EXHIBIT
10.1


FORM
OF EXCHANGE AGREEMENT


April 16, 2007


Veeco Instruments Inc.


100 Sunnyside Boulevard,
Suite B


Woodbury, New York
11797


Re:          Exchange of Convertible
Subordinated Notes Listed on Appendix A


Ladies and
Gentlemen:


The undersigned
(the “Holder”) owns the principal
amount of 4.125% Convertible Subordinated Notes due December 21, 2008 (the “Old Notes”) of Veeco Instruments Inc., a Delaware corporation (the “Company”), set forth on Appendix A
hereto.  The Holder desires to exchange
the Old Notes set forth on Appendix A for a principal amount of the
Company’s newly issued 4.125% Convertible Subordinated Notes due April 15, 2012
(the “New Notes”) at an exchange
ratio of $991.70 principal amount of New Notes for each $1,000 principal amount
of Old Notes exchanged, plus a cash payment by the Company to the Holder equal
to the accrued and unpaid interest on the Old Notes to, but not including, the
Settlement Date (defined below) (the “Interest
Payment”).  The terms of the
New Notes will be substantially as described in the Company’s preliminary
offering memorandum dated April 12, 2007, as supplemented by the three-page
supplement thereto dated April 16, 2007 (the “Preliminary
Offering Memorandum”) and the initial conversion rate for each
$1,000 principal amount of New Notes will be 36.7277 shares of Company common
stock (equivalent to an initial conversion price of approximately $27.2274 per
share).  The New Notes will be issued
pursuant to an Indenture dated as of April 16, 2007, by and between the
Company, as issuer, and U.S. Bank Trust National Association, as trustee (the “Trustee”), as supplemented by the First
Supplemental Indenture thereto to be dated as of April 20, 2007 (as
supplemented, the “New Notes Indenture”).


This letter
agreement (the “Exchange Agreement”)
sets forth the agreement between the Company and the Holder regarding the terms
upon which the Company will exchange the New Notes for the Old Notes.  In connection with this exchange, the Company
and the Holder hereby agree as follows:


1.             Exchange
of the Notes.


(a)   On the terms and subject to the
conditions of this Exchange Agreement, the Company hereby agrees to sell,
transfer and deliver to the Holder, and the Holder agrees to accept from the
Company, New Notes and the Interest Payment in exchange for Old Notes.  The principal amount of New Notes set forth
on Appendix A and the Interest Payment











calculated as set forth on Appendix A will be
exchanged for the principal amount of Old Notes set forth on Appendix A.


(b)   On a date to be agreed upon between
the Company and the Holder (but in no event later than the fourth (4th) business day after the date
of this Exchange Agreement) (the “Settlement
Date”), the Holder will deliver the Old Notes in accordance with the
Old Notes Indenture (defined below) for the transfer of securities and the
Deposit/Withdrawal at Custodian (“DWAC”)
procedures of The Depository Trust Company (“DTC”)
free and clear of any liens, claims, encumbrances, security interests, options,
charges and restrictions of any kind (other than those arising from acts of the
Company or its affiliates).  Upon receipt
of the Old Notes as transferred through the DWAC procedures of DTC, the Company
shall issue New Notes and make the Interest Payment to the Holder in accordance
with the New Notes Indenture and the DWAC procedures of DTC free and clear of
any liens, claims, encumbrances, security interests, options, charges and
restrictions of any kind (other than those arising from acts of the Holder or
its affiliates).


2.             Representations, Warranties
and Agreements of the Holder.  The
Holder hereby represents and warrants to the Company and agrees as follows:


(a)   The
Holder is a corporation or other entity, as specified on the signature page of
this Exchange Agreement, duly organized, validly existing and in good standing
under the laws of the jurisdiction identified on the signature page of this
Exchange Agreement.  The Holder has all
requisite entity level power and authority to enter into this Exchange Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby.  All entity level
acts and other proceedings required to be taken by the Holder to authorize the
execution, delivery and performance of this Exchange Agreement and the
consummation of the transactions contemplated hereby have been duly and
properly taken.  This Exchange Agreement
has been duly executed and delivered by the Holder and, assuming due execution
and delivery by the Company, constitutes a legal, valid and binding obligation
of the Holder, enforceable against the Holder in accordance with its terms,
except that such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors’ rights generally, and (ii) general principles of
equity.


(b)   The Holder has good and valid title to the Old Notes,
free and clear of any liens, claims, encumbrances, security interests, options,
charges and restrictions of any kind. 
Upon delivery to the Company of securities representing the Old Notes,
as transferred through the DWAC procedures of DTC, and upon the Holder’s
receipt of the New Notes and the Interest Payment, good and valid title to the
Old Notes will pass to the Company, free and clear of any liens, claims,
encumbrances, security interests, options, charges and restrictions of any kind
(except for those arising from acts of the Company or its affiliates).


(c)   The Holder acknowledges that (i) it has reviewed the
Company’s filings with the Securities and Exchange Commission (the “SEC”) since February 28, 2007, and
(ii) it understands that the rights and privileges of holders of the New
Notes (set forth in the New Notes Indenture), may be substantially different
from the rights of holders of the Old Notes











(set forth in that certain
Indenture, dated as of December 21, 2001, by and between the Company and the
Trustee (as successor in interest), relating to the Old Notes (the “Old Notes Indenture”)).


(d)   The Holder has the requisite knowledge and experience
in financial and business matters so that it is capable of evaluating the
merits and risks of the transactions contemplated hereby and acquiring the New
Notes in connection therewith and has had such opportunity as it has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Holder to evaluate the merits and risks of such
transactions.  The Holder acknowledges
receipt of the Preliminary Offering Memorandum and a draft of the New Notes
Indenture.  In entering into this
Exchange Agreement and the transactions contemplated hereby, the Holder
acknowledges that it has and is acting for itself and not at the direction or
instruction of any other person, including without limitation, the Company, and
the Holder has not, is not and will not hold itself out as, an agent of the
Company in connection with the transactions contemplated hereby or in
connection with any subsequent sale of the New Notes.


(e)   The Holder represents that it is acting solely as
principal and has not received any commission or remuneration (other than
trading profits) in connection with this transaction.  The Holder further represents that the
transactions contemplated in this Exchange Agreement were privately negotiated
and it has not been solicited by any person in connection with this
transaction.  The terms of this Exchange
Agreement are the result of negotiations between the Holder and the Company.


(f)    The Holder also understands that the Company is
issuing the New Notes and the Interest Payments delivered pursuant to this
letter agreement in reliance upon the exemption from the registration
requirements of Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), contained in
Section 3(a)(9) thereof in reliance, in part, on the accuracy of the
Holder’s representations, warranties and agreements herein.  The Holder agrees that any resale of the New
Notes will be in accordance with the provisions of the Federal securities laws.


3.             Representations,
Warranties and Agreements of the Company. 
The Company hereby represents and warrants to the Holder and agrees as
follows:


(a)   The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware.  The Company has all requisite corporate power
and authority to enter into this Exchange Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.  All corporate acts and other proceedings
required to be taken by the Company to authorize the execution, delivery and
performance of this Exchange Agreement and the consummation of the transactions
contemplated hereby have been duly and properly taken.  This Exchange Agreement has been duly
executed and delivered by the Company and, assuming due execution and delivery
by the Holder, constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except that such enforcement may be subject to (i)











bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting or relating to enforcement of creditors’ rights
generally, and (ii) general principles of equity.


(b)   The issuance of the New Notes is exempt from the
registration requirements of Section 5 of the Securities Act, pursuant to the exemption
contained in Section 3(a)(9) thereof. 
The New Notes will not be “restricted securities” within the meaning of
Rule 144 under the Securities Act and will be freely transferable by the
Holder.  Accordingly, any certificates
representing the New Notes will not bear any restrictive legends.


(c)   The New Notes, when issued and delivered by the
Company to the Holder in exchange for the Old Notes pursuant to this Exchange
Agreement and when duly executed and authenticated at closing by the Trustee,
will be (i) legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms (except that such
enforcement may be subject to (x) bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting or relating to enforcement of
creditors’ rights generally, and (y) general principles of equity); and (ii)
will be free clear of any liens, claims, encumbrances, security interests,
options, charges and restrictions of any kind (other than those arising from
acts of the Holder or its affiliates); and
(iii) the Holder will be entitled to the benefits of the New Notes Indenture.


(d)   The Company is not and, after giving
effect to the issuance of the New Notes, will not be, (i) in violation of its
charter or bylaws, (ii) in default in the performance of any bond, debenture,
note, indenture, mortgage, deed of trust or other agreement or instrument to
which it is a party or by which it is bound or to which any of its parties is
subject that could reasonably be expected to have a material adverse effect on
the business or financial condition of the Company, or (iii) in violation of
any local, state, federal or foreign law, statute, ordinance, rule, regulation,
requirement, judgment or court decree applicable to it or any of its assets or
properties (whether owned or leased) that could reasonably be expected to have
a material adverse effect on the business or financial condition of the
Company.  To the best knowledge of the Company,
there exists no condition that, with notice, the passage of time or otherwise,
would constitute a default under any such document or instrument that could
reasonably be expected to have a material adverse effect on the business or
financial condition of the Company.


(e)   The documents incorporated by reference in
the Preliminary Offering Memorandum (the “Incorporated
Documents”), at the time they were or hereafter are filed with the
SEC, or if amended, as so amended, complied and will comply in all material
respects with the requirements of the Securities and Exchange Act of 1934, as
amended (the “1934 Act”) and the
rules and regulations of the SEC thereunder. 
As of their respective dates, neither the Incorporated Documents nor the
Preliminary Offering Memorandum contained or contains an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.  The terms of the New Notes will be in all
material respects as described in the Preliminary Offering Memorandum.











(f)    The authorized, issued and
outstanding shares of capital stock of the Company as of December 31, 2006 are
as set forth in the Preliminary Offering Memorandum under the caption “Capitalization”
(except for subsequent issuances, if any, pursuant to this Agreement, pursuant
to reservations, agreements or employee benefit plans referred to or
incorporated by reference in the Preliminary Offering Memorandum or pursuant to
the exercise of convertible securities or options referred to or incorporated
by reference in the Preliminary Offering Memorandum).  The shares of issued and outstanding capital
stock of the Company have been duly authorized and validly issued and are fully
paid and non-assessable.  None of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the
Company.  There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase granted by the Company or to which the Company is a
party, or equity or debt securities of the Company convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its
subsidiaries other than those described in the Preliminary Offering Memorandum
or the Incorporated Documents.


(g)   Since the respective dates as of which
information is given in the Incorporated Documents, no event or circumstance
has occurred or arisen which has had, or would reasonably be expected to, individually
or in the aggregate, have, a Material Adverse Effect on the Company or its
subsidiaries.  As used herein, the term “Material Adverse Effect” shall mean a
material adverse effect on the business, condition (financial or otherwise),
properties or results of operations of the Company and its subsidiaries, taken
as a whole, or would materially adversely affect the ability of the Company to
perform its obligations under this Agreement or the New Notes; provided, however, that to the extent any effect, change,
events, circumstances or development is caused by or results from any of the
following, it shall not be taken into account in determining whether there has
been a “Material Adverse Effect”: (i) the announcement of the execution of this
Agreement, actions contemplated by this Agreement or the performance of
obligations under this Agreement, (ii) factors affecting the economy or
financial markets as a whole, provided that the Company and its subsidiaries
are not materially disproportionately affected thereby, (iii) failure to meet
internal or analyst financial forecasts, in and of itself, (iv) any change in
the market price or trading volume of the Company’s common stock, par value
$0.01 per share (the “Common Stock”)
after the date hereof, in and of itself, or (v) the suspension of trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq Global Select Market.


(h)   The Company has not retained or authorized the Holder to act on its behalf in
connection with the Old Notes, and no broker, finder or other person has been
retained by or authorized to act on behalf of the Company in connection with
the transactions contemplated hereby, and the Company has not paid or given,
directly or indirectly, any commission or other remuneration, to any person,
for soliciting the acquisition of the Old Notes or the exchange as contemplated
hereby.


(i)    The Company’s Common Stock issuable
upon conversion of the New Notes has been duly reserved for issuance, and upon
issuance in accordance with the terms of the New Notes, will be validly issued,
fully paid and non-assessable.  Such
Common Stock will be











transferable by the Holder to the same extent as the
Common Stock  issuable upon conversion of
the Old Notes.  Accordingly, any certificates
representing such Common Stock will only bear the restrictive legends (if any)
required by the New Notes Indenture.


(j)    No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance
by the Company of its obligations hereunder, or under the New Notes Indenture,
in connection with the actions contemplated by this Agreement, or for the due
execution, delivery or performance by the Company of this Agreement, or the New
Notes Indenture, except such as have been already obtained or as may be
required under the Securities Act, the 1934 Act, the Trust Indenture Act of
1939, as amended, or in connection with state securities laws.


4.     Notices.  All notices and other communications under
this letter agreement, including any notices with respect to the transfer of
the New Notes, shall be in writing and shall be deemed given (a) when delivered
personally, (b) one business day after being delivered to a nationally
recognized overnight courier or (c) when sent by facsimile or electronic mail
(with confirmation of transmission received by the sender) to the parties at
the addresses (or at such other address as shall be specified by like notice):


If to the Company:


Veeco
Instruments Inc.


100
Sunnyside Boulevard, Suite B


Woodbury,
New York 11797


Attention:              General Counsel


Facsimile No.:       516-677-0380


If to the Holder:


As set forth on the signature page of this Exchange
Agreement


5.     Confidentiality.  Each of the Company and the Holder represent
that it has not disclosed any information regarding discussions relating to
this Exchange Agreement and each has directed its representatives not to
disclose any such information.  Prior to the
issuance of the press release contemplated by Section 6, except as required by
law or any regulation (including any regulation of The NASDAQ National Market),
neither the Company nor the Holder shall disclose the existence of this
Exchange Agreement or any of the provisions contained herein without the prior
written consent of the other, which consent will not be unreasonably withheld
or delayed.  Notwithstanding the
foregoing, each of the Company and the Holder may disclose this Exchange
Agreement to its respective outside legal counsel, independent auditors or
advisors.  The separate confidentiality
agreement executed by the Holder relating to the matters contemplated by this
Agreement and the confidentiality provisions of this Section 5 shall terminate
upon the public issuance by the Company of the press release contemplated by
Section 6.











6.     Press
Release; SEC Reports. 
Notwithstanding anything contrary in Section 5, the Company may issue a
press release or press releases on or after the execution of this Exchange
Agreement announcing the execution of this Agreement and/or the issuance of the
New Notes, and file or furnish such press release(s) with or to the SEC on a
Current Report on Form 8-K promptly thereafter, which Current Report on Form
8-K may include this Exchange Agreement or a form of agreement as an
exhibit.  Notwithstanding the foregoing,
no such press release issued by the Company shall name the Holder or affiliates
of the Holder without the Holder’s prior written consent, unless required by
law (in which case prior notice to the Holder shall be given).


7.     Amendment.  Neither this Exchange Agreement nor any of
the terms hereof may be amended, supplemented, waived or modified except by an
instrument in writing signed by the parties hereto or, in the case of a waiver,
signed by the party waiving compliance.


8.     Governing
Law; Jurisdiction.  This Exchange
Agreement shall be governed by the laws of the State of New York, without
regard to any conflicts of law principles. 
By its execution and delivery of this Exchange Agreement, each party
irrevocably and unconditionally agrees that any legal action, suit or
proceeding against it with respect to any matter arising out of or in
connection with this Exchange Agreement or for recognition or enforcement of
any judgment rendered in any such action, suit or proceeding, may be brought in
the courts of the State of New York, County of New York, or in the United
States District Court for the Southern District of New York.  By execution and delivery of this Exchange
Agreement, each party irrevocably and unconditionally accepts and submits
itself to the nonexclusive jurisdiction of such courts with respect to any such
action, suit or proceeding.


9.     Counterparts.  This Exchange Agreement may be executed in
any number of counterparts, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts will together constitute but one
and the same instrument.  Delivery of an
executed counterpart of a signature page by facsimile transmission shall be
effective as a delivery of a manually executed counterpart of this Exchange
Agreement.


10.   Entire
Agreement.  This Exchange Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersede all prior negotiations, agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.


11.   Assignment.  Neither this Exchange Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by the Company
or the Holder without the prior written consent of the other.


12.   Successors
and Assigns.  Subject to Section 11,
this Exchange Agreement shall bind and inure to the benefit of the parties
hereto, and their respective successors, assigns, administrators and
representatives.











13.   No
Third-Party Beneficiaries.  This
Exchange Agreement shall be solely for the benefit of the parties hereto, and
no other person or entity shall be a third-party beneficiary of this Exchange
Agreement.


14.   Severability.  The unenforceability or invalidity of
any term or provision of this Exchange Agreement in any situation in any
jurisdiction shall not affect the enforceability or validity of the remaining
terms and provisions or the enforceability of the offending term or provision
in any other situation or in any other jurisdiction.


15.   Certain
Terms.  The term “affiliate” as used
in this Exchange Agreement shall mean, with respect to a specified person or
entity, a person or entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
the person or entity specified.


*     *     *    
*     *


If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Holder a counterpart hereof,
whereupon this letter agreement, along with all counterparts, will become a
binding agreement between the Holder and the Company in accordance with its
terms.


	
  

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  ,

  	
   

  
	
   

  	
  a                      
  organized under the laws of                      ,
  on behalf of the Holder(s) listed on Appendix A

  



 


	
  

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile No.:

  



 


Confirmed
and agreed to as 

of the date first above written:


VEECO INSTRUMENTS INC.


	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 











Appendix A


Each Holder listed below enters into the Exchange Agreement
and makes the agreements, representations and warranties contained therein with
respect to the Old Notes set forth opposite its name below.


Old
Notes:  4.125% Convertible Subordinated Notes due
December 21, 2008  (CUSIP #922417 AB6)


New
Notes:  4.125% Convertible Subordinated Notes due
April 15, 2012  (CUSIP #922417 AC4)


	
  Holder

  	
   

  	
  Principal

  Amount of

  Old Notes to

  be Delivered

  by Holder

  	
   

  	
  Principal

  Amount of

  New Notes to

  be Delivered

  by the

  Company

  	
   

  	
  Interest

  Payment to

  be Made by

  the Company

  (daily rate)

  	
   

  	
  Cash in lieu

  of Fractional

  New Notes