Exhibit 4.2


 


AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT


 


 


DATED AS OF APRIL 27, 2006


 


 


among


 


CPI INTERNATIONAL, INC. (FORMERLY CPI
ACQUISITION CORP.)


 


CYPRESS MERCHANT BANKING PARTNERS II L.P.


 


CYPRESS MERCHANT B II C.V.


 


55TH STREET PARTNERS II L.P.


 


and


 


CYPRESS SIDE-BY-SIDE LLC


 

















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  3

  
	
   

  	
   

  
	
  ARTICLE II REGISTRATION RIGHTS

  	
  6

  
	
   

  	
   

  
	
  Section 2.1.   Demand
  Registration

  	
  6

  
	
  Section 2.2.   Piggy-Back
  Registration

  	
  7

  
	
  Section 2.3.   Reduction of
  Offering

  	
  8

  
	
   

  	
   

  
	
  ARTICLE III REGISTRATION PROCEDURES

  	
  8

  
	
   

  	
   

  
	
  Section 3.1.   Filings;
  Information

  	
  8

  
	
  Section 3.2.   Registration
  Expenses

  	
  11

  
	
   

  	
   

  
	
  ARTICLE IV INDEMNIFICATION AND CONTRIBUTION

  	
  12

  
	
   

  	
   

  
	
  Section 4.1.   Indemnification by
  the Company

  	
  12

  
	
  Section 4.2.   Indemnification by
  Holders of Registrable Securities

  	
  13

  
	
  Section 4.3.   Conduct of
  Indemnification Proceedings

  	
  13

  
	
  Section 4.4.   Contribution

  	
  14

  
	
   

  	
   

  
	
  ARTICLE V MISCELLANEOUS

  	
  15

  
	
   

  	
   

  
	
  Section 5.1.   Participation in
  Underwritten Registrations

  	
  15

  
	
  Section 5.2.   Rule 144

  	
  15

  
	
  Section 5.3.   Holdback
  Agreements

  	
  15

  
	
  Section 5.4.   Other Registration
  Rights

  	
  15

  
	
  Section 5.5.   No Inconsistent
  Agreements

  	
  16

  
	
  Section 5.6.   Successors and
  Assigns

  	
  16

  
	
  Section 5.7.   No Waivers,
  Amendments

  	
  16

  
	
  Section 5.8.   Notices

  	
  16

  
	
  Section 5.9.   Term of Agreement

  	
  17

  
	
  Section
  5.10.   GOVERNING LAW; SUBMISSION TO JURISDICTION

  	
  17

  
	
  Section 5.11.   Section Headings

  	
  18

  
	
  Section 5.12.   Entire Agreement

  	
  18

  
	
  Section 5.13.   Severability

  	
  18

  
	
  Section 5.14.   Counterparts

  	
  18

  
	
  Section 5.15.   Parties in Interest

  	
  18

  
	
  Section 5.16.   Enforcement;
  Further Assurances

  	
  18

  



 


2

















 


AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT


 


AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT dated as of April
27, 2006 (this “Agreement”) among CPI International, Inc. (formerly
known as CPI Acquisition Corp.), a Delaware corporation (the “Company”),
Cypress Merchant Banking Partners II L.P., a Delaware limited partnership (“Cypress
Onshore”), Cypress Merchant B II C.V., a Netherlands limited partnership (“Cypress
Offshore”), 55th Street Partners II L.P., a Delaware limited partnership (“Cypress
55th Street”), and Cypress Side-by-Side LLC, a Delaware limited liability
company (“Cypress Side-by-Side,” and together with Cypress Onshore,
Cypress Offshore, Cypress 55th Street, “Cypress”). Capitalized terms
used but not otherwise defined herein have the meanings given to them in the
Merger Agreement (as hereinafter defined).


 


WITNESSETH:


 


WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
November 17, 2003 (the “Merger Agreement”), among Communications &
Power Industries Holding Corporation (“Holding”), the Company, CPI
Merger Sub Corp., a Delaware corporation and wholly-owned Subsidiary (as
hereinafter defined) of the Company prior to the Merger (as hereinafter
defined) (“Merger Sub”), and Green Equity Investors II L.P., as
Securityholders’ Representative, the Company acquired Holding pursuant to a
merger (the “Merger”) in which Merger Sub merged with and into Holding
with Holding as the surviving corporation (the “Merger”);


 


WHEREAS, in connection with the closing of
the Merger, the Company and Cypress entered into a Registration Rights
Agreement, dated as of January 23, 2004 (the “Original Agreement”),
pursuant to which the Company granted to Cypress certain registration rights;


 


WHEREAS, Cypress and the Company wish to
amend and restate the Original Agreement on the terms and conditions set forth
herein.


 


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


 


ARTICLE I



DEFINITIONS


 


As used in this Agreement, the following
terms have the following meanings:


 


“Affiliate”, as applied to any Person, shall mean any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition “control”
(including, with correlative meanings, the terms “controlling”, “controlled
by” and “under common control with”), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the


 


3

















 


management and policies of that Person, whether through the ownership
of voting securities (the ownership of more than 50% of the voting securities
of an entity shall for purposes of this definition be deemed to be “control”),
by contract or otherwise.


 


“Agreement” shall have the meaning set forth in the preamble of
this Agreement.


 


“Business Day” shall mean any day that is not a Saturday or
Sunday or a day on which banks located in New York City are authorized or
required to be closed.


 


“Common Stock” shall mean the common
stock, par value $0.01 per share, of the Company.


 


“Company” shall have the meaning set
forth in the preamble of this Agreement.


 


“Cypress” shall have the meaning set forth in the preamble of
this Agreement.


 


“Cypress Onshore” shall have the meaning set forth in the
preamble of this Agreement.


 


“Cypress Offshore” shall have the meaning set forth in the
preamble of this Agreement.


 


“Cypress Side-by-Side” shall have the meaning set forth in the
preamble of this Agreement.


 


“Cypress 55th Street” shall have the meaning set forth in the
preamble of this Agreement.


 


“Exchange Act” shall mean the United States Securities and
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.


 


“Holder” means (i) each of Cypress Onshore, Cypress Offshore,
Cypress Side-by-Side and Cypress 55th Street, (ii) any Affiliate of any of
foregoing and (iii) any other Person to whom any of the foregoing transfer
Registrable Securities; provided that (a) such Person agrees in writing
to be bound by the provisions of this Agreement, (b) to be entitled to exercise
the rights of a Holder pursuant to Section 2.1, a Holder or Holders pursuant to
clause (iii) must either individually or in the aggregate with all other
Holders with whom it is acting together to demand registration own at least 30%
of the total number of Registrable Securities and (c) no such Person pursuant
to this clause (iii) shall be permitted to further transfer any rights
hereunder.


 


“Holding” shall have the meaning set forth in the recitals of
this Agreement.


 


“Indemnified Party” has the meaning set forth in Section 4.3.


 


“Indemnifying Party” has the meaning set forth in Section 4.3.


 


“Inspectors” has the meaning set forth in Section 3.1(h).


 


4

















 


“Initial Public Offering” shall mean the initial Public Offering
(other than pursuant to a registration statement on Form S-8 (or comparable
form for a private issuer or otherwise relating to equity securities issuable
under any employee benefit plan)) of the Common Stock.


 


“Merger” shall have the meaning set forth in the recitals of
this Agreement.


 


“Merger Agreement” shall have the meaning set forth in the
recitals of this Agreement.


 


“Merger Sub” shall have the meaning set forth in the recitals of
this Agreement.


 


“Person” shall mean an individual, partnership, corporation,
business trust, joint stock company, limited liability company, unincorporated
association, joint venture or other entity of whatever nature.


 


“Piggy-Back Registration” has the meaning set forth in Section
2.2.


 


“Public Offering” shall mean any public offering of equity
securities of the Company pursuant to an effective registration statement under
the Securities Act.


 


“Records” has the meaning set forth in Section 3.1(h).


 


“Registrable Security” means any outstanding shares of Common
Stock held by a Holder; provided, however, such Common Stock shall cease to be
Registrable Securities when (i) a registration statement covering such Common
Stock has been declared effective by the Commission and such stock has been
disposed of pursuant to such effective registration statement, (ii) such stock
is sold pursuant to Rule 144 (or any similar provisions then in force) under
the Securities Act or (iii) such Common Stock can be sold pursuant to Rule 144
(or any similar provisions then in force) without regard to the volume and
manner of sale limitations set forth in Rule 144 (or any similar provisions
then in force).


 


“Registration Expenses” has the meaning set forth in Section
3.2.


 


“Securities Act” shall mean the United States Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.


 


“Selling Holder” means a Holder who is selling Registrable
Securities pursuant to a registration statement under the Securities Act.


 


“Subsidiary” shall mean, with respect to any Person, any
corporation or other entity of which a majority of the capital stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar function at the time
directly or indirectly owned by such Person.


 


“Underwriter” means a securities dealer who purchases any
Registrable Securities as principal in an underwritten offering and not as part
of such dealer’s market-making activities.


 


5

















 


ARTICLE II

REGISTRATION RIGHTS


 


Section 2.1.            Demand Registration.


 


(a)           Request for
Registration. At any time on or after the date 180 days following the
consummation of an Initial Public Offering or such earlier date as permitted by
the managing underwriters for the Initial Public Offering, any Holder may
request registration under the Securities Act of all or part of its or their
Registrable Securities (a “Demand Registration”); provided that
such request specifies the number of shares of Registrable Securities proposed
to be sold and the intended method of disposition thereof. Holders shall be
entitled to request no more than six (6) Demand Registrations in the aggregate.


 


(b)           Selection of
Underwriters. If the Holder making the Demand Registration so elects, the
offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. Such Holder shall select,
subject to the Company’s reasonable approval, one or more nationally recognized
firms of investment bankers to act as the book-running managing Underwriter or
Underwriters in connection with such offering and shall select, subject to the
Company’s reasonable approval, any additional investment bankers and managers
to be used in connection with the offering. 


 


(c)           Effective
Registration Statement. A registration effected pursuant to this Section
2.1 will not be deemed to have been effected unless it has become effective and
has remained continuously effective for a period of 90 days (or, with respect
to a registration that is effected pursuant to Form S-3 (or any successor or
similar short-form registration), 9 months) or such shorter period which will
terminate when all of the Registrable Securities requested to be registered
thereunder have been sold.


 


(d)           Registration
Statement Form. The Company shall select the registration statement form
for any registration pursuant to this Section 2.1; provided, that if any
registration requested pursuant to this Section 2.1 is proposed to be effected
on Form S-3 (or any successor or similar short-form registration) and is in
connection with an underwritten offering, and if the managing Underwriter shall
advise the Company in writing that, in its opinion, it is of material
importance to the success of such proposed offering to include in such
registration statement information not required to be included pursuant to such
form, then the Company will supplement such registration statement as
reasonably requested by such managing Underwriter.


 


(e)           Withdrawal. Each
demanding Holder may, no less than five Business Days before any registration
statement becomes effective pursuant to this Section 2.1, withdraw some or all
of its Registrable Securities from inclusion in such registration statement. If
all of the Registrable Securities are withdrawn from inclusion in a
registration statement, then the Company may withdraw such registration
statement. If the Company withdraws a registration statement pursuant to the
preceding sentence, then the requested registration shall be deemed to have
been a Demand Registration for purposes of the limitations on the number of
Demand Registrations contained in Section 2.1 unless (i) at the time of the
Holders’ withdrawal of Registrable Securities, there has been a material
adverse change in the operating results, financial condition, or business of
the Company that was not publicly known at the time that the


 


6

















 


demand for registration was made, or (ii) the Company has postponed its
obligations under this Agreement as described in paragraph (f).


 


(f)            Restrictions on
Demand Registrations. The Company will not be obligated to effect any
Demand Registration within three months after the effective date of a Public
Offering by the Company pursuant to Section 2.1 or a Public Offering for which
Piggy-Back Registration was fully available. If at the time of the request to
register Registrable Securities pursuant to Section 2.1(a), the Company is
engaged, or has fixed plans (which have been or are reasonably expected to be
approved by the Board of Directors within 30 days) to engage within 90 days of
the time of the request, in a registered public offering as to which the
Holders may include such Registrable Securities pursuant to Section 2.2 hereof,
or is engaged in any activity which, in the good faith determination of the
Board of Directors, would be adversely affected by the requested registration
to the material detriment of the Company, then the Company may at its option
direct that such request be delayed for a period not in excess of 120 days from
the effective date of such offering, or in the case of such other material
activity, the date of such request for registration, such right to delay a
request to be exercised by the Company, not more than once within any
twelve-month period. A request for Demand Registration may be withdrawn if the
Company delays the requested Demand Registration pursuant to this paragraph
(f).


 


Section 2.2.            Piggy-Back
Registration. If at any time following the consummation of an Initial
Public Offering, the Company proposes to file a registration statement under
the Securities Act with respect to an offering by the Company for its own
account and/or for the account of any of its security holders (including in
connection with a Demand Registration) of any Common Stock (other than (i) a registration
statement on Form S-4 (or F-4) or S-8 (or any substitute form that may be
adopted by the Commission) or (ii) a registration statement filed in
connection with an exchange offer or an offering of securities solely to the Company’s
existing securityholders), then the Company shall give written notice of such
proposed filing to the Holders as soon as practicable (but in no event less
than 15 days before the anticipated filing date), and such notice shall
identify the anticipated filing date and offer such Holders the opportunity to
register such number of shares of Registrable Securities as each such Holder
may request (which request shall specify the Registrable Securities intended to
be disposed of by such Holder and the intended method of distribution thereof
and shall be delivered to the Company at least two days prior to the
anticipated filing date) (a “Piggy-Back Registration”). The Company
shall use its commercially reasonable efforts to cause the managing Underwriter
or Underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
on the same terms and conditions to permit the sale or other disposition of
such Registrable Securities in accordance with the intended method of
distribution thereof. Any Holder shall have the right to withdraw its request
for inclusion of its Registrable Securities in any registration statement
pursuant to this Section 2.2 by giving written notice to the Company of its
request to withdraw. The Company may withdraw a Piggy-Back Registration at any
time prior to the time it becomes effective, provided that, in such
event, the Company shall reimburse Holders requested to be included in such
Piggy-Back Registration for all Registration Expenses (including reasonable
counsel fees and expenses) incurred prior to such withdrawal.


 


7

















 


Section 2.3.            Reduction of Offering.
Notwithstanding anything contained herein, if the managing Underwriter(s) of an
offering described in Section 2.1 or 2.2 determine that the offering that the
Holders, the Company and/or such other Persons intend to make is such that the
success of the offering would be materially and adversely affected by inclusion
of the Registrable Securities requested to be included, then the Company shall
include in such registration:  (a) in the
case of a demand registration, (i) first, an amount of securities requested to
be included in such registration by any holder exercising “demand registration
rights” (such amount to be allocated among such holders in proportion to the
number of securities held by such holders) and (ii) second, the Registrable
Securities and any other securities of the Company requested to be included in
such registration (such amount to be allocated among such holders in proportion
to the number of shares of Common Stock held by such holders); and (b) in the
case of a piggy-back registration, (i) first, the shares, if any, proposed to be
registered by the Company for its own account or for the account of a holder
exercising “demand registration rights”; and (ii) second, an amount of
securities requested to be included in such registration (including pursuant to
Section 2.2) by the holders exercising “piggy-back registration rights” (such
amount to be allocated among such holders in proportion to the number of shares
of Common Stock held by such holders).


 


ARTICLE III

REGISTRATION PROCEDURES


 


Section 3.1.            Filings; Information.
Whenever the Holders have requested that any Registrable Securities be registered
pursuant to this agreement, the Company will use its reasonable efforts to
effect the registration of such Registrable Securities in accordance with the
intended method of disposition thereof as quickly as practicable, and in
connection with any such request:


 


(a)           The Company will as
expeditiously as practicable prepare and file with the Commission a
registration statement on any form for which the Company then qualifies or
which counsel for the Company shall deem appropriate and which form shall be
available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof (it
being understood that the Company shall use Form S-3 (or any replacement form)
if such form is then available), and use its commercially reasonable efforts to
cause such filed registration statement to become effective.


 


(b)           The Company will
prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective and to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until such time as all of
such securities have been disposed of in accordance with the intended methods
of disposition by the Selling Holder or Selling Holders thereof set forth in
such registration statement.


 


(c)           The Company will, prior
to filing a registration statement or prospectus or any amendment or supplement
thereto, furnish to each Selling Holder, counsel representing any Selling
Holders, and each Underwriter, if any, of the Registrable Securities covered by
such registration statement copies of such registration statement as proposed
to be filed, together with


 


8

















 


exhibits
thereto, which documents will be subject to review by the foregoing within 5
Business Days after delivery, and thereafter furnish to such Selling Holder,
counsel and Underwriter, if any, such number of copies of such registration
statement, each amendment and supplement thereto (in each case including all
exhibits thereto and documents incorporated by reference therein), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as such Selling Holder or Underwriter may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Selling Holder.


 


(d)           After the filing of the
registration statement, the Company will promptly notify each Selling Holder
covered by such registration statement of any stop order issued or threatened
by the Commission and take all reasonable actions required to prevent the entry
of such stop order or to remove it if entered.


 


(e)           The Company will use
its commercially reasonable efforts to
(i) register or qualify the Registrable Securities under such other
securities or blue sky laws of such jurisdictions in the United States and such
other jurisdictions as any Selling Holder reasonably (in light of such Selling
Holder’s intended plan of distribution) requests and (ii) cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary
by virtue of the business and operations of the Company and do any and all
other acts and things that may be reasonably necessary or advisable to enable
such Selling Holder to consummate the disposition of the Registrable Securities
owned by such Selling Holder; provided that the Company will not be
required to (A) qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this paragraph (e),
(B) subject itself to taxation in any such jurisdiction or
(C) consent to general service of process in any such jurisdiction.


 


(f)            The Company will
immediately notify each Selling Holder of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will promptly make available to each Selling Holder any such
supplement or amendment.


 


(g)           The Company will enter
into customary agreements (including, if applicable, an underwriting agreement
in customary form) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities
in accordance with the intended plan of distribution of the Selling Holders.


 


(h)           The Company will
deliver promptly to each Selling Holder of such Registrable Securities and each
Underwriter, if any, subject to restrictions imposed by the United States
federal government or any agency or instrumentality thereof, copies of all
correspondence between the Commission and the Company and its counsel or
auditors and all memoranda relating to discussions with the Commission or its
staff with respect to the registration statement and make available for
inspection by any Selling Holder of such Registrable Securities, any


 


9

















 


Underwriter participating
in any disposition pursuant to such registration statement and any attorney,
accountant or other professional retained by any such Selling Holder or
Underwriter (collectively, the “Inspectors”), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the “Records”), as shall be reasonably necessary to
enable them to perform a reasonable and customary due diligence investigation,
and cause the Company’s officers, directors and employees to supply all
information reasonably requested by any Inspectors in connection with such
registration statement. Records which the Company determines, in good faith, to
be confidential and which it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors unless (i) the disclosure of such Records
is necessary to avoid or correct a misstatement or omission in such
registration statement or (ii) the disclosure or release of such Records
is requested or required pursuant to oral questions, interrogatories, requests
for information or documents or a subpoena or other order from a court of
competent jurisdiction or other process; provided that prior to any
disclosure or release pursuant to clause (ii), the Inspectors shall provide the
Company with prompt notice of any such request or requirement so that the
Company may seek an appropriate protective order or waive such Inspectors’
obligation not to disclose such Records; and provided, further,
that if failing the entry of a protective order or the waiver by the Company
permitting the disclosure or release of such Records, the Inspectors, upon
advice of counsel, are compelled to disclose such Records, the Inspectors may
disclose that portion of the Records which counsel has advised the Inspectors that
the Inspectors are compelled to disclose. Each Selling Holder of such
Registrable Securities agrees that it will, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company at its expense, to undertake appropriate action
to prevent disclosure of the Records deemed confidential.


 


(i)            The Company will
furnish to each Underwriter, if any, (i) an opinion or opinions of counsel
to the Company and (ii) a comfort letter or comfort letters from the
Company’s independent public accountants, each in customary form and covering
such matters of the type customarily covered by opinions or comfort letters, as
the case may be, as the managing Underwriter, if any, therefor reasonably requests.


 


(j)            The Company will use
its commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission, and make available to its securityholders, as
soon as reasonably practicable, an earnings statement covering a period of 12
months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder.


 


(k)           The Company will use
its commercially reasonable efforts (a) to cause all such Registrable
Securities to be listed on a national securities exchange (if such shares are
not already so listed) and on each additional national securities exchange on
which similar securities issued by the Company are then listed (if any), if the
listing of such Registrable Securities is then permitted under the rules of
such exchange or (b) to secure designation of all such Registrable Securities
covered by such registration statement as a NASDAQ “national market system
security” within the meaning of Rule 11Aa2-1 of the Commission or, failing
that, to secure NASDAQ authorization for such Registrable Securities and,
without limiting the generality of the foregoing, to arrange for at least two
market makers to register as such with respect to such Registrable Securities
with the NASD.


 


10

















 


(l)            The Company will
appoint a transfer agent and registrar for all such Registrable Securities
covered by such registration statement not later than the effective date of
such registration statement.


 


The Company may require each Selling Holder of Registrable Securities
to promptly furnish in writing to the Company such information regarding the
distribution of the Registrable Securities as the Company may from time to time
reasonably request and such other information as may be legally required in
connection with such registration.


 


Each Selling Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3.1(f)
hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Selling Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3.1(f) hereof, and,
if so directed by the Company such Selling Holder will deliver to the Company
all copies, other than permanent file copies then in such Selling Holder’s
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event the Company shall give such
notice, the Company shall extend the period during which such registration
statement shall be maintained effective (including the period referred to in
Section 3.1(a) hereof) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 3.1(f) hereof to
the date when the Company shall make available to the Selling Holders of
Registrable Securities covered by such registration statement a prospectus
supplemented or amended to conform with the requirements of Section 3.1(f)
hereof.


 


(m)          In connection with the
first two (2) underwritten registrations effected pursuant to Section 2.1
hereof, the Company shall, if requested by the book running managing
Underwriter(s), use its commercially reasonable efforts to make the Company’s
senior executives reasonably available for “road shows” in connection with such
offerings. A registration statement that is withdrawn pursuant to the first two
sentences of Section 2.1(f) prior to the roadshow shall not count as an
underwritten registration for purposes of this paragraph (m).


 


Section 3.2.            Registration Expenses.
In connection with any registration statement filed pursuant to Section 2.1 or
2.2, the Company shall pay the following registration expenses incurred in
connection with any registration hereunder (the “Registration Expenses”):  (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), (iii) printing
expenses, (iv) the Company’s internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (v) fees and expenses incurred in connection
with the listing of the Registrable Securities, (vi) reasonable fees and
disbursements of counsel for the Company and not more than one counsel for the
Selling Holders, as may be chosen by a majority of the Selling Holders, and
customary fees and expenses for independent certified public accountants
retained by the Company (including the expenses of any comfort letters or costs
associated with the delivery by independent certified public accountants of a
comfort letter or comfort letters requested pursuant to Section 3.1(i) hereof)
and (vii) reasonable fees and expenses of any special experts retained by
the Company in connection with such registration.


 


11

















 


The Company shall have no
obligation to pay any underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities.


 


ARTICLE IV

INDEMNIFICATION AND CONTRIBUTION


 


Section 4.1.            Indemnification by
the Company. To the fullest extent permitted by law, the Company agrees to indemnify
and hold harmless each Selling Holder of Registrable Securities, its officers,
directors, employees and agents, and each person, if any, who controls such
Selling Holder within the meaning of the Securities Act from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Common Stock) to which such Selling
Holder, officer, director, employee or agent or controlling Person may become
subject under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement, preliminary prospectus or final prospectus or any amendment
or supplement thereto relating to the Registrable Securities or (ii) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading and
shall reimburse each Selling Holder and each such officer, director, employee,
agent and controlling Person for any legal and other expenses reasonably
incurred by that Selling Holder, officer, director, employee, agent or
controlling Person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred, except insofar as the same are contained in any
information furnished in writing to the Company by such Selling Holder
expressly for use therein; provided, however, that the Company
shall not be liable to any Selling Holder or such Person’s directors, officers,
agents or controlling Persons, in any such case for any such loss, claim,
damage or liability to the extent that it arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in connection with such registration statement, preliminary prospectus,
final prospectus or amendments or supplements thereto, in conformity with written
information relating to such Selling Holder furnished to the Company by such
Selling Holder expressly for inclusion therein in connection with such
registration; and, provided, further, that as to any preliminary
prospectus or any final prospectus, this indemnity agreement shall not inure to
the benefit of any Selling Holder or such Person’s directors, officers, agents
or controlling Persons, on account of any loss, claim, damage or liability
arising from the sale of Registrable Securities to any Person by such Selling
Holder if such Selling Holder or its representatives failed to send or give a
copy of the final prospectus or a prospectus supplement, as the case may be
(excluding documents incorporated by reference therein), as the same may be
amended or supplemented, to that Person within the time required by the
Securities Act, and the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in such
preliminary prospectus or final prospectus was corrected in the final
prospectus or such prospectus supplement, as the case may be (excluding
documents incorporated by reference therein), unless such failure resulted from
the non-compliance by the Company with Section 3.1(f). The Company also agrees
to indemnify any Underwriters of the Registrable Securities, their officers and
directors and each Person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Selling Holders provided in
this Section 4.1. The


 


12

















 


indemnities provided by this Section 4.1 shall remain in full force and
effect regardless of any investigation made by or on behalf of such Selling
Holder or Underwriter.


 


Section 4.2.            Indemnification by
Holders of Registrable Securities. To the fullest extent permitted by law,
each Selling Holder agrees, severally but not jointly, to indemnify and hold
harmless the Company its officers, directors and agents and each Person, if
any, who controls the Company within the meaning of the Securities Act to the
same extent as the indemnity from the Company to such Selling Holder pursuant
to clauses (i) and (ii) of Section 4.1, but only with reference to information
related to such Selling Holder furnished in writing by such Selling Holder or
on such Selling Holder’s behalf expressly for use in any registration statement
or prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus; provided that the
obligation to indemnify will be individual to each Selling Holder and will be
limited to the net amount of proceeds received by such Selling Holder from the
sale of Registrable Securities pursuant to such Registration Statement. Each
Selling Holder also agrees to indemnify and hold harmless Underwriters of the
Registrable Securities, their officers and directors and each Person who
controls such Underwriters on substantially the same basis as that of the
indemnification of the Company provided in this Section 4.2, subject to the
proviso in the first sentence of this Section 4.2. Notwithstanding the
foregoing, the indemnity set forth in this Section 4.2, shall not apply to
amounts paid in settlements effected without the consent of such Selling Holder
(which consent shall not be unreasonably withheld or delayed).


 


Section 4.3.            Conduct of
Indemnification Proceedings. Promptly after receipt by any person in
respect of which indemnity may be sought pursuant to Section 4.1 or 4.2 (an “Indemnified
Party”) of notice of any claim or the commencement of any action, the
Indemnified Party shall, if a claim in respect thereof is to be made against
the person against whom such indemnity may be sought (an “Indemnifying Party”)
notify the Indemnifying Party in writing of the claim or the commencement of
such action, provided that the failure to notify the Indemnifying Party
shall not relieve it from any liability which it may have to an Indemnified
Party otherwise than under Section 4.1 or 4.2, except to the extent of any
actual prejudice resulting therefrom. If any such claim or action shall be
brought against an Indemnified Party, and it shall notify the Indemnifying
Party thereof, the Indemnifying Party shall be entitled to participate therein,
and, to the extent that it wishes, jointly with any other similarly notified
Indemnifying Party, to assume the defense thereof with counsel satisfactory to
the Indemnified Party. After notice from the Indemnifying Party to the
Indemnified Party of its election to assume the defense of such claim or
action, the Indemnifying Party shall not be liable to the Indemnified Party for
any legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of investigation;
provided that the Indemnified Party shall have the right to employ
separate counsel to represent the Indemnified Party and its controlling Persons
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Indemnified Party against the Indemnifying
Party, but the fees and expenses of such counsel shall be for the account of
such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel
or (ii) in the reasonable judgment of such Indemnified Party
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any claim or pending or


 


13

















 


threatened proceeding in respect of which the Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such claim or
proceeding.


 


Section 4.4.            Contribution. If
the indemnification provided for in this Article IV is unavailable to the Indemnified
Parties in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then each such Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses (i) as between the Company and the Selling Holders on the one
hand and the Underwriters on the other, in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling Holders
on the one hand and the Underwriters on the other from the offering of the
Registrable Securities, or if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits but also the relative fault of the Company and the Selling Holders on
the one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations and
(ii) as between the Company on the one hand and each Selling Holder on the
other, in such proportion as is appropriate to reflect the relative fault of the
Company and of each Selling Holder in connection with such statements or
omissions, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Holders on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the
Selling Holders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the prospectus. The relative fault of the Company and the Selling
Holders on the one hand and of the Underwriters on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and the Selling
Holders or by the Underwriters. The relative fault of the Company on the one
hand and of each Selling Holder on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.


 


The Company and the Selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 4.4, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities underwritten by it and distributed to the public


 


14

















 


were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities of such Selling Holder were
offered to the public (less underwriting discounts and commissions) exceeds the
amount of any damages which such Selling Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Each
Selling Holder’s obligations to contribute pursuant to this Section 4.4 are
several in proportion to the proceeds of the offering received by such Selling
Holder and not joint.


 


ARTICLE V

MISCELLANEOUS


 


Section 5.1.            Participation in
Underwritten Registrations. No Person may participate in any underwritten registration
hereunder unless such Person (a) agrees to sell such Person’s securities on the
basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such underwriting
arrangements and these Registration Rights.


 


Section 5.2.            Rule 144. The
Company covenants that it will file any reports required to be filed by it
under the Securities Act and the Exchange Act and that it will take such
further action as any Holder may reasonably request, all to the extent required
from time to time to enable Holders to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rules may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Holder, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.


 


Section 5.3.            Holdback Agreements.
If any registration hereunder shall be in connection with an underwritten public
offering, each Holder of Registrable Securities agrees not to effect any sale
or distribution of the securities being registered or of a similar security of
the Company or any securities convertible into or exchangeable or exercisable
for such securities, including a sale pursuant to Rule 144 under the Securities
Act, during the 14 days prior to, and during (i) the 180-day period
beginning on the consummation of the Initial Public Offering, unless the
investment banks or underwriters managing the public offering otherwise agree,
and (ii) the 90-day period beginning on, the effective date of any other
public offering to be underwritten on a firm commitment basis (except as part
of such underwritten registration), unless the investment banks or underwriters
managing the public offering otherwise agree.


 


Section 5.4.            Other Registration
Rights. Notwithstanding anything contained in this Agreement to the
contrary, no provision herein or therein shall be interpreted to limit
(i) the right of the Company to grant to any other Person any right of
registration in respect of any securities of the Company (provided, however,
that the Company shall not enter into any


 


15

















 


agreement with respect to the Registrable Securities which would
prevent the Company from complying with its obligations under this Agreement)
or (ii) the number of times the Company may grant any such right of
registration under the Securities Act to any Person.


 


Section 5.5.            No Inconsistent
Agreements. The Company will not hereafter enter into any agreement with respect
to its securities which is inconsistent with the rights granted to the Holders
in this Agreement.


 


Section 5.6.            Successors and
Assigns. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, and their respective successors and permitted
assigns.


 


Section 5.7.            No Waivers,
Amendments. (a)  Except as expressly
set forth herein, no failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.


 


(b)           Any amendment,
modification or supplement to this Agreement shall not be enforced against any
party hereto unless such amendment, modification or supplement is signed by the
Company and each of the Holders.


 


(c)           Any provision of this
Agreement may be waived if, but only if, such waiver is in writing and is signed
by the party against whom the enforcement of such waiver is sought.


 


Section 5.8.            Notices. All
notices, requests and other communications to any party hereunder shall be in
writing (including telex, telecopier or similar writing) and shall be given to
such party at its address or telecopier number set forth below, or such other
address or telecopier number as such party may hereinafter specify for the
purpose to the party giving such notice. Each such notice, request or other
communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and
the appropriate answerback is received or, (b) if given by overnight
courier or express mail service, when delivery is confirmed or, (c) if
given by any other means, when delivered at the address specified in this
Section 4.7. In each case, notice shall be sent to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):


 


(i)            if
to the Company:


 


CPI International, Inc.


811 Hansen Way, Mail Stop A-028

Palo Alto, California 94303

Attention:  Joel A. Littman

Telecopier:  (650) 846-3276


 


16

















 


with a copy to:


 


The Cypress Group L.L.C.


65 East 55th Street


New York, New York 10022


Attention: 
Michael F. Finley


Telecopier: 
(212) 705-0199


 


and


 


Simpson Thacher & Bartlett LLP


425 Lexington Avenue


New York, New York 10017


Attention: 
Marni J. Lerner


Telecopier: 
(212) 455-2502


 


and


 


Irell & Manella LLP


1800 Avenue of the Stars


Suite 900


Los Angeles, California 90067


Attention: 
Rick Wirthlin


Telecopier: 
(310) 203-7199


 


(ii)           if
to Cypress:


 


c/o The Cypress Group L.L.C.


65 East 55th Street


New York, New York 10022


Attention: 
Michael F. Finley


Telecopier: 
(212) 705-0199


 


with a copy to:


 


Simpson Thacher & Bartlett LLP


425 Lexington Avenue


New York, New York 10017


Attention: 
Marni J. Lerner


Telecopier: 
(212) 455-2502


 


Section 5.9.            Term of Agreement.  This
Agreement shall terminate at such time as the Holders cease to beneficially own
any Registrable Securities; provided that any termination pursuant to
this Section 5.9 will not relieve any party for any liability arising from a
breach of representation, warranty, covenant or agreement occurring prior to
such termination.


 


Section 5.10.        GOVERNING LAW; SUBMISSION TO JURISDICTION.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN


 


17

















 


ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE. Each of the parties hereto hereby
(a) submits to the jurisdiction of the courts of the State of Delaware and
the United States District Court for the District of Delaware with respect to
matters arising out of or relating hereto, (b) agrees that all claims with
respect to such matters may be heard and determined in an action or proceeding
in such Delaware courts, and (c) agrees that a final judgment in any such
action or proceeding will be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.


 


Section 5.11.          Section Headings. The
section headings contained in this Agreement are for reference purposes only
and shall not affect the meaning or interpretation of this Agreement.


 


Section 5.12.          Entire Agreement. This
Agreement constitutes the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings
(including without limitation, the Original Agreement), written or oral,
relating to the subject matter hereof.


 


Section 5.13.          Severability. Any
term or provision of this Agreement which is invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdictions, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.


 


Section 5.14.          Counterparts. This
Agreement may be signed in counterparts, each of which shall constitute an original
and which together shall constitute one and the same agreement.


 


Section 5.15.          Parties in Interest.
This Agreement and all the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors. Except as
expressly set forth herein, neither this Agreement nor any of their rights
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties.


 


Section 5.16.          Enforcement; Further
Assurances. (a)  The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms. It is accordingly agreed that the parties shall be entitled to
specific performance of the terms hereof, this being in addition to any other
remedy to which they are entitled at law or in equity.


 


(b)           The parties hereto
agree to execute, acknowledge, deliver, file and record such further
certificates, amendments, instruments, agreements and documents, and to do all
such other acts and things, as may be required by law or as may be necessary or
advisable to carry out the intent and purposes of this Agreement.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


18

















 


IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.


 


	
   

  	
  CPI INTERNATIONAL, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ O. Joe Caldarelli

  	
   

  
	
   

  	
   

  	
  Name: O. Joe Caldarelli

  	
   

  
	
   

  	
   

  	
  Title: CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CYPRESS MERCHANT BANKING PARTNERS

  II L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Cypress Associates II LLC,

  as general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Stern

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James Stern

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CYPRESS MERCHANT B II C.V.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Cypress Associates II LLC,

  as managing general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Stern

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James Stern

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CYPRESS SIDE-BY-SIDE LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Stern

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James Stern

  
	
   

  	
   

  	
  Title:

  	
  Sole Member

  
						



 


19

















 


	
   

  	
  55TH STREET PARTNERS II L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Cypress Associates II LLC,

  as general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Stern

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James Stern

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  
						



 


20