**Exhibit 4.2**

 

AMENDED AND RESTATEDREGISTRATION RIGHTS AGREEMENT

 

 

DATED AS OF APRIL 27, 2006

 

 

among

 

CPI INTERNATIONAL, INC. (FORMERLY CPIACQUISITION 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

 

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**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       |

 

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AMENDED AND RESTATEDREGISTRATION RIGHTS AGREEMENT

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT dated as of April27, 2006 (this “Agreement”) among CPI International, Inc. (formerlyknown as CPI Acquisition Corp.), a Delaware corporation (the “Company”),Cypress Merchant Banking Partners II L.P., a Delaware limited partnership (“CypressOnshore”), Cypress Merchant B II C.V., a Netherlands limited partnership (“CypressOffshore”), 55th Street Partners II L.P., a Delaware limited partnership (“Cypress55th Street”), and Cypress Side-by-Side LLC, a Delaware limited liabilitycompany (“Cypress Side-by-Side,” and together with Cypress Onshore,Cypress Offshore, Cypress 55th Street, “Cypress”). Capitalized termsused but not otherwise defined herein have the meanings given to them in theMerger Agreement (as hereinafter defined).

 

WITNESSETH:

 

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

 

WHEREAS, in connection with the closing ofthe Merger, the Company and Cypress entered into a Registration RightsAgreement, 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 toamend and restate the Original Agreement on the terms and conditions set forthherein.

 

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

 

ARTICLE IDEFINITIONS

 

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

 

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

 

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management and policies of that Person, whether through the ownershipof voting securities (the ownership of more than 50% of the voting securitiesof 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 ofthis Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Holder” means (i) each of Cypress Onshore, Cypress Offshore,Cypress Side-by-Side and Cypress 55th Street, (ii) any Affiliate of any offoregoing and (iii) any other Person to whom any of the foregoing transferRegistrable Securities; provided that (a) such Person agrees in writingto be bound by the provisions of this Agreement, (b) to be entitled to exercisethe rights of a Holder pursuant to Section 2.1, a Holder or Holders pursuant toclause (iii) must either individually or in the aggregate with all otherHolders 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 pursuantto this clause (iii) shall be permitted to further transfer any rightshereunder.

 

“Holding” shall have the meaning set forth in the recitals ofthis 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).

 

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

 

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

 

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

 

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

 

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

 

“Piggy-Back Registration” has the meaning set forth in Section2.2.

 

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

 

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

 

“Registrable Security” means any outstanding shares of CommonStock held by a Holder; provided, however, such Common Stock shall cease to beRegistrable Securities when (i) a registration statement covering such CommonStock has been declared effective by the Commission and such stock has beendisposed of pursuant to such effective registration statement, (ii) such stockis sold pursuant to Rule 144 (or any similar provisions then in force) underthe 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 andmanner of sale limitations set forth in Rule 144 (or any similar provisionsthen in force).

 

“Registration Expenses” has the meaning set forth in Section3.2.

 

“Securities Act” shall mean the United States Securities Act of1933, as amended, and the rules and regulations promulgated thereunder.

 

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

 

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

 

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

 

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# ARTICLE IIREGISTRATION RIGHTS

#  

## Section 2.1.            Demand Registration.

##  

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

 

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

 

(c)           EffectiveRegistration Statement. A registration effected pursuant to this Section2.1 will not be deemed to have been effected unless it has become effective andhas remained continuously effective for a period of 90 days (or, with respectto a registration that is effected pursuant to Form S-3 (or any successor orsimilar short-form registration), 9 months) or such shorter period which willterminate when all of the Registrable Securities requested to be registeredthereunder have been sold.

 

(d)           RegistrationStatement Form. The Company shall select the registration statement formfor any registration pursuant to this Section 2.1; provided, that if anyregistration requested pursuant to this Section 2.1 is proposed to be effectedon Form S-3 (or any successor or similar short-form registration) and is inconnection with an underwritten offering, and if the managing Underwriter shalladvise the Company in writing that, in its opinion, it is of materialimportance to the success of such proposed offering to include in suchregistration statement information not required to be included pursuant to suchform, then the Company will supplement such registration statement asreasonably requested by such managing Underwriter.

 

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

 

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

 

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

 

Section 2.2.            Piggy-BackRegistration. If at any time following the consummation of an InitialPublic Offering, the Company proposes to file a registration statement underthe Securities Act with respect to an offering by the Company for its ownaccount and/or for the account of any of its security holders (including inconnection with a Demand Registration) of any Common Stock****(other than (i) a registrationstatement on Form S-4 (or F-4) or S-8 (or any substitute form that may beadopted by the Commission) or (ii) a registration statement filed inconnection with an exchange offer or an offering of securities solely to the Company’sexisting securityholders), then the Company shall give written notice of suchproposed filing to the Holders as soon as practicable (but in no event lessthan 15 days before the anticipated filing date), and such notice shallidentify the anticipated filing date and offer such Holders the opportunity toregister such number of shares of Registrable Securities as each such Holdermay request (which request shall specify the Registrable Securities intended tobe disposed of by such Holder and the intended method of distribution thereofand shall be delivered to the Company at least two days prior to theanticipated filing date) (a “Piggy-Back Registration”). The Companyshall use its commercially reasonable efforts to cause the managing Underwriteror Underwriters of a proposed underwritten offering to permit the RegistrableSecurities requested to be included in a Piggy-Back Registration to be includedon the same terms and conditions to permit the sale or other disposition ofsuch Registrable Securities in accordance with the intended method ofdistribution thereof. Any Holder shall have the right to withdraw its requestfor inclusion of its Registrable Securities in any registration statementpursuant to this Section 2.2 by giving written notice to the Company of itsrequest to withdraw. The Company may withdraw a Piggy-Back Registration at anytime prior to the time it becomes effective, provided that, in suchevent, the Company shall reimburse Holders requested to be included in suchPiggy-Back Registration for all Registration Expenses (including reasonablecounsel fees and expenses) incurred prior to such withdrawal.

 

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Section 2.3.            Reduction of Offering.Notwithstanding anything contained herein, if the managing Underwriter(s) of anoffering described in Section 2.1 or 2.2 determine that the offering that theHolders, the Company and/or such other Persons intend to make is such that thesuccess of the offering would be materially and adversely affected by inclusionof the Registrable Securities requested to be included, then the Company shallinclude in such registration:  (a) in thecase of a demand registration, (i) first, an amount of securities requested tobe included in such registration by any holder exercising “demand registrationrights” (such amount to be allocated among such holders in proportion to thenumber of securities held by such holders) and (ii) second, the RegistrableSecurities and any other securities of the Company requested to be included insuch registration (such amount to be allocated among such holders in proportionto the number of shares of Common Stock held by such holders); and (b) in thecase of a piggy-back registration, (i) first, the shares, if any, proposed to beregistered by the Company for its own account or for the account of a holderexercising “demand registration rights”; and (ii) second, an amount ofsecurities requested to be included in such registration (including pursuant toSection 2.2) by the holders exercising “piggy-back registration rights” (suchamount to be allocated among such holders in proportion to the number of sharesof Common Stock held by such holders).

 

# ARTICLE IIIREGISTRATION PROCEDURES

#  

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

 

### (a)           The Company will asexpeditiously as practicable prepare and file with the Commission aregistration statement on any form for which the Company then qualifies orwhich counsel for the Company shall deem appropriate and which form shall beavailable for the sale of the Registrable Securities to be registeredthereunder in accordance with the intended method of distribution thereof (itbeing 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 tocause such filed registration statement to become effective.

###  

### (b)           The Company willprepare and file with the Commission such amendments and supplements to suchregistration statement and the prospectus used in connection therewith as maybe necessary to keep such registration statement effective and to comply withthe provisions of the Securities Act with respect to the disposition of allsecurities covered by such registration statement until such time as all ofsuch securities have been disposed of in accordance with the intended methodsof disposition by the Selling Holder or Selling Holders thereof set forth insuch registration statement.

###  

### (c)           The Company will, priorto filing a registration statement or prospectus or any amendment or supplementthereto, furnish to each Selling Holder, counsel representing any SellingHolders, and each Underwriter, if any, of the Registrable Securities covered bysuch registration statement copies of such registration statement as proposedto be filed, together with

 

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### exhibitsthereto, which documents will be subject to review by the foregoing within 5Business Days after delivery, and thereafter furnish to such Selling Holder,counsel and Underwriter, if any, such number of copies of such registrationstatement, each amendment and supplement thereto (in each case including allexhibits thereto and documents incorporated by reference therein), theprospectus included in such registration statement (including each preliminaryprospectus) and such other documents as such Selling Holder or Underwriter mayreasonably request in order to facilitate the disposition of the RegistrableSecurities owned by such Selling Holder.

###  

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

###  

### (e)           The Company will useits commercially reasonable efforts****to(i) register or qualify the Registrable Securities under such othersecurities or blue sky laws of such jurisdictions in the United States and suchother jurisdictions as any Selling Holder reasonably (in light of such SellingHolder’s intended plan of distribution) requests and (ii) cause suchRegistrable Securities to be registered with or approved by such othergovernmental agencies or authorities in the United States as may be necessaryby virtue of the business and operations of the Company and do any and allother acts and things that may be reasonably necessary or advisable to enablesuch Selling Holder to consummate the disposition of the Registrable Securitiesowned by such Selling Holder; provided that the Company will not berequired to (A) qualify generally to do business in any jurisdiction whereit 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 willimmediately notify each Selling Holder of such Registrable Securities, at anytime when a prospectus relating thereto is required to be delivered under theSecurities Act, of the occurrence of an event requiring the preparation of asupplement or amendment to such prospectus so that, as thereafter delivered tothe purchasers of such Registrable Securities, such prospectus will not containan untrue statement of a material fact or omit to state any material factrequired to be stated therein or necessary to make the statements therein notmisleading, and will promptly make available to each Selling Holder any suchsupplement or amendment.

###  

### (g)           The Company will enterinto customary agreements (including, if applicable, an underwriting agreementin customary form) and take such other actions as are reasonably required inorder to expedite or facilitate the disposition of such Registrable Securitiesin accordance with the intended plan of distribution of the Selling Holders.

###  

### (h)           The Company willdeliver promptly to each Selling Holder of such Registrable Securities and eachUnderwriter, if any, subject to restrictions imposed by the United Statesfederal government or any agency or instrumentality thereof, copies of allcorrespondence between the Commission and the Company and its counsel orauditors and all memoranda relating to discussions with the Commission or itsstaff with respect to the registration statement and make available forinspection by any Selling Holder of such Registrable Securities, any

 

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### Underwriter participatingin any disposition pursuant to such registration statement and any attorney,accountant or other professional retained by any such Selling Holder orUnderwriter (collectively, the “Inspectors”), all financial and otherrecords, pertinent corporate documents and properties of the Company(collectively, the “Records”), as shall be reasonably necessary toenable them to perform a reasonable and customary due diligence investigation,and cause the Company’s officers, directors and employees to supply allinformation reasonably requested by any Inspectors in connection with suchregistration statement. Records which the Company determines, in good faith, tobe confidential and which it notifies the Inspectors are confidential shall notbe disclosed by the Inspectors unless (i) the disclosure of such Recordsis necessary to avoid or correct a misstatement or omission in suchregistration statement or (ii) the disclosure or release of such Recordsis requested or required pursuant to oral questions, interrogatories, requestsfor information or documents or a subpoena or other order from a court ofcompetent jurisdiction or other process; provided that prior to anydisclosure or release pursuant to clause (ii), the Inspectors shall provide theCompany with prompt notice of any such request or requirement so that theCompany 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 Companypermitting the disclosure or release of such Records, the Inspectors, uponadvice of counsel, are compelled to disclose such Records, the Inspectors maydisclose that portion of the Records which counsel has advised the Inspectors thatthe Inspectors are compelled to disclose. Each Selling Holder of suchRegistrable Securities agrees that it will, upon learning that disclosure ofsuch Records is sought in a court of competent jurisdiction, give notice to theCompany and allow the Company at its expense, to undertake appropriate actionto prevent disclosure of the Records deemed confidential.

###  

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

###  

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

###  

### (k)           The Company will useits commercially reasonable efforts (a) to cause all such RegistrableSecurities to be listed on a national securities exchange (if such shares arenot already so listed) and on each additional national securities exchange onwhich similar securities issued by the Company are then listed (if any), if thelisting of such Registrable Securities is then permitted under the rules ofsuch exchange or (b) to secure designation of all such Registrable Securitiescovered by such registration statement as a NASDAQ “national market systemsecurity” within the meaning of Rule 11Aa2-1 of the Commission or, failingthat, to secure NASDAQ authorization for such Registrable Securities and,without limiting the generality of the foregoing, to arrange for at least twomarket makers to register as such with respect to such Registrable Securitieswith the NASD.

 

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### (l)            The Company willappoint a transfer agent and registrar for all such Registrable Securitiescovered by such registration statement not later than the effective date ofsuch registration statement.

###  

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

 

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

 

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

###  

Section 3.2.            Registration Expenses.In connection with any registration statement filed pursuant to Section 2.1 or2.2, the Company shall pay the following registration expenses incurred inconnection 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 bluesky qualifications of the Registrable Securities), (iii) printingexpenses, (iv) the Company’s internal expenses (including, withoutlimitation, all salaries and expenses of its officers and employees performinglegal or accounting duties), (v) fees and expenses incurred in connectionwith the listing of the Registrable Securities, (vi) reasonable fees anddisbursements of counsel for the Company and not more than one counsel for theSelling Holders, as may be chosen by a majority of the Selling Holders, andcustomary fees and expenses for independent certified public accountantsretained by the Company (including the expenses of any comfort letters or costsassociated with the delivery by independent certified public accountants of acomfort letter or comfort letters requested pursuant to Section 3.1(i) hereof)and (vii) reasonable fees and expenses of any special experts retained bythe Company in connection with such registration.

 

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The Company shall have noobligation to pay any underwriting fees, discounts or commissions attributableto the sale of Registrable Securities.

 

# ARTICLE IVINDEMNIFICATION AND CONTRIBUTION

#  

Section 4.1.            Indemnification bythe Company. To the fullest extent permitted by law, the Company agrees to indemnifyand hold harmless each Selling Holder of Registrable Securities, its officers,directors, employees and agents, and each person, if any, who controls suchSelling Holder within the meaning of the Securities Act from and against anyloss, claim, damage or liability, joint or several, or any action in respectthereof (including, but not limited to, any loss, claim, damage, liability oraction relating to purchases and sales of Common Stock) to which such SellingHolder, officer, director, employee or agent or controlling Person may becomesubject under the Securities Act or otherwise, insofar as such loss, claim,damage, liability or action arises out of, or is based upon, (i) anyuntrue statement or alleged untrue statement of a material fact contained inany registration statement, preliminary prospectus or final prospectus or any amendmentor supplement thereto relating to the Registrable Securities or (ii) anyomission or alleged omission to state therein a material fact required to bestated therein or necessary to make the statements therein not misleading andshall reimburse each Selling Holder and each such officer, director, employee,agent and controlling Person for any legal and other expenses reasonablyincurred by that Selling Holder, officer, director, employee, agent orcontrolling Person in connection with investigating or defending or preparingto defend against any such loss, claim, damage, liability or action as suchexpenses are incurred, except insofar as the same are contained in anyinformation furnished in writing to the Company by such Selling Holderexpressly for use therein; provided, however, that the Companyshall 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 anuntrue statement or alleged untrue statement or omission or alleged omissionmade in connection with such registration statement, preliminary prospectus,final prospectus or amendments or supplements thereto, in conformity with writteninformation relating to such Selling Holder furnished to the Company by suchSelling Holder expressly for inclusion therein in connection with suchregistration; and, provided, further, that as to any preliminaryprospectus or any final prospectus, this indemnity agreement shall not inure tothe benefit of any Selling Holder or such Person’s directors, officers, agentsor controlling Persons, on account of any loss, claim, damage or liabilityarising from the sale of Registrable Securities to any Person by such SellingHolder if such Selling Holder or its representatives failed to send or give acopy of the final prospectus or a prospectus supplement, as the case may be(excluding documents incorporated by reference therein), as the same may beamended or supplemented, to that Person within the time required by theSecurities Act, and the untrue statement or alleged untrue statement of amaterial fact or omission or alleged omission to state a material fact in suchpreliminary prospectus or final prospectus was corrected in the finalprospectus or such prospectus supplement, as the case may be (excludingdocuments incorporated by reference therein), unless such failure resulted fromthe non-compliance by the Company with Section 3.1(f). The Company also agreesto indemnify any Underwriters of the Registrable Securities, their officers anddirectors and each Person who controls such Underwriters on substantially thesame basis as that of the indemnification of the Selling Holders provided inthis Section 4.1. The

 

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indemnities provided by this Section 4.1 shall remain in full force andeffect regardless of any investigation made by or on behalf of such SellingHolder or Underwriter.

 

Section 4.2.            Indemnification byHolders of Registrable Securities. To the fullest extent permitted by law,each Selling Holder agrees, severally but not jointly, to indemnify and holdharmless the Company its officers, directors and agents and each Person, ifany, who controls the Company within the meaning of the Securities Act to thesame extent as the indemnity from the Company to such Selling Holder pursuantto clauses (i) and (ii) of Section 4.1, but only with reference to informationrelated to such Selling Holder furnished in writing by such Selling Holder oron such Selling Holder’s behalf expressly for use in any registration statementor prospectus relating to the Registrable Securities, or any amendment orsupplement thereto, or any preliminary prospectus; provided that theobligation to indemnify will be individual to each Selling Holder and will belimited to the net amount of proceeds received by such Selling Holder from thesale of Registrable Securities pursuant to such Registration Statement. EachSelling Holder also agrees to indemnify and hold harmless Underwriters of theRegistrable Securities, their officers and directors and each Person whocontrols such Underwriters on substantially the same basis as that of theindemnification of the Company provided in this Section 4.2, subject to theproviso in the first sentence of this Section 4.2. Notwithstanding theforegoing, the indemnity set forth in this Section 4.2, shall not apply toamounts paid in settlements effected without the consent of such Selling Holder(which consent shall not be unreasonably withheld or delayed).

 

Section 4.3.            Conduct ofIndemnification Proceedings. Promptly after receipt by any person inrespect of which indemnity may be sought pursuant to Section 4.1 or 4.2 (an “IndemnifiedParty”) of notice of any claim or the commencement of any action, theIndemnified Party shall, if a claim in respect thereof is to be made againstthe person against whom such indemnity may be sought (an “Indemnifying Party”)notify the Indemnifying Party in writing of the claim or the commencement ofsuch action, provided that the failure to notify the Indemnifying Partyshall not relieve it from any liability which it may have to an IndemnifiedParty otherwise than under Section 4.1 or 4.2, except to the extent of anyactual prejudice resulting therefrom. If any such claim or action shall bebrought against an Indemnified Party, and it shall notify the IndemnifyingParty thereof, the Indemnifying Party shall be entitled to participate therein,and, to the extent that it wishes, jointly with any other similarly notifiedIndemnifying Party, to assume the defense thereof with counsel satisfactory tothe Indemnified Party. After notice from the Indemnifying Party to theIndemnified Party of its election to assume the defense of such claim oraction, the Indemnifying Party shall not be liable to the Indemnified Party forany legal or other expenses subsequently incurred by the Indemnified Party inconnection with the defense thereof other than reasonable costs of investigation;provided that the Indemnified Party shall have the right to employseparate counsel to represent the Indemnified Party and its controlling Personswho may be subject to liability arising out of any claim in respect of whichindemnity may be sought by the Indemnified Party against the IndemnifyingParty, but the fees and expenses of such counsel shall be for the account ofsuch Indemnified Party unless (i) the Indemnifying Party and theIndemnified Party shall have mutually agreed to the retention of such counselor (ii) in the reasonable judgment of such Indemnified Partyrepresentation of both parties by the same counsel would be inappropriate dueto actual or potential differing interests between them. No Indemnifying Partyshall, without the prior written consent of the Indemnified Party, effect anysettlement of any claim or pending or

 

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

 

Section 4.4.            Contribution. Ifthe indemnification provided for in this Article IV is unavailable to the IndemnifiedParties in respect of any losses, claims, damages, liabilities or expensesreferred to herein, then each such Indemnifying Party, in lieu of indemnifyingsuch Indemnified Party, shall contribute to the amount paid or payable by suchIndemnified Party as a result of such losses, claims, damages, liabilities orexpenses (i) as between the Company and the Selling Holders on the onehand and the Underwriters on the other, in such proportion as is appropriate toreflect the relative benefits received by the Company and the Selling Holderson the one hand and the Underwriters on the other from the offering of theRegistrable Securities, or if such allocation is not permitted by applicablelaw, in such proportion as is appropriate to reflect not only the relativebenefits but also the relative fault of the Company and the Selling Holders onthe one hand and of the Underwriters on the other in connection with thestatements or omissions which resulted in such losses, claims, damages orliabilities, as well as any other relevant equitable considerations and(ii) as between the Company on the one hand and each Selling Holder on theother, in such proportion as is appropriate to reflect the relative fault of theCompany and of each Selling Holder in connection with such statements oromissions, as well as any other relevant equitable considerations. The relativebenefits received by the Company and the Selling Holders on the one hand andthe Underwriters on the other shall be deemed to be in the same proportion asthe total proceeds from the offering (net of underwriting discounts andcommissions but before deducting expenses) received by the Company and theSelling Holders bear to the total underwriting discounts and commissionsreceived by the Underwriters, in each case as set forth in the table on thecover page of the prospectus. The relative fault of the Company and the SellingHolders on the one hand and of the Underwriters on the other shall be determinedby reference to, among other things, whether the untrue or alleged untruestatement of a material fact or the omission or alleged omission to state amaterial fact relates to information supplied by the Company and the SellingHolders or by the Underwriters. The relative fault of the Company on the onehand and of each Selling Holder on the other shall be determined by referenceto, among other things, whether the untrue or alleged untrue statement of amaterial fact or the omission or alleged omission to state a material factrelates to information supplied by such party, and the parties’ relativeintent, knowledge, access to information and opportunity to correct or preventsuch statement or omission.

 

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

 

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were offered to the public exceeds the amount of any damages which suchUnderwriter has otherwise been required to pay by reason of such untrue oralleged untrue statement or omission or alleged omission, and no Selling Holdershall be required to contribute any amount in excess of the amount by which thetotal price at which the Registrable Securities of such Selling Holder wereoffered to the public (less underwriting discounts and commissions) exceeds theamount of any damages which such Selling Holder has otherwise been required topay by reason of such untrue or alleged untrue statement or omission or allegedomission. No person guilty of fraudulent misrepresentation (within the meaningof Section 11(f) of the Securities Act) shall be entitled to contribution fromany person who was not guilty of such fraudulent misrepresentation. EachSelling Holder’s obligations to contribute pursuant to this Section 4.4 areseveral in proportion to the proceeds of the offering received by such SellingHolder and not joint.

 

# ARTICLE VMISCELLANEOUS

#  

Section 5.1.            Participation inUnderwritten Registrations. No Person may participate in any underwritten registrationhereunder unless such Person (a) agrees to sell such Person’s securities on thebasis provided in any underwriting arrangements approved by the Personsentitled hereunder to approve such arrangements and (b) completes and executesall questionnaires, powers of attorney, indemnities, underwriting agreementsand other documents reasonably required under the terms of such underwritingarrangements and these Registration Rights.

 

Section 5.2.            Rule 144. TheCompany covenants that it will file any reports required to be filed by itunder the Securities Act and the Exchange Act and that it will take suchfurther action as any Holder may reasonably request, all to the extent requiredfrom time to time to enable Holders to sell Registrable Securities withoutregistration under the Securities Act within the limitation of the exemptionsprovided by (a) Rule 144 under the Securities Act, as such Rules may beamended from time to time, or (b) any similar rule or regulation hereafteradopted by the Commission. Upon the request of any Holder, the Company willdeliver to such Holder a written statement as to whether it has complied withsuch requirements.

 

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

 

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

 

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

 

Section 5.5.            No InconsistentAgreements. The Company will not hereafter enter into any agreement with respectto its securities which is inconsistent with the rights granted to the Holdersin this Agreement.

 

Section 5.6.            Successors andAssigns. This Agreement shall be binding upon and shall inure to thebenefit of the parties hereto, and their respective successors and permittedassigns.

 

Section 5.7.            No Waivers,Amendments. (a)  Except as expresslyset 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 anysingle or partial exercise thereof preclude any other or further exercisethereof or the exercise of any other right, power or privilege. The rights andremedies herein provided shall be cumulative and not exclusive of any rights orremedies provided by law.

 

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

###  

### (c)           Any provision of thisAgreement may be waived if, but only if, such waiver is in writing and is signedby the party against whom the enforcement of such waiver is sought.

###  

Section 5.8.            Notices. Allnotices, requests and other communications to any party hereunder shall be inwriting (including telex, telecopier or similar writing) and shall be given tosuch party at its address or telecopier number set forth below, or such otheraddress or telecopier number as such party may hereinafter specify for thepurpose to the party giving such notice. Each such notice, request or othercommunication shall be effective (a) if given by telecopy, when suchtelecopy is transmitted to the telecopy number specified in this Section andthe appropriate answerback is received or, (b) if given by overnightcourier or express mail service, when delivery is confirmed or, (c) ifgiven by any other means, when delivered at the address specified in thisSection 4.7. In each case, notice shall be sent to the parties at the followingaddresses (or at such other address for a party as shall be specified by likenotice):

 

#### (i)            ifto the Company:

####  

CPI International, Inc.

811 Hansen Way, Mail Stop A-028Palo Alto, California 94303Attention:  Joel A. LittmanTelecopier:  (650) 846-3276

 

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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)           ifto 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.  ThisAgreement shall terminate at such time as the Holders cease to beneficially ownany Registrable Securities; provided that any termination pursuant tothis Section 5.9 will not relieve any party for any liability arising from abreach of representation, warranty, covenant or agreement occurring prior tosuch termination.

 

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

 

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

 

Section 5.11.          Section Headings. Thesection headings contained in this Agreement are for reference purposes onlyand shall not affect the meaning or interpretation of this Agreement.

 

Section 5.12.          Entire Agreement. ThisAgreement constitutes the entire agreement and understanding among the partieshereto 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. Anyterm or provision of this Agreement which is invalid or unenforceable in any jurisdictionshall, as to such jurisdiction, be ineffective to the extent of such invalidityor unenforceability without rendering invalid or unenforceable the remainingterms and provisions of this Agreement or affecting the validity orenforceability of any of the terms or provisions of this Agreement in any otherjurisdictions, it being intended that all rights and obligations of the partieshereunder shall be enforceable to the fullest extent permitted by law.

 

Section 5.14.          Counterparts. ThisAgreement may be signed in counterparts, each of which shall constitute an originaland 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 tothe benefit of the parties hereto and their respective successors. Except asexpressly set forth herein, neither this Agreement nor any of their rightshereunder shall be assigned by any of the parties hereto without the priorwritten consent of the other parties.

 

Section 5.16.          Enforcement; FurtherAssurances. (a)  The parties heretoagree that irreparable damage would occur in the event that any of theprovisions of this Agreement were not performed in accordance with theirspecific terms. It is accordingly agreed that the parties shall be entitled tospecific performance of the terms hereof, this being in addition to any otherremedy to which they are entitled at law or in equity.

 

### (b)           The parties heretoagree to execute, acknowledge, deliver, file and record such furthercertificates, amendments, instruments, agreements and documents, and to do allsuch other acts and things, as may be required by law or as may be necessary oradvisable to carry out the intent and purposes of this Agreement.

###  

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as ofthe 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 |
|        |                                            |                                                         |  |  |  |

 

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|   | 55TH STREET PARTNERS II L.P. |                                           |
|--------|------------------------------|------------------------------------------------|
|   |                         |                                           |
|   | By:                          | Cypress Associates II LLC,  as general partner |
|   |                         |                                           |
|   |                         |                                           |
|   | By:                          | /s/ James Stern                                |   |
|   |                         | Name:                                          | James Stern |
|   |                         | Title:                                         | Managing Member |
|        |                              |                                                |  |  |  |

 

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