Exhibit
4.1


 


AMENDED AND RESTATED MANAGEMENT STOCKHOLDERS AGREEMENT


 


 


DATED AS OF APRIL 27, 2006


 


 


among


 


CPI INTERNATIONAL, INC. 

(FORMERLY KNOWN AS CPI ACQUISITION CORP. AND CPI HOLDCO, INC.)


 


CYPRESS MERCHANT BANKING PARTNERS II L.P.


 


CYPRESS MERCHANT B II C.V.


 


55TH STREET PARTNERS II L.P.


 


CYPRESS SIDE-BY-SIDE LLC


 


and


 


THE MANAGEMENT STOCKHOLDERS NAMED HEREIN


 

















 


AMENDED AND RESTATED MANAGEMENT STOCKHOLDERS
AGREEMENT


 


AMENDED
AND RESTATED MANAGEMENT STOCKHOLDERS AGREEMENT dated as of April 27, 2006 (this
“Agreement”) among CPI International, Inc. (formerly known as CPI
Acquisition Corp. and CPI Holdco, Inc.), 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”), 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”), and certain
management stockholders of the Company listed on Schedule I hereto (each
such management stockholder is hereinafter referred to as a “Management Stockholder”).


 


WITNESSETH:


 


WHEREAS,
all of the parties hereto are parties to the Management Stockholders Agreement,
dated as of January 23, 2004 (the “Original Agreement”), which provided
for certain restrictions on the sale, assignment, transfer, encumbrance or
other disposition of the Shares, and certain rights, obligations and other
agreements in respect of the Shares and the Company, all as set forth therein; and


 


WHEREAS,
in connection with the contemplated Initial Public Offering (as defined below),
and effective upon the consummation thereof, the parties hereto desire to amend
and restate the Original Agreement in its entirety, as hereinafter provided;


 


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


 


ARTICLE I


 


DEFINITIONS


 


Section 1.1.            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 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.


 


“Cause”
shall mean, unless otherwise defined in a Management Stockholder’s Employment
Agreement, (i) the Management Stockholder’s continued failure to perform
such Management Stockholder’s duties (other than as a result of total or
partial incapacity due to physical or mental illness) which is not cured for a
period of 10 days following written notice by the Company or its Affiliates to
the Management Stockholder of such failure, (ii) conviction or plea of
guilty or no contest to a (x) felony, or (y) crime involving moral turpitude
or the property or business of the Company or its Affiliates, (iii) willful
malfeasance or willful misconduct in performance of duties to the Company or
its Affiliates, or (iv) breach by the Management Stockholder of the
material terms of any non-compete, non-solicitation or confidentiality
provisions of this Agreement.


 


“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.


 


“Competitive
Business” shall have the meaning set forth in Section 3.4(b).


 


“Confidential
Information” shall have the meaning set forth in Section 3.5(c).


 


“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.


 


“Employment
Agreement” shall mean an employment agreement between a Management
Stockholder and the Company or any of its Subsidiaries that is in effect as of
the date hereof or that becomes effective at the time of the Initial Public
Offering and continues to be effective thereafter in accordance with its terms.


 


“Employment”
shall mean (i) a Management Stockholder’s employment if the Management
Stockholder is an employee of the Company or any of its Affiliates, (ii) a
Management Stockholder’s services as an non-employee director, if the
Management Stockholder is a non-employee member of the board of directors of
the Company or an Affiliate or (iii) a Management Stockholder’s services
as an independent contractor, vendor or third-party service provider, if the
Management Stockholder is an independent contractor, vendor or third-party service
provider to the Company or any of its Affiliates; provided,


 


2

















 


however, that unless otherwise
determined by a committee of the board of directors of the Company, a change in
a Management Stockholder’s status from employee to a consultant shall
constitute a termination of employment hereunder.


 


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


 


“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.


 


“Majority
Management Stockholders” shall mean, at any time, Management Stockholders
and their Permitted Transferees holding a majority of the number of Shares (including
any Shares issuable upon the conversion, exchange or exercise of Share
Equivalents) then outstanding and held by the Management Stockholders and their
Permitted Transferees.


 


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


 


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


 


“Permitted
Transferee” shall mean, with respect to any Management Stockholder,
(a) in the event of such Management Stockholder’s death, the heirs, executors,
administrators, testamentary trustees, legatees or beneficiaries of such
Management Stockholder (or their Permitted Transferees), (b) such
Management Stockholder’s spouse and lineal descendants and (c) trusts,
partnerships, limited liability companies or other entities of which such
Management Stockholder and/or such Management Stockholder’s spouse or lineal descendants
are the sole owners and beneficiaries.


 


“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.


 


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


 


“Restricted
Period” shall have the meaning set forth in Section 3.4(a).


 


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


 


“Senior
Manager” shall mean each of the persons listed on Schedule II hereto.


 


“Share
Equivalents” shall mean securities of any kind (including “phantom” securities)
issued by the Company convertible into or exchangeable for Shares or options,


 


3

















 


warrants or other rights to purchase or subscribe for Shares or
securities convertible into or exchangeable for Shares.


 


“Shares”
shall mean, with respect to any Stockholder, any and all shares of Common
Stock, whether now owned or hereafter acquired (including upon exercise of
options, preemptive rights or otherwise), held by such Stockholder.


 


“Stockholder”
shall mean each of Cypress and the Management Stockholders.


 


“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.


 


ARTICLE II


 


PERMITTED TRANSFEREES


 


No
Management Stockholder shall Transfer any Shares to a Permitted Transferee of such
Management Stockholder, unless, as a condition precedent to such Transfer, the
Permitted Transferee executes an instrument in the form of Exhibit B
hereto or otherwise reasonably satisfactory to the Company agreeing to be bound
hereby as a Permitted Transferee of such Management Stockholder; provided,
however, the foregoing restriction shall not apply after the Piggy-Back
Termination Date (as defined in Exhibit C); provided, further, the foregoing
restriction shall not apply to Transfers to parties that are not Permitted
Transferees.


 


ARTICLE III


 


RIGHTS AND OBLIGATIONS 

OF MANAGEMENT STOCKHOLDERS AND THE COMPANY


 


Section 3.1.            [Intentionally
Omitted]


 


Section 3.2.            Registration
Rights.  The Company hereby grants to
the Management Stockholders (and their Permitted Transferees) the registration
and other rights set forth in, and the Management Stockholders (and their
Permitted Transferees) agree to comply with the terms and conditions contained
in, Exhibit C hereto.


 


Section 3.3.            [Intentionally
Omitted]


 


Section 3.4.            Covenant
Not to Compete; Non-Solicitation.  Each Senior Manager acknowledges and
recognizes the highly competitive nature of the businesses of the Company and
its Subsidiaries and accordingly agrees that, if such Senior Manager is subject
to an Employment Agreement, he/she will abide by the non-competition and
non-solicitation covenants contained therein, which are incorporated herein by
reference with respect to such Senior Manager.  If no such covenants are contained in the
Employment Agreement or if


 


4

















 


there is no such
agreement, then each Senior Manager agrees, subject to Section 3.4(f), as
follows:


 


(a)           During
the term of Employment by the Company or any of its Subsidiaries and for the
period of time set forth on Schedule II opposite such Senior Manager’s name following
the date such Senior Manager ceases to be employed by the Company for any
reason (the “Restricted Period”), such Senior Manager will not, whether
on his/her own behalf or on behalf of or in conjunction with any Person,
directly or indirectly solicit or assist in soliciting in competition with the
Company or any of its Subsidiaries, the business of any client or prospective
client:


 


(i)            with
whom such Senior Manager had personal contact or dealings on behalf of the
Company or its Subsidiaries during the one year period preceding such Senior
Manager’s termination of Employment;


 


(ii)           with
whom employees reporting to such Senior Manager have had personal contact or
dealings on behalf of the Company or any of its Subsidiaries during the one
year immediately preceding such Senior Manager’s termination of Employment; or


 


(iii)          for
whom such Senior Manager had direct or indirect responsibility during the one
year immediately preceding such Senior Manager’s termination of Employment.


 


(b)           During
the Restricted Period, such Senior Manager will not directly or indirectly:


 


(i)            engage
in any business that competes with the business of the Company or its
Subsidiaries (including, without limitation, businesses which the Company or
its Subsidiaries have specific plans to conduct in the future and as to which such
Senior Manager is aware of such planning) in any geographic area in which the Company
or its Subsidiaries conducts such business (a “Competitive Business”);


 


(ii)           enter
the employ of, or render any services to, any Person (or any division or
controlled or controlling Affiliate of any Person) who or which engages in a Competitive
Business;


 


(iii)          acquire
a financial interest in, or otherwise become actively involved with, any
Competitive Business, directly or indirectly, as an individual, partner, shareholder,
officer, director, principal, agent, trustee or consultant; or


 


(iv)          interfere
with, or attempt to interfere with, business relationships (whether formed
before, on or after the date of this Agreement) between the Company or any of
its Subsidiaries, on the one hand, and customers, clients, suppliers partners, members
or investors of the Company or its Subsidiaries, on the other hand.


 


5

















 


(c)           During
the Restricted Period, such Senior Manager will not, whether on such Senior
Manager’s own behalf or on behalf of or in conjunction with any Person,
directly or indirectly:


 


(i)            solicit
or encourage any employee of the Company or its Subsidiaries to leave the
Employment of the Company or its Subsidiaries (except in cases during a Senior
Manager’s Employment where such Senior Manager reasonably believes such action
to be in the best interests of the Company or its Subsidiaries); or


 


(ii)           hire
any such employee who was employed by the Company or its Subsidiaries as of the
date of such Senior Manager’s termination of Employment with the Company or who
left the Employment of the Company or its Subsidiaries coincident with, or
within one year prior to, the termination of such Senior Manager’s Employment with
the Company (other than any such employee whose Employment with the Company is
terminated by the Company without Cause).


 


(d)           During
the Restricted Period, such Senior Manager will not, directly or indirectly,
encourage or solicit to cease to work with the Company or its Subsidiaries any consultant
then under contract with the Company or its Subsidiaries.


 


(e)           Notwithstanding
anything to the contrary in this Agreement, any Senior Manager may, directly or
indirectly own, solely as an investment, securities of any Person engaged in
the business of the Company or its Subsidiaries which are publicly traded on a national
or regional stock exchange or on the over-the-counter market if the Senior
Manager (i) is not a controlling person of, or a member of a group which
controls, such person and (ii) does not, directly or indirectly, own 5% or
more of any class of securities of such Person.


 


(f)            It
is expressly understood and agreed that although the Senior Managers and the
Company consider the restrictions contained in this Section 3.4 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against the relevant Senior
Manager, the provisions of this Agreement will not be rendered void but will be
deemed amended to apply as to such maximum time and territory and to such
maximum extent as such court may judicially determine or indicate to be
enforceable.  Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to
make it enforceable, such finding will not affect the enforceability of any of
the other restrictions contained herein.


 


Section 3.5.            Confidential
Information.  (a) No Management
Stockholder will at any time (whether during or after such Management
Stockholder’s employment with the Company) (i) retain or use for the
benefit, purposes or account of such Management Stockholder or any other
Person; or (ii) disclose, divulge, reveal, communicate, share, transfer or
provide access to any Person outside the Company (other than its professional
advisers who are bound by confidentiality obligations), any non-public,
proprietary or


 


6

















 


confidential
information – including without limitation trade secrets, know-how,
research and development, software, databases, inventions, processes, business
strategies, formulae, technology, designs and other intellectual property,
information concerning finances, investments, profits, pricing, costs,
products, services, vendors, customers, clients, partners, investors,
personnel, compensation, recruiting, training, advertising, sales, marketing,
promotions, government and regulatory activities and approval – concerning
the past, current or future business, activities and operations of the Company,
its subsidiaries, Affiliates or any third party that has disclosed or provided
any of same to the Company on a confidential basis (“Confidential
Information”) without the prior written authorization of the board of
directors of the Company.


 


(b)           “Confidential
Information” will not include any information that is (i) generally known
to the industry or the public other than as a result of such Management Stockholder’s
breach of this covenant or any breach of other confidentiality obligations by
third parties; (ii) made legitimately available to the Management
Stockholder by a third party without breach of any confidentiality obligation;
or (iii) required by law or a court of competent jurisdiction to be
disclosed; provided that such Management Stockholder will give prompt written
notice to the Company of such requirement, disclose no more information than is
so required, and cooperate with any attempts by the Company to obtain a
protective order or similar treatment.


 


(c)           [Intentionally
Omitted]


 


(d)           Upon
termination of such Management Stockholder’s employment for any reason, the
Management Stockholder will (i) cease and not thereafter commence use of
any Confidential Information or intellectual property (including without
limitation, any patent, invention, copyright, trade secret, trademark, trade
name, logo, domain name or other source indicator) owned or used by the Company
or its Affiliates; (ii) immediately destroy, delete, or return to the
Company, at the Company’s option, all originals and copies in any form or
medium (including memoranda, books, papers, plans, computer files, letters and
other data) in such Management Stockholder’s possession or control (including
any of the foregoing stored or located in the Management Stockholder’s office,
home, laptop or other computer, whether or not Company property) that contain
Confidential Information or otherwise relate to the business of the Company and
its Affiliates, except that such Management Stockholder may retain only those
portions of any personal notes, notebooks and diaries that do not contain any
Confidential Information; and (iii) notify and fully cooperate with the
Company regarding the delivery or destruction of any other Confidential
Information of which the Management Stockholder is or becomes aware


 


Section 3.6.            [Intentionally
Omitted]


 


ARTICLE IV


 


MISCELLANEOUS


 


Section 4.1.            [Intentionally
Omitted]


 


7

















 


Section 4.2.            [Intentionally
Omitted]


 


Section 4.3.            Employment
by the Company.  Nothing contained in
this Agreement or any option agreement entered into by the Company and any
Management Stockholder (a) obligates the Company or any Subsidiary or
Affiliate of the Company to employ any Management Stockholder or his/her
Permitted Transferees in any capacity whatsoever or (b) prohibits or
restricts the Company (or any such Subsidiary or Affiliate) from terminating
the Employment of any Management Stockholder at any time or for any reason
whatsoever, with or without Cause, and each of the Management Stockholders and
their Permitted Transferees hereby acknowledges and agrees that neither the
Company nor any other Person has made any representations or promises in this
Agreement or in any option agreement to such Management Stockholder or Permitted
Transferee concerning such person’s Employment or continued Employment by the
Company or any Subsidiary or Affiliate of the Company.


 


Section 4.4.            [Intentionally
Omitted]


 


Section 4.5.            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 4.6.            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 the Majority Management Stockholders, provided, however
that notwithstanding the foregoing, any amendment, modification or supplement
to this Agreement with respect to a matter that does not directly or indirectly
adversely affect the rights of any of the Management Stockholders shall be
enforceable without requiring that such amendment, modification or supplement
be signed by the Majority Management Stockholders.


 


(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 4.7.            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


 


8

















 


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


 


with a copy to:


 


Irell & Manella LLP


1800 Avenue of the Stars,
Suite 900


Los Angeles, California
90067


Attention:  Richard C. 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


 


(iii)          if
to a Management Stockholder, at the address for such Management Stockholder
listed below such Management Stockholder’s signature hereto.


 


Section 4.8.            Term
of Agreement.  This Agreement shall
terminate (a) in full on the earlier to occur of (i) January 23, 2014 (provided
that the registration rights in Exhibit C hereto shall survive any such
termination until such time as all Management Stockholders hold no Registrable
Securities) and (ii) when all Management Stockholders cease to
beneficially own any Shares, and, if earlier, (b) with respect to any
Management Stockholder, when such Management Stockholder ceases to beneficially
own any Shares;


 


9

















 


provided
that any termination pursuant to this Section 4.8 will not relieve any party
for any liability arising from a breach of representation, warranty, covenant
or agreement occurring prior to such termination.  Notwithstanding the foregoing, Section 5.3
(Holdback Agreements) of Exhibit C shall terminate on the second
anniversary of the date of the Initial Public Offering.


 


Section 4.9.            Inspection.
 So long as this Agreement shall be in
effect, this Agreement and any amendments hereto shall be made available for
inspection by any Management Stockholder at the principal offices of the
Company.


 


Section 4.10.          GOVERNING LAW; SUBMISSION TO JURISDICTION.
 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN 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 4.11.          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 4.12.          Entire
Agreement.  This Agreement (including
the Exhibits hereto) constitutes the entire agreement and understanding among
the parties hereto and supersedes any and all prior agreements and
understandings, written or oral, relating to the subject matter hereof.


 


Section 4.13.          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 4.14.          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 4.15.          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 and Permitted Transferees.  Except as expressly set forth herein, neither
this Agreement nor any of their rights hereunder shall be assigned by any of
the parties hereto who are not Permitted Transferees without the prior written
consent of the other parties.


 


10

















 


Section 4.16.          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.


 


Section 4.17.          Advice
of Counsel.  Each Management
Stockholder and Permitted Transferee of a Management Stockholder acknowledges
that, in executing this Agreement, he or she has had the opportunity to seek
the advice of independent legal counsel, and has read and understood all of the
terms and provisions of this Agreement.


 


Section 4.18.          Amendment
and Restatement of Original Agreement; Effectiveness of Agreement. The
parties hereto intend that this Agreement shall amend and restate, and shall
supersede in all respects, the Original Agreement.  Notwithstanding anything to the contrary
contained herein, this Agreement shall become effective upon the consummation of
the Initial Public Offering.  In the
event that the Initial Public Offering shall not be consummated, this Agreement
shall be null and void and shall have no force or effect.


 


Section 4.19.          Additional
Parties to this Agreement.  Except
for Permitted Transferees of a Management Stockholder who become a party hereto
by executing and delivering to the Company an instrument in the form of Exhibit
B hereto or otherwise reasonably satisfactory to the Company, no additional
Persons shall become a party hereto.


 


 


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11

















 


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 A. Stern

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James
  A. Stern

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CYPRESS
  MERCHANT B II C.V.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Cypress
  Associates II LLC, as managing

  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James A. Stern

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James
  A. Stern

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CYPRESS
  SIDE-BY-SIDE LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James A. Stern

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James
  A. Stern

  
	
   

  	
   

  	
  Title:

  	
  Sole
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  55TH
  STREET PARTNERS II L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Cypress
  Associates II LLC, as general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James A. Stern

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James
  A. Stern

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Member

  
							



 

















 


	
   

  	
  Joe
  Caldarelli

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  O. Joe Caldarelli

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Robert
  Fickett

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Robert A. Fickett

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Don
  Coleman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Don Coleman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Joel
  Littman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Joel A. Littman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  



 


2

















 


	
   

  	
  Mike
  Cheng

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Mike Cheng

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  John
  Beighley

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  John Beighley

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Michael
  Targoff

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Michael Targoff

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Chris
  Toffales

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Chris Toffales

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  



 


3

















 


SCHEDULE I


 


Management Stockholders


 


Joe
Caldarelli


 


Robert
Fickett


 


Don
Coleman


 


Joel
Littman


 


Mike
Cheng


 


John
Beighley


 


Michael
Targoff


 


Chris
Toffales


 

















 


SCHEDULE II


 


Senior Managers


 


	
  Name

  	
   

  	
  Restricted Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Joe
  Caldarelli

  	
   

  	
  18
  months

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Robert
  Fickett

  	
   

  	
  18
  months

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Don
  Coleman

  	
   

  	
  12
  months

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Joel
  Littman

  	
   

  	
  18
  months

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mike
  Cheng

  	
   

  	
  12
  months

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  John
  Beighley

  	
   

  	
  12
  months

  	
   

  



 

















 


EXHIBIT A


 


[Intentionally Omitted]


 

















 


EXHIBIT B


 


PERMITTED TRANSFEREE


FORM OF AGREEMENT TO BE BOUND


 


[DATE]


 


To the
Parties to the


Amended
and Restated Management Stockholders Agreement


dated
as of April 27, 2006


 


Ladies
and Gentlemen:


 


Reference
is made to the Amended and Restated Management Stockholders Agreement, dated as
of April 27, 2006 (as may be amended, supplemented or modified from time to
time in accordance with the terms thereof, the “Management Stockholders
Agreement”), among CPI International, Inc., Cypress Merchant Banking Partners
II L.P., Cypress Merchant B II C.V., 55th Street Partners II L.P., Cypress
Side-by-Side LLC, and the stockholders listed on Schedule 1 thereto and each
other Permitted Transferee who shall become party to the Management
Stockholders Agreement as provided therein, as the same may be subsequently
modified, supplemented or amended in accordance with its terms.  Capitalized terms used herein and not defined
have the meanings ascribed to them in the Management Stockholders Agreement.


 


In
consideration of the mutual covenants and agreements contained in the Management
Stockholders Agreement, the undersigned hereby confirms and agrees that it
shall be bound by all of the provisions thereof as a Permitted Transferee of
[Name of Transferor].


 


This
letter shall be construed and enforced in accordance with the laws of Delaware.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Permitted
  Transferee]

  



 

















 


EXHIBIT C


 


REGISTRATION RIGHTS


 


ARTICLE I

DEFINITIONS


 


Section 1.1.            Definitions.
 Terms defined in the Amended and
Restated Management Stockholders Agreement, dated as of April 27, 2006 (as may
be amended, supplemented or modified from time to time in accordance with the
terms thereof, the “Management Stockholders Agreement”), among CPI
International, Inc., Cypress Merchant Banking Partners II L.P., Cypress
Merchant B II C.V., 55th Street Partners II L.P., Cypress Side-by-Side LLC, and
the stockholders listed on Schedule I thereto and each other person who shall become
party to the Management Stockholders Agreement as provided therein, are used
herein as therein defined. In addition, the following terms shall have the
meanings ascribed to them below:


 


“Commission”
means the United States Securities and Exchange Commission.


 


“Exchange
Act” means the United States Securities Exchange Act of 1934, as amended.


 


“Holder”
means any Management Stockholder and any Permitted Transferee of a Management
Stockholder, in each case holding Registrable Securities.


 


“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).


 


“Piggy-Back
Registration” has the meaning set forth in Section 2.1.


 


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


 


“Registrable
Security” means any outstanding shares of Common Stock held by a Holder as
of the date of the Initial Public Offering or shares of Common Stock issuable pursuant
to stock options held by a Holder as of the date of the Initial Public Offering
(whether or not such options are vested at the time of the Initial Public
Offering) until (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 stock is eligible to be sold pursuant to Rule
144(k) (or any similar provision then in force) under the Securities Act.


 


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


 

















 


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


 


“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.


 


ARTICLE II

REGISTRATION RIGHTS


 


Section 2.1.            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 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 2.1 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; provided, further, a Holder shall not be eligible for
piggy-back registration rights pursuant to this Section 2.1 with
respect to any registration statements which are initially filed by the Company
after the Piggy-Back Termination Date with respect to such Holder (or offerings
made after such Piggy-Back Termination Date pursuant to shelf registration
statements previously on file).   For
these purposes, the “Piggy-Back Termination Date” shall mean the second
anniversary of the Company’s Initial Public Offering; provided, however, with
respect to any Holder whose status as an employee or director of the Company or
its subsidiaries terminates prior to such second anniversary, the Holder may,
by written notice to the Company, elect to have the Piggy-Back Termination Date
(with respect to such Holder and his Permitted Transferees only) occur any date
after the date of such termination of employee or director status and before
such second anniversary.


 


2

















 


Section 2.2.            Reduction
of Offering.  Notwithstanding
anything contained herein, if the managing Underwriter(s) of an offering
described in Section 2.1 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:
 (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 2.1) 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).  Holders may not sell shares in a Public
Offering if the managing Underwriter(s) determine in their reasonable business
judgment that such participation will have an adverse impact on such Public
Offering.  Notwithstanding any provision
in this Agreement to the contrary, no Holder may exercise piggyback
registration rights to the extent it would otherwise result in the sale by him
or her, on a cumulative basis taking into account all prior sales, of a greater
percentage of the Common Stock that has ever been held by him than the
percentage equal to the cumulative shares of Common Stock sold by Cypress
divided by the total shares of Common Stock ever held by Cypress.  The Holders agree that they will not sell any
shares in an Initial Public Offering.


 


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


 


3

















 


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 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 (d), (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


 


4

















 


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 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


 


5

















 


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.


 


(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(b) 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.


 


Section 3.2.            Registration
Expenses.  In connection with any
registration statement filed pursuant to Section 2.1, the Company shall pay the
following registration expenses incurred in connection with the 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.  The Company shall have no


 


6

















 


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


 


7

















 


that of the indemnification of the Selling Holders
provided in this Section 4.1.  The 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


 


8

















 


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 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


 


9

















 


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 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
statement shall be in connection with a Public Offering to be underwritten on a
firm commitment basis, then 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 the
90-day period beginning on, the effective date of such Public Offering (except
as part of such underwritten registration), unless the investment banks or
underwriters managing the public offering otherwise agree.  Notwithstanding anything to the contrary
contained in the Management Stockholders Agreement or in this Exhibit C,
this Section 5.3 shall not apply with respect to any


 


10

















 


registration
statements initially filed after the Piggy-Back Termination Date with respect
to a Holder (or offerings made after such Piggy-Back Termination Date pursuant
to shelf registration statements previously on file).


 


Section 5.4.            Other
Registration Rights.  Notwithstanding
anything contained in this Exhibit C or the Management Stockholders
Agreement to the contrary, no provision herein or therein shall be interpreted
to limit (i) the right of the Company to grant Cypress or 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 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 (including Cypress).


 


11

















 


EXHIBIT D


 


[Intentionally Omitted]


 

















 


Schedules


 


Schedule
I             Management
Stockholders


Schedule
II            Senior Managers


 


Exhibits


 


Exhibit
A                [Intentionally
Omitted]


Exhibit
B                Permitted
Transferee Form of Agreement to be Bound


Exhibit
C                Registration
Rights


Exhibit
D                [Intentionally
Omitted]


 


i