Exhibit 10.1


 


AMENDMENT NO. 3 to Credit Agreement


 


AMENDMENT
NO. 3, dated as of December 15, 2005, to that certain Credit
Agreement, dated as of January 23, 2004, and amended and restated as of November 29,
2004, and as further amended on February 16, 2005 and on April 13,
2005 (the “Credit Agreement”; capitalized terms used herein and not
defined herein shall have the meaning set forth in the Credit Agreement), among
Communications & Power Industries, Inc., a Delaware corporation,
as borrower (“Borrower”), UBS AG, Stamford Branch, as administrative
agent (the “Administrative Agent”), the lenders from time to time party
thereto (the “Lenders”), and the other parties thereto (the “Amendment”).


 


W  I  T  N  E  S
S  E  T  H:


 


WHEREAS, Section 11.02
of the Credit Agreement permits the Credit Agreement and the other Loan
Documents to be amended from time to time;


 


NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:


 


SECTION ONE     Amendments.


 


(a)                                  The
following definitions shall be added to Section 1.01 of the Credit
Agreement:


 


“Additional 2005 Term B Loans” shall have the meaning
assigned to such term in the definition of “Term B Loan Commitment.”


 


“Amendment No. 3 Effectiveness Date” shall mean the date
of effectiveness of Amendment No. 3 to this Agreement.


 


“Parent Floating Rate Notes” shall mean (i) Parent’s
Floating Rate Senior Notes due 2015 and any registered notes issued by Parent
in exchange for, and as contemplated by, such notes with substantially
identical terms as Parent’s Floating Rate Senior Notes due 2015 and (ii) any
securities issued as payment of interest on securities described in clause (i) and
any registered notes issued by Parent in exchange for, and as contemplated by,
such notes, provided that all such notes shall have substantially identical
terms as Parent’s Floating Rate Notes due 2015.


 


“Specified Equity Issuance” shall mean the first Equity Issuance
consummated after the Amendment No. 3 Effectiveness Date which results in
aggregate gross proceeds of $5.0 million or more to Parent.  


 





















 


(b)                                 The
definition of “Equity Issuance” shall be amended by replacing “15.0%” with “25%.”.


 


(c)                                  The
definition of “Excess Cash Flow” shall be amended to replace clause (k) thereof
in its entirety with the following: 


 


“(k)                            dividends
made by Borrower to fund cash interest on the Permitted Parent Notes and
payments under any Permitted Parent Hedge pursuant to Section 6.05(g) during
such fiscal year; plus


 


(l)                                     any
amount received by Borrower from Parent pursuant to clause (i)(B)(y) of the
proviso in Section 6.05(g); minus


 


(m)                               for
the fiscal year ended September 29, 2006, the amount of the cash dividend
to Parent pursuant to Section 6.05(i) in excess of the gross
proceeds of the Additional 2005 Term B Loans;”


 


(d)                                 The
definition of “Term B Loan Commitment” shall be amended by adding the following
at the end thereof: “On the Amendment No. 3 Effectiveness Date, an additional
$10.0 million of Term B Loans (the “Additional 2005 Term B Loans”) were
made pursuant to an Increase Joinder in accordance with Section 2.20
hereof.”


 


(e)                                  Section 2.07
of the Credit Agreement shall be amended by replacing “The Term B Loan
Commitments shall automatically terminate on the Amendment Effectiveness Date.”
with “The Term B Loan Commitments (other than new Term B Loan Commitments made
pursuant to Section 2.20) shall automatically terminate on the
Amendment Effectiveness Date.”


 


(f)                                    Section 2.10(e) of
the Credit Agreement shall be amended by replacing “Upon any Equity Issuance
(other than a Preferred Stock Issuance) after the Closing Date,” with “Upon any
Equity Issuance after the Closing Date (other than the Specified Equity
Issuance and any Preferred Stock Issuance),”.


 


(g)                                 Section 2.20(a) of
the Credit Agreement shall be amended to add the following before the period in
the first sentence: “(provided that with respect to the Additional 2005 Term B
Loans, such $25.0 million minimum shall not apply and such notice by Borrrower shall
not be required)”.


 


(h)                                 The
following sentence shall be added at the end of Section 3.11: “The
proceeds of the Additional 2005 Term B Loans shall be used promptly after
receipt thereof to fund the cash dividend described in Section 6.05(i).”


 


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(i)                                     Section 6.05
shall be amended by (i) deleting the word “and” at the end of clause (g), (ii) replacing
the “.” at the end of clause (h) with “; and” and (iii) adding a new
clause (i) as follows: 


 


“(i)                               Borrower
may pay a cash dividend to Parent to be used by Parent to pay a dividend to the
holders of Parent’s Equity Interests in an aggregate amount not to exceed the
sum of (x) the gross proceeds of the Additional 2005 Term B Loans plus
(y) $10.0 million; provided that
at the time of and after giving effect to such dividend on a Pro Forma Basis,
Borrower and Parent shall be in compliance with all covenants set forth in Section 6.07
and no Default shall exist.”


 


(j)                                     Section 6.08
shall be amended to replace clause (i) thereof in its entirety with the following:



 


(i) Make
(or give any notice in respect thereof) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of, or any prepayment or
redemption as a result of any asset sale, change of control or similar event
of, any Subordinated Indebtedness or Permitted Parent Notes, except (x) as
otherwise permitted by this Agreement and (y) that Parent Floating Rate Notes
and/or Senior Subordinated Notes may redeemed or repurchased with the proceeds
of the Specified Equity Issuance within 120 days after the consummation of the
Specified Equity Issuance; provided that (A) the
aggregate amount of proceeds used for any such redemption or repurchase pursuant
to this Section 6.08(i)(y) and Section 6.12(a)(vii) shall not
exceed $70.0 million in the aggregate and (B) at the time of and after
giving effect to any such prepayment or repurchase, Borrower and Parent shall
be in compliance with all covenants set forth in Section 6.07 and
no Default shall exist;”.


 


(k)                                  Section 6.12(a) shall
be amended by replacing “and (vii)” with the following:


 


“, (vii) Parent may redeem or repurchase Parent Floating Rate
Notes with the proceeds of the Specified Equity Issuance within 120 days after
the consummation of the Specified Equity Issuance; provided
that (A) the aggregate amount of proceeds used for any such redemption or
repurchase pursuant to this Section 6.12(a)(vii) and Section 6.08(i)(y)
shall not exceed $70.0 million in the aggregate and (B) at the time of and
after giving effect to any such prepayment or repurchase, Borrower and Parent
shall be in compliance with all covenants set forth in Section 6.07
and no Default shall exist and (viii)”.


 


(l)                                     Annex
I to the Credit Agreement shall be replaced with Annex I attached hereto (it
being understood that such Annex gives effect to all prepayments through the
Amendment No. 3 Effectiveness Date).


 


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(m)                               The
Increase Joinder with respect to the Additional 2005 Term B Loans is attached
hereto as Exhibit A.


 


SECTION TWO     Conditions to Effectiveness.  This Amendment shall become effective as of
the date (the “Effective Date”)
which is the date on which (i) the Administrative Agent shall have
received (x) counterparts of this Amendment executed by the Borrower, Parent,
the Administrative Agent, the Collateral Agent and (y) the Administrative Agent
shall have received executed consents to this Amendment from the Required
Lenders and (ii) the conditions specified in Section 2.20(b) of
the Credit Agreement are satisfied, including the delivery of a favorable
written opinion of Irell & Manella LLP in form and substance reasonably
acceptable to the Administrative Agent.


 


SECTION THREE     Reference to and Effect on the Credit
Agreement.  On and after the
Effective Date, each reference in the Credit Agreement to “this Agreement,” “hereunder,”
“hereof” or words of like import referring the Credit Agreement and each
reference in each of the Loan Documents to “the Credit Agreement,” “thereunder,”
“thereof” or words of like import referring to the Credit Agreement shall mean
and be a reference to the Credit Agreement as amended by this Amendment.  The Credit Agreement and each of the other
Loan Documents, as specifically amended by this Amendment, are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed.  The execution, delivery
and effectiveness of this Amendment shall not, except as expressly provided
herein, operate as a waiver of any right, power or remedy of any Lender or any
Agent under any of the Loan Documents, nor constitute a waiver of any provision
of any of the Loan Documents.


 


SECTION FOUR     Costs and Expenses.  Borrower agrees to pay all reasonable costs
and expenses of the Administrative Agent in connection with the preparation, execution
and delivery of this Amendment and the other instruments and documents to be
delivered hereunder, if any (including, without limitation, the reasonable fees
and expenses of Cahill Gordon & Reindel LLP,
counsel to the Administrative Agent). 


 


SECTION FIVE     Execution in Counterparts.  This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Amendment by telecopier shall be effective as
delivery of a manually executed counterpart of this Amendment.


 


SECTION SIX     Governing Law.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.


 


[Signature Pages Follow]


 


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  COMMUNICATIONS & POWER

  INDUSTRIES, INC., as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel A. Littman

  
	
   

  	
   

  	
  Name: Joel A. Littman

  
	
   

  	
   

  	
  Title: CFO, Treasurer and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CPI HOLDCO, INC., as Parent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel A. Littman

  
	
   

  	
   

  	
  Name: Joel A. Littman

  
	
   

  	
   

  	
  Title: CFO, Treasurer and Secretary

  



 


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  UBS AG, STAMFORD BRANCH,  as Administrative Agent and as Collateral
  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Irla R. Otsa

  
	
   

  	
   

  	
  Name: Irla R. Otsa

  
	
   

  	
   

  	
  Title:  
  Associate Director Banking Products
            Services US

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Tavrow

  
	
   

  	
   

  	
  Name: Richard L. Tavrow

  
	
   

  	
   

  	
  Title:  
  Director Banking Products Services US

  



 


6





















 


Annex I


 


Amortization
Table


 




	
  Date

  	
   

  	
  Term B Loan

  Amount

  	
   

  
	
  December 31,
  2005

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  March 31,
  2006

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  June 30,
  2006

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  September 30,
  2006

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  December 31,
  2006

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  March 31,
  2007

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  June 30,
  2007

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  September 30,
  2007

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  December 31,
  2007

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  March 31,
  2008

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  June 30,
  2008

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  September 30,
  2008

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  December 31,
  2008

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  March 31,
  2009

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  June 30,
  2009

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
  September 30,
  2009

  	
   

  	
   

  	
  $

  	
  18,825,000.00

  	
   

  
	
  December 31,
  2009

  	
   

  	
   

  	
  $

  	
  23,725,000.00

  	
   

  
	
  March 31,
  2010

  	
   

  	
   

  	
  $

  	
  23,725,000.00

  	
   

  
	
  July 23,
  2010

  	
   

  	
   

  	
  $

  	
  23,725,000.00

  	
   

  
	
  Total

  	
   

  	
   

  	
  $

  	
  90,000,000.00