwise use such information to his own or a third party's benefit.

7. Return of Property. Employee agrees that upon the termination of his employment hereunder, that he will immediately return to the Company the originals and all copies of any and all documents (including computer data, disks, programs, or printouts) that contain any customer information, financial information, product information, or other information that in any way relates to any of them, any of their products or services, clients, suppliers or other aspects of any of their business(es). Employee further agrees to not retain any summary of such information.

8. Non-competition. Employee understands and agrees that, in the performance of his duties under this Agreement and as a result of his previous employment by RMD, Employee may at times meet with the Company's, RMD's customers and/or suppliers and that, as a consequence of using or associating himself with their name, goodwill and professional reputation, Employee's employment will place him in a position where Employee can further develop personal and professional relationships with the Company's, and/or RMD's current and prospective customers and/or suppliers. Employee further acknowledges that in the performance of his duties under this Agreement and as a result of his previous employment by RMD, Employee has been and will continue to be provided with certain specialized skills, training and/or know-how, as well as possess the Confidential Information or Trade Secrets referred to above. Employee understands and agrees that this goodwill and reputation, as well as Employee's skills, training, know-how and knowledge of Confidential Information or Trade Secrets could be used to compete with the Company and RMD. Accordingly, Employee agrees that, during the course of Employee's employment with Company and for five years from the date of Employee's inception of employment (whether voluntarily or involuntarily) or the termination of this Agreement at the end of any term, except as approved by the Company in writing which will not be unreasonably withheld, Employee shall not directly or indirectly, individually or with others:

(a) Cause or attempt to cause any existing customer of the Company to divert, terminate, limit, modify adversely or not enter into any business relationship with the Company.

(b) Solicit, employ or contract with any of Company's or any of its subsidiaries' employees. The term "employ" for purposes of this paragraph means to enter into an arrangement for services as a full-time or part-time employee, independent contractor, agent or otherwise.

(c) Compete with the Company in the design, development, manufacture or sale of any of its then current or contemplated products or services.

Employee further agrees during the above-stated five year period to inform any new person, firm or entity with whom Employee proposes to enter into an employment or a business relationship, before accepting such employment or entering into such a relationship, of the restrictions on Employee set forth in Paragraphs 7, 8 and 9 of this Agreement.

9. Consideration. Employee and Company agree that the provisions of this Agreement are reasonable and necessary for the protection of Company.

10. Remedies for Breach. Each party acknowledges that breach by the other party of the provisions of this Agreement will cause the first party irreparable harm that is not fully remedied by monetary damages. Accordingly, each party agrees that the other party shall, in addition to any relief afforded by law, be entitled to injunctive relief. Each party agrees that both damages at law and injunctive relief shall be proper modes of relief and are not to be considered alternative remedies. Furthermore, each party agrees that all actions, suits or proceedings arising under or relating to this Agreement may be brought only in a court of general jurisdiction in and for Middlesex County, Massachusetts or the United States District Court for the District of Massachusetts, to the jurisdiction and venue of which each party hereto consents and waives the right to argue forum non conveniens.

11. General Provisions. The parties acknowledge and agree as follows:

(a) This Agreement contains the entire understanding of the parties with regard to all matters contained herein. There are no other agreements, conditions, or representations, oral or written, express or implied, with regard to such matters. This Agreement supersedes and replaces any prior agreement between the parties generally relating to the same subject matter.

(b) This Agreement may be amended or modified only by a writing signed by all parties.

(c) Waiver by either Company or Employee of a breach of any provision, term or condition hereof shall not be deemed or construed as a further or continuing waiver thereof or a waiver of any breach of any other provision, term or condition of this Agreement.

(d) The rights and obligations of Company hereunder may be transferred or assigned to any successor or assign of the Company. The term "Company" as used herein is intended to include Dynasil Corporation of America, its successors and/or assigns, if any. No assignment of this Agreement shall be made by Employee, and any purported assignment shall be null and void.

(e) Employee's obligations under Paragraphs 7, 8 and 9 of this Agreement shall survive any change in Employee's employment status with Company, by promotion or otherwise, or, except to the extent provided therein, the termination of Employee's employment with Company.

(f) If any Court finds any provision or part of this Agreement to be unreasonable, in whole or in part, such provision shall be deemed and construed to be reduced to the maximum duration, scope or subject matter allowable under applicable law. Any invalidation of any provision or part of this Agreement will not invalidate any other part of this Agreement.

(g) This Agreement will be construed and enforced in accordance with the laws and legal principles of the Commonwealth of Massachusetts.

(h) This Agreement may be executed in any number of counterparts, including counterparts transmitted by telecopier or facsimile, any one of which shall constitute an original of this Agreement. When counterparts of facsimile copies have been executed by all parties, they shall have the same effect as if the signatures to each counterpart or copy were upon the same document and copies of such documents shall be deemed valid as originals. The parties agree that all such signatures may be transferred to a single document upon the request of any party.

This Agreement is intended to be a legally binding document fully enforceable in accordance with its terms.

DYNASIL CORPORATION OF AMERICA

By:
Craig T. Dunham
President and CEO

EMPLOYEE:

Gerald Entine

DYNASIL CORPORATION OF AMERICA
FORMER OWNER WORK CONTINUATION AGREEMENT

THIS AGREEMENT is effective as of the closing of the RMD, Inc. Merger Agreement and the RMD Instruments, LLC Asset Purchase sale to Dynasil Corporation of America (the "Closing Date"), by and between DYNASIL CORPORATION OF AMERICA, a Delaware corporation with offices at 385 Cooper Road, West Berlin, New Jersey, 08091, for itself and/or on behalf of any of its wholly-owned subsidiaries (collectively, the "Company") and Jacob Paster ("Employee"), whose address is 20 Navesink Rd., Red Bank, NJ, 07701.

1. Employment. Effective at the Closing Date (the "Effective Date"), the Company agrees to employ Employee as Vice President of the Company's subsidiary RMD Instruments Corporation, with such duties as are customary for such position. Employee shall perform these duties subject to the direction and supervision of the Executive Leadership and Board of Directors of the Company. Employee accepts such employment and agrees to devote his full time, effort and skills to the conduct of the combined Company's businesses, performing to the best of Employee's abilities such duties as may be reasonably requested by the Company. Employee agrees to serve the Company diligently and faithfully so as to advance the Company's best interests and agrees to not take any action in conflict with the Company's best interests.

2. Term.

(a) The term of employment of Employee hereunder shall be for a period of twenty-four (24) months commencing on the Closing Date, subject to the conditions set forth herein.

3. Compensation.

(a) Base Salary. Employee shall receive as base salary, during the Term of this Agreement, of $20,833 per month (which is equivalent to Two Hundred and Fifty Thousand Dollars ($250,000) over a twelve month period).

(b) Stock Options. Subject to ratification by the Board of Directors, Dynasil will issue on the Effective Date 100,000 Dynasil shares at an exercise price of 33% above market price with a three year term. An additional 20,000 shares will be issued on the Effective Date at an exercise price of 33% above market price with a three year term and these options will vest on October 15, 2009 contingent upon the RMD Instruments meeting the revenue forecast covering July 2008 to September 2009 (total revenue of $13,700,000).

(c) Reimbursement for Expenses. Employee will receive reimbursement from the Company for expenses reasonably incurred by Employee on behalf of the Company in accordance with the Company's normal policies with respect to expense reimbursements.

(d) Severance. In the event the Company terminates the Employee's employment for any reason other than "Cause" as set forth in paragraph 5(a) of this Agreement, the Company will make a severance payment to Employee of the balance of the first twelve (12) months of base pay or 20% of annual base pay, whichever is greater. Otherwise, the Company will have no obligation to make any severance payments to or for Employee.

4. Other Benefits During the Employment Period.

(a) Employee shall receive all other benefits substantially similar to those received by other employees of the successor companies to RMD, Inc. and RMD, LLC (collectively called "RMD") (collectively, "Benefits").

(b) The Company shall furnish Employee with such working facilities, support and other services as the Company believes are suitable to Employee's positions and adequate to the performance of his duties under this Agreement.

(c) Dynasil will reimburse the Employee at the rate of $2,625/mo (which includes parking) for a Boston apartment through October 2008 with the understanding that the Employee will be located on site 3-4 days per week at minimum (excepting business travel) and if the Employee terminates the lease earlier then the reimbursement will end earlier. This will be taxable income for the Employee.

5. Termination. This Agreement is subject to termination prior to the expiration of its initial term or any extended term for the following reasons:

(a) Termination for Cause. The Company and Employee agree that no future or further salary or other benefits (except for any benefits which are required by law) will be payable to or for the Employee by the Company and the employment relationship between the parties will terminate immediately following the occurrence of any one or more of the following events:

(i) Employee violates any of the terms or conditions of this Agreement in any material respect and such violation is not corrected within fifteen (15) days after notice thereof is provided to Employee;

(ii) Employee commits a felony, gross misdemeanor, act of dishonesty or moral turpitude or violates in any material way any of the rules, regulations or policies of the Company; or

(iii) Employee engages in a general course of conduct of non- cooperation, negligence or other misconduct materially and adversely affecting the welfare, reputation, continuity or future of the Company's business

(b) Death or Disability. If Employee dies or becomes totally and permanently disabled during the term of employment, the parties agree that the employment relationship and this Agreement will terminate automatically. "Total disability" means the inability of Employee, resulting from sickness, disease, injury or physical or mental illness, to perform in all material respects all of the services pertaining to his employment under this Agreement. Such total disability will be deemed "permanent" if Employee has not recovered and returned to render the full services of his employment hereunder within six (6) months of becoming totally disabled.

(c ) Termination by Employee.

(d) Termination by Company without Cause.

6. Confidential Information/Trade Secrets. Employee acknowledges that during the course and as a result of his employment hereunder and previously with RMD, Employee has received or had access to, or contributed to the production of Confidential Information or Trade Secrets. Confidential Information or Trade Secrets means information that is proprietary to or in the unique knowledge of the Company and/or RMD (including information discovered or developed in whole or in part by Employee); or information that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Confidential Information shall also include all terms and conditions of this Agreement.

Employee understands and acknowledges that all such information that he has previously obtained or will obtain in the course of Employee's employment hereunder constitutes Confidential Information or Trade Secrets. In particular, Employee agrees that this information includes among other things, procedures, manuals, confidential reports, lists of clients, customers, suppliers, or products, and information concerning the prices paid by the Company's', and/or RMD's customers to any of them, or by any of them to any of their suppliers.

Employee further acknowledges and appreciates that any Confidential Information or Trade Secrets constitute valuable assets of the Company and RMD and that each of them intends any such information to remain secret and confidential. Employee therefore specifically agrees that except to the extent required by Employee's duties to the Company or as permitted by the express written consent of the Company's President and CEO or its Board of Directors, Employee shall never, either during employment hereunder or for a period of five (5) years thereafter, directly or indirectly use, discuss or disclose any of its Confidential Information or Trade Secrets or otherwise use such information to his own or a third party's benefit.

7. Return of Property. Employee agrees that upon the termination of his employment hereunder, that he will immediately return to the Company the originals and all copies of any and all documents (including computer data, disks, programs, or printouts) that contain any customer information, financial information, product information, or other information that in any way relates to any of them, any of their products or services, clients, suppliers or other aspects of any of their business(es). Employee further agrees to not retain any summary of such information.

8. Non-competition. Employee understands and agrees that, in the performance of his duties under this Agreement and as a result of his previous employment by RMD, Employee may at times meet with the Company's, RMD's customers and/or suppliers and that, as a consequence of using or associating himself with their name, goodwill and professional reputation, Employee's employment will place him in a position where Employee can further develop personal and professional relationships with the Company's, and/or RMD's current and prospective customers and/or suppliers. Employee further acknowledges that in the performance of his duties under this Agreement and as a result of his previous employment by RMD, Employee has been and will continue to be provided with certain specialized skills, training and/or know-how, as well as possess the Confidential Information or Trade Secrets referred to above. Employee understands and agrees that this goodwill and reputation, as well as Employee's skills, training, know-how and knowledge of Confidential Information or Trade Secrets could be used to compete with the Company and RMD. Accordingly, Employee agrees that, during the course of Employee's employment with Company and for five years from the date of Employee's inception of employment under this agreement except as approved by the Company in writing which will not be unreasonably withheld, Employee shall not directly or indirectly, individually or with others:

(a) Cause or attempt to cause any existing customer of the Company to divert, terminate, limit, modify adversely or not enter into any business relationship with the Company.

(b) Solicit, employ or contract with any of Company's or any of its subsidiaries' employees. The term "employ" for purposes of this paragraph means to enter into an arrangement for services as a full-time or part-time employee, independent contractor, agent or otherwise.

(c) Compete with the Company in the design, development, manufacture or sale of any of its then current or contemplated products or services.

Employee further agrees during the above-stated five year period to inform any new person, firm or entity with whom Employee proposes to enter into an employment or a business relationship, before accepting such employment or entering into such a relationship, of the restrictions on Employee set forth in Paragraphs 7, 8 and 9 of this Agreement.

9. Consideration. Employee and Company agree that the provisions of this Agreement are reasonable and necessary for the protection of Company.

10. Remedies for Breach. Each party acknowledges that breach by the other party of the provisions of this Agreement will cause the first party irreparable harm that is not fully remedied by monetary damages. Accordingly, each party agrees that the other party shall, in addition to any relief afforded by law, be entitled to injunctive relief. Each party agrees that both damages at law and injunctive relief shall be proper modes of relief and are not to be considered alternative remedies. Furthermore, each party agrees that all actions, suits or proceedings arising under or relating to this Agreement may be brought only in a court of general jurisdiction in and for Middlesex County, Massachusetts or the United States District Court for the District of Massachusetts, to the jurisdiction and venue of which each party hereto consents and waives the right to argue forum non conveniens.

11. General Provisions. The parties acknowledge and agree as follows:

(a) This Agreement contains the entire understanding of the parties with regard to all matters contained herein. There are no other agreements, conditions, or representations, oral or written, express or implied, with regard to such matters. This Agreement supersedes and replaces any prior agreement between the parties generally relating to the same subject matter.

(b) This Agreement may be amended or modified only by a writing signed by all parties.

(c) Waiver by either Company or Employee of a breach of any provision, term or condition hereof shall not be deemed or construed as a further or continuing waiver thereof or a waiver of any breach of any other provision, term or condition of this Agreement.

(d) The rights and obligations of Company hereunder may be transferred or assigned to any successor or assign of the Company. The term "Company" as used herein is intended to include Dynasil Corporation of America, its successors and/or assigns, if any. No assignment of this Agreement shall be made by Employee, and any purported assignment shall be null and void.

(e) Employee's obligations under Paragraphs 7, 8 and 9 of this Agreement shall survive any change in Employee's employment status with Company, by promotion or otherwise, or, except to the extent provided therein, the termination of Employee's employment with Company.

(f) If any Court finds any provision or part of this Agreement to be unreasonable, in whole or in part, such provision shall be deemed and construed to be reduced to the maximum duration, scope or subject matter allowable under applicable law. Any invalidation of any provision or part of this Agreement will not invalidate any other part of this Agreement.

(g) This Agreement will be construed and enforced in accordance with the laws and legal principles of the Commonwealth of Massachusetts.

(h) This Agreement may be executed in any number of counterparts, including counterparts transmitted by facsimile, any one of which shall constitute an original of this Agreement. When counterparts of facsimile copies have been executed by all parties, they shall have the same effect as if the signatures to each counterpart or copy were upon the same document and copies of such documents shall be deemed valid as originals. The parties agree that all such signatures may be transferred to a single document upon the request of any party.

This Agreement is intended to be a legally binding document fully enforceable in accordance with its terms.

DYNASIL CORPORATION OF AMERICA

By:
Craig T. Dunham
President and CEO

EMPLOYEE:

Jacob Paster

STANDARD FORM COMMERCIAL LEASE - RMD-I

1. PARTIES Charles River Realty, dba Bachrach, Inc., 44 Hunt Street, (fill in) Watertown, Massachusetts 02472, LESSOR, which expression shall include its heirs, successors, and assigns where the context so admits, does hereby lease to RMD Instruments, Corp., 44 Hunt Street, Watertown, Massachusetts 02472 LESSEE, which expression shall include its successors, executors, administrators, and assigns where the context so admits, and the LESSEE hereby leases the following described premises:
2. PREMISES (fill in and include, if applicable, suite number, floor number, and square feet) Approximately 7,700 square feet of space as now occupied by Lessee on the five floors located at 44 Hunt Street, Watertown, Massachusetts 02472. Premises include the use of 20% of all parking spaces but two (2) parking spaces in the front presently marked Ms. Redler and Dr. Entine, together with the right to use in common, with others entitled thereto, the hallways, stairways, and elevators, necessary for access to said leased premises, and lavatories nearest thereto.

3. TERM
(fill in) The term of this lease shall be for five (5) years commencing on July 1, 2008 and ending on June 30, 2013.

4. BASE RENT
(fill in) The LESSEE shall pay to the LESSOR rent at the base rate of $153,230 ($19.90/sq. ft.), payable in advance in monthly installments of $12,769. and increasing by 4% starting with the beginning of each new lease year after the initial one.

5. SECURITY DEPOSIT
(fill in) The LESSOR and LESSEE agree that a deposit in the amount of $13,000.00 dollars paid by the LESSEE to the LESSOR as below, shall be held as a security for the LESSEE's performance as herein provided and refunded to the LESSEE within thirty days (30) at the end of this lease subject to the LESSEE's satisfactory compliance with the conditions hereof. The deposit will be paid in two equal installments of $6,500 each, payable on January 1st, 2009 and July 1st, 2009.

6. RENT ADJUSTMENT
(fill in)

The LESSEE shall pay to the LESSOR as additional rent a pro-rata share (19.2%) of any increase or decrease in the building's real estate taxes, the building's water and sewer use charges and the building's costs of heating oil over the charges and costs of each of these items for the base Calendar year 2007. Thus, for the lease year running from July 1, 2008 to June 30, 2009, the amount to be added as an adjustment to the first year's base rent would be 19.2% of the difference in the cost of these building expenses for Calendar 2008 and Calendar 2007.

For the purposes of this agreement, for the Calendar year 2007, real estate taxes for the building were $35,839.00; water and sewer use charges were $2,569.00; and the cost of heating oil was $36,412.00. LESSEE shall make payment by the latter of the end of the month of April of the lease year or thirty days after the LESSOR has provided the LESSEE written notice accompanied by a statement showing the determination of the amount due from LESSEE. This increase shall be prorated should this lease terminate before the end of any lease year.

7. UTILITIES (fill in or delete) LESSEE's water and sewer use charges, and steam heat, but The LESSOR shall provide and shall pay for all of the not electricity, gas or telephone; Where practical, the and services Lessee shall be metered for electricity and gas and pay that directly to the utility companies. Where separate metering is not practical, the Lessee will pay the Lessor 19.2% of the cost of such utilities in response to semi- annual bills provided to it, covering the six month periods ending June 30th and December 31st.

LESSOR agrees to furnish reasonable heat to the leased premises, the hallways, stairways. elevators, and lavatories on regular business days of the heating season of each year, to furnish elevator service and to light passageways and stairways, and to furnish such cleaning service for the common areas as is customary in similar buildings in said city or town, all subject to interruption due to any accident, to the making of repairs, alterations or improvements, to labor difficulties, to trouble in obtaining fuel, electricity, service or supplies from the sources from which they are usually obtained for said building, or to any cause beyond the LESSOR's control.

8. USE OF LEASED PREMISES The LESSEE shall use the leased premises only for the purpose of research and manufacturing of instruments, components and other technologically based activities and associated work without written consent of Lessor which shall not be unreasonably withheld.

9. COMPLIANCE WITH LAWS The LESSEE acknowledges that no trade or occupation shall be conducted in the leased premises or use made thereof which will be unlawful, improper, noisy or offensive, or contrary to any law or any municipal by-law or ordinance in force in the city or town in which the premises are situated.

10. FIRE INSURANCE The LESSEE shall not permit any use of the leased premises which will make voidable any insurance on the property of which the leased premises are a part, or on the contents of said property or which shall be contrary to any law or regulation from time to time established by the New England Fire Insurance Rating Association, or any similar body succeeding to its powers. The LESSEE shall on demand reimburse the LESSOR, and all other tenants, all extra insurance premiums caused by the LESSEE's use of the premises.

11. MAINTENANCE OF PREMISES The LESSEE agrees to maintain the leased premises in the same condition as they are at the commencement of the term or as they may be put in during the term of this lease, reasonable wear and tear, damage by fire and other casualty only excepted, and whenever necessary, to replace plate glass and other glass therein; acknowledging that the leased premises are now in good order and the glass whole. The LESSEE shall not permit the leased premises to be overloaded, damaged, stripped, or defaced, nor suffer any waste other than ordinary wear and tear. LESSEE shall obtain written consent of LESSOR before erecting any sign on the premises.

Maintenance of the building exterior including the roof and parking lot as well as the heating system and building structure are included in the base rent in Section 4. Maintenance costs for the building interior is not included in the base rent and the Lessor shall pay 19.2% of the cost of such maintenance.

12. ALTERATIONS- ADDITIONS The LESSEE shall not make structural alterations or additions to the leased premises, but may make non- structural alterations provided the LESSOR consents thereto in writing, which consent shall not be unreasonably withheld or delayed. All such allowed alterations shall be at LESSEE's expense and shall be in quality at least equal to the present construction. LESSEE shall not permit any mechanics' liens, or similar liens, to remain upon the leased premises for labor and material furnished to LESSEE or claimed to have been furnished to LESSEE in connection with work of any character performed or claimed to have been performed at the direction of LESSEE and shall cause any such lien to be released of record forthwith without cost to LESSOR. Any alterations or improvements made by the LESSEE shall become the property of the LESSOR at the termination of occupancy as provided herein, except for any trade fixtures installed by LESSEE which shall remain the LESSEE's property.

13. ASSIGNMENT- SUBLEASING The LESSEE shall not assign or sublet the whole or any part of the leased premises without LESSOR's prior written consent, which consent shall not be unreasonably withheld or delayed. Notwithstanding such consent, LESSEE shall remain liable to LESSOR for the payment of all rent and for the full performance of the covenants and conditions of this lease.

14. SUBORDINATION This lease shall be subject and subordinate to any and all mortgages, deeds of trust and other instruments in the nature of a mortgage, now or at any time hereafter, a lien or liens on the property of which the leased premises are a part and the LESSEE shall, when requested, promptly execute and deliver such written instruments as shall be necessary to show the subordination of this lease to said mortgages, deeds of trust or other such instruments in the nature of a mortgage.

15. LESSOR'S ACCESS The LESSOR or agents of the LESSOR may, at reasonable times, enter to view the leased premises and may remove placards and signs not approved and affixed as herein provided, and make repairs and alterations as LESSOR should elect to do and may show the leased premises to others, and at any time within three (3) months before the expiration of the term, may affix to any suitable part of the leased premises a notice for letting or selling the leased premises or property of which the leased premises are a part and keep the same so affixed without hindrance or molestation.

16. INDEMNIFI- CATION AND LIABILITY
(fill in) The LESSEE shall save the LESSOR harmless from all loss and damage occasioned by the use or escape of water or by the bursting of pipes, as well as from any claim or damage resulting from neglect in not removing snow and ice from the roof of the building or from the sidewalks bordering upon the premise so leased, or by any nuisance made or suffered on the leased premises, unless such loss is caused by the neglect of the LESSOR. The removal of snow and ice from the sidewalks bordering upon the leased premises shall be LESSORS responsibility.

17. LESSEE'S LIABILITY INSURANCE
(fill in) The LESSEE shall maintain with respect to the leased premises and the property including the real estate, of which the leased premises are a part, comprehensive public liability insurance in the amount of $500,000/$1,000,000 with property damage insurance in limits of $100,000 in responsible companies qualified to do business in Massachusetts and in good standing therein insuring the LESSOR as well as LESSEE against injury to persons or damage to property as provided. The LESSEE shall deposit with the LESSOR certificates for such insurance at or prior to the commencement of the term, and thereafter within thirty (30) days prior to the expiration of any such policies. All such insurance certificates shall provide that such policies shall not be canceled without at least ten (10) days prior written notice to each assured named therein.

18. FIRE, CASUALTY- EMINENT DOMAIN Should a substantial portion of the leased premises, or of the property of which they are a part, be substantially damaged by fire or other casualty, or be taken by eminent domain, the LESSOR may elect to terminate this lease. When such fire, casualty, or taking renders the leased premises substantially unsuitable for their intended use, a just and proportionate abatement of rent shall be made, and the LESSEE may elect to terminate this lease if:

(a)The LESSOR fails to give written notice within thirty
(30) days of intention to restore leased premises, or
(b)The LESSOR fails to restore the leased premises to a condition substantially suitable for their intended use within ninety (90) days of said fire, casualty, or taking.

The LESSOR reserves, and the LESSEE grants to the LESSOR, all rights which the LESSEE may have for damages or injury to the leased premises for any taking by eminent domain, except for damage to the LESSEE's fixtures, property, or equipment.

19. DEFAULT In the event that:
AND
BANKRUPTCY

(a)The LESSEE shall default in the payment of any installment of rent or other sum herein specified and such default shall continue for ten (10) days after written notice thereof; or
(b)The LESSEE shall default in the observance or performance of any other of the LESSEE's covenants, agreements, or obligations hereunder and such default shall not be corrected within thirty (30) days after written notice thereof; or
(c)The LESSEE shall be declared bankrupt or insolvent according to law, or, if any assignment shall be made of LESSEE's property for the benefit of creditors,

then the LESSOR shall have the right thereafter, while such default continues, to re-enter and take complete possession of the leased premises, to declare the term of this lease ended, and remove the LESSEE's effects, without prejudice to any remedies which might be otherwise used for arrears of rent or other default. The LESSEE shall indemnify the LESSOR against all loss of rent and other payments which the LESSOR may incur by reason of such termination during the residue of the term.

If the LESSEE shall default, after reasonable notice thereof, in the observance or performance of any conditions or covenants on LESSEE's part to be observed or performed under or by virtue of any of the provisions in any article of this lease, the LESSOR, without being under any obligation to do so and without thereby waiving such default, may remedy such default for the account and at the expense of the LESSEE. If the LESSOR makes any expenditures or incurs any obligations for the payment of money in connection therewith, including but not limited to, reasonable attorney's fees in instituting, prosecuting or defending any action or proceeding, such sums paid or obligations insured, with interest at the rate of six (6) per cent per annum and costs, shall be paid to the LESSOR by the LESSEE as additional rent.

20. NOTICE
(fill in) Any notice from the LESSOR to the LESSEE relating to the leased premises or to the occupancy thereof, shall be deemed duly served, if left at the leased premises with a suitable representative of the Lessee and addressed to the LESSEE, or, if mailed to the leased premises, registered or certified mail, return receipt requested, postage prepaid, addressed to the LESSEE. Any notice from the LESSEE to the LESSOR relating to the leased premises or to the occupancy thereof, shall be deemed duly served, if mailed to the LESSOR by registered or certified mail, return receipt requested, postage prepaid, addressed to the LESSOR at such address as the LESSOR may from time to time advise in writing. All rent and notices shall be paid and sent to the LESSOR at 44 Hunt Street, Watertown, Massachusetts 02472.

21. SURRENDER The LESSEE shall at the expiration or other termination of this lease remove all LESSEE's goods and effects from the leased premises, (including, without hereby limiting the generality of the foregoing, all signs and lettering affixed or painted by the LESSEE, either inside or outside the leased premises). LESSEE shall deliver to the LESSOR the leased premises and all keys, locks thereto, and other fixtures connected therewith and all alterations and additions made to or upon the leased premises, in the same condition as they were at the commencement of the term, or as they were put in during the term hereof, reasonable wear and tear and damage by fire or other casualty only excepted. In the event of the LESSEE's failure to remove any of LESSEE's property from the premises, LESSOR is hereby authorized, without liability to LESSEE for loss or damage thereto, and at the sole risk of LESSEE, to remove and store any of the property at LESSEE's expense, or to retain same under LESSOR's control or to sell at public or private sale, any or all of the property not so removed and to apply the net proceeds of such sale to the payment of any sum due hereunder, or to destroy such property.

It is also understood and agreed that at the expiration or other termination of this lease, LESSOR at his option, may take title to any and all leasehold improvements, including, but not limited to, chemical hoods, HVAC systems, built-in or attached work benches, telephone systems, backup generators and electrical distribution equipment, air circulation systems, etc. However, this does not include those pieces of equipment which are part of working systems used by the LESSEE as part of his manufacturing or research activities such as refrigeration units providing cooling to evaporators and x-ray equipment or other technological items, such as local transformers which prepare power for use by special equipment. Those leasehold items to which the LESSOR does not opt to take title shall be removed by the LESSEE at its expense.

22. HAZARDOUS WASTE PROVISION It is also understood and agreed that at the expiration or other termination of this lease, the LESSEE shall remove all hazardous waste associated with its occupancy to the satisfaction of an independent environmental consulting firm such as IES, Inc of Somerville, MA, the firm that did an ASTM Screen/Limited Assessment of the entire property in May 2008, or a similar qualified inspection service. Any expense incurred to engage an environmental casualty firm to make this determination shall be the LESSOR's responsibility. However, if the firm determines that the Lessee has failed to meet this obligation, the cost of re- inspections will be that of the LESSEE.

23. PROPERTY & LIABILITY INSURANCE PROVISION

LESSEE will coordinate the purchase of property and liability insurance with the LESSOR to maintain a high quality of coverage and pay for 19.2% of the cost as part of the miscellaneous expenses described below. The cost of insurance is not included in the base rent in Section
4. This clause shall dominate Clause 17 "Lessee's Liability* Insurance" above.

24. OPTION TO EXTEND LEASE LESSEE and LESSOR agree to negotiate in good faith an extension of this Lease at the end of the term. LESSOR hereby grants to LESSEE the right of first refusal to re- let the Premises at the end of the term. If LESSOR receives an acceptable offer from a bona fide prospective tenant to lease the Premises at the end of the term, LESSOR shall give notice of the same to LESSEE and LESSEE shall have fifteen (15) calendar days from LESSEE's receipt of said written notice to exercise LESSEE's right of first refusal and match the terms proposed by the bona fide prospective tenant except with a 2.5% surcharge on the cash rent.

25. RIGHT OF FIRST REFUSAL LESSOR hereby grants to LESSEE a right of first refusal to purchase 44 Hunt Street, Watertown, Massachusetts 02472 (the "Property"), exercisable during the term of this Lease, but subordinated to any right of first refusal given to Radiation Monitoring Devices, Inc. If LESSOR receives a bona fide offer to purchase from a third party, LESSOR shall provide LESSEE with written notice thereof together with a true and correct copy of the buyer executed offer to purchase. LESSEE shall have a period of fifteen days following receipt of such notice in which to elect to purchase the Property on the same terms and conditions whereupon LESSEE shall enter into a purchase contract with LESSOR on such terms. If LESSEE does not elect to purchase as aforesaid and the underlying sale does not occur, or if the terms change from the terms presented to LESSEE, this right of first refusal provision shall remain in effect.

26. MISCELLANEOUS EXPENSES PROVISION It is also understood and agreed that the LESSEE will reimburse the LESSOR for 19.2% of the other expenses paid for by the LESSOR as illustrated in the Attachments I appended to this document. It is included for illustrative purposes only and does not take precedence over the written provisions of this lease. The payment will be made in response to quarterly or semi-annual bills provided to the LESSEE covering the appropriate periods ending either June 30th and December 31st, or March 31st, June 30th, September 30th and December 31st as requested by the LESSEE.

27. EXCELL SPREADSHEET EXHIBIT The "Bachrach Building Rent Chart is appended to this lease as Attachment II. It is included for illustrative purposes only and does not take precedence over the written provisions of this lease.

27. ENVIRONMENTAL Notwithstanding anything to the contrary contained herein, Lessor shall indemnify, defend and hold the Lessee harmless against any Damages arising from, relating to or constituting any liability, for investigative, remedial or response actions or otherwise, under Environmental Laws, arising out of the ownership, operation or condition of the Business and/or its properties on or prior to the Lease commencement date (notwithstanding the disclosure of the possibility of such event in the IES Report or otherwise).

Notwithstanding anything to the contrary contained herein, Lessee shall indemnify, defend and hold the Lessor harmless against any Damages arising from, relating to or constituting any liability, for investigative, remedial or response actions or otherwise, under Environmental Laws, arising out of the operation or condition of the Business subsequent to the Lease commencement date.

IN WITNESS WHEREOF, the LESSOR and LESSEE have hereunto set their hands and common seals this _____________________ day of _________________________ 2008.

________________________       ________________________
LESSOR                         LESSEE
Gerald Entine, Partner         Craig Dunham
Bachrach, Inc.                 RMD, Inc

ATTACHMENT I
ILLUSTRATION OF METHODOLOGY OF ALLOCATING EXPENSES

CLOSING JUNE 05 OF CHARLES RIVER REALTY
June 30, 2007

GENERAL METHODOLOGY
The mid-year and year end adjustments which must be made relate to the portion of CRR building expenses, such as utilities, maintenance, and insurance with the Sub-S and LLC should pick up from CRR and vice-versa. It also concerns how much of the building maintenance should be capitalized.

BUILDING MAINTENANCE - January 1 to June 30, 2007
1. D&R Electric, Instant Signal and G.C. Paint are shared and is transferred in its entirety upstairs and then has 1/4 sent back downstairs since almost all of this cost is indoor wiring for labs and work areas.
2. The cost of repairing air conditioners to CRR was $0. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $0 goes to LLC and 59.25% or $0 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate. (Note that because of changes in the occupancy, the new percentage allocations are RMD 19.2%, RMD, Instruments 19.2% and CRR 5.5%.)
3. The cost of carpentry to CRR was $123,949. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $24,480 goes to LLC and 59.25% or $73,440 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
4. The cost of plumbing to CRR was $4,832. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $954 goes to LLC and 59.25% or $2,863 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
5. The cost of masonry to CRR was $4,595. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $908 goes to LLC and 59.25% or $2,723 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
6. G.C. Painting did most of its work directly for LLC since it works on specific lab and production areas. However, the cost of the general projects for CRR was $0. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $0 goes to LLC and 59.25% or $0 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
7. The cost of floor repair to CRR was $4,418. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $478 goes to LLC and 59.25% or $1,433 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
8. The cost of locks to CRR was $0. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $0 goes to LLC and 59.25% or $0 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
9. The cost of windows to CRR was $22,205. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $4,385 goes to LLC and 59.25% or $13,156 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
10. The cost of utilities should be shared under separate billing.

INSURANCE - Bldg. - January 1 to June 30, 2007
1. The cost of insurance should go by square feet. Since RMD has been paying for everything, (6x$2,879/mo. _ $17,276) for this six month period, CRR owes RMD 21% ($3,628).

UTILITIES - January 1 to June 30, 2007
1. The cost of electricity ($36,911) and gas ($8,964) to CRR was $45,875. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $9,060 goes to LLC and 59.25% or $27,181 goes to RMD. Each entity should write their check directly to CRR and enter under Utilities - Separate.

ITEM                CRR             RMD           LLC         Notes
D&R                   0               0             0
Air                   0               0             0
Conditioners
Carpentry             0          73,440        24,480
Plumbing              0           2,863           954
Masonry               0           2,723           908
Painting              0               0             0
Floor Repair          0           1,433           478
Lock Repair           0               0             0
Window                0          13,156         4,385
Repair
Subtotal              0         $93,615       $31,205
Insurance             3             628             0          0
Utilities          0 27             181         9,060
Rent                  0               0             0
Adjustment

Total $3,628 $120,796 $40,265

CRR-> RMD RMD -> CRR LLC-> CRR

Note that because of changes in the occupancy, the new percentage
allocations are RMD 19.2%, RMD, Instruments 19.2% and CRR 5.5%.

CLOSING DECEMBER 07 OF CHARLES RIVER REALTY
December 31, 2007

GENERAL METHODOLOGY
The mid-year and year end adjustments which must be made relate to the portion of CRR building expenses, such as utilities, maintenance, and insurance with the Sub-S and LLC should pick up from CRR and vice-versa. As per the space allocation for the building, now that RMD has taken over the VideoLink space, the common space and that occupied by the other tenant comprises 0.0%. RMD occupies 78% and LLC 22% of the remainder. It also concerns how much of the building maintenance should be capitalized. The detailed allocation of expenses is contained the allocation chart later in this document.

BUILDING MAINTENANCE - July 1 to December 31, 2007
1. The cost of air conditioning cleaning and freon to CRR was $0. All of this, except for special projects for common areas ($2,482), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
2. The cost of air conditioning repairs to CRR was $6,875. All of this, except for special projects for common areas ($2,873), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
3. The cost of appliance repairs to CRR was $2,068. All of this, except for special projects for common areas ($2,873), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
4. The cost of cabinets to CRR was $202. All of this, except for special projects for common areas ($967), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Equip. Maintenance - Separate.
5. The cost of carpentry to CRR was $114,966. All of this, except for special projects for common areas ($13,574), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
6. The cost of door repairs to CRR was $0. All of this, except for special projects for common areas ($0), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
7. The cost of electric repairs to CRR was $0. All of this, except for special projects for common areas ($0), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
8. The cost of floor repair to CRR was $5,232. All of this, except for special projects for common areas ($4,880), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
9. The cost of hood repair to CRR was $0. All of this belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
10. The cost of Lighting to CRR was $0. All of this, except for special projects for common areas ($2,196), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
11. The cost of Locks and Security Systems to CRR was $0. All of this, except for special projects for common areas ($1,182), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
12. The cost of masonry to CRR was $5,395. All of this, except for special projects for common areas ($3,077), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
13. The cost of painting to CRR was $0. All of this, except for special projects for common areas ($3,404), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
14. The cost of plumbing to CRR was $16,556. All of this, except for special projects for common areas ($3,718), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
15. The cost of repairing radiators and steam pipes to CRR was $16,100. All of this, except for special projects for common areas ($3,152), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
16. The cost of repairing stairs and railings to CRR was $0. All of this, except for special projects for common areas ($1,137), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
17. The cost of repairing vacuum and pressurized air systems to CRR was $0. All of this belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
18. The cost of repairing windows and mirrors to CRR was $8.173. All of this, except for special projects for common areas ($3,378), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate. INSURANCE - Bldg. - July 1 to December 31, 2007
1. The cost of insurance should go by square feet. Since RMD has been paying for everything, (6x$2,150/mo. = $12,900) for July through December 07, CRR owes RMD 0% ($0), now that there is no longer any common space.
ELECTRICITY - July 1 to December 31, 2007
1. The cost of electricity to CRR was $54,141. Of this 100% belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Utilities - Separate.
CHECKS TO BE WRITTEN - July 1 to December 31, 2007

ITEM                 CRR         RMD         LLC      Notes
Repairs                 0     136,943         38,625
Insurance               0           0              0
Utilities               0      42,230         11,911
Total               $   0    $179,173        $50,536

                 CRR->RMD    RMD->CRR        LLC->CRR

CAPITALIZATION OF MAINTENANCE COSTS - December 31, 2007
1. The cost of various maintenance items have been capitalized as per the chart below, corresponding to zero percent for carpentry and zero percent for the other items which were just repairs to try to best reflect the correct distribution.

ITEM                   CRR-Total   Expense   Lshold  %Capital
                                             Improve.
Air Cond. Cleaning             0          0     0      0 %
Air Cond. Repairs          6,875      6,875     0      0 %
Appliances                 2,068      2,068     0      0 %
Cabinets                     202        202     0      0 %
Carpentry                114,966    114,966     0      0 %
Door Repairs                   0          0     0      0 %
Electrical Repairs             0          0     0      0 %
Floor Repair               5,232      5,232     0      0 %
Hood Repair (All RMD)          0          0     0      0 %
Lighting                       0          0     0      0 %
Locks                          0          0     0      0 %
Masonry                    5,395      5,395     0      0 %
Painting                       0          0     0      0 %
Plumbing                  16,556     16,556     0      0 %
Radiators, Steam          16,100     16,100     0      0 %
Pipes
Stairs and Railings            0          0     0      0 %
Vacuum Repairs   (All          0          0     0      0 %
RMD)
Windows & Mirrors          8,173      8,173     0      0 %
Total                   $175,567   $175,567    $0      0 %

REIMBURSEMENT OF EXPENSES FOR OTHER PROPERTIES - December 31, 2007
1. The cost of any items managed by CRR but attributable to non- CRR properties has been reimbursed by a personal check from GE in an amount of $19,679.

ITEM   Description             TOTAL     CRR         RMD        LLC
  1    Air Cond. Cleaning          0      0            0          0
  2    Air Cond. Repairs       6,875      0        5,363      1,513
  3    Appliances              2,068      0        1,613        455
  4    Cabinets                  202      0          158         44
  5    Carpentry               114,9      0       89,673     25,293
                                  66
  6    Door Repairs                0      0            0          0
  7    Electrical Repairs          0      0            0          0
  8    Floor Repair            5,232      0        4,081      1,151
  9    Hood Repair (All RMD)       0      0            0          0
 10    Lighting                    0      0            0          0
 11    Locks                       0      0            0          0
 12    Masonry                 5,395      0        4,208      1,187
 13    Painting                    0      0            0          0
 14    Plumbing                16,55      0       12,914      3,642
                                   6
 15    Radiators, Steam Pipes  16,10      0       12,558      3,542
                                   0
 16    Stairs and Railings         0      0            0          0
 17    Vacuum  Repairs   (All      0      0            0          0
       RMD)
 18    Windows & Mirrors       8,173      0        6,375      1,798
                               =====    ======     =====       ====
       Total                 175,567      0      136,943     38,625

ATTACHMENT II
ILLUSTRATION OF METHODOLOGY OF ALLOCATING YEARLY COST INCREASES

STANDARD FORM COMMERCIAL LEASE - RMD-S

1. PARTIES Charles River Realty, dba Bachrach, Inc., 44 Hunt Street, (fill in) Watertown, Massachusetts 02472, LESSOR, which expression shall include its heirs, successors, and assigns where the context so admits, does hereby lease to Radiation Monitoring Devices, Inc, 44 Hunt Street, Watertown, Massachusetts 02472, LESSEE, which expression shall include its successors, executors, administrators, and assigns where the context so admits, and the LESSEE hereby leases the following described premises:
2. PREMISES (fill in and include, if applicable, suite number, floor number, and square feet) Approximately 30,100 square feet of space as now occupied by Lessee on the five floors located at 44 Hunt Street, Watertown, Massachusetts 02472. Premises include the use of 80% of all parking spaces but two (2) parking spaces in the front presently marked Ms. Redler and Dr. Entine, together with the right to use in common, with others entitled thereto, the hallways, stairways, and elevators, necessary for access to said leased premises, and lavatories nearest thereto.

3. TERM
(fill in) The term of this lease shall be for five (5) years commencing on July 1, 2008 and ending on June 30, 2013.

4. BASE RENT
(fill in) The LESSEE shall pay to the LESSOR rent at the base rate of $598,990 ($19.90/sq. ft.), payable in advance in monthly installments of $49,916. and increasing by 4% starting with the beginning of each new lease year after the initial one.

5. SECURITY DEPOSIT
(fill in) The LESSOR and LESSEE agree that a deposit in the amount of $50,000.00 dollars paid by the LESSEE to the LESSOR as below, shall be held as a security for the LESSEE's performance as herein provided and refunded to the LESSEE within thirty days (30) at the end of this lease subject to the LESSEE's satisfactory compliance with the conditions hereof. The deposit will be paid in two equal installments of $25,000 each, payable on January 1st, 2009 and July 1st, 2009.

6. RENT ADJUSTMENT
(fill in)

The LESSEE shall pay to the LESSOR as additional rent a pro-rata share (75.3%) of any increase or decrease in the building's real estate taxes, the building's water and sewer use charges and the building's costs of heating oil over the charges and costs of each of these items for the base Calendar year 2007. Thus, for the lease year running from July 1, 2008 to June 30, 2009, the amount to be added as an adjustment to the first year's base rent would be 75.3% of the difference in the cost of these building expenses for Calendar 2008 and Calendar 2007.

For the purposes of this agreement, for the Calendar year 2007, real estate taxes for the building were $35,839.00; water and sewer use charges were $2,569.00; and the cost of heating oil was $36,412.00. LESSEE shall make payment by the latter of the end of the month of April of the lease year or thirty days after the LESSOR has provided the LESSEE written notice accompanied by a statement showing the determination of the amount due from LESSEE. This increase shall be prorated should this lease terminate before the end of any lease year.

7. UTILITIES (fill in or delete) LESSEE's water and sewer use charges, and steam heat, but The LESSOR shall provide and shall pay for all of the not electricity, gas or telephone; Where practical, the and services Lessee shall be metered for electricity and gas and pay that directly to the utility companies. Where separate metering is not practical, the Lessee will pay the Lessor 75.3% of the cost of such utilities in response to semi- annual bills provided to it, covering the six month periods ending June 30th and December 31st.

LESSOR agrees to furnish reasonable heat to the leased premises, the hallways, stairways. elevators, and lavatories on regular business days of the heating season of each year, to furnish elevator service and to light passageways and stairways, and to furnish such cleaning service for the common areas as is customary in similar buildings in said city or town, all subject to interruption due to any accident, to the making of repairs, alterations or improvements, to labor difficulties, to trouble in obtaining fuel, electricity, service or supplies from the sources from which they are usually obtained for said building, or to any cause beyond the LESSOR's control.

8. USE OF LEASED PREMISES The LESSEE shall use the leased premises only for the purpose of research and manufacturing of instruments, components and other technologically based activities and associated work without written consent of Lessor which shall not be unreasonably withheld.

9. COMPLIANCE WITH LAWS The LESSEE acknowledges that no trade or occupation shall be conducted in the leased premises or use made thereof which will be unlawful, improper, noisy or offensive, or contrary to any law or any municipal by-law or ordinance in force in the city or town in which the premises are situated.

10. FIRE INSURANCE The LESSEE shall not permit any use of the leased premises which will make voidable any insurance on the property of which the leased premises are a part, or on the contents of said property or which shall be contrary to any law or regulation from time to time established by the New England Fire Insurance Rating Association, or any similar body succeeding to its powers. The LESSEE shall on demand reimburse the LESSOR, and all other tenants, all extra insurance premiums caused by the LESSEE's use of the premises.

11. MAINTENANCE OF PREMISES The LESSEE agrees to maintain the leased premises in the same condition as they are at the commencement of the term or as they may be put in during the term of this lease, reasonable wear and tear, damage by fire and other casualty only excepted, and whenever necessary, to replace plate glass and other glass therein; acknowledging that the leased premises are now in good order and the glass whole. The LESSEE shall not permit the leased premises to be overloaded, damaged, stripped, or defaced, nor suffer any waste other than ordinary wear and tear. LESSEE shall obtain written consent of LESSOR before erecting any sign on the premises.

Maintenance of the building exterior including the roof and parking lot as well as the heating system and building structure are included in the base rent in Section 4. Maintenance costs for the building interior is not included in the base rent and the Lessor shall pay 75.3% of the cost of such maintenance.

12. ALTERATIONS- ADDITIONS The LESSEE shall not make structural alterations or additions to the leased premises, but may make non- structural alterations provided the LESSOR consents thereto in writing, which consent shall not be unreasonably withheld or delayed. All such allowed alterations shall be at LESSEE's expense and shall be in quality at least equal to the present construction. LESSEE shall not permit any mechanics' liens, or similar liens, to remain upon the leased premises for labor and material furnished to LESSEE or claimed to have been furnished to LESSEE in connection with work of any character performed or claimed to have been performed at the direction of LESSEE and shall cause any such lien to be released of record forthwith without cost to LESSOR. Any alterations or improvements made by the LESSEE shall become the property of the LESSOR at the termination of occupancy as provided herein, except for any trade fixtures installed by LESSEE which shall remain the LESSEE's property.

13. ASSIGNMENT- SUBLEASING The LESSEE shall not assign or sublet the whole or any part of the leased premises without LESSOR's prior written consent, which consent shall not be unreasonably withheld or delayed. Notwithstanding such consent, LESSEE shall remain liable to LESSOR for the payment of all rent and for the full performance of the covenants and conditions of this lease.

14. SUBORDINATION This lease shall be subject and subordinate to any and all mortgages, deeds of trust and other instruments in the nature of a mortgage, now or at any time hereafter, a lien or liens on the property of which the leased premises are a part and the LESSEE shall, when requested, promptly execute and deliver such written instruments as shall be necessary to show the subordination of this lease to said mortgages, deeds of trust or other such instruments in the nature of a mortgage.

15. LESSOR'S ACCESS The LESSOR or agents of the LESSOR may, at reasonable times, enter to view the leased premises and may remove placards and signs not approved and affixed as herein provided, and make repairs and alterations as LESSOR should elect to do and may show the leased premises to others, and at any time within three (3) months before the expiration of the term, may affix to any suitable part of the leased premises a notice for letting or selling the leased premises or property of which the leased premises are a part and keep the same so affixed without hindrance or molestation.

16. INDEMNIFI- CATION AND LIABILITY
(fill in) The LESSEE shall save the LESSOR harmless from all loss and damage occasioned by the use or escape of water or by the bursting of pipes, as well as from any claim or damage resulting from neglect in not removing snow and ice from the roof of the building or from the sidewalks bordering upon the premise so leased, or by any nuisance made or suffered on the leased premises, unless such loss is caused by the neglect of the LESSOR. The removal of snow and ice from the sidewalks bordering upon the leased premises shall be LESSORS responsibility.

17. LESSEE'S LIABILITY INSURANCE
(fill in) The LESSEE shall maintain with respect to the leased premises and the property including the real estate, of which the leased premises are a part, comprehensive public liability insurance in the amount of $500,000/$1,000,000 with property damage insurance in limits of $100,000 in responsible companies qualified to do business in Massachusetts and in good standing therein insuring the LESSOR as well as LESSEE against injury to persons or damage to property as provided. The LESSEE shall deposit with the LESSOR certificates for such insurance at or prior to the commencement of the term, and thereafter within thirty (30) days prior to the expiration of any such policies. All such insurance certificates shall provide that such policies shall not be canceled without at least ten (10) days prior written notice to each assured named therein.

18. FIRE, CASUALTY- EMINENT DOMAIN Should a substantial portion of the leased premises, or of the property of which they are a part, be substantially damaged by fire or other casualty, or be taken by eminent domain, the LESSOR may elect to terminate this lease. When such fire, casualty, or taking renders the leased premises substantially unsuitable for their intended use, a just and proportionate abatement of rent shall be made, and the LESSEE may elect to terminate this lease if:

(a)The LESSOR fails to give written notice within thirty
(30) days of intention to restore leased premises, or
(b)The LESSOR fails to restore the leased premises to a condition substantially suitable for their intended use within ninety (90) days of said fire, casualty, or taking.

The LESSOR reserves, and the LESSEE grants to the LESSOR, all rights which the LESSEE may have for damages or injury to the leased premises for any taking by eminent domain, except for damage to the LESSEE's fixtures, property, or equipment.

19. DEFAULT In the event that:
AND
BANKRUPTCY

(a)The LESSEE shall default in the payment of any installment of rent or other sum herein specified and such default shall continue for ten (10) days after written notice thereof; or
(b)The LESSEE shall default in the observance or performance of any other of the LESSEE's covenants, agreements, or obligations hereunder and such default shall not be corrected within thirty (30) days after written notice thereof; or
(c)The LESSEE shall be declared bankrupt or insolvent according to law, or, if any assignment shall be made of LESSEE's property for the benefit of creditors,

then the LESSOR shall have the right thereafter, while such default continues, to re-enter and take complete possession of the leased premises, to declare the term of this lease ended, and remove the LESSEE's effects, without prejudice to any remedies which might be otherwise used for arrears of rent or other default. The LESSEE shall indemnify the LESSOR against all loss of rent and other payments which the LESSOR may incur by reason of such termination during the residue of the term.

If the LESSEE shall default, after reasonable notice thereof, in the observance or performance of any conditions or covenants on LESSEE's part to be observed or performed under or by virtue of any of the provisions in any article of this lease, the LESSOR, without being under any obligation to do so and without thereby waiving such default, may remedy such default for the account and at the expense of the LESSEE. If the LESSOR makes any expenditures or incurs any obligations for the payment of money in connection therewith, including but not limited to, reasonable attorney's fees in instituting, prosecuting or defending any action or proceeding, such sums paid or obligations insured, with interest at the rate of six (6) per cent per annum and costs, shall be paid to the LESSOR by the LESSEE as additional rent.

20. NOTICE
(fill in) Any notice from the LESSOR to the LESSEE relating to the leased premises or to the occupancy thereof, shall be deemed duly served, if left at the leased premises with a suitable representative of the Lessee and addressed to the LESSEE, or, if mailed to the leased premises, registered or certified mail, return receipt requested, postage prepaid, addressed to the LESSEE. Any notice from the LESSEE to the LESSOR relating to the leased premises or to the occupancy thereof, shall be deemed duly served, if mailed to the LESSOR by registered or certified mail, return receipt requested, postage prepaid, addressed to the LESSOR at such address as the LESSOR may from time to time advise in writing. All rent and notices shall be paid and sent to the LESSOR at 44 Hunt Street, Watertown, Massachusetts 02472.

21. SURRENDER The LESSEE shall at the expiration or other termination of this lease remove all LESSEE's goods and effects from the leased premises, (including, without hereby limiting the generality of the foregoing, all signs and lettering affixed or painted by the LESSEE, either inside or outside the leased premises). LESSEE shall deliver to the LESSOR the leased premises and all keys, locks thereto, and other fixtures connected therewith and all alterations and additions made to or upon the leased premises, in the same condition as they were at the commencement of the term, or as they were put in during the term hereof, reasonable wear and tear and damage by fire or other casualty only excepted. In the event of the LESSEE's failure to remove any of LESSEE's property from the premises, LESSOR is hereby authorized, without liability to LESSEE for loss or damage thereto, and at the sole risk of LESSEE, to remove and store any of the property at LESSEE's expense, or to retain same under LESSOR's control or to sell at public or private sale, any or all of the property not so removed and to apply the net proceeds of such sale to the payment of any sum due hereunder, or to destroy such property.

It is also understood and agreed that at the expiration or other termination of this lease, LESSOR at his option, may take title to any and all leasehold improvements, including, but not limited to, chemical hoods, HVAC systems, built-in or attached work benches, telephone systems, backup generators and electrical distribution equipment, air circulation systems, etc. However, this does not include those pieces of equipment which are part of working systems used by the LESSEE as part of his manufacturing or research activities such as refrigeration units providing cooling to evaporators and x-ray equipment or other technological items, such as local transformers which prepare power for use by special equipment. Those leasehold items to which the LESSOR does not opt to take title shall be removed by the LESSEE at its expense.

22. HAZARDOUS WASTE PROVISION It is also understood and agreed that at the expiration or other termination of this lease, the LESSEE shall remove all hazardous waste associated with its occupancy to the satisfaction of an independent environmental consulting firm such as IES, Inc of Somerville, MA, the firm that did an ASTM Screen/Limited Assessment of the entire property in May 2008, or a similar qualified inspection service. Any expense incurred to engage an environmental casualty firm to make this determination shall be the LESSOR's responsibility. However, if the firm determines that the Lessee has failed to meet this obligation, the cost of re- inspections will be that of the LESSEE.

23. PROPERTY & LIABILITY INSURANCE PROVISION

LESSEE will coordinate the purchase of property and liability insurance with the LESSOR to maintain a high quality of coverage and pay for 75.3% of the cost as part of the miscellaneous expenses described below. The cost of insurance is not included in the base rent in Section
4. This clause shall dominate Clause 17 "Lessee's Liability* Insurance" above.

24. OPTION TO EXTEND LEASE LESSEE and LESSOR agree to negotiate in good faith an extension of this Lease at the end of the term. LESSOR hereby grants to LESSEE the right of first refusal to re- let the Premises at the end of the term. If LESSOR receives an acceptable offer from a bona fide prospective tenant to lease the Premises at the end of the term, LESSOR shall give notice of the same to LESSEE and LESSEE shall have fifteen (15) calendar days from LESSEE's receipt of said written notice to exercise LESSEE's right of first refusal and match the terms proposed by the bona fide prospective tenant except with a 2.5% surcharge on the cash rent.

25. RIGHT OF FIRST REFUSAL LESSOR hereby grants to LESSEE a right of first refusal to purchase 44 Hunt Street, Watertown, Massachusetts 02472 (the "Property"), exercisable during the term of this Lease, but subordinated to any right of first refusal given to Radiation Monitoring Devices, Inc. If LESSOR receives a bona fide offer to purchase from a third party, LESSOR shall provide LESSEE with written notice thereof together with a true and correct copy of the buyer executed offer to purchase. LESSEE shall have a period of fifteen days following receipt of such notice in which to elect to purchase the Property on the same terms and conditions whereupon LESSEE shall enter into a purchase contract with LESSOR on such terms. If LESSEE does not elect to purchase as aforesaid and the underlying sale does not occur, or if the terms change from the terms presented to LESSEE, this right of first refusal provision shall remain in effect.

26. MISCELLANEOUS EXPENSES PROVISION It is also understood and agreed that the LESSEE will reimburse the LESSOR for 19.2% of the other expenses paid for by the LESSOR as illustrated in the Attachments I appended to this document. It is included for illustrative purposes only and does not take precedence over the written provisions of this lease. The payment will be made in response to quarterly or semi-annual bills provided to the LESSEE covering the appropriate periods ending either June 30th and December 31st, or March 31st, June 30th, September 30th and December 31st as requested by the LESSEE.

27. EXCELL SPREADSHEET EXHIBIT The "Bachrach Building Rent Chart is appended to this lease as Attachment II. It is included for illustrative purposes only and does not take precedence over the written provisions of this lease.

27. ENVIRONMENTAL Notwithstanding anything to the contrary contained herein, Lessor shall indemnify, defend and hold the Lessee harmless against any Damages arising from, relating to or constituting any liability, for investigative, remedial or response actions or otherwise, under Environmental Laws, arising out of the ownership, operation or condition of the Business and/or its properties on or prior to the Lease commencement date (notwithstanding the disclosure of the possibility of such event in the IES Report or otherwise).

Notwithstanding anything to the contrary contained herein, Lessee shall indemnify, defend and hold the Lessor harmless against any Damages arising from, relating to or constituting any liability, for investigative, remedial or response actions or otherwise, under Environmental Laws, arising out of the operation or condition of the Business subsequent to the Lease commencement date.

IN WITNESS WHEREOF, the LESSOR and LESSEE have hereunto set their hands and common seals this _____________________ day of _________________________ 2008.

________________________         ________________________
LESSOR                           LESSEE
Gerald Entine, Partner           Craig Dunham
Bachrach, Inc.                   RMD, Inc

ATTACHMENT I
ILLUSTRATION OF METHODOLOGY OF ALLOCATING EXPENSES

CLOSING JUNE 05 OF CHARLES RIVER REALTY
June 30, 2007

GENERAL METHODOLOGY
The mid-year and year end adjustments which must be made relate to the portion of CRR building expenses, such as utilities, maintenance, and insurance with the Sub-S and LLC should pick up from CRR and vice-versa. It also concerns how much of the building maintenance should be capitalized.

BUILDING MAINTENANCE - January 1 to June 30, 2007
1. D&R Electric, Instant Signal and G.C. Paint are shared and is transferred in its entirety upstairs and then has 1/4 sent back downstairs since almost all of this cost is indoor wiring for labs and work areas.
2. The cost of repairing air conditioners to CRR was $0. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $0 goes to LLC and 59.25% or $0 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate. (Note that because of changes in the occupancy, the new percentage allocations are RMD 75.3%, RMD, Instruments 19.2% and CRR 5.5%.)
3. The cost of carpentry to CRR was $123,949. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $24,480 goes to LLC and 59.25% or $73,440 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
4. The cost of plumbing to CRR was $4,832. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $954 goes to LLC and 59.25% or $2,863 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
5. The cost of masonry to CRR was $4,595. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $908 goes to LLC and 59.25% or $2,723 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
6. G.C. Painting did most of its work directly for LLC since it works on specific lab and production areas. However, the cost of the general projects for CRR was $0. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $0 goes to LLC and 59.25% or $0 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
7. The cost of floor repair to CRR was $4,418. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $478 goes to LLC and 59.25% or $1,433 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
8. The cost of locks to CRR was $0. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $0 goes to LLC and 59.25% or $0 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
9. The cost of windows to CRR was $22,205. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $4,385 goes to LLC and 59.25% or $13,156 goes to RMD. Each entity should write their check directly to CRR and enter under Bldg. Maintenance - Separate.
10. The cost of utilities should be shared under separate billing. INSURANCE - Bldg. - January 1 to June 30, 2007
1. The cost of insurance should go by square feet. Since RMD has been paying for everything, (6x$2,879/mo. _ $17,276) for this six month period, CRR owes RMD 21% ($3,628). UTILITIES - January 1 to June 30, 2007
1. The cost of electricity ($36,911) and gas ($8,964) to CRR was $45,875. Of this 79% belongs to RMD and LLC split 3/4 and 1/4. Thus 19.75% or $9,060 goes to LLC and 59.25% or $27,181 goes to RMD. Each entity should write their check directly to CRR and enter under Utilities - Separate.

ITEM                CRR             RMD           LLC         Notes
D&R                   0               0             0
Air                   0               0             0
Conditioners
Carpentry             0          73,440        24,480
Plumbing              0           2,863           954
Masonry               0           2,723           908
Painting              0               0             0
Floor Repair          0           1,433           478
Lock Repair           0               0             0
Window                0          13,156         4,385
Repair
Subtotal              0         $93,615       $31,205
Insurance             3             628             0           0
Utilities          0 27             181         9,060
Rent                  0               0             0
Adjustment
Total            $3,628        $120,796       $40,265
                CRR->RMD       RMD->CRR      LLC-> CRR

Note that because of changes in the occupancy, the new percentage
allocations are RMD 75.3%, RMD, Instruments 19.2% and CRR 5.5%.

CLOSING DECEMBER 07 OF CHARLES RIVER REALTY
December 31, 2007

GENERAL METHODOLOGY
The mid-year and year end adjustments which must be made relate to the portion of CRR building expenses, such as utilities, maintenance, and insurance with the Sub-S and LLC should pick up from CRR and vice-versa. As per the space allocation for the building, now that RMD has taken over the VideoLink space, the common space and that occupied by the other tenant comprises 0.0%. RMD occupies 78% and LLC 22% of the remainder. It also concerns how much of the building maintenance should be capitalized. The detailed allocation of expenses is contained the allocation chart later in this document.

BUILDING MAINTENANCE - July 1 to December 31, 2007
1. The cost of air conditioning cleaning and freon to CRR was $0. All of this, except for special projects for common areas ($2,482), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
2. The cost of air conditioning repairs to CRR was $6,875. All of this, except for special projects for common areas ($2,873), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
3. The cost of appliance repairs to CRR was $2,068. All of this, except for special projects for common areas ($2,873), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
4. The cost of cabinets to CRR was $202. All of this, except for special projects for common areas ($967), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Equip. Maintenance - Separate.
5. The cost of carpentry to CRR was $114,966. All of this, except for special projects for common areas ($13,574), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
6. The cost of door repairs to CRR was $0. All of this, except for special projects for common areas ($0), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
7. The cost of electric repairs to CRR was $0. All of this, except for special projects for common areas ($0), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
8. The cost of floor repair to CRR was $5,232. All of this, except for special projects for common areas ($4,880), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
9. The cost of hood repair to CRR was $0. All of this belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
10. The cost of Lighting to CRR was $0. All of this, except for special projects for common areas ($2,196), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
11. The cost of Locks and Security Systems to CRR was $0. All of this, except for special projects for common areas ($1,182), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
12. The cost of masonry to CRR was $5,395. All of this, except for special projects for common areas ($3,077), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
13. The cost of painting to CRR was $0. All of this, except for special projects for common areas ($3,404), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
14. The cost of plumbing to CRR was $16,556. All of this, except for special projects for common areas ($3,718), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
15. The cost of repairing radiators and steam pipes to CRR was $16,100. All of this, except for special projects for common areas ($3,152), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
16. The cost of repairing stairs and railings to CRR was $0. All of this, except for special projects for common areas ($1,137), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
17. The cost of repairing vacuum and pressurized air systems to CRR was $0. All of this belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate.
18. The cost of repairing windows and mirrors to CRR was $8.173. All of this, except for special projects for common areas ($3,378), belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Bldg. Maintenance - Separate. INSURANCE - Bldg. - July 1 to December 31, 2007
1. The cost of insurance should go by square feet. Since RMD has been paying for everything, (6x$2,150/mo. = $12,900) for July through December 07, CRR owes RMD 0% ($0), now that there is no longer any common space.
ELECTRICITY - July 1 to December 31, 2007
1. The cost of electricity to CRR was $54,141. Of this 100% belongs to RMD and LLC split 78% and 22%. Each entity should write their check directly to CRR under Utilities - Separate.
CHECKS TO BE WRITTEN - July 1 to December 31, 2007

ITEM                 CRR         RMD         LLC      Notes
Repairs                 0     136,943         38,625
Insurance               0           0              0
Utilities               0      42,230         11,911
Total               $   0     $179,173       $50,536
                  CRR->RMD    RMD->CRR      LLC-> CRR

CAPITALIZATION OF MAINTENANCE COSTS - December 31, 2007
1. The cost of various maintenance items have been capitalized as per the chart below, corresponding to zero percent for carpentry and zero percent for the other items which were just repairs to try to best reflect the correct distribution.

ITEM                   CRR-Total   Expense   Lshold  %Capital
                                             Improve.
Air Cond. Cleaning             0          0     0      0 %
Air Cond. Repairs          6,875      6,875     0      0 %
Appliances                 2,068      2,068     0      0 %
Cabinets                     202        202     0      0 %
Carpentry                114,966    114,966     0      0 %
Door Repairs                   0          0     0      0 %
Electrical Repairs             0          0     0      0 %
Floor Repair               5,232      5,232     0      0 %
Hood Repair (All RMD)          0          0     0      0 %
Lighting                       0          0     0      0 %
Locks                          0          0     0      0 %
Masonry                    5,395      5,395     0      0 %
Painting                       0          0     0      0 %
Plumbing                  16,556     16,556     0      0 %
Radiators,      Steam     16,100     16,100     0      0 %
Pipes
Stairs and Railings            0          0     0      0 %
Vacuum Repairs   (All          0          0     0      0 %
RMD)
Windows & Mirrors          8,173      8,173     0      0 %
Total                   $175,567   $175,567    $0      0 %

REIMBURSEMENT OF EXPENSES FOR OTHER PROPERTIES - December 31, 2007
1. The cost of any items managed by CRR but attributable to non- CRR properties has been reimbursed by a personal check from GE in an amount of $19,679.

ITEM   Description             TOTAL     CRR         RMD        LLC
  1    Air Cond. Cleaning          0      0            0          0
  2    Air Cond. Repairs       6,875      0        5,363      1,513
  3    Appliances              2,068      0        1,613        455
  4    Cabinets                  202      0          158         44
  5    Carpentry               114,9      0       89,673     25,293
                                  66
  6    Door Repairs                0      0            0          0
  7    Electrical Repairs          0      0            0          0
  8    Floor Repair            5,232      0        4,081      1,151
  9    Hood Repair (All RMD)       0      0            0          0
 10    Lighting                    0      0            0          0
 11    Locks                       0      0            0          0
 12    Masonry                 5,395      0        4,208      1,187
 13    Painting                    0      0            0          0
 14    Plumbing                16,55      0       12,914      3,642
                                   6
 15    Radiators, Steam Pipes  16,10      0       12,558      3,542
                                   0
 16    Stairs and Railings         0      0            0          0
 17    Vacuum  Repairs   (All      0      0            0          0
       RMD)
 18    Windows & Mirrors       8,173      0        6,375      1,798
                               =====    ======     =====       ====
       Total                 175,567      0      136,943     38,625

ATTACHMENT II
ILLUSTRATION OF METHODOLOGY OF ALLOCATING YEARLY COST INCREASES

TERM LOAN AND LINE OF CREDIT LOAN AGREEMENT

THIS TERM LOAN AND LINE OF CREDIT LOAN AGREEMENT (this "Agreement"), is made as of the 1st day of July, 2008, by and among SUSQUEHANNA BANK DV, a New Jersey chartered bank (the "Bank"), as lender and by DYNASIL CORPORATION OF AMERICA, a Delaware corporation with a principal office at 385 Cooper Road West Berlin, NJ 08091 ("the "Borrower") and EVAPORATED METAL FILMS CORP., a New York corporation, OPTOMETRICS CORPORATION, a Delaware corporation, RMD INSTRUMENTS CORP., a Delaware corporation, and RMD ACQUISITION SUB, INC., a Delaware corporation, as guarantors (collectively herein the "Guarantor") (the "Borrower" and the "Guarantor" collectively referred to as the "Obligors").

BACKGROUND

The Bank and the Obligors desire to set forth the terms and conditions under which the Bank will make available and/or extend to the Borrower certain credit facilities to be used for the purposes specified in this Agreement and upon the following conditions.
Accordingly, the Bank and the Obligors, each intending to be legally bound hereby, agree as follows:

ARTICLE I

DEFINITIONS

1.1 Affiliate
. "Affiliate" shall mean any Subsidiary of the Borrower and any Person or entity that, now or hereafter, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common ownership or control with the Borrower. For purposes of this definition, the terms "control," "controls" and "controlled" shall refer to the power to determine the management or policies of a Person, whether resulting from an official position or capacity with such Person, direct or indirect beneficial ownership of at least twenty percent (20%) of the voting securities or other equity interests of such Person, or otherwise.

1.2 Agreement
. "Agreement" shall mean this Term Loan and Line of Credit Loan Agreement, together with all exhibits, amendments, modifications and supplements hereto as may be in effect from time to time.

1.3 Bank
. "Bank" shall have the meaning specified in the initial paragraph of this Agreement, together with its successors and assigns.

1.4 Borrower
. "Borrower" shall have the meaning specified in the initial paragraph of this Agreement, together with its successors and assigns.

1.5 Business Day
. "Business Day" shall mean any day other than a Saturday, Sunday, or other day on which commercial banks in New Jersey, are authorized or required to close under the laws of the State of New Jersey.

1.6 Closing
. "Closing" shall mean the execution and delivery to the Bank of all of the documents and instruments required by the terms of this Agreement and the other Loan Documents and the closing of the transactions contemplated by this Agreement and the other Loan Documents.

1.7 Closing Date
. "Closing Date" shall mean the date on which the Closing takes place.

1.8 Collateral. "Collateral" shall mean, collectively, the Mortgaged Property and any real, personal or mixed property interests of Borrower or any other Obligor subject to an Encumbrance in favor of Bank as Security for the Term Loan.

1.9 Commitment
. "Commitment" shall mean that certain Commitment Letter entered into by and between/among the Bank and the Borrowers and/or Guarantors dated May 21, 2008 concerning this Term Mortgage Loan, which will survive the Closing.

1.10 Covenant Compliance Certificate. "Covenant Compliance Certificate" shall mean that certain form of covenant compliance certificate set forth herein as Exhibit "A".

1.11 Default
. "Default" shall mean the occurrence of any fact, condition or event which with the giving of notice or lapse of time or both, would be an Event of Default under this Agreement.

1.12 Default Rate
. "Default Rate" shall mean the interest rate changed above and beyond the Note interest rates upon an Event of Default and as further defined in Article II of this Agreement.

1.13 Encumbrances
. "Encumbrances" shall mean, as to any Person, any mortgage, lien, pledge, adverse claim, charge, security interest or other encumbrance in or on, or any interest or title of any vendor, lessor, lender to, or other secured party of the Person under any conditional sale or other title retention agreement or capital lease with respect to, any property or asset of the Person.

1.14 Environmental Laws
. "Environmental Laws" shall mean the Federal Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601, et. seq., the Federal Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901 et. seq., the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et. seq., all other federal, state and local environmental or health laws applicable to any Obligor or its business, operations or assets now or hereafter enacted, and all rules, regulations, orders and publications adopted or promulgated pursuant thereto from time to time.

1.15 ERISA. "ERISA" shall mean the federal Employee Retirement Income Security Act of 1974, as amended.

1.16 Event of Default
. "Event of Default" shall have the meaning set forth in Article VIII of this Agreement.

1.17 Financial Statements
. "Financial Statements" shall mean the consolidated and consolidating balance sheet, statements of income and retained earnings and statements of cash flow of the Borrower and its Subsidiaries and Affiliates and all other Financial Statements of Borrower and its Subsidiaries and Affiliates submitted and to be submitted to the Bank hereunder, and in form acceptable to Bank.

1.18 GAAP
. "GAAP" shall mean generally accepted accounting principles, as in effect at the time of application to the provisions hereof, and consistently applied.

1.19 Guarantors
. "Guarantors" shall mean the Guarantor(s) jointly and severally specified in the initial paragraph of this Agreement, together with their/its successors and assigns.

1.20 Guaranty
. "Guaranty" shall mean any guaranty or agreement to be a surety or other contingent liability (other than any endorsement for collection or deposit in the ordinary course of business), direct or indirect, with respect to any obligation of another Person.

1.21 Guaranty Agreements
. "Guaranty Agreements" shall mean Guaranties, dated the same date of this Agreement, in form and substance satisfactory to the Bank, by Guarantor(s) as required by Article V of this Agreement, together with all amendments, modifications, exhibits and schedules thereto as may be in effect from time to time.

1.22 Hazardous Materials
. "Hazardous Materials" shall mean any substance, material or waste which is regulated under any Environmental Law, including any material, substance or waste defined, without limitation, as a "hazardous waste", "hazardous material", "hazardous substance", "contaminant", "toxic waste" or other similar terms.

1.23 Historical Financial Statements
. "Historical Financial Statements" shall have the meaning set forth in Article IV of this Agreement.

1.24 Indebtedness
. "Indebtedness" shall mean any obligation for borrowed money, including, without limitation:
(a) any obligation owed for all or any part of the purchase price of property or other assets or for the cost of property or other assets constructed or of improvements thereto, other than accounts payable included in current liabilities and incurred in respect of property purchased in the ordinary course of business;
(b) any capital lease obligation; and
(c) any reimbursement obligations and other obligations under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management devise, or any forward sale or purchase agreement for foreign currencies.

1.25 Judgment
. "Judgment" shall have the meaning set forth in Article VIII of this Agreement.

1.26 Late Charge
. "Late Charge" shall mean the charge assessed by the Bank for failure to timely make payments when due and as further defined in Article II of this Agreement.

1.27 Liabilities. "Liabilities" shall mean all liabilities which, in accordance with GAAP should be classified as liabilities of the Obligor.

1.28 Line of Credit Loan
. "Line of Credit Loan" or "Line of Credit" shall mean the term loan as evidenced by this Agreement, the Line of Credit Loan Note and other related loan documents executed in connection with this Agreement and any and all replacements, amendments, extensions and renewals thereof and as further defined in Article II of this Agreement.

1.29 Loan Documents
. "Loan Documents" shall mean including without limitation, this Agreement, the Notes, the Security Agreement, the Mortgages, the Guaranty Agreement, the Guarantor Security Agreement, and all other agreements, amendments, certificates, financing statements, schedules, reports, notices, and exhibits now or hereafter executed or delivered in connection with any of the foregoing, as may be in effect from time to time and as required pursuant to Article V of this Agreement.

1.30 Maturity Date
. "Maturity Date" shall have the meaning set forth in Article II of this Agreement.

1.31 Mortgage
. "Mortgage" shall mean a mortgage, assignment of rents and leases and security agreement, given by one or more of the Obligors as mortgagor in favor of the Bank, as mortgagee, in form and substance satisfactory to the Bank, pursuant to which the Obligor shall grant to the Bank mortgage liens on the real property set forth therein, as required pursuant to Article V hereof, together with all amendments, modifications, supplements, exhibits and schedules thereto as may be in effect from time to time.

1.32 Note
. "Note" shall collectively refer to that certain Term Mortgage Loan Note and the Line of Credit Note dated on or about the date hereof given by the Borrower in favor of the Bank and shall have the meaning set forth in Article II of this Agreement, and shall include all replacements, supplements, modifications, amendments extensions, and renewals thereof.

1.33 Obligations
. "Obligations" shall mean the following obligations of each Obligor:
(a) to pay the principal, interest, commitment fees and any other liabilities of such Obligor to the Bank under this Agreement and the other Loan Documents in accordance with the terms thereof;
(b) to satisfy all of the other direct or indirect liabilities of such Obligor to the Bank, whether hereunder or otherwise, whether now existing or hereafter incurred, whether or not evidenced by any note or other instrument, matured or unmatured, direct, absolute or contingent, joint or several, including any extensions, modifications, renewals thereof and substitutions therefor, including without limitation, any liabilities of any Obligor to the Bank;
(c) to repay the Bank all amounts advanced by the Bank hereunder or otherwise on behalf of any Obligor, including, but without limitation, advances for principal or interest payments to prior secured parties, mortgagors or lienors, or for taxes, levies, insurance, rent, wages, repairs to or maintenance or storage of any collateral;
(d) to reimburse the Bank, on demand, for all of the Bank's expenses and costs, including the reasonable fees and expenses of its counsel, in connection with the negotiation, preparation, administration, amendment, modification, or enforcement of this Agreement and the Loan Documents; and
(e) as further defined and set forth in Article III entitled "Security".

1.34 Obligors
. "Obligors" shall have the meaning specified in the initial and opening paragraph of this Agreement, together with their successors and assigns.

1.35 Permitted Indebtedness
. "Permitted Indebtedness" shall mean:
(a) the Term Loan and the Line of Credit Loan and any subsequent Indebtedness owed to the Bank;
(b) existing Indebtedness disclosed on the attached Schedule entitled "Permitted Indebtedness"; and
(c) indebtedness which is subject to the prior written approval of the Bank.

1.36 Person
. "Person" shall mean any individual, or artificial entity including, without limitation, any corporation, partnership, association, joint-stock company, trust, limited liability company, unincorporated organization, joint venture, court or governmental or political subdivision or agency thereof.

1.37 Plan
. "Plan" shall have the meaning given to such term in Article IV of this Agreement.

1.38 Related Parties
. "Related Parties" shall mean with respect to any Person, such Person's Affiliates and their respective directors, officers, employees, agents and advisors of such Person and such Person's Affiliates.

1.39 Security Agreement. "Security Agreement" shall mean that certain Security Agreement given by the Borrower and/or Guarantor as grantor in favor of the Bank as secured party in connection with the Term Loan and the Line of Credit granting security interest in certain Obligors' assets to the Bank in form and substance to the Bank together with all amendments, modifications, renewals, extensions, exhibits and schedules thereto as may be in effect from time to time.

1.40 Subsidiary
. "Subsidiary" shall mean, as to any designated Person (i), any corporation, the outstanding shares of which having sufficient voting power (not depending on the happening of a contingency) to elect at least a majority of the members of its board of directors as are up for election at any particular time, are at the time directly or indirectly owned, by the designated corporation, or (ii) any partnership of which more than 50% of the outstanding partnership interests having the power to act as a general partner of such partnership (irrespective of whether at the time of any partnership interests other than general partnership interest of such partnership shall or might have voting power upon the occurrence of any contingency) are at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, by one or more other Subsidiaries of such Person.

1.41 Taxes
. "Taxes" shall have the meaning set forth in Article II of this Agreement.

1.42 Term Loan
. "Term Loan" shall mean the term loan as evidenced by this Agreement, the Term Loan Note and other related loan documents executed in connection with the Term Loan Agreement and any and all replacements, amendments, extensions and renewals thereof and as further defined in Article II of this Agreement.

1.43 Uniform Commercial Code
. "Uniform Commercial Code" shall mean the Uniform Commercial Code of each state in which each Obligor is located, as in effect on the date of this Agreement.
ARTICLE II

CREDIT ACCOMMODATIONS

2.1 Term Loan
. Subject to the terms of this Agreement, the Bank shall make available and/or extend to the Borrower commencing on the date that the Bank and Obligors execute and deliver to the Bank all of the documents and instruments required by the terms of this Agreement and the closing of transactions contemplated by this Agreement on the date hereof (the "Closing Date") a term loan (the "Term Loan") in the amount of Nine Million Dollars ($9,000,000) for the purpose of acquisition of the stock and/or assets of Radiation Monitoring Devices, Inc. and RMD Instruments, LLC and general working capital, subject to the terms and conditions and in reliance upon the representations and warranties of the Obligors set forth in this Agreement.
(a) Term Loan Note
. The Obligations of the Borrower to repay the aggregate outstanding principal under the Term Loan and to pay accrued interest thereon together with all renewals, extensions, amendments and restatements thereof shall be evidenced by that certain Term Loan Note, in form and substance satisfactory to the Bank, to be executed and delivered to the Bank concurrently with the execution and delivery of this Agreement (the "Term Loan Note").
(b) Fees
. On or before the Closing Date, the Borrower will pay to the Bank a non-refundable loan fee (the "Term Loan Fee") in the amount of $35,000.00, irrespective of the total amount advanced hereunder.
2.2 Line of Credit Loan
. Subject to the terms of this Agreement, the Bank shall make available and/or extend to the Borrower, commencing on the date that the Bank and Obligors execute and deliver to Bank all of the documents and instruments required by the terms of this Agreement and the closing of transactions contemplated by this Agreement on the Closing Date, a revolving Line of Credit Facility (the "Line of Credit") in the maximum aggregate principal amount of One Million and No/100 Dollars ($1,000,000.00) (the "Line of Credit Commitment"), upon the terms and conditions and in reliance upon the representations and warranties of the Obligors as set forth in this Agreement. Line of Credit Note. The Obligations of the Borrower to repay the aggregate outstanding principal under the Line of Credit and to pay accrued interest thereon together with all renewals, extensions, amendments, modifications, and restatements shall be evidenced by that certain Line of Credit Note, in form and substance satisfactory to the Bank, to be executed and delivered to the Bank concurrently with the execution and delivery of this Agreement (the "Line of Credit Note"). Advances Under the Line of Credit.
At any time and from time to time during the period commencing on the Closing Date and ending on the Line of Credit Maturity Date, upon the request of the Borrower, the Bank shall provide to the Borrower a loan or loans (each an "Advance"), which shall be used by the Borrower for working capital. The Borrower may use the Line of Credit during the period referred to in the preceding sentence by borrowing, repaying and reborrowing in accordance with the terms of this Agreement; provided, however, that the aggregate outstanding principal under the Line of Credit at any time shall not exceed the Line of Credit Commitment.
Requirements For Advances. The obligation of the Bank to make any Advance under the Note is conditioned upon the following:

i. The
representations and warranties made
in this Agreement and in all of the
other Loan Documents are true and
correct as of the date of each such
Advance;

ii. No Event Of Default (as hereinafter defined) and no event with the giving of notice or passage of time or both, if applicable, would become an Event Of Default has occurred and is continuing; and
iii. All of the Loan Documents remain in full force and effect. Requests for Borrowing. The Borrower shall give the Bank prior written notice, by submitting a fully completed and executed Line of Credit Loan Request in the form acceptable to Bank (the "Line of Credit Loan Request") not later than 10:00 a.m. at least one (1) Business Day(s) before each Advance, of its intention to borrow, specifying (A) the date of such borrowing and (B) the amount of such borrowing. Notices received after 10:00
a.m. shall be deemed received on the next Business Day; or if Bank permits in its sole discretion and absolute discretion, an oral request of the Borrower to the Bank of the amount and date of each proposed Advance; provided such oral request is confirmed promptly after the oral request to the Bank by written confirmation in the form of Line of Credit Loan Request. Notwithstanding the foregoing, the Bank's records of any Advances made pursuant to this Agreement shall in the absence of manifest error; be deemed correct and acceptable and binding upon the Obligors. The outstanding principal balance of the Line of Credit Commitment under this Agreement and Note shall not exceed at anytime the Line of Credit Commitment. Line of Credit Maturity Date. The Line of Credit shall mature on January 31, 2010 ("Line of Credit Maturity Date") whereupon all Obligations under the Line of Credit shall be immediately due and payable in full. Payment Upon Maturity. Upon the Line of Credit Maturity Date, the Bank's commitment to make Advances shall terminate, all Advances shall immediately mature and all Obligations under the Advances shall be immediately due and payable in full. Fees. On or before the Closing Date, the Borrower will pay to the Bank a non-refundable loan fee (the "Line of Credit Loan Fee") in the amount of $10,000.00, irrespective of the total amount advanced hereunder.
1.1 Default Rate of Interest: Late Charges. Upon an Event of Default and during the continuance thereof, interest shall accrue on the Obligations at an annual rate at all times equal to the interest rate in effect in the Term Loan Note and/or the Line of Credit Note, as applicable plus two percent (2.0%) but not more than the maximum rate allowed by law (the "Default Rate") and shall continue to accrue until such time the Obligations are paid in full. The Default Rate shall continue to apply until the Event of Default is remedied whether or not judgment shall be entered on this Note. If any payment (including without limitation any regularly scheduled payment or any payment following demand) is not paid within ten (10) days after it is due, the Borrower will pay a late charge (the "Late Charge") as specified below, regardless of whether the payment due consists of principal and interest, principal only or interest only: the greater of (a) 5.0% of the unpaid portion of the payment due, or (b) $25. The Late Charge shall be in addition to any increase made to the Default Rate applicable to the outstanding balance hereof as a result of the failure to pay following failure to make payments of Obligations when due and payable, as well as in addition to any other applicable fees, charges and costs.
1.2 Payments and Computations
. All amounts payable by the Borrower to the Bank under this Agreement, the Note or other Loan Documents shall be paid directly to the Bank in same day immediately available same day funds at the address of the Bank set forth in the Article X hereof or at such other address of which the Bank shall give written notice to the Borrower pursuant to Article X hereof. The Bank is hereby authorized to charge any account of the Borrower at the Bank for any payment due by the Borrower under the Agreement and the Note. All payments under the Note shall be applied first to accrued interest due and payable thereunder then to fees and expenses (including attorneys' fees incurred by the Bank) and then to the reduction of the outstanding principal balance thereof.
1.3 Requirements of Law
. In the event that after the date hereof, any adoption of or change in any law, regulation or treaty or in the interpretation or application thereof or compliance by the Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental authority, agency or instrumentality:
(a) subjects or shall subject the Bank to any tax of any kind whatsoever with respect to this Agreement, the loans made hereunder, the other Loan Documents or changes the basis of taxation of payments to the Bank of principal, commitment fees, interest or any other amount payable hereunder (except for changes in the rate of tax on the overall net income of the Bank);
(b) imposes, modifies or holds or shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of the Bank, which reserve, special deposit, compulsory loan or similar requirement is not otherwise included in determination of the interest rate hereunder;
(c) imposes or shall impose on the Bank any other condition; and the result of any of the foregoing is to, directly or indirectly, increase the cost to the Bank of making, renewing or maintaining advances or extensions of credit or to reduce any amount receivable thereunder then, in any such case, the Borrower shall promptly pay the Bank, upon its demand, any additional amounts necessary to compensate the Bank for such additional cost or reduced amount receivable. If the Bank becomes entitled to claim any additional amounts pursuant to this subsection, it shall notify the Borrower in writing of the event by reason of which it has become so entitled and set forth the reason for, and calculation of, such amounts. The good faith determination as to any additional amounts payable pursuant to the foregoing sentence by the Bank shall be conclusive in the absence of manifest error.
1.4 No Claims or Defenses
. All payments made to the Bank by the Obligor hereunder, under the Note or under any of the other Loan Documents will be made without setoff, counterclaim or other defense. All such payments will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or any political subdivision or taxing authority thereof or therein (but excluding, except as provided below, any tax imposed on or measured by the gross or net income of a Bank (including all interest, penalties or similar liabilities related thereto) pursuant to the laws of the United States of America or any political subdivision thereof, or taxing authority of the United States of America or any political subdivision thereof, in which the principal office or applicable lending office of the Bank is located), and all interest, penalties or similar liabilities with respect thereto (collectively, together with any amounts payable pursuant to the next sentence, "Taxes"). The Obligors shall also reimburse the Bank, upon the written request, for Taxes imposed on or measured by the gross or net income of the Bank pursuant to the laws of the United States of America (or any State or political subdivision thereof), or the jurisdiction (or any political subdivision or taxing authority thereof) in which the principal office or applicable lending office of the Bank is located as the Bank shall determine are payable by the Bank due to the amount of Taxes paid to or on behalf of the Bank pursuant to this or the preceding sentence. If any Taxes are so levied or imposed, the Obligors agree to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due hereunder, under any Note or under any other Loan Document, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note. The Obligors will furnish to the Bank upon request certified copies of tax receipts evidencing such payment by the Borrower. The Obligors will indemnify and hold harmless the Bank, and reimburse the Bank upon its written request, for the amount of any Taxes so levied or imposed and paid or withheld by the Bank.
1.5 Right Of Setoff
. In addition to all liens upon and rights of setoff against each and every Obligor's money, securities or other property given to the Bank by law, the Bank shall have with respect to each and every Obligor's Obligations to the Bank under this Agreement, Note and/or Loan Documents and to the extent permitted by law, a contractual possessory security interest in and a contractual right of setoff against, and each and every Obligor hereby grants a security interest in, lien upon and rights to setoff against and each and every Obligor hereby assigns, conveys, delivers, pledges and transfers to the Bank each and every Obligor's right, title and interest in and to, each of the Obligor's deposits, moneys, credits, securities and other property and proceeds thereof, including without limitation any proceeds or returned or unearned premium of insurance now or hereafter in the possession of or on deposit with, or in transit to, the Bank or any other direct or indirect Subsidiary, or Affiliate of the Bank whether held in a general or special account or deposit, whether held jointly with someone else or whether held for safekeeping or otherwise, excluding, however, all IRA, Keogh and trust accounts. Every such security interest and right of setoff may be exercised without demand upon or notice to the Obligors. Every such right of setoff shall be deemed to have been exercised immediately upon the occurrence of an Event of Default hereunder without any action of the Bank, although the Bank may enter such setoff on its books and records at a later time.
1.6 Bank's Rights
. Obligors hereby authorize the Bank, and the Bank shall have the continuing right, at its sole option and discretion, but, in no event is required to do so or is obligated to: (a) do anything which Borrower is required but fails to do hereunder, and in particular Bank may, if Borrower fails to do so, obtain and pay any premiums payable on any policies of insurance required to be obtained or maintained hereunder; (b) direct any insurer to make payment of any insurance proceeds including any returned or unearned premiums, directly to the Bank and apply such moneys to any Indebtedness or other amount evidenced hereby in such order or fashion as Bank may elect; and (c) add any amounts paid or incurred by the Bank for costs and expenses in accordance with the terms of this Agreement to the principal amount of the Obligations evidenced by the Note.
1.7 Continuing Liability
. The liabilities of the Borrower under this Article II shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the payments to the Bank is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any other Borrower or any other Obligor or person, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to any Borrower or any other Obligor or any substantial part of its property, or otherwise, all as though such payment had not been made.
ARTICLE II

SECURITY

2.1 Security
. The security for repayment of the Term Loan and the Line of Credit Loan shall include without limitation the collateral, guaranties and other documents heretofore, contemporaneously or hereafter executed and delivered to the Bank ("Security Documents") which shall secure repayment of the Term Loan, the Term Loan Note, the Line of Credit Loan, the Line of Credit Loan and all other loans, advances, debts, liabilities, obligations, covenants and duties owing by the Obligors to the Bank or to any other direct or indirect Subsidiary or Affiliate of Bank of any kind or nature, present or future (including any interest accruing after the commencement of any insolvency, reorganization or like proceeding relating to the Obligors whether or not a claim for post- filing or post-petition interest is allowed in such proceeding) whether or not evidenced by any note, guaranty or other instrument, whether arising under any agreement, instrument or document, whether or not for the payment of money, whether arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, under any interest or currency swap, future, option or other interest rate protection or similar agreement, or in any other manner, whether arising out of overdrafts on deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of the Bank's non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several due or to become due, now existing or hereafter arising, and any amendments, extensions, renewals or increases and all other costs and expenses of the Bank incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including reasonable attorneys' fees and expenses (hereinafter referred to collectively as the "Obligations"). Unless expressly provided to the contrary in documentation for any other loan or loans, it is the express intent of the Bank and the Obligors that all Obligations including those included in the Term Loan be cross-collateralized and cross-defaulted, such that collateral securing any of the Obligations shall secure repayment of all Obligations and a default under any Obligation shall be a default under all Obligations.

3.1            Good Standing Of Obligors; Authorization
.
(a)                 The Borrower is a corporation duly

organized and existing and in good standing in the State of Delaware and has the power to own its properties and to carry on its business as now conducted. The Borrower is duly authorized to execute and deliver the Loan Agreement and the Loan Documents; all necessary action to authorize the execution and delivery of the Loan Agreement and Loan Documents has been properly taken and the Borrower is and will continue to be duly authorized to borrow under this Loan Agreement and to perform all other terms and provisions of the Loan Agreement and the Loan Documents.
(b) Each Guarantor is duly organized and existing and in good standing in the jurisdiction of its incorporation or formation, and has the power to own its properties and to carry on its business as now conducted. The Guarantors are duly authorized to execute and deliver the Loan Agreement and the Loan Documents to which they are a party; all necessary action to authorize the execution and deliver of the Loan Agreement and the Loan Documents to which they are a party has been properly taken and the Guarantors are and will continue to be duly authorized to guarantee and to perform all other terms and provisions of this Loan Agreement and the Loan Documents to which they are a party.
3.2 Compliance with Laws and Other Agreements
. Each Obligor is in material compliance with all laws, rules, regulations, judgments, decrees, orders, agreements and requirements which affect in any material way such Obligor, its assets or the operation of its business and has not received, and has no knowledge of, any order or notice of any governmental investigation or of any violation or claim of violation of any law, regulation, judgment, decree, order, agreement, or other governmental requirement.
3.3 No Conflict; Governmental Approvals
. The execution, delivery, and performance of this Agreement and each of the Loan Documents will not i. conflict with, violate, constitute a default under, or result in a breach of any provision of any applicable law, rule, regulation, judgment, decree, order, instrument or other agreement, or ii. conflict with or result in a breach of any provision of the articles or certificate of incorporation or bylaws, or regulations if the Obligor is a corporation, its partnership agreement if the Obligor is a partnership, or its other organizational documents as applicable; or (c) result in a default or violation of any indenture, mortgage, deed of trust, franchise, permit, contract, agreement or other instrument to which it is a party or by which it is bound. No authorization, permit, consent or approval of or other action by, and no filing, registration or declaration with, any governmental authority or regulatory body is required to be obtained or made by any Obligor for the due execution, delivery and performance of this Agreement or any of the Loan Documents, (other than filings to perfect the security granted by it) except such as have been duly obtained or made prior to the Closing Date and are in full force and effect as of the Closing Date (copies of which have been delivered to the Bank on or before the Closing Date). The consummation of this Agreement and the other Loan Documents and the transactions set forth herein will not result on any such default or violation or Event of Default.
3.4 Pending Litigation
. Prior to the date hereof, there are no actions, suits, proceedings or governmental investigations pending or, to the actual knowledge of the Obligors, threatened against the Obligors, which could result in a material adverse change in its business, assets, operations, condition (financial or otherwise) or results of operations and there is no basis known to the Obligors for any suit, proceeding or investigation which could result in such a material adverse change.
3.5 Financial Statements
. The Obligors have delivered or caused to be delivered to the Bank their most recent Financial Statements (the "Historical Financial Statements"). The Historical Financial Statements are true, complete and accurate in all material respects and fairly present the financial condition, assets and liabilities, whether accrued, absolute, contingent or otherwise and the consolidated results of the Obligors' operations for the period specified therein. The Historical Financial Statements have been prepared in accordance with GAAP consistently applied from period to period subject in the case of interim statements to normal year-end adjustments and to any comments and notes acceptable to the Bank in its sole discretion. Further, no information has been omitted which would make the information previously furnished misleading or incorrect in any material respect.
3.6 No Material Adverse Change
. Since the date of the most recent Historical Financial Statements, none of the Obligors have suffered any damage, destruction or loss, and no event or condition has occurred or exists which has resulted or could result in a material adverse change in business, assets, operations, conditions (financial or otherwise), prospects or results of operation.
3.7 No Indebtedness
. No Obligor has any Indebtedness other than Permitted Indebtedness.
3.8 Solvency
. As of the date hereof and after giving effect to the transactions contemplated by the Loan Documents, i. the aggregate value of the Borrower's assets will exceed its Indebtedness and other liabilities (including contingent, subordinated, unmatured and unliquidated liabilities), ii. the Borrower will have sufficient cash flow to enable it to pay its debts as they mature, and iii. the Borrower will not have unreasonably small capital for the business in which it is engaged as such business is currently conducted and is proposed to be conducted.
3.9 No Investments
. No Obligor has any "investment" (as such term is defined under GAAP), whether by stock purchase, capital contribution, loan, advance, purchase of property or otherwise, in any Person, other than as shown in the most recent Financial Statements.
3.10 Payment of Taxes
. No Obligor is delinquent in payment of any income, property or other tax, except for any delinquency in the payment of a tax which is contested in good faith by such Obligor and for which appropriate reserves have been established in accordance with GAAP. Each Obligor has timely filed all federal, state and other material income tax returns and reports required by law to have been filed by it.
3.11 Assets
. All properties and assets of each Obligor are owned by such Obligor free and clear of all Encumbrances except i. those for taxes or other government charges either not yet delinquent; ii. those not arising in connection with Indebtedness that do not materially impair the use or value of the properties or assets of such Obligor in the conduct of its businesses;
iii. Encumbrances whose release and termination is evidenced by such Obligor's delivery to the Bank of appropriate documents on the Closing Date; iv. the Loan Documents and Encumbrances otherwise permitted under the Security Agreement and the Mortgages; and/or v. Permitted Encumbrances.
3.12 Intellectual Property
. The Borrower owns or is licensed to use all patents, patent rights, trademarks, trade names, service marks, copyrights, intellectual property, technology, know-how and processes necessary for the conduct of its business as currently conducted that are material to the condition (financial or otherwise), business or operations of the Borrower.
3.13 Guaranties
. No Obligor is obligated under any Guaranty except as given in connection with this Term Loan, and except as noted in Schedule 4 to this Agreement and disclosed to the Bank.
3.14 Regulatory Matters/Margin Securities
. No part of the proceeds of the Term Loan will be used for "purchasing" or "carrying" any "margin stock" within the respective meaning of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time-to- time in effect or for any purpose which violates the provisions of the regulations of such Board of Governors. The assets of each Obligor do not include any "margin" securities within the meanings of Regulation G or U of the Board of Governors of the Federal Reserve System and each such Obligor does not have any present intention of acquiring any margin security.
3.15 ERISA
. The provisions of each employee benefit plan as defined in Section 3(3) of ERISA ("Plan") maintained by any Obligor complies with all applicable requirements of ERISA and of the Code, and with all applicable rulings and regulations issued under the provisions of ERISA and the Code setting forth those requirements. No reportable event, as defined in Section 4043 of ERISA, has occurred or is reasonably expected to occur with respect to any Plan; no Plan to which Section 4021 of ERISA applies has been terminated; no Plan has incurred any liability to PBGC as provided in Section 4062, 4063 and 4064 of ERISA; no Plan has been involved in any prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code; and there are no unfunded liabilities with respect to any Plan which are not disclosed in the Financial Statements.
3.16 Valid, Binding and Enforceable Obligations
. Each of the Obligors, respectively has full power and authority to enter into the transactions provided for in this Agreement and each and every of the other Loan Documents to which it is a party and has been duly authorized to do so by appropriate action of its Board of Directors if the Obligor is a corporation, all its general partners if the Obligor is a partnership or otherwise as may be required by law, charter, other organizational documents or agreements, and the Agreement and the Loan Documents, when executed and delivered by each of the Obligors respectively, will constitute the legal, valid, binding and enforceable obligations of the Obligors in accordance with their terms except as enforcement of this Agreement and the other Loan Documents may be limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights and except as enforcement is subject to general equitable principles.

3.17           Priority of Liens and Security Interests
.
(a)                 The Mortgage, when properly recorded,

will create a valid first priority mortgage lien on the real property described therein as collateral for all the Obligations, subject only to the Permitted Encumbrances as may be expressly permitted by the Loan Documents.
(b) The Security Agreement, upon the filing of financing statements in the appropriate governmental offices, will create valid first priority perfected security interests in the personal property of the Borrower described therein as collateral for all of the Obligations subject only to such Permitted Encumbrances as may be expressly permitted by the Loan Documents.
(c) The Guarantors' Security Agreements, upon the filing of financing statements in the appropriate governmental offices, will create valid first priority perfected security interests in the personal property of the Guarantors described therein as collateral for all of the Obligations subject only to such Permitted Encumbrances as may be expressly permitted by the Loan Documents.
(d) The Guarantor's Mortgage, when recorded, will create a valid first priority mortgage lien on the real property described therein as collateral for all the Obligations subject only to Encumbrances permitted under Article IV at Section 4.11 of this Agreement.

3.18           Environmental Matters
.
(a)                 Each Obligor has performed all of its

obligations under, has obtained all necessary approvals, permits, authorizations and other consents required by, and is not in material violation of, any Environmental Laws.
(b) No Obligor has received any notice, citation, summons, directive, order or other communication, written or oral, from, and no Obligor has any knowledge of the filing or giving of any such notice, citation, summons, directive, order or other communication by, any governmental or quasi-governmental authority or agency or any other Person concerning the presence, generation, treatment, storage, transportation, transfer, disposal, release or other handling of any Hazardous Materials within, on, from, related to, or affecting any real property owned or occupied by such Obligor.
(c) No real property owned or occupied by such Obligor has ever been used by the Obligor, to generate, treat, store, transport, transfer, dispose of, release or otherwise handle any Hazardous Material in violation of any applicable Environmental Laws.
(d) To Obligor's knowledge, there are no Hazardous Materials within, on or under any real property owned or occupied by any Obligor in violation of any applicable Environmental Laws.
3.19 No Untrue Statements
. Neither this Agreement, the Loan Documents nor any other document, certificate or statement furnished or to be furnished by any Obligor or by any other party to the Bank in connection herewith contains, or at the time of delivery will contain, any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact known to any of the Obligors which materially adversely affects or might materially adversely affect the business, assets, operations, prospects or condition (financial or otherwise) or results of operation of the Borrower which has not otherwise been fully set forth in the Agreement or the Loan Documents.

(b)                 the Note duly executed by the
Borrower;
(c)                 the Guaranty Agreements duly executed
by the Guarantors;
(d)                 the Security Agreement duly executed

by the Borrower, together with such Uniform Commercial Code financing statements and other documents as the Bank may reasonably require;
(e) the Mortgage duly executed by Borrower and other documents as the Bank may reasonably require;
(f) the Mortgage duly executed by Guarantor and other documents as the Bank may reasonably require;
(g) the Security Agreement (Guarantors) duly executed by the parties named as Grantors therein, together with such Uniform Commercial Code financing statements and other documents as the Bank may reasonably require;
(h) the fully executed and delivered non- compete agreements for a term of at least five years by Gerald Entine and Jack Paster.
(i) Equipment appraisal of EMF equipment dated October 16, 2006, satisfactory to Bank as to value and in all other aspects;
(j) any other documents, agreements or instruments that the Bank may require in connection with the Term Loan in form and substance satisfactory to the Bank, as it deems appropriate in its sole discretion;
(k) evidence of the Obligors' compliance with those covenants regarding insurance as are contained in this Agreement and the other Loan Documents;

(1) If a corporation: a certificate of the Secretary or an Assistant Secretary of each of the corporate Obligors dated the Closing Date including i. resolutions duly adopted by each such Obligor authorizing the transactions under the Loan Documents; ii. a copy of the bylaws of each such Obligor; iii. evidence of the incumbency and signature of the officers executing on its behalf any of the Loan Documents and any other document to be delivered pursuant to any such documents, together with evidence of the incumbency of such Secretary or Assistant Secretary; iv. a copy, certified by the appropriate Secretary of State, as of the most recent date practicable, of each such Obligor's Articles and Certificate of Incorporation, together with the certification of the Secretary or Assistant Secretary of each such Obligor as of the Closing Date that such Articles and Certificate of Incorporation have not been amended since the date of the aforesaid certification by the Secretary of State; and v. certificates of authority or good standing for each such Obligor from its jurisdiction of incorporation and any other jurisdiction where such Obligor is qualified to do business; and
(2) If other than a corporation:
certified copies of resolutions of the partners, members or managers of any partnership or limited liability company that execute this Agreement, the Note and the other Loan Documents and all other documents authorizing
(a) the entry into the Term Loan by the Obligor, (b) the execution of the Loan Documents by the Obligors and (c) that the individual signing on behalf of each and every Obligor, respectively, has the appropriate authority legally to sign on behalf of the Obligor and bind said Obligor. True and correct copies of (i) the formation documents of each and every Obligor and any supplements thereto and (ii) members or partnership agreements with certification as to authenticity and validity of each agreement as of the Closing Date. A certificate of authority or good standing for each Obligor that it is in good standing and active from its jurisdiction of formation and any other jurisdictions where each Obligor is qualified to do business; and
(3) If an individual: an affidavit stating each individual Obligor is sui juris and of full capacity to make, execute and perform pursuant to the terms and conditions of this Agreement and all of the Loan Documents executed in connection herewith.
(m) Policies of title insurance issued by a title company satisfactory to the Bank insuring the Mortgage, as a valid mortgage lien, subject only to exceptions approved by the Bank; and
(n) The opinion of Borrower's counsel dated as of Closing Date, in form and substance reasonably satisfactory to the Bank and its counsel; and
5.2 Other Conditions.
(o) Pre-funding field audit of Borrower's accounts receivable and inventory, satisfactory to Bank as to value and in all other aspects, the cost of which is to be paid by Borrower;
(p) Pre-funding site visit at RMD by Bank employee, satisfactory to Bank in all aspects;
(q) Satisfactory appraisal of property at 239 Cherry Street, Ithaca, NY;
(r) Bank shall have received all fees due and payable, pursuant to the Loan Documents, including without limitation the fee arising under the Commitment on or prior to the Closing Date, including reimbursement or payment of all reasonable out of pocket expenses required to be reimbursed or paid by Borrower hereunder or under any of the other Loan Documents.
(s)

4.2
ARTICLE V

AFFIRMATIVE COVENANTS

Each Obligor hereby covenants and agrees that from the date hereof and until satisfaction in full of the Obligations, unless the Bank shall otherwise consent in writing, each such Obligor shall do the following:
5.1 Use of Proceeds
. Use the proceeds of the borrowings hereunder only for the purposes specified in Article II of this Agreement.
5.2 Maintain Books and Records/ Conduct of Business
. Keep and maintain complete and accurate books and records of its assets, liabilities and operations consistent with sound business practices in accordance with GAAP, and conduct its business only in the ordinary course.
5.3 Financial Information
. Provide to the Bank the following financial information and other financial reporting at such times as are specified herein:
(a) Annual Financial Statements of the Obligors on a consolidated basis shall be provided to the Bank within 120 days of the Obligors' fiscal year-end;
(b) Tax Returns of the Obligors on a consolidated basis within 10 days of filing;
(c) Monthly aged accounts receivable statements of the Obligors, shall be provided to the Bank within 10 days of each month's end; and
(d) such other financial information, in form acceptable to the Bank, for the immediately preceding fiscal year and such other information respecting the operations, financial or otherwise, of the Borrower and Guarantor, as the Bank may from time to time reasonably request.
(e) In the event the Borrower or Guarantor fails to comply with this provision, the Bank, at its sole option and discretion, shall have the right to increase the interest rate of the Loan by one-half of one percent (1/2%) for each quarter that the condition is not met. Such increased interest rate shall continue until the Borrower and/or Guarantor has complied with the financial reporting provisions set forth herein. The Borrower will not be held responsible for delays in complying with the requirements of this paragraph if such delays are beyond the control of the Borrower or Guarantor, and a good faith effort has been demonstrated to comply with this Section 6.3.
5.4 Inspection
. Make available upon no less than 2 business days' prior written notice and during normal business hours for inspection by the Bank or its designated representatives any of its books and records when reasonably requested by the Bank to do so, and furnish the Bank any information reasonably requested regarding its operations, business affairs and financial condition within a reasonable time after the Bank gives notice of its request therefor. In particular, and without limiting the foregoing, each Obligor shall permit, upon no less than 2 business days' prior written notice and during normal business hours, representatives of the Bank to make such periodic inspections of each such Obligor's books, records and assets as such representatives deem necessary and proper.
5.5 Insurance
. Carry at all times with financially sound and reputable insurers: i. all workers' compensation or similar insurance as may be required under the laws of any applicable jurisdiction; ii. public liability insurance against claims for personal injury, death or property damage suffered upon, in or about any premises occupied by it or occurring as a result of the ownership, maintenance or operation by it of any automobile, truck or other vehicle or as a result of the use of products manufactured, constructed or sold by it, or services rendered by it; iii. business interruption insurance covering risk of loss as a result of the cessation for all or any part of one year of any substantial part of the business conducted by it; iv. hazard insurance against such other hazards as are usually insured against by business entities of established reputation engaged in like businesses and similarly situated, including, without limitation, fire (flood, if applicable) and extended coverage; and v. such other insurance as the Bank may from time to time reasonably require, including but not limited to products liability insurance, and pay all premiums on the policies for all such insurance when and as they become due and take all other actions necessary to maintain such policies in full force and effect at all times. The insurance specified in Subsections (b), (c) and (d) shall be maintained in such amounts (and with co-insurance and deductibles) as such insurance is usually carried by business entities of established reputation engaged in the same or similar business and similarly situated. Each Obligor shall from time to time, upon request by the Bank, promptly furnish or cause to be furnished to the Bank evidence, in form and substance satisfactory to the Bank, of the maintenance of all insurance required to be maintained hereby, including, without limitation, such originals or copies as the Bank may request of policies, certificates of insurance, riders and endorsements relating to such insurance and proof of premium payments. Each Obligor shall cause each hazard insurance policy to provide, and the insurer issuing each such policy to certify to the Bank, that vi. if such insurance be proposed to be cancelled or materially changed for any reason whatsoever, such insurer will promptly notify the Bank and such cancellation or change shall not be effective for thirty (30) days after receipt by the Bank of such notice, unless the effect of such change is to extend or increase coverage under the policy; vii. the Bank shall be named as lender loss payee with respect to personal property and mortgagee with respect to real property containing a standard mortgagee clause for loss in favor of the Bank; and viii. the Bank will have the right but not the obligation, at its election, to remedy any default in the payment of premiums within thirty (30) days of notice from the insurer of such default. The foregoing covenants regarding insurance are in addition to, and not intended to supersede, those covenants regarding insurance set forth in the Security Agreement. In the event and to the extent of any conflict between the provisions of this Agreement and the provisions of the Security Agreement regarding the insuring of collateral, the provisions of the Security Agreement with respect thereto shall govern.
5.6 Maintain Property
. Maintain its equipment, real property and other material properties in good condition and repair (normal wear and tear excepted) and pay and discharge the cost of repairs thereto or maintenance thereof.
5.7 Taxes
. Pay all taxes, assessments, charges and levies imposed upon such Obligor or on any of its property, or which it is required to withhold and pay over, and provide evidence of payment thereto to the Bank if the Bank so requests, except where contested in good faith by lawful and appropriate proceedings and where adequate reserves therefor have been set aside on its books; provided, however, that such Obligor shall pay all such taxes, assessments, charges and levies forthwith whenever foreclosure on any lien which attaches or security therefor appears imminent.
5.8 Perform Obligations
. Pay all rent or other sums required by every lease to which each such Obligor is a party as the same becomes due and payable, perform all of its obligations as tenant or lessee thereunder except where contested in good faith by lawful and appropriate proceedings and where adequate reserves therefor have been set aside; and keep all such leases at all times in full force and effect during the terms thereof.
5.9 Corporate Existence; Certain Rights; Laws
. Do all things necessary to preserve and keep in full force and effect in each jurisdiction in which each Obligor conducts business the business existence, licenses, permits, rights, patents, trademarks, trade names and franchises of such Obligor and comply in all material respects with all present and future laws, ordinances, rules, regulations judgments, orders and decrees which affect in any material way such Obligor, its assets or the operation of its business.
5.10 Notice of Litigation, Other Proceedings And Certain Events
. Give prompt written notice to the Bank of i. the existence of any dispute involving more than $10,000,
ii. the institution of any litigation, administrative proceeding or governmental investigation involving any Obligor, iii. the entry of any judgment, decree or order against or involving any Obligor or (d) any event any of which might in the aggregate materially and adversely affect the operation, condition (financial or otherwise) property, prospects or business of any Obligor or affect the enforceability of this Agreement or any of the other Loan Documents.
5.11 Pay Indebtedness
. Pay or cause to be paid when due (or within applicable grace periods) all indebtedness of each such Obligor.
5.12 Notice of Defaults
. Give prompt written notice to the Bank if such Obligor becomes aware of the occurrence of any Event of Default, or of any fact, condition or event which with the giving of notice or lapse of time, or both, could reasonably be expected to result in an Event of Default, or of the failure of any Obligor to observe or perform any of the conditions or covenants to be observed or performed by it under this Agreement or any of the other Loan Documents.
5.13 ERISA
. Maintain each Plan in compliance with all applicable requirements of ERISA and of the Code and with all applicable rulings and regulations issued under the provisions of ERISA and of the Code. As promptly as practicable (but in any event not later than ten (10) days) after any Obligor receives from the Pension Benefits Guaranty Corporation (PBGC) a notice of intent to terminate any Plan or to appoint a trustee to administer any Plan, after such Obligor has notified the PBGC that any reportable event, as defined in Section 4043 of ERISA, with respect to any Plan has occurred, or after such Obligor has provided a notice of intent to terminate to each affected party, as defined for purposes of Section 4041(a)(2) of ERISA, with respect to any Plan, a certificate of the chief executive officer of such Obligor shall be furnished to the Bank setting forth the details with respect to the events resulting in such reportable event, as the case may be, and the action which such Obligor proposes to take with respect thereto, together with a copy of the notice of intent to terminate or to appoint a trustee from the PBGC, of the notice of such reportable event or of such Obligor's notice of intent to terminate, as the case may be.
5.14 Bank as Primary Depository
. Use the Bank as its primary depository institution unless otherwise agreed in writing by the Bank; and notify the Bank, in writing and on a continuing basis, of all deposit accounts and certificates of deposit (including the numbers thereof) maintained with or purchased from other banks and other financial institutions. The Borrower will maintain with the Bank throughout the term of the Loan a commercial operating account from which all costs of the Project will be paid.
THE BORROWER HEREBY AUTHORIZES THE BANK TO i. MAKE DISBURSEMENTS OF LOAN PROCEEDS BY THE BANK'S CREDITING OF SUCH DISBURSEMENTS DIRECTLY INTO SUCH ACCOUNT AND ii. AT THE BANK'S OPTION, TO DIRECT THE ACCOUNT TO PAY ANY INTEREST UPON THE NOTE WHEN THE SAME SHALL BE DUE, AND ALL OTHER COSTS AND EXPENSES WHICH ARE REIMBURSABLE HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT, AND THE BORROWER AGREES THAT SUCH DISBURSEMENTS SHALL CONSTITUTE AN ADVANCE UNDER THE NOTE. The Borrower agrees to pay all normal and customary charges of the Bank for maintaining such account.
5.15 Compliance With Environmental Laws
. Comply fully with all Environmental Laws where a failure to do so would result in a material adverse change and not use any property which it owns or occupies to generate, treat, store, transport, transfer, dispose of, release or otherwise handle any Hazardous Material, except in such compliance with all Environmental Laws.
5.16 Security for Obligations. As security for the prompt payment, performance, satisfaction and discharge when due of all the Obligations, the Obligors shall each execute and deliver or shall cause to be executed and delivered to the Bank, concurrently with the execution of this Loan Agreement, the Security Agreement, the Mortgage, the Guaranty, and such other documents that the Bank shall require.
5.17 Further Actions
. Cooperate and join with the Bank, at such Obligor's own expense, in taking all such further actions as the Bank, in its sole judgment, shall deem necessary to effectuate the provisions of the Loan Documents and to perfect or continue the perfected status of all Encumbrances granted to the Bank pursuant to the Loan Documents, including, without limitation, the execution, delivery and filing of financing statements, amendments thereto and continuation statements, the delivery of chattel paper, documents or instruments to the Bank, and the notation of Encumbrances in favor of the Bank on certificates of title.

5.18           Indemnification
.
(a)                 The Obligors, jointly and severally,

shall indemnify, defend and hold harmless the Bank and its Related Parties with respect to any and all claims, expenses, demands, losses, costs, fines or liabilities of any kind, including reasonable attorneys' fees and costs, arising from or in any way related to i. acts or conduct of any Obligor under, pursuant to or related to this Agreement and the other Loan Documents, ii. any Obligor's breach or violation of any representation, warranty, covenant or undertaking contained in this Agreement or the other Loan Documents, and iii. any Obligor's failure to comply with any or all applicable laws, statutes, ordinances, governmental rules, regulations or standards, whether federal, state, or local, or court or administrative orders or decrees, including without limitation those resulting from any Hazardous Materials within, on, from, related to or affecting any real property owned or occupied by any Obligor, unless resulting from the acts or conduct of the Bank constituting gross negligence or willful misconduct.
(b) If, after receipt of any payment of all or any part of the Obligations, the Bank is compelled to surrender such payment to any Person or entity for any reason (including, without limitation, a determination that such payment is void or voidable as a preference or fraudulent conveyance, an impermissible setoff, or a diversion of trust funds), then this Agreement and the other Loan Documents shall continue in full force and effect, and the Obligors shall be jointly and severally liable for, and shall indemnify, defend and hold harmless the Bank with respect to the full amount so surrendered.
(c) The provisions of this section shall survive the termination of this Agreement and the other Loan Documents and shall be and remain effective notwithstanding the payment of the Obligations, the cancellation of any of the Notes, the release of any Encumbrance securing the Obligations or any other action which the Bank may have taken in reliance upon its receipt of such payment. Any cancellation of any of the Note, release of any Encumbrance or other such action shall be deemed to have been conditioned upon any payment of the Obligations having become final and irrevocable.
6.19 Inventory Audits and Controls. RMD Instruments Corp. shall perform the following in connection with their inventory:
(a) By Closing, secure the parts storage area and designate personnel who are authorized to remove stock and are responsible to make the appropriate inventory entries.
(b) By September 15, 2008 for the current year, and within 45 days of the end of each Obligors' fiscal year for subsequent years, provide a detailed report to Bank of a complete (100%) physical inventory. The perpetual inventory will be used for the balance sheet inventory.
(c) By September 15, 2008 for the current year, and within 45 days of the end of each Obligors' fiscal year for subsequent years, provide a detailed report to Bank of slow-moving and obsolete inventory and the amount of any reserve set up.
(d) By the end of the next fiscal year quarter, and each quarter thereafter, complete a physical inventory on high value items until inventory accuracy is acceptable to Obligors and Bank, and provide a report to Bank within 30 days.
(e) Starting in August of 2008, establish a monthly cycle count program, with reports to Bank.
6.20 Financial Covenants.
(a) Debt-Service Coverage Ratio. At all times, Borrower shall maintain a Debt-Service Coverage Ratio (DSCR) of at minimum 1.20 to 1.0, measured annually at the end of each fiscal year of Borrower starting with the fiscal year ending in 2009. Debt-Service Coverage Ratio is defined as Borrower's net income plus interest expense plus depreciation plus amortization [less Distributions] divided by the current maturities of all long term debt and current maturities of capital leases plus interest expense, with all terms defined under Generally Accepted Accounting Principles ("GAAP").
(b) Earnings Recapture. Bank shall apply an Earnings Recapture pursuant to which principal shall be prepaid in full or in part by the Borrower in the amount of twenty percent (20%) of Net Income ("Net Income" is defined as earnings after taxes) made by the Borrower as stated in its fiscal year-end financial statements. The recapture shall be capped at $300,000 for the fiscal year ending in 2009 and at $500,000 for the fiscal year ending in 2010, after which this recapture provision shall expire.

6.21 Covenant Compliance Certificate. Within forty-five days of the end of Borrower's fiscal year, Borrower shall prepare and send to Bank, signed by the President, a completed Covenant Compliance Certificate.
ARTICLE VI

NEGATIVE COVENANTS

Each Obligor hereby covenants and agrees that from the Closing Date until satisfaction in full of the Obligations, it will not do any one or more of the following without first obtaining the written consent of the Bank, which shall not be unreasonably withheld, conditioned or delayed:
6.1 Fundamental Corporate Changes
. Change its name, enter into or effect any merger, consolidation, share exchange, division, conversion, reclassification, recapitalization, reorganization or other transaction of like effect, change its legal structure or state of incorporation, or dissolve.
6.2 Dispose of Assets
. Sell, transfer, lease or otherwise dispose of all or (except in the ordinary course of business) any material part of its assets or any significant product line or process, or permit any Subsidiary to do so.
6.3 Indebtedness
. Incur, create, assume or have any Indebtedness

except:
(a)                 the Loan;
(b)                 open account trade debt incurred in
the ordinary course of business and not past due; and
(c)                 Permitted Indebtedness.
6.4            Encumbrances
.  Create or allow any Encumbrances to be on or

otherwise affect any of its property or assets except:
(a) Encumbrances in favor of the Bank;
(b) Encumbrances for taxes, assessments and other governmental charges incurred in the ordinary course of business which are not yet due and payable;
(c) Pledges or deposits made in the ordinary course of business to secure payment of workers' compensation or to participate in any fund in connection with workers' compensation, unemployment insurance or social security obligations;
(d) Good faith pledges or deposits made in the ordinary course of business to secure performance of tenders, contracts (other than for the repayment of Indebtedness) or leases or to secure statutory obligations or surety, appeal, indemnity, performance or other similar bonds required in the ordinary course of business;
(e) Liens of mechanics, materialmen, warehousemen, carriers or other similar liens, securing obligations incurred in the ordinary course of business that are not yet due and payable; or
(f) Permitted Encumbrances securing Indebtedness permitted under this Loan Agreement.
6.5 Guaranties
. Other than Permitted Indebtedness, directly or indirectly make, incur and/or assume any guaranty liability and/or surety liability.
6.6 Sales and Lease Backs
. Sell, transfer or otherwise dispose of any property, real or personal, now owned or hereafter acquired, with the intention of directly or indirectly taking back a lease on such property.
6.7 Change in Business
. Discontinue any substantial part, or change the nature of, the business of any Obligor, or enter into any new business unrelated to the business conducted as of the date hereof by any Obligor.

6.8            ERISA
.
(a)                 Terminate any Plan maintained by any

Obligor to which Section 4021 of ERISA applies;
(b) Underfund (as required by law or regulation, from time to time) the benefits guaranteed under Title IV of ERISA; or
(c) Incur a withdrawal liability within the meaning of Section 4201 of ERISA.
6.9 Margin Securities
. i. Use any of the proceeds of the Term Loan, directly or indirectly, for the purposes of purchasing or carrying any "margin security" within the meaning of Regulations G or U of the Board of Governors of the Federal Reserve System (12 C.F.R. 207, 221), ii. use any of the proceeds of the Term Loan, directly or indirectly, for the purpose of purchasing, carrying or trading in any securities under such circumstances as to involve any Obligor in a violation of Regulation X of such Board (12 C.F.R. 224), or iii. take or permit to be taken any other action which would result in the Term Loan or the consummation of any of the other transactions contemplated hereby being violative of such regulations or any other regulation of such Board.
ARTICLE VII

EVENTS OF DEFAULT

An event of default ("Event of Default") under this Agreement shall be deemed to exist if any one or more of the following events occurs whatever the reason therefor:
7.1 Failure to Pay
. Any Obligor fails to pay any amount of principal, interest, fees or other sums as and when such payment is due under this Agreement or any of the Loan Documents, or any other Obligations, whether upon stated maturity, acceleration, or otherwise.
7.2 Breach of Covenants or Conditions
. Any Obligor fails to perform or observe any other term, covenant, agreement or condition in this Loan Agreement or any of the other Loan Documents or any other agreement with the Bank or is in violation of or non- compliant with any provision of this Loan Agreement or any of the Loan Documents or any other agreement with the Bank and has not remedied and fully cured such non- performance, non-observance, violation of or non- compliance within 30 calendar days after the Bank has given written notice thereof to such Obligor; provided, however, that during such 30 calendar day period the Bank's obligations to make further loans or advances to the Borrower shall be suspended.
7.3 Defaults in Other Agreements
. Any Obligor fails to perform or observe any term, covenant, agreement or condition contained in, or there shall occur any default under or as defined in, any other agreement applicable to such Obligor relating to Indebtedness which shall not be remedied within the period of time (if any) within which such other agreement permits such default to be remedied, unless such default is waived by the other party thereto or excused as a matter of law. Notwithstanding anything to the contrary in this Section 8.3, if an Obligor provides written notice to the Bank that it is contesting any obligation described in this Section 8.3 in good faith, the Obligor shall not be in default pursuant to this Section 8.3, so long as the Obligor is not in violation of any of the other terms or conditions of any of the Loan Documents.
7.4 Agreements Invalid
. The validity, binding nature of, or enforceability of any material term or provision of any of the Loan Documents is disputed by, on behalf of, or in the right or name of the Borrower or any other Obligor or any material term or provision of any such Loan Document is found or declared to be invalid, avoidable, or non- enforceable by any court of competent jurisdiction.
7.5 False Warranties; Breach of Representations
. Any warranty or representation made by any Obligor in this Agreement or any other Loan Document or in any certificate or other writing delivered under or pursuant to this Agreement or any other Loan Document, or in connection with any provision of this Agreement or related to the transactions contemplated hereby shall prove to have been false or incorrect or breached in any material respect on the date as of which made.
7.6 Judgments
. A final judgment or judgments is entered, or an order or orders of any judicial authority or governmental entity is issued against any Obligor (such judgment(s) and order(s) hereinafter collectively referred to as "Judgment") i. for payment of money; or
ii. for injunctive or declaratory relief which, in either case, would have a material adverse effect on the ability of any Obligor to conduct its business, and such Judgment is not discharged or execution thereon or enforcement thereof stayed pending appeal, within thirty (30) days after entry or issuance thereof, or, in the event of such a stay, such Judgment is not discharged within thirty
(30) days after such stay expires.

7.7            Bankruptcy or Insolvency
.
(a)                 Any Obligor becomes insolvent, or

generally fails to pay, or is generally unable to pay, or admits in writing its inability to pay, its debts as they become due or applies for, consents to, or acquiesces in, the appointment of a trustee, receiver or other custodian for the Borrower or any other Obligor, as the case may be, or a substantial part of its property, or makes a general assignment for the benefit of creditors.
(b) Any Obligor commences any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any state or federal bankruptcy or insolvency law, or any dissolution or liquidation proceeding.
(c) Any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any state or federal bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is involuntarily commenced against or in respect of any Obligor, or an order for relief is entered in any such proceeding.
(d) A trustee, receiver, or other custodian is appointed for any Obligor or a substantial part of such Person's property.

8.1            Further Advances; Acceleration; Setoff
.
(a)                 Upon the occurrence of any one or

more Events of Default, the Bank shall have no obligation to make any further advances or loans to the Borrower.
(b) Automatically upon the occurrence of any Event of Default described in Article VIII of this Agreement, and in the sole discretion of the Bank upon the occurrence of any other Event of Default, the unpaid principal balance of the Term Loan, all interest and fees accrued and unpaid thereon, and all other amounts and Obligations payable by the Borrower under this Agreement and the other Loan Documents shall immediately become due and payable in full, all without protest, presentment, demand, or further notice of any kind to the Borrower, all of which are expressly waived by the Borrower and each Obligor.
(c) If any of the Obligations shall be due and payable or any one or more Events of Default shall have occurred, the Bank shall have the immediate right, in addition to all other rights and remedies available to it, without notice to the Borrower or any Obligor, to apply toward and set-off against and apply to the then unpaid balance of the Notes and the other Obligations any items or funds held by the Bank, any and all deposits (whether general or special, time or demand, matured or unmatured, fixed or contingent, liquidated or unliquidated) now or hereafter maintained by any of the Obligors for its own account with the Bank, and any other Indebtedness at any time held or owing by the Bank to or for the credit or the account of the Obligors. For such purpose the Bank shall have, and the Obligors hereby grant to the Bank, a first lien on all such deposits. The Bank is hereby authorized to charge any such account or Indebtedness for any amounts due to the Bank. Such right of set-off shall exist whether or not the Bank shall have made any demand under this Agreement, the Notes or any other Loan Document and whether or not the Notes and the other Obligations are matured or unmatured. The Obligors hereby confirm the Bank's lien on such accounts and right of set-off, and nothing in this Agreement shall be deemed to waive or prohibit such lien and right of set-off.
8.2 Further Exercise of Remedies
. Upon the occurrence of any one or more Events of Default, the Bank may proceed to protect and enforce its rights under this Agreement and the other Loan Documents by exercising such remedies as are available to the Bank in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any provision contained in this Agreement or any of the other Loan Documents or in aid of the exercise of any power granted in this Agreement or any of the other Loan Documents.
8.3 Remedies Cumulative; No Waiver
. The rights, powers and remedies of the Bank provided in this Agreement and the other Loan Documents are cumulative and not exclusive of any right, power or remedy provided by law or equity, and no failure or delay on the part of the Bank in the exercise of any right, power, or remedy shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy.
ARTICLE IX

MISCELLANEOUS

9.1 Notices
. Every notice and communication under this Agreement or any of the other Loan Documents shall be in writing and shall be given by either i. hand-delivery,
ii. first class mail (postage prepaid), iii. reliable overnight commercial courier (charges prepaid), or iv. telecopy or other means of electronic transmission, if confirmed promptly by any of the methods specified in clauses (a), (b) and (c) of this sentence, to the following addresses:
If to the Borrower:

Craig Dunham
Dynasil Corporation of America 385 Cooper Road
West Berlin, NJ 08091
Facsimile No.: 856.767.6813

If to any Guarantor:

385 Cooper Road
West Berlin, New Jersey 08091

Attention: Craig Dunham
Facsimile No.: 856.767.6813

With a copy to:

Bond, Schoeneck & King, PLLC
One Lincoln Center
Syracuse, New York 13202
Attention: J.P. Paraschos
Facsimile No.: 315.218.8297

If to the Bank:

Susquehanna Bank DV
Two Aquarium Drive
Camden, NJ 08103
Attention: David Slobotkin, A.V.P.

Facsimile No.: (856) 756-7825

With a copy to:

Peter S. Bejsiuk, Esq.
Capehart Scatchard
8000 Midlantic Dr., Suite 300S Mount Laurel, NJ 08054
Facsimile No.: 856-235-2786
Notice by hand delivery shall be deemed to have been given and received upon delivery. Notice by mail shall be deemed to have been given and received three (3) calendar days after the date first deposited in the United States Mail. Notice by overnight courier shall be deemed to have been given and received on the date scheduled for delivery. Notice given by telecopy or other means of electronic transmission shall be deemed to have been given and received when sent. A party may change its address by giving written notice to the other party as specified herein.

9.2            Costs, Expenses and Attorneys' Fees
.
(a)                 Whether or not the transactions

contemplated by this Agreement and the other Loan Documents are fully consummated, the Obligors shall promptly pay (or reimburse, as the Bank may elect) all costs and expenses which the Bank has incurred or may hereafter incur in connection with the negotiation, preparation, reproduction, interpretation and enforcement of this Agreement, the Note and the other Loan Documents, the collection of all amounts due hereunder and thereunder, and any amendment, modification, consent or waiver which may be hereafter requested by any Obligor or otherwise required. Such costs and expenses shall include, without limitation, the fees and disbursements of counsel to the Bank, the costs of appraisal fees, searches of public records, costs of filing and recording documents with public offices, and similar costs and expenses incurred by the Bank.
(b) Further, the Obligors agree to pay and shall promptly pay (or reimburse, as the Bank may elect) the amount of any and all costs and expenses, including but not limited to, the legal fees of the Bank's outside counsel and any other professionals the Bank may employ in connection with any waivers, amendments, extensions, enforcements or collection efforts of this Term Loan Agreement, Note and/or Loan Documents;
(c) The Obligors' reimbursement obligations under this Section shall survive any termination of this Agreement.
9.3 Survival of Covenants, Representations and Warranties
. This Agreement and the other Loan Documents and all covenants, agreements, representations and warranties made herein and therein and in any certificates delivered pursuant hereto and thereto shall survive the making of the Term Loan and the execution and delivery of the Note and, subject to the provisions of this Agreement, shall continue in full force and effect until all of the Obligations have been fully paid, performed, satisfied and discharged.
9.4 Counterparts; Effectiveness
. This Agreement and all of the other Loan Documents may be executed in any number of counterparts and by the different parties on separate counterparts. Each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement may be executed by exchange of facsimile signatures, which shall be deemed original signatures for purposes of this Agreement or otherwise. This Agreement shall be deemed to have been executed and delivered when the Bank has received counterparts hereof executed by all parties listed on the signature page(s) hereto.

9.5            Payment Due On A Day Other Than A Business
Day
.  If any payment due or action to be taken

under this Agreement or any Loan Document falls due or is required to be taken on a day which is not a Business Day, such payment or action shall be made or taken on the next succeeding Business Day and such extended time shall be included in the computation of interest.
9.6 Governing Law
. This Agreement shall be governed by and be construed and enforced in accordance with the internal laws of the State of New Jersey without regard to conflicts of law principles thereof.
9.7 Integration and Modification
. This Agreement and the other Loan Documents constitute the sole agreement of the parties with respect to the subject matter hereof and thereof and supersede all oral negotiations and prior writings with respect to the subject matter hereof and thereof. No modification or waiver of any terms of this Agreement will be valid and binding unless agreed to in writing by the Bank.
9.8 Waiver
. Bank's waiver of any breach or failure to enforce any of the terms and conditions of this Term Loan Agreement at any time, shall not in any way affect, limit or waive Bank's right thereafter to enforce and compel strict compliance with every term and condition of the Term Loan Agreement.
9.9 Successors and Assigns
. This Agreement i. shall be binding upon each Obligor and the Bank and their respective permitted successors and assigns, and ii. shall inure to the benefit of the Obligors and the Bank and its respective permitted successors and assigns, provided, however, that no Obligor may assign its rights hereunder or any interest herein without the prior written consent of the Bank, and any such assignment or attempted assignment by any Obligor shall be void and of no effect with respect to the Bank. The Bank may assign this Agreement in whole or in part.
9.10 Assignments and Participations
. At any time, without notice to the Obligors, the Bank may sell, assign, transfer, negotiate, grant participations in, or otherwise dispose of all or any part of the Bank's interest in the Term Loan. The Obligors hereby authorize the Bank to provide without any notice to the Obligors, any information concerning the Obligors, including information pertaining to the Obligors' financial condition, business operations or general creditworthiness, to any person or entity which may succeed to or participate in all or any part of the Bank's interest in the Term Loan.
9.11 Severability
. Any provision in this Agreement that is held to be inoperative, unenforceable, voidable, or invalid in any jurisdiction shall, as to that jurisdiction, be ineffective, unenforceable, void or invalid without affecting the remaining provisions, and to this end the provisions of this Agreement are declared to be severable.
9.12 Consent to Jurisdiction
. The Bank and its Related Parties, as well as each and every Obligor irrevocably appoints each and every officer, member or partner of such Obligor as applicable as its attorneys upon whom may be served, by regular or certified mail at the address set forth in Article X hereof, any notice, process or pleading in any action or proceeding against it arising out of or in connection with this Agreement or any of the other Loan Documents; and each hereby i. consents that any action or proceeding against it be commenced and maintained in any court within the State of New Jersey or in the United States District Court for the District of New Jersey by service of process on any such officer; ii. agrees that the courts of the State of New Jersey and the United States District Court for the District of New Jersey shall have jurisdiction with respect to the subject matter hereof and the person of any Obligor and the Collateral; and iii. waives any objection that each and every Obligor may now or hereafter have as to the venue of any such suit, action or proceeding brought in such a court or that such court is an inconvenient forum. Notwithstanding the foregoing, the Bank, in its absolute discretion may also initiate proceedings in the courts of any other jurisdiction in which such Obligor may be found or in which any of its properties or the collateral may be located.
9.13 Waiver of Jury Trial
. Each and every party to this Agreement agrees that any suit, action or proceeding, whether claim or counterclaim, brought or instituted by any party hereto or any successor or assign of any party, on or with respect to this Agreement or any of the other Loan Documents or the dealings of the parties with respect hereto, or thereto, shall be tried only by a court and not by a jury. EACH AND EVERY PARTY HEREBY KNOWINGLY, EXPRESSLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. Further, each party waives any right it may have to claim or recover, in any such suit, action or proceeding, any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. EACH OBLIGOR ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT THE BANK WOULD NOT EXTEND CREDIT TO THE BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.
9.14 Interpretation
. In this Agreement, unless the parties hereto otherwise agree in writing, the singular includes the plural and the plural, the singular, references to statutes are to be construed as including all statutory provisions consolidating , amending or replacing the statute referred to, the word "or" shall be deemed to include "and/or", the words "including," "includes" and "include" shall be deemed to be followed by the words "without limitation"; and references to sections, schedules or exhibits are to those of this Agreement unless otherwise indicated. Section headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Term Loan Agreement for any other purpose.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

EACH AND EVERY OBLIGOR ACKNOWLEDGES THAT THEY HAVE READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT INCLUDING WITHOUT LIMITATION THE WAIVER OF JURY TRIAL CLAUSE AND HAVE BEEN ADVISED BY COUNSEL AS NECESSARY AND APPROPRIATE.
IN WITNESS WHEREOF, the undersigned hereto, intending to create an instrument under seal, have duly executed this Agreement the day and year aforesaid and have affixed their respective seals or have adopted as their own the seals typed next to their respective signatures with the intent to be legally bound hereby as of the day and year first above written.

Attest:                            BORROWER:

                              DYNASIL CORPORATION OF AMERICA,
                              A DE corporation

(SEAL) _______
(SEAL)

                              a NY corporation

                     (SEAL)   _______
                     (SEAL)
Patricia Johnson, Secretary
     Craig Dunham, President
                              OPTOMETRICS CORPORATION
                              a DE corporation


                             (SEAL)   _______
(SEAL)
Patricia Johnson, Secretary          Craig Dunham, President



                              RMD INSTRUMENTS CORP.,
                              a DE corporation

(SEAL) _______
(SEAL)

                                             a DE
                         corporation

                             (SEAL)   _______
(SEAL)
Patricia Johnson, Secretary          Craig Dunham, President

SCHEDULES AND EXHIBITS

SCHEDULES

1 Permitted Indebtedness
2 Pending And Threatened Litigation
3 Permitted Encumbrances
4 Guaranty Obligations

EXHIBITS
A. Covenant Compliance Certificate Schedule 1 To Term Loan Agreement "Permitted Indebtedness"
1. First Mortgage on 239 Cherry Street, Ithaca, NY
2. Intercompany indebtedness relating to "CORE" expenses
3. Agreement between the Dynasil and the RMD parties that the sellers are allowed to remove retained earnings. This is being done through a valuation at closing, trued up 75 days out, during which time receivables and proceeds from seller investment accounts are being administered (essentially held in trust) by the Dynasil acquisition entity. Bank waives its security interest in these funds. Until the true-up, the Dynasil entity can use as much as $500,000 of these funds for operating capital.

4. Corporate credit cards

Schedule 2 To Term Loan Agreement

Pending And Threatened Litigation

1) Workers' Comp trust case as disclosed in the Other Comments in our quarterly SEC filing dated 5-15-08. On or about May 6, 2008, EMF received a copy of Summons with Notice (the "Summons") filed on January 18, 2008 in the Supreme Court of the State of New York, County of Albany, by the New York State Attorney General on behalf of the State of New York Workers' Compensation Board, as plaintiff. The Summons requires EMF, which is one of a large number of defendants, to appear in the action commenced by the plaintiff alleging its entitlement to recover previously billed and unpaid assessments aggregating approximately $1 million and other, but as yet undetermined, assessments which could aggregate to more than $25 million from the defendants based upon their participation on a joint and several liability basis in a Manufacturing Self Insurance Trust that closed on or about August 31, 2007. EMF has engaged counsel to appear for it in this action. Although the action is in an early state, EMF believes that its ultimate liability, if any, in this matter will not have a material adverse effect on its financial condition.
2) Notified of a potential claim for a large waste disposal site which has contamination issues where EMF has sent a small amount in the past

Schedule 3 To Term Loan Agreement

Permitted Encumbrances

1. First Lien of Tompkins County Trust on EMF Property
2. Dynasil's obligations under the RMD acquisition agreements to repurchase up to one million shares of its common stock, at $2.00 per share, for the period from July 1, 2010 until June 30, 2012, or to issue a promissory note in lieu of such repurchase until such repurchase is consummated.

3. Encumbrances relating to purchase money security interests that arise in connection with the acquisition of inventory items in the ordinary course of business

4. Encumbrances arising in connection with the conversion or redemption of securities issued by Dynasil

5. Encumbrances relating to intercompany indebtedness for "CORE" expenses

Schedule 4 To Term Loan Agreement

Guaranty Obligations

1. Dynasil Corporation of America guaranty to Tompkins Trust Co. of indebtedness of Evaporated Metal Films Corporation

EXHIBIT A

COVENANT COMPLIANCE CERTIFICATE

[Letterhead of Borrower]

[Dated]

Susquehanna Bank DV
Two Aquarium Drive
Camden, NJ 08103
Attention: David Slobotkin, A.V.P.

Dear Mr. Slobotkin:

This Compliance Certificate ("Compliance Certificate") is executed and delivered to Susquehanna Bank DV (the "Bank") pursuant to the Loan Agreement, dated as of July 1, 2008 (the "Loan Agreement") by and between Dynasil Corporation of America (the "Borrower") and the Bank. All terms not defined herein but used as defined terms herein shall have the meaning ascribed to them in the Loan Agreement. This Compliance Certificate covers the Borrower's financial statements, a copy of which is attached hereto, for the period ending _____________ (the "Financial Statements"). We hereby certify that the Financial Statements have been prepared in accordance with GAAP and fairly present the financial condition of the Borrower, as at the close of business on ________________, and the results of operations for the period then ended.

The attachments hereto set forth calculations made to demonstrate compliance with the provisions of the Loan Agreement, as of the end of the fiscal period set forth in paragraph 1 hereof.

The undersigned has reviewed the terms of the Loan Agreement and has made, or caused to be made under his/her supervision, a review in reasonable detail of the transactions and condition of the Borrower during the fiscal period covered by this Compliance Certificate. The undersigned does not (either as a result of such review or otherwise) have any knowledge of the existence as of the date of this Compliance Certificate of any condition or event that constitutes an Event of Default.

As of the date hereof, to the best of the undersigned's knowledge, information and belief, i. the representations and warranties of the Borrower contained in the Loan Agreement are true and correct in all material respects, ii. the Borrower is in full compliance with all covenants contained in the Loan Agreement, and iii. no event has occurred and is continuing which constitutes an Event of Default or an event which, with the giving of notice or lapse of time or both, would constitute such an Event of Default.
This Compliance Certificate is executed on __________________, 20 by the Borrower. The undersigned hereby certifies that each and every matter contained herein is derived from the Borrower's books and records and is, to the best of the undersigned, true and correct.

Sincerely,