<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<FILENAME>cvdnote1mm.txt
<DESCRIPTION>EXHIBIT 10.12 CVD NOTE $1MM
<TEXT>
Exhibit 10.12

                                                  For Bank use only:

                                                  Received by: ____
                                                  Approved by: ____
                                                  Other:           _____


                                NORTH FORK BANK,
                         a division of Capital One, NA.
                                  MORTGAGE NOTE

BORROWER:       CVD EQUIPMENT CORPORATION,
                a New York corporation
PRINCIPAL:      $1,000,000.00
DATE:           February 8, 2008

PROMISE TO PAY: The undersigned (the `Borrower"),  jointly and severally if more
than one signer,  does hereby  promise to pay to the order of NORTH FORK BANK, a
division of Capital One,  N.A.  (the  "Bank") at its offices at 275  Broadhollow
Road,  Melville,  New  York  11747,  or at any of its  branches,  the sum of ONE
MILLION AND 00/100 ($1,000,000.00)  DOLLARS plus interest thereon, from the date
hereof in the manner set forth below.

RATE AND PAYMENT:  The unpaid principal  balance hereof shall bear interest at a
fixed annual rate of interest of Five and 67/1 00 percent (5.67%) (at times, the
"Rate"), payable monthly in arrears, and repayment shall be from the date hereof
up to March 1, 2018 (the "Maturity Date") as follows:

     (1) in one payment  due and  payable at closing in the amount of  $3,465.00
representing  interest on the principal  amount  outstanding  hereunder from the
date hereof to March 1,2008; and, then

     (2) in  one  hundred  nineteen  (119)  consecutive  monthly  payments  each
consisting of principal and interest in the amount of $7,022.99,  commencing and
due and  payable on the first  (1st) day of April,  2008 and  continuing  on the
first (1st) day of each and every month thereafter; and, then

     (3) in one final payment due and owing on the Maturity  Date  consisting of
the entire  unpaid  principal  balance  hereof and all accrued  interest  and/or
related charges due to the Bank hereunder.

THIS NOTE  SHALL  MATURE ON MARCH  1,2018  WITH ALL SUMS OF  PRINCIPAL,  ACCRUED
INTEREST AND RELATED CHARGES DUE AND OWING ON SUCH DATE.

Payments shall be applied first to interest on unpaid  principal  balance hereof
to the date payment is received by the Bank and then to reduction of  principal.
Interest  shall  be  calculated  on a 360 day  year and  actual  number  of days
elapsed.

All payments  due  hereunder  shall be made by  automatic  debit from an account
maintained  by the  Borrower  for such purpose at the Bank in which the Borrower



                                       1
<PAGE>

shall maintain balances  sufficient to pay each monthly payment due to the Bank.
Each monthly payment of principal and interest shall be  automatically  deducted
from North Fork Bank Account No. [INTENTIONALLY OMITTED] in connection with this
Note on the due date  thereof (at times,  the "due date"),  and the  undersigned
agrees to maintain sufficient funds in said account to cover these payments. The
undersigned  further  agrees that  should  there be  insufficient  funds in said
account on the monthly  payment due date,  an overdraft  charge will be incurred
and the account will not be charged for the monthly  payment.  However,  if this
occurs,  the undersigned will remain  responsible  forthe principal and interest
payment,  plus any late charges,  and the  undersigned  will be in default under
this  Note.  In  the  event  that  the  money  maintained  in  such  account  is
insufficient  for any  payment  due under  this  Note,  the Bank may  charge any
account of the Borrower or any Guarantor  hereof for any payment due to the Bank
under this Note.

PREPAYMENT:  This Note may be prepaid, upon no less than thirty (30) days' prior
written  notice from the  Borrower to the Bank,  provided the Borrower is not in
default,  all accrued interest and any and all applicable  charges due hereunder
have been paid to the date of such  prepayment,  and  further  provided  that in
connection with any prepayment in whole or in part the undersigned  shall to the
Bank a prepayment fee equal to two (2%) percent of the principal sum so prepaid.

If this Note is  prepaid  in part,  then any such  prepayment  shall be  applied
against the payments due hereunder in inverse order of maturity.

DEFAULT  INTEREST RATE: The unpaid  principal sum due under this Note shall bear
interest at a rate equal to five (5%) percent above the  applicable  Rate herein
on and after the  occurrence  of any Event of  Default as herein  described  and
until the entire principal sum hereof has been fully paid, both before and after
the entry of any judgment with respect to such event,  but in no event shall the
Rate either before or after the  occurrence  of any Event of Default  exceed the
highest rate of interest,  if any,  permitted  under the  applicable New York or
Federal Law.

RIGHT OF OFFSET:  If any payment is not made on time,  or if the entire  balance
becomes due and  payable  and is not paid,  all or part of the amount due may be
offset out of any account or other property which the Borrower or the Guarantors
hereof has at the Bank or at any  affiliate of the Bank without  prior notice or
demand.

LATE CHARGES:  The Borrower will pay a charge of four (4%) percent of the amount
of any  payment  which is not made  within ten (10) days of its  respective  due
date.

SECURITY: This Note is secured by:

     (1) a  security  interest  in and  assignment  and  pledge  of all  monies,
deposits,  or  other  sums now or  hereafter  held by the  Bank on  deposit,  in
safekeeping,  transit or otherwise,  at any time credited by or due from Bank to
the  Borrower  or to the  Guarantor  hereof,  or in which  the  Borrower  or the
Guarantor shall have an interest;

     (2) a first  position  mortgage  lien  evidenced by a Mortgage and Security
Agreement of even date  herewith  made by Town of Islip  Industrial  Development
Agency, as Mortgagor,  the undersigned Borrower,  as Borrower,  and the Bank, as
Mortgagee (the  "Mortgage")  encumbering  the property known as, and located at,
979 Marconi Avenue, Ronkonkoma, Town of lslip, County of Suffolk, City and State



                                       2
<PAGE>

of New York and  formally  described on the Tax and Land Maps of the said County
of  Suffolk  as  District  0500,  Section  105.00,   Block  03.00,  Lot  002.001
(hereinafter referred to, at times, as the "Premises");

     (3) an  Assignment  of all Leases and Rents from the  Premises  that is the
subject of the Mortgage;

     (4) a security interest in all personal property of the Borrower  evidenced
by a Security  Agreement of even date  herewith made by the Borrower in favor of
the  Bank and  appertaining  UCC-1  financing  statement,  excluding  any of the
Borrower's equipment financed under chattel liens held by the Bank;

     (5) a  collateral  Assignment  by  Borrower to the Bank of a portion of the
proceeds of a life insurance  policy issued on the life of Leonard A. Rosenbaum,
President  and CEO of the Borrower,  in the amount of Five Hundred  Thousand and
00/100  ($500,000.00)  Dollars  which  such  policy  was  issued  by Pruco  Life
Insurance  Company of New Jersey (a Stock  Company of the  Prudential  Insurance
Company of America),  under policy no.  [INTENTIONALLY  OMITTED]  (contract date
October 14, 2006) and has a face value of Two Million and 00/100 ($2,000,000.00)
Dollars.

DEFAULT:  The Bank may  declare the entire  unpaid  balance of this Note due and
payable on the  happening of any of the  following  events  (each,  an "Event of
Default" or, collectively, "Events of Default"):

     (a) failure to pay any amount required by this Note within ten (10) days of
its respective due date, or any other  obligation  owed to the Bank by Borrower,
or,  failure of the  Borrower to have  sufficient  funds in its  account(s)  for
payments due  hereunderto be debited on the due date orwithin three (3) business
days thereafter;

     (b) failure to perform or keep or abide by any term,  covenant or condition
contained in this Note or the Mortgage or any other document or instrument given
to the Bank in connection with this or any other loan;

     (c) the filing of a bankruptcy  proceeding,  assignment  for the benefit of
creditors,  issuance of any  execution,  garnishment,  or levy  against,  or the
commencement  of any proceeding for relief from  indebtedness  by or against the
Borrower;

     (d)  the  happening  of any  event  which,  in  the  judgment  of the  Bank
substantially affects: (i) the Borrower's ability to repay this Note; or (H) the
value of the Premises;  or (Hi) the value of any collateral for this Note or the
Mortgage;

     (e) if any  written  representation  or  statement  made to the Bank by the
Borrower is untrue;

     (f) if any written representation, covenant or warranty made to the Bank by
the Borrower is breached;

     (g) the occurrence of an Event of Default under the Mortgage, any Guaranty,
or any other  document or instrument  given to the Bank in connection  with this
Note, the Mortgage or any other loan;



                                       3
<PAGE>

     (h)  Inability of the Borrower to manage its affairs,  or the  voluntary or
involuntary dissolution of the Borrower;

     (i) failure of the Borrower to utilize the Bank as  its/their  primary bank
and to maintain relevant accounts at the Bank during the term hereof;

     (j) default by Borrower  under any other guaranty or loan document or other
agreement made in favor of, or with, the Bank.

     (k) the Bank shall have determined,  in its reasonable  business  judgment,
that one or more conditions  exist or events have occurred which has resulted in
a material adverse change in the business,  properties or financial condition of
Borrower;

     (l) Failure of the to provide the Bank with the  following  during the term
of this Note:

     (i) SEC  10-K  reports  including  audited  consolidated  fiscal  financial
statements of the Borrower  prepared by a firm of certified  public  accountants
acceptable to the Bank with an unqualified  opinion,  within ninety (90) days of
its fiscal year end; and

     (ii) SEC 10-Q quarterly financial  statements of the Borrower within sixty
(60) days of each quarter end; and

     (iii) compliance and covenant  calculations for the Borrower on a quarterly
basis to be submitted with each of the afore-mentioned financial statements.

     (m) Failure of the Borrower,  during the term hereof, to maintain a Maximum
Leverage of 120:1. For purposes hereof,  the term "Maximum  Leverage" shall mean
the ratio of total liabilities of the Borrower divided by its tangible net worth
at all times;

     (n) Failure of the Borrower,  during the term hereof, to maintain a minimum
Debt  Service  Coverage  Ratio of 1.25:1.  For purposes  hereof,  the term "Debt
Service  Coverage" shall mean earnings of the Borrower before  interest,  taxes,
depreciation and  amortization for the previous twelve month period,  divided by
the  interest  expense  for the prior  twelve  (12) month  period and  aggregate
principal payments of loans and capitalized leases scheduled to be paid over the
ensuing twelve (12) month period,  exclusive of any balloon or maturity  balance
of any mortgage made or extended by the Bank to the Borrower, and the GE Capital
mortgage  loan made to the Borrower and the Kidco Realty  mortgage  loan made to
the Borrower, and exclusive of the principal balance due at the maturity of this
Note;

     (o) Borrower shall fail to pay its debts,  liabilities  and  obligations to
the Bank as and when due and  payable,  or Borrower  fails to perform or observe
any term,  covenant,  or condition on its part to be performed or observed under
any  agreement  or  instrument  relating  to any  such  debts,  liabilities  and
obligations  when  required to be performed  or observed,  if the effect of such
failure to perform or observe is to  accelerate,  or to permit the  acceleration
after the giving of notice or passage of time,  or both, of the maturity of such
debts,  liabilities and  obligations,  whether or not such failure to perform or
observe  shall  be  waived  by  the  holder  of  such  debts,   liabilities  and
obligations, or any such debts, liabilities and obligations shall be declared to
be due and  payable,  or be  required  to be prepaid  (other than by a regularly



                                       4
<PAGE>

scheduled  required  prepayment)  prior to the stated  maturity  of such  debts,
liabilities and obligations,

Notwithstanding the foregoing, the balance of this Note shall become immediately
due and payable upon the occurrence of any of the events set forth in (c) above.

ATTORNEY'S  FEES:  In the  event  the  Bank  retains  counsel  with  respect  to
enforcement of this Note or any other document or instrument  given to the Bank,
the Borrower agrees to pay the Bank's reasonable  attorney's fees and associated
costs and  disbursements  (whether or not an action is commenced  and whether or
not in the court of original jurisdiction, appellate court, bankruptcy court, or
otherwise).

SUBSEQUENT  AGREEMENTS:  The Borrower shall be bound by any agreement  extending
the  time or  modifying  the  above  terms of  payment  made by the Bank and any
owner(s) of the  property  covered by the Mortgage  referred to herein,  without
notice to the Borrower or the Guarantor,  and the Borrower and Guarantors  shall
continue to be liable to pay all amounts due hereunder,  but at an interest rate
not  exceeding  the rate set forth  herein,  according  to the terms of any such
agreement of extension or modification.

MISCELLANEOUS:  Delay or failure of the Bank to exercise any of its rights under
this Note shall not be deemed a waiver  thereof.  No waiver of any  condition or
requirement  shall operate as a waiver of any other or  subsequent  condition or
requirement.  The Bank or any other holder of this Note does not have to present
it before  requiring  payment.  The  Borrower  and the  Guarantors,  jointly and
severally,  waive trial by jury,  offset,  and counterclaim  with respect to any
action arising out of or relating to this Note. This Note may not be modified or
terminated  orally.  This Note shall be governed by the laws of the State of New
York  without  regard  to its  conflict  of laws  rules.  The  Borrower  and the
Guarantors  irrevocably  consent to the  jurisdiction  and venue of the New York
State Supreme Court,  Suffolk County in any action  concerning  this Note.  This
Note is binding upon the Borrower and the Guarantors and all of their respective
heirs, successors and assigns.

All  signatories to this Note,  jointly and  severally,  waive  presentment  for
payment,  notice of dishonor,  protest,  notice of protest of this Note or other
notice of any kind and all demands  whatsoever;  and in any litigation  with the
Bank,  whether or not arising out of or relating to this Note or any  collateral
security therefore, said parties expressly waive trial by jury, and in addition,
expressly  waive the right to  interpose  any  defense  based on any  statute of
limitations or any claim of laches and any set-off, counterclaim, or cross-claim
of any nature or description.

No  failure to  accelerate  the debt  evidenced  hereby by reason of an Event of
Default hereunder,  acceptance of a past due installment,  or indulgence granted
from  time-to-time  shall  be  construed  (a) as a  novation  of this  Note or a
reinstatement of the indebtedness  evidenced hereby or as a waiver of such right
or  acceleration  or the  right of the Bank  thereafter  to insist  upon  strict
compliance  with the terms of this Note,  or (b) to prevent the exercise of such
right of acceleration or any other right granted hereunder or by applicable law;
and  Borrower  and the  Guarantors  hereby  expressly  waive the  benefit of any
statute or rule of law or equity now provided,  which may hereafter be provided,
which would produce a result  contrary to or in conflict with the foregoing.  No
extension  of the time  for the  payment  of this  Note or any  installment  due
hereunder,  made by agreement  with any person now or  hereafter  liable for the
payment of this Note,  shall operate to release,  discharge,  modify,  change or
affect the original liability of Borrower under this Note, either in whole or in
part, unless the Bank agrees otherwise in writing. No provision of this Note may



                                       5
<PAGE>

be changed, waived, discharged, or terminated except by an instrument in writing
signed by the party against whom enforcement of the waiver, change, modification
or discharge is sought.  The Bank may, without the consent of Borrower,  release
or discharge the Borrower, accommodation party, or surety or release, surrender,
waive,  substitute,  compromise,  or  discharge  any  security  herefor  without
affecting the liability of the Borrower hereunder.

The Borrower  shall not,  without the prior written  consent of the Bank hereof,
enter into any transaction of merger,  sale or consolidation or transfer,  sell,
assign,  lease or otherwise dispose of any parcel or parcels of real property as
described herein or in the Mortgage or any or all or a substantial part of their
assets, individually or jointly subject to the terms and conditions set forth in
the Mortgage of even date herewith.

The terms of the said Mortgage are incorporated into this Note by reference with
the same force and effect as if fully set forth at length herein.

This  Note is  cross-defaulted  and  cross-collateralized  with  each and  every
obligation of the  Borrower,  due to the Bank,  any  successor  and/or assign or
parent or subsidiary thereof including, without limitation, the loan made to the
Borrower by the Bank of even date  herewith in the principal sum of Five Hundred
Thousand   and  00/100   ($500,000.00)   Dollars   (the   "$500,000.00   Loan").
Specifically,  any Event of Default under the $500,000.00 Loan or any other loan
or  obligation  made by Bank to the  Borrower,  or any other  obligation  of the
Borrower  in favor of the Bank,  shall be deemed an Event of Default  hereunder.
The within Note,  and any other  obligation of the Borrower due to the Bank, are
hereby  collateralized  with the  same  security  and  collateral  securing  the
$500,000.00 Loan and any other said loan or obligation.

The Borrower expressly warrants and represents that no statements, agreements or
representations,  whether oral or written, have been made by the Bank, or by any
employee,  agent or broker of the Bank with  respect to the  obligation  or debt
evidenced by this Note. The Borrower further  expressly  warrants and represents
that (a) no oral  commitment has been made by the Bank to extend or continue any
credit to the Borrower or any party other than as expressly  stated herein or in
those certain documents executed in connection  herewith,  (b) no representation
or agreement has been made by or with the Bank, or any employee, agent or broker
of the Bank,  to  forebear  or refrain in any way from  exercising  any right or
remedy in its favor  hereunder or otherwise  unless  expressly set forth herein,
and (c) the  Borrower has not and will not rely on any  commitment  to extend or
continue any credit, nor on any agreement to forebear or refrain from exercising
rights or remedies  unless such  commitment or agreement shall be in writing and
duly executed by an authorized officer of the Bank.

In accordance with Article 9 of the Uniform  Commercial Code and Revised Article
9 thereof,  the Borrower  hereby  authorizes the Bank to sign and file financing
statements at any time with respect to any security  herefor or for the Mortgage
without the signature or any further authorization of the Borrower. The Borrower
agrees to pay all filing fees and all other costs and  expenses  incident to the
filing of such statements.



                                       6
<PAGE>

     IN  WITNESS  WHEREOF,  the  Borrower  has  signed  this Note the 8th day of
February, 2008.


                                            CVD EQUIPMENT CORPORATION,
                                            a New York corporation,
                                            Borrower


                                         By:   /s/ Leonard A. Rosenbaum
                                            ---------------------------------
                                            LEONARD A. ROSENBAUM,
                                            President and CEO


                                         By:   /s/ Glen Charles
                                            ---------------------------------
                                            GLEN CHARLES,
                                            Secretary and CFO


Borrower's Address:

1860 Smithtown Avenue
Ronkonkoma, New York 11779



                                       7
<PAGE>

State of New York
                 ) ss.:
County of Suffolk

     On  February  8,  2008,  before me, the  undersigned,  personally  appeared
Leonard  A.  Rosenbaum,  personally  known to me or proved to me on the basis of
satisfactory  evidence  to be the  individual  whose name is  subscribed  to the
within  instrument and acknowledged to me that he executed same in his capacity,
and that by his signature in the instrument,  the individual, or the person upon
behalf of which the individual acted, executed the instrument.

                                                  /s/ Janice P. McKay
                                               ---------------------------
                                               Notary Public


                                                          [GRAPHIC OMITTED]




State of New York
                 ) ss.:
County of Suffolk

     On February 8, 2008, before me, the undersigned,  personally  appeared Glen
Charles,  personally  known to me or proved  to me on the basis of  satisfactory
evidence to be the individual whose name is subscribed to the within  instrument
and  acknowledged  to me that he executed same in his capacity,  and that by his
signature in the instrument,  the individual, or the person upon behalf of which
the individual acted, executed the instrument.

                                                 /s/ Janice P. McKay
                                               ---------------------------
                                               Notary Public


                                                          [GRAPHIC OMITTED]



                                       8

</TEXT>
</DOCUMENT>
