AMENDMENT NO.  2 AND WAIVER TO
CREDIT AGREEMENT

AMENDMENT NO.  2 AND WAIVER, dated as of August 5, 2014 (this "Amendment and
Waiver") to the CREDIT AGREEMENT dated as of August 5, 2011, by and between CVD
EQUIPMENT CORPORATION, a New York corporation (the “Company”) and HSBC BANK USA,
NATIONAL ASSOCIATION, a national banking association (the “Bank”) (as amended,
restated, supplemented or otherwise modified, from time to time, the "Credit
Agreement").

RECITALS

The Company has requested that the Bank, and the Bank has agreed to amend, and
waive compliance with, certain provisions of the Credit Agreement, subject to
the terms and conditions of this Amendment and Waiver.

Accordingly, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:

1.    Amendments.

                      (a)           The definition of the term “Revolving Credit
Commitment Termination Date” in Section 1.01 of the Credit Agreement is hereby
amended and restated in its entirety to provide as follows:

      “Revolving Credit Commitment Termination Date” shall mean August 5, 2015.

                      (b)           The second sentence of Section 2.7 of the
Credit Agreement is hereby amended and restated in it is entirety to provide as
follows:

Notwithstanding the foregoing, no Letter of Credit shall be issued if, after
giving effect to the same, (a) the Aggregate Outstandings would exceed the
Revolving Credit Commitment or (b) Aggregate Letters of Credit Outstanding would
exceed $1,000,000.
 
2.    Waiver.  The Bank hereby waives compliance with Section 7.13(b) of the
Credit Agreement, Fixed Charge Coverage Ratio, for the fiscal quarter ended June
30, 2014.

 
3.  
Conditions of Effectiveness

                      This Amendment and Waiver shall become effective as of the
date hereof, upon receipt by the Bank of this Amendment and Waiver, duly
executed by the Company.

4.    Conforming Amendments and Waiver.  The Credit Agreement, the Loan
Documents and all agreements, instruments and documents executed and delivered
in connection with any of the foregoing, shall each be deemed to be amended,
waived and supplemented hereby to the extent necessary, if any, to give effect
to the provisions of this Amendment and Waiver.  The Credit Agreement and the
other Loan Documents shall remain in full force and effect in accordance with
their respective terms.

 
5.  
Representations and Warranties.

The Company hereby represents and warrants to the Bank as follows:
 

RESTRICTED
 

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(a)           After giving effect to this Amendment and Waiver (i) each of the
representations and warranties set forth in Article IV of the Credit Agreement
is true and correct in all material respects on and as of the date hereof as if
made on and as of the date of this Amendment and Waiver except to the extent
such representations or warranties relate to an earlier date in which case they
shall be true and correct in all material respects as of such earlier date, and
(ii) no Default or Event of Default has occurred and is continuing as of the
date hereof or shall result from after giving effect to this Amendment and
Waiver.

(b)           The Company has the power to execute, deliver and perform this
Amendment and Waiver and each of the other agreements, instruments and documents
to be executed by it in connection with this Amendment and Waiver.  No
registration with or consent or approval of, or other action by, any
Governmental Authority is required in connection with the execution, delivery
and performance of this Amendment and Waiver and the other agreements,
instruments and documents executed in connection with this Amendment and Waiver
by the Company, other than registration, consents and approvals received prior
to the date hereof and disclosed to the Bank and which are in full force and
effect.

(c)           The execution, delivery and performance by the Company of this
Amendment and Waiver and each of the other agreements, instruments, and
documents to be executed by it in connection with this Amendment and Waiver, (i)
have been duly authorized by all requisite corporate action, and (ii) will not
violate  (A) any provision of law applicable to the Company, any rule or
regulation of any Governmental Authority applicable to the Company or (B) the
certificate of incorporation, by-laws, or other organizational documents, as
applicable, of the Company.

                               (d)           This Amendment and Waiver has been
duly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company enforceable in accordance with its terms,
except to the extent that enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar laws, now or hereafter
in effect, relating to or affecting the enforcement of creditors’ rights
generally and by equitable principles of general application, regardless of
whether considered in a proceeding in equity or at law.

                               (e)           There have been no changes to the
Certificate of Incorporation or Bylaws of the Borrower, previously delivered to
the Bank on August 5, 2011, and there is no plan or proceeding for the
dissolution or liquidation of the Borrower.

6.           Miscellaneous.

           Capitalized terms used herein and not otherwise defined herein shall
have the same meanings as defined in the Credit Agreement.

           The amendments and waiver herein contained are limited specifically
to the matters set forth above and do not constitute directly or by implication
an amendment or a waiver of any other provision of the Credit Agreement or a
waiver of any Default or Event of Default which may occur or may have occurred
under the Credit Agreement.

           This Amendment and Waiver may be executed in one or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one Amendment and Waiver.
 
 
RESTRICTED - 2
 

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           THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PRINCIPLES.

           This Amendment and Waiver shall constitute a Loan Document.

7.           Reaffirmation.

The Company hereby: (a) acknowledges and confirms that, except as amended by
this Amendment and Waiver, (i) all terms and provisions contained in the Credit
Agreement and the other Loan Documents are, and shall remain, in full force and
effect in accordance with their respective terms and (ii) the liens heretofore
granted, pledged and/or assigned to the Bank as security for the Company’s
Obligations under the Notes, the Credit Agreement and the other Loan Documents
shall not be impaired, limited or affected in any manner whatsoever by reason of
this Amendment and Waiver and the Company further acknowledges that such liens
shall secure all of the Obligations of the Company; (b) reaffirms and ratifies
all the representations and covenants contained in each Loan Document; and (c)
represents, warrants and confirms the non-existence of any offsets, defenses, or
counterclaims to its obligations under the Credit Agreement and the other Loan
Documents.

[the next page is the signature page]

RESTRICTED - 3 
 

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IN WITNESS WHEREOF, the Company and the Bank have caused this Amendment and
Waiver to be duly executed by their duly authorized officers, all as of the day
and year first above written.
 
 

   CVD EQUIPMENT CORPORATION             By:  /s/ Glen Charles                 
Name:  Glen Charles                  Title:    CFO                  HSBC BANK
USA, NATIONAL ASSOCIATION             By:  /s/ Jose L. Won                 
Name:   Jose L. Won                  Title:     VP              

 

 
              
RESTRICTED - 4 
 

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