Exhibit 10.3


 


THIRD AMENDMENT AND CONSENT TO CREDIT AGREEMENT


 


THIRD  AMENDMENT AND CONSENT, dated as of May 7,
2009, and effective as of March 27, 2009, (this “Amendment and Consent”)
to the Credit Agreement dated as of August 20, 2007 (as amended by the First
Amendment to Credit Agreement, dated as of February 25, 2008 and the
Second Amendment to Credit Agreement, dated as of February 27, 2009, the “Credit
Agreement”) by and among VEECO INSTRUMENTS
INC., a Delaware corporation (the “Company”), the Lenders party
thereto and HSBC BANK USA, NATIONAL
ASSOCIATION, a national banking association, as Administrative Agent
for the Lenders.


 


WHEREAS, the Company
has requested that the Lenders amend certain provisions of the Credit Agreement
and consent to the acquisition by Veeco Process Equipment Inc. of the stock of
Fluens Corporation, and the Lenders have agreed to amend such provisions of the
Credit Agreement and grant such consent, subject to the terms and conditions
set forth herein;


 


NOW,
THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:


 


1.             Amendments.


 


a.             The definition
of the term “Loan Documents” in Section 1.01 of the Credit Agreement is
hereby amended and restated in its entirety to provide as follows:


 


“Loan
Documents” shall mean, collectively, this Agreement, the Notes, the Guaranties,
the Security Agreement, the Hedging Agreements (but only to the extent that
such Hedging Agreements are between the Company and a Lender and relate to the
Company’s hedging of interest rate exposure under this Agreement), the Pledge
Agreements, the Account Pledge Agreement and each other agreement executed in
connection with the transactions contemplated hereby or thereby, as each of the
same may hereafter be amended, restated, supplemented or otherwise modified
from time to time.


 


b.             Section 1.01 of the Credit
Agreement is hereby amended to add the following definition in its appropriate
alphabetical order:


 


“Account
Pledge Agreement” shall mean the Account Pledge Agreement, dated as of May 7,
2009, between the Company and the Administrative Agent, as the same may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time.


 


c.             Section 5.02 of the Credit
Agreement is hereby amended to add the following new subsection “(d)”
immediately following subsection “(c)” thereof:


 


“(d)         Cash Collateral.  The Company shall have deposited with the
Administrative Agent, Cash Collateral in an amount equal to the Aggregate
Outstandings (after giving effect to the Loan requested or the requested
issuance, amendment, renewal or extension of a Letter of Credit).”


 


d.             Article VI of the Credit
Agreement is hereby amended to add a new Section 6.16 at the end thereof
as follows:


 


 


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“SECTION 6.16.  Cash
Collateral.  The Company
shall, at all times required by the Lenders, maintain with, and pledge to, the
Administrative Agent for the ratable benefit of the Lenders, Cash Collateral in
an amount equal to or greater than the Aggregate Outstandings, pursuant to the
Account Pledge Agreement.”


 


e.             Section 7.13(e) of the
Credit Agreement is hereby amended and restated in its entirety to provide as
follows:


 


“(e)         Consolidated EBITA.  Permit Consolidated EBITA to exceed (i) ($11,692,000),
for the fiscal quarter ending March 31, 2009, (ii) ($19,807,000), on
a cumulative basis for the two fiscal quarters ending June 30, 2009, (iii) ($21,899,000),
on a cumulative basis for the three fiscal quarters ending September 30,
2009 or (iv) ($14,710,000), for the fiscal year ending December 31,
2009.”


 


2.                                      Consent.


 


The Company acknowledges and
agrees that a Compliance Period is not currently in effect and, as a result
thereof, the Required Lenders must consent to the acquisition by Veeco Process
Equipment Inc. of the stock of Fluens Corporation, a Massachusetts corporation
as a Permitted Acquisition (the “Specified Acquisition”).  In accordance with Section 7.06(d) of
the Credit Agreement, the Required Lenders hereby consent to the consummation
of the Specified Acquisition as a Permitted Acquisition, provided that (a) no
Default or Event of Default has occurred and is then continuing at the time of,
or will occur after giving effect to, such Acquisition and (b) such Acquisition
otherwise satisfies the requirements of a “Permitted Acquisition” as defined in
the Credit Agreement other than the requirement set forth in clause “(f)(ii)”
thereof with respect to the ratio of Consolidated Senior Funded Debt to
Consolidated EBITA.


 


3.                                      Conditions to Effectiveness.


 


This Amendment and Consent
shall become effective upon receipt by the Administrative Agent of: (a) this
Amendment and Consent, duly executed by the Company and the Guarantors, (b) the
Account Pledge Agreement, duly executed by the Company, and Cash Collateral in
an amount equal to the Aggregate Outstandings as of the date hereof, (c) executed
consents from the Lenders authorizing the Administrative Agent to execute this
Amendment and Consent on behalf of the Lenders (the “Consent”), and (d) an
amendment fee for each Lender providing its Consent to the Administrative Agent
on or before the time that the Administrative Agent shall sign this Amendment
and Consent on behalf of the Required Lenders, in an amount equal to ten (10) basis
points of such Lender’s Revolving Credit Commitment.


 


4.             Miscellaneous.


 


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


 


Except as expressly amended
hereby, the Credit Agreement shall remain in full force and effect in
accordance with the original terms thereof.


 


The amendments set forth
above are limited specifically to the matters set forth above and for the
specific instances and purposes given and do not constitute directly or by
implication a waiver or 


 


 


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amendment of any other
provision of the Credit Agreement or a waiver of any Default or Event of
Default, whether now existing or hereafter arising, which may occur or may have
occurred.


 


The Company hereby (i) represents
and warrants that (a) after giving effect to this Amendment and Consent,
the representations and warranties made by the Company and each of its
Subsidiaries pursuant to the Credit Agreement and the other Loan Documents to
which each is a party are true and correct in all material respects as of the
date hereof with the same effect as though such representations and warranties
had been made on and as of such date, unless any such representation or warranty
is as of a specific date, in which case, as of such date and (b) after
giving effect to this Amendment and Consent, no Default or Event of Default has
occurred and is continuing and (ii) confirms that the liens, heretofore
granted, pledged and/or assigned to the Administrative Agent for the Lenders
shall not be impaired, limited or affected in any manner whatsoever by reason
of this Amendment and Consent.


 


The Company hereby further
represents and warrants that the execution, delivery and performance by the
Company of this Amendment and Consent and the Credit Agreement (as amended by
this Amendment and Consent), (a) have been duly authorized by all
requisite corporate action, (b) will not violate or require any consent
(other than consents as have been made or obtained and which are in full force
and effect) under (i) any provision of law applicable to the Company, any
applicable rule or regulation of any Governmental Authority, or the
Certificate of Incorporation or By-laws of the Company, (ii) any order of
any court or other Governmental Authority binding on the Company or (iii) any
agreement or instrument binding on the Company. 
Each of this Amendment and Consent and the Credit Agreement (as amended
hereby), constitutes a legal, valid and binding obligation of the Company.


 


This Amendment and Consent
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 Consent. This Amendment and Consent shall become effective when
duly executed counterparts hereof which, when taken together, bear the
signatures of each of the parties hereto shall have been delivered to the
Administrative Agent.


 


This Amendment and Consent
shall constitute a Loan Document.


 


This Amendment and Consent
shall be governed by, and construed in accordance with, the laws of the State
of New York.


 


[next page is signature
page]


 


 


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IN WITNESS
WHEREOF, the Company and the Administrative Agent, as
authorized on behalf of the Required Lenders, have caused this Amendment and
Consent to be duly executed by their duly authorized officers, all as of the
day and year first above written.


 




	
   

  	
  HSBC BANK
  USA, NATIONAL

  
	
   

  	
  ASSOCIATION, as
  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher Mendelsohn

  
	
   

  	
  Name:

  	
  Christopher Mendelsohn

  
	
   

  	
  Title:

  	
  Senior Vice President

  
				






 




	
   

  	
  VEECO
  INSTRUMENTS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John F. Rein, Jr.

  
	
   

  	
  Name:

  	
  John F. Rein, Jr.

  
	
   

  	
  Title:

  	
  Executive Vice President
  and Chief Financial Officer

  
				






 


The undersigned, not parties
to the Credit Agreement but as “Guarantors” under the Guaranty and “Grantors”
under the Security Agreement, hereby (a) accept and agree to the terms of
the foregoing Amendment and Consent, (b) acknowledge and confirm that all
terms and provisions contained in the Loan Documents to which they are a party
are, and shall remain, in full force and effect in accordance with their
respective terms, (c) reaffirm and ratify all of the representations and
covenants contained in the Loan Documents to which they are a party, (d) represent,
warrant and confirm the non-existence of any offsets, defenses and
counterclaims to its obligations under the Loan Documents to which they are a
party and (e) confirm that the liens, heretofore granted, pledged and/or
assigned to the Administrative Agent for the Lenders shall not be impaired,
limited or affected in any manner whatsoever by reason of this Amendment and
Consent.


 




	
   

  	
  VEECO
  COMPOUND SEMICONDUCTOR INC.

  VEECO
  METROLOGY INC.

  VEECO
  PROCESS EQUIPMENT INC.

  VEECO
  APAC INC.

  VEECO
  CORPORATE LLC

  By:  Veeco Metrology Inc., its Sole Member

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John F. Rein, Jr.

  
	
   

  	
  Name:

  	
  John F. Rein, Jr.

  
	
   

  	
  Title:

  	
  Vice President of each of
  the foregoing corporations

  
				






 


 


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