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             [LOGO]  SOVEREIGN  -  SANTANDER




                                        June 29, 2012

Dynasil Corporation of America
239 Cherry Street
Ithaca, New York 14850
Attention:     Richard Johnson,
          Chief Financial Officer.

          Re:   Loan and Security Agreement, dated July 7,  2010,
          between
                Sovereign  Bank, N.A. and Dynasil Corporation  of
          America

Dear Richard:

      Sovereign  Bank, N.A., a national banking association  (the
"Lender"),  and  Dynasil  Corporation  of  America,  a   Delaware
corporation (the "Borrower"), made, executed and delivered a Loan
and  Security Agreement, dated July 7, 2010 (as amended, modified
or  supplemented prior to the date hereof, the "Loan Agreement").
All  capitalized terms utilized herein and not otherwise  defined
herein shall have the meanings ascribed to such terms in the Loan
Agreement.

      The Borrower has informed the Lender that the Borrower has,
in  violation  of  Section 12(b) of the Loan Agreement,  incurred
certain  indebtedness  which is evidenced by  certain  promissory
notes dated as of June 7, 2012, in the original principal amounts
totaling  $1,857,546.00, executed by the  Borrower  in  favor  of
certain  entities affiliated with Dr. Gerald Entine (the  "Entine
Indebtedness").   In  addition, the  Borrower  has  informed  the
Lender  that  the  Borrower will not be in  compliance,  for  the
fiscal quarter of the Borrower ending on June 30, 2012, with  the
requirements of the Consolidated Maximum Leverage Ratio  covenant
set  forth  in Section 13(a) of the Loan Agreement  or  with  the
requirements  of  the  Consolidated Fixed Charge  Coverage  Ratio
covenant set forth in Section 13(b) of the Loan Agreement.

      Subject  to  execution and delivery by the Borrower  of  an
Amendment  No.  3  to  Loan and Security Agreement  in  the  form
attached  hereto  as  Exhibit A (the  "Required  Amendment")  and
compliance  by  the Borrower with the terms thereof,  the  Lender
hereby  agrees  to waive (i) the Event of Default caused  by  the
Borrower's  breach  of  Section  12(b)  of  the  Loan   Agreement
resulting  from  the  incurrence by the Borrower  of  the  Entine
Indebtedness,   (ii)  compliance  by  the   Borrower   with   the
requirements of the Consolidated Maximum Leverage Ratio  covenant
set  forth in Section 13(a) of the Loan Agreement for the  fiscal
quarter  of  the  Borrower  ending on June  30,  2012,  and  (ii)
compliance  by  the  Borrower  with  the  requirements   of   the
Consolidated  Fixed Charge Coverage Ratio covenant set  forth  in
Section 13(b) of the Loan Agreement for the fiscal quarter of the
Borrower  ending on June 30, 2012.  The waiver by the  Lender  of
compliance  by the Borrower with the provisions of Section  12(b)
of  the  Loan  Agreement shall be specific with  respect  to  the
incurrence of the Entine Indebtedness, as set forth herein.   The
waiver  by  the  Lender of compliance by the  Borrower  with  the
Consolidated Maximum Leverage Ratio covenant and the Consolidated
Fixed  Charge Coverage Ratio covenant shall be specific  for  the




fiscal  quarter  of the Borrower ending on June  30,  2012  only.
Such  waivers  shall not be construed to be,  or  operate  as,  a
waiver  of any other right of the Lender arising under  the  Loan
Agreement  or any other Other Agreement, nor shall they  preclude
any other present or future exercise of the rights granted to the
Lender under the Loan Agreement or any other Other Agreement upon
the  failure  of  the  Borrower to comply with  any  other  term,
covenant or condition contained in the Loan Agreement or  in  any
other  Other  Agreement or the occurrence of any other  Event  of
Default,  including  without  limitation  any  Event  of  Default
arising as a result of the Borrower's failure to comply with  the
Consolidated  Maximum Leverage Ratio covenant or the Consolidated
Fixed  Charge Coverage Ratio covenant for any fiscal period other
than the fiscal quarter ending on June 30, 2012.

      This  will also confirm that the Borrower has agreed to  be
responsible  for  paying or reimbursing the  Lender,  immediately
upon demand, for all fees and expenses incurred by the Lender  in
connection  with the requested waivers granted herein,  including
without limitation fees of legal counsel.

      If  you have any questions concerning the foregoing, please
contact  me immediately.  Unless I hear from you to the contrary,
I   will  assume  that  the  foregoing  accurately  reflects  the
understanding which has been reached between the Lender  and  the
Borrower with respect to the subject matter hereof.  Please  note
that the waivers set forth herein shall automatically expire  and
be  deemed to be of no force and effect if the Borrower fails  to
return to the Lender, on or before June 30, 2012, a countersigned
copy  of  this  letter and a fully executed copy of the  Required
Amendment.

                              Sincerely,

                              SOVEREIGN BANK, N.A.


                              By: ___________________________
                              Name:  Daniel Vereb
                              Title:    Senior Vice President

Accepted and agreed to this
____ day of June, 2012.


DYNASIL CORPORATION OF AMERICA


By: __________________________
Name:   Richard Johnson
Title:     Chief Financial Officer



                            EXHIBIT A

                   FORM OF AMENDMENT NO. 3 TO
                   LOAN AND SECURITY AGREEMENT



See attached.







































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