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                                                                  EXHIBIT 10.1.1

ABN AMRO Bank N.V.
as Agent for the Lenders and the Participants
June 20, 1997
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                              [NOVELLUS LETTERHEAD]

                                  June 20, 1997


ABN AMRO Bank N.V.,
as Agent for the Lenders and the Participants
101 California Street, Suite 4550
San Francisco, CA  94111-5813
Attn: Robin Yim


        Reference is made to the following:

               (1) The Credit Agreement dated as of June 9, 1997 (the "Credit
        Agreement") among Novellus Systems, Inc, ("Novellus"), ABN AMRO Bank
        N.V. ("ABN AMRO") and ABN AMRO Bank N.V., as agent for each "Lender"
        under the Credit Agreement (in such capacity, the "Credit Agreement
        Agent"); and

               (2) The Participation Agreement dated as of June 9, 1997 (the
        "Participation Agreement") among Novellus Systems, Inc, ("Novellus"),
        Lease Plan North America, Inc.("Lease Plan"), ABN AMRO and ABN AMRO Bank
        N.V., as agent for each "Participant" under the Participation Agreement
        (in such capacity, the "Participation Agent") (the Credit Agreement
        Agent and the Participation Agent, collectively referred to as "Agent").


        Novellus is hereby providing written notice to Agent that Novellus has
received written notice from Varian Associates, Inc. ("Varian") that Applied
Materials, Inc. ("Applied") filed a complaint (the "Complaint") captioned
Applied Materials, Inc. v. Varian Associates, Inc., Case No. C-97 20523 RMW, on
June 13, 1997 in the U.S. District Court for the Northern District of
California, San Jose Division (the "Action"). In addition to the Complaint,
Applied has also threatened to file suit against Varian as to certain other
claims set forth in a letter, dated June 6, 1997 from Applied to Varian. The
Complaint and the threatened suit against Varian alleges the infringement of the
following specific United States Patents: (1) No. 5,496,455; (2) No. 5,171,412;
(3) No. 5,186,718; (4) No. 5,540,821; (5) No. 5,607,776; and (6) No. 5,427,666
(collectively, the "Applied Patents"). The patent infringement claimed or
threatened by Applied allegedly involves Varian technology and intellectual
property that Varian has agreed to sell and Novellus has agreed to buy pursuant
to the terms of the Asset Purchase Agreement dated as of May 7, 1997 (the
"Varian Purchase Agreement"). Upon consummation of the transactions set forth in
the Varian Purchase Agreement, Applied may bring suit against Novellus (or join
Novellus in the Action) based on some or all of the same facts and circumstances
concerning the Applied Patents. Applied's threatened and current claims against
Varian, Novellus or their respective affiliates or subsidiaries, as they relate
to the Applied Patents shall be referred to collectively as the "Applied
Dispute."

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ABN AMRO Bank N.V.
as Agent for the Lenders and the Participants
June 20, 1997
Page 2


        Novellus and Varian have entered into a First Amendment to Asset
Purchase Agreement dated as of June 20, 1997 (the "First Amendment"), a
Litigation Expense and Indemnification Agreement dated as of June 20, 1997 (the
"Litigation Indemnification"), and a Joint Defense Agreement dated as of June
10, 1997 ("Joint Defense Agreement") to address the parties obligations and the
allocation of costs regarding the Applied Dispute. Novellus represents and
warrants that true, correct and fully signed copies of the Varian Purchase
Agreement, the First Amendment, the Litigation Indemnification, and the Joint
Defense Agreement are attached to this letter.

        The Credit Agreement and the Participation Agreement each require, as a
condition precedent to ABN AMRO's obligation to advance any funds under the
respective agreement, that all of the representations and warranties set forth
in Section 4.01 of the Credit Agreement and Section 4.01 of the Participation
Agreement, as applicable, shall be true and correct in all material respects.
The representations and warranties include, without limitation, statements by
Novellus as to litigation (Section 4.01(g)), patents and other rights (Section
4.01(n)), and that there not exist any event or condition which is reasonably
likely to have a Material Adverse Effect (Section 4.01(s) (as defined in the
Credit Agreement and in the Participation Agreement, as applicable).

        In order to induce ABN AMRO to proceed with an advance of funds under
the Credit Agreement as requested by Novellus in its Notice of Borrowing to ABN
AMRO dated June 17, 1997 (the "Notice"), Novellus hereby represents and warrants
to Agent on behalf of itself and the Lenders and the Participants that, based on
opinion of counsel, Novellus has adequate defenses based on noninfringement
and/or invalidity, to all of the claims of the Applied Patents. Novellus further
represents and warrants that the opinion of counsel will be an adequate defense
to willful infringement for any future infringement by the Inova product line.

        Agent on behalf of itself and the Lenders and the Participants hereby
acknowledges and agrees that it has received notice of the Complaint, the Action
and the Applied Dispute. Agent on behalf of itself and the Lenders and the
Participants hereby acknowledges and agrees that the Litigation Indemnification
shall be subject to the confidentiality provisions of Section 8.11 of the Credit
Agreement and Section 7.13 of the Participation Agreement.

        In light of the Applied Dispute, Novellus also wishes to update certain
representations and warranties set forth in Section 4.01 of the Credit Agreement
and Section 4.01 of the Participation Agreement. Specifically, the following
representations and warranties are hereby modified to reflect, as if originally
set forth therein, the Applied Dispute as described above concerning the Applied
Patents:

               Credit Agreement:            Section 4.01(g) (Litigation)

                                                   Section 4.01(h) (Title;

                                                   Section 4.01(n) (Patent and
                                                          Other Rights)

                                                   Section 4.01(s) (No Material

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ABN AMRO Bank N.V.
as Agent for the Lenders and the Participants
June 20, 1997
Page 3

                                                   Section 4.01(t) (Accuracy of

               Participation Agreement:     Section 4.01(g) (Litigation)

                                                   Section 4.01(h) (Title;

                                                   Section 4.01(n) (Patent and

                                                   Section 4.01(s) (No Material

                                                   Section 4.01(v) (Accuracy of

        Novellus acknowledges and agrees that if any of the representations or
warranties made by Novellus in this letter agreement is subsequently determined
by Agent to be false, incorrect, incomplete or misleading in any material
respect, such determination shall constitute an "Event of Default" (as defined
in the Credit Agreement and in the Participation Agreement, as applicable).

        This letter agreement may be executed in any number of identical
counterparts, any set of which signed by all the parties hereto shall be deemed
to constitute a complete, executed original for all purposes.

        This letter agreement shall constitute an amendment to the Credit
Agreement and the Participation Agreement only as to the specific matters set
forth herein. All references to the Credit Agreement or the Participation
Agreement, in any document, shall mean the Credit Agreement or the Participation
Agreement, as applicable, as amended hereby.

        This letter agreement shall be governed by the laws of the State of
California, without reference to the conflicts of law rules thereof. This letter
agreement shall survive the execution of the Credit Agreement, Participation
Agreement and all related documents, notwithstanding any integration clause in
any such document, and shall constitute a "Credit Document" under the

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ABN AMRO Bank N.V.
as Agent for the Lenders and the Participants
June 20, 1997
Page 4


Credit Agreement and an "Operative Document" under the Participation Agreement.

                                            Very truly yours,
                                            Novellus Systems, Inc.



                                            By:________________________________
                                                Name:__________________________
                                                Title:_________________________


        ABN AMRO, in its capacity as Lender, Participant, Credit Agreement
Agent, and Participation Agent hereby agree to waive any default or Event of
Default which may have occurred under the Credit Agreement or in the
Participation Agreement only as it may relate to the Applied Dispute concerning
the Applied Patents subject to the terms and provisions set forth in this letter
agreement.

AGENT:

ABN AMRO Bank N.V.


By: ______________________
    Name: ________________
    Title: _______________


By: ______________________
    Name: ________________
    Title: _______________


                       [SIGNATURES CONTINUED ON NEXT PAGE]


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ABN AMRO Bank N.V.
as Agent for the Lenders and the Participants
June 20, 1997
Page 5


PARTICIPANT:

ABN AMRO BANK N.V.


By: ______________________
    Name: ________________
    Title: _______________


By: ______________________
    Name: ________________
    Title: _______________


AGENT:

ABN AMRO Bank N.V.


By: ______________________
    Name: ________________
    Title: _______________


By: ______________________
    Name: ________________
    Title: _______________


LENDER:

ABN AMRO BANK N.V.


By: ______________________
    Name: ________________
    Title: _______________


By: ______________________
    Name: ________________
    Title: _______________