Document:

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                                                                    EXHIBIT 10.8

                               CONTINUING GUARANTY

        This Continuing Guaranty (this "Agreement"), dated as of December 15,
2000, is made by the undersigned ("Guarantor") in favor of Foothill Capital
Corporation, a California corporation ("Foothill"), as Agent for itself and
Lenders, and the other Lenders, pursuant to that certain Loan and Security
Agreement (the "Loan Agreement"), dated as of December 15, 2000, by and among
Communication & Power Industries, Inc., a Delaware corporation ("Debtor"), the
other Obligors named therein, Foothill and the other Lenders named herein
(Foothill and the other Lenders are collectively referred to herein as
"Lender"). Capitalized terms, which are used herein but not defined herein,
shall have the meanings ascribed to them in the Loan Agreement.

        Guarantor, at the solicitation of Debtor, requests that Lender extend
Credit to Debtor and in consideration of Credit heretofore, now or hereafter
granted to Debtor by Lender, Guarantor agrees as follows:

        1. The term "Credit" is used throughout this Agreement in its most
comprehensive sense and means and includes, without limitation, any and all
loans, advances, debts, obligations and liabilities of any kind or nature owed
by Debtor to Lender (including, without, limitation, the Obligations) and any
and all future Obligations owing by Debtor to Lender and all other financial
accommodations extended by Lender to Debtor, heretofore, now, or hereafter made,
incurred or created, whether voluntary or involuntary and however arising,
whether owed directly to Lender or acquired by Lender by assignment,
subrogation, or succession (including, without limitation, Lender participations
and interests of Lender in the obligations of Debtor to others), whether due or
not due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, secured or unsecured, whether on original, renewed, extended or
revised terms (including, without limitation, those evidenced by new or
additional instruments or agreements or those changing the applicable rate of
interest or which release any obligor with respect thereto), whether principal,
interest (including any interest that, but for the provisions of the U.S.
Bankruptcy Code would have accrued) or fees, whether Debtor may be liable
individually or jointly with others, whether recovery upon such indebtedness may
be or hereafter become barred by any statute of limitations, and whether such
indebtedness may be or hereafter become invalid or otherwise unenforceable. In
the event a petition under the U.S. Bankruptcy Code is filed by or against
Debtor, the term "Debtor" shall also mean and include Debtor in its status as a
debtor, debtor-in-possession and/or reorganized debtor under the U.S. Bankruptcy
Code.

        2. If there is more than a single person included in the terms
"Guarantor" or "Debtor," respectively, (a) each reference herein to such terms
shall mean all and any one or more of such entities and persons both jointly and
severally, and (b) if more than one entity executes this Agreement, the
obligations and liabilities hereunder of Guarantors are and shall be both joint
and several. If Debtor is a partnership or association, each reference herein to
the term "Debtor" shall include any successor entity to Debtor. As used in this
Agreement, neuter terms include the masculine and feminine, and vice versa.

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        3. Guarantor's liability hereunder shall be unlimited. Without limiting
the foregoing and in addition thereto, Guarantor agrees to bear and be liable to
Lender for the interest and expenses enumerated in paragraph 17 hereof.

        4. Guarantor unconditionally guarantees and agrees to pay Lender or its
order, on demand, in lawful money of the United States of America, an amount
equal to the amount of the Credit, and to otherwise perform any obligation of
Debtor undertaken pursuant to any Credit. This Agreement is a guaranty of
payment and not of collection.

        5. Either before or after revocation hereof, Guarantor authorizes Lender
at its sole discretion, with or without notice, and without affecting
Guarantor's continuing liability hereunder, from time to time to (a) change the
time or manner of payment of any Credit by renewal, extension, acceleration or
otherwise, (b) alter or change any other provision of any Credit including the
rate of interest thereon, (c) accept partial payment on any Credit, (d) accept
new or additional instruments, agreements or documents relative to any Credit,
(e) release, substitute or add one or more endorsers, cosigners or guarantors
for any Credit, (f) amend or modify the terms of any guaranty executed by a
co-guarantor, including the maximum liability thereunder, (g) obtain collateral
for the payment of any Credit and/or any guaranty thereof, (h) waive, release,
exchange, substitute, release or modify, in whole or in part, existing or
after-acquired collateral securing payment of the Credit or any guaranty
therefor on such terms as Lender in its sole discretion shall determine, (i)
subordinate payment of all or any part of the Credit to other creditors of
Debtor or other persons on such terms as Lender deems appropriate, (j) apply any
sums received from Debtor, any other guarantor, endorser or cosigner or from the
sale or collection of collateral or its proceeds to any indebtedness whatsoever
in any order and regardless of whether or not such indebtedness is guaranteed
hereby, is secured by collateral or is due and payable, (k) apply any sums
received from Guarantor or from the sale of collateral granted by Guarantor to
any, all, or any portion of the Credit in any order regardless of whether the
Credit is secured by collateral, but only so long as such Credit is due and
payable, and (l) exercise any right or remedy it may have with respect to any
Credit or any collateral securing any Credit, this Agreement or any other
guaranty, including bidding and purchasing at any sale of any such collateral,
and compromising, collecting or otherwise liquidating any collateral or any
Credit.

        6. (a) Guarantor acknowledges that Guarantor may have certain rights
under applicable law which, if not waived by Guarantor, might provide Guarantor
with defenses against Guarantor's liability under this Agreement. Among those
rights, are certain rights of subrogation, reimbursement, indemnification and
contribution, and rights provided in sections 2787 to 2855, inclusive, of the
California Civil Code (or any comparable provision of applicable state law). To
the maximum extent permitted by law, Guarantor waives all of Guarantor's rights
of subrogation, reimbursement, indemnification, and contribution, and any other
rights and defenses that are or may become available to Guarantor, whether such
rights arise by reason of any or all of California Civil Code Sections 2787 to
2855, inclusive (or any comparable provision of applicable state law), or
otherwise, and including, without limitation, Guarantor's rights:

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                      (i) To require Lender to notify Guarantor of any default
by Debtor, provide Guarantor with notice of any sale or other disposition of
security for any Credit, or disclose information with respect to the Credit, the
Debtor, or any other guarantor, co-signer or endorser, or with respect to any
collateral;

                      (ii) That Guarantor's obligation under this Agreement must
be commensurate with that of Debtor;

                      (iii) To be discharged based upon the absence of any
liability of the Debtor, at any time, by virtue of operation of law, or
otherwise, or due to any other disability or defense of Debtor or any other
guarantor, endorser or co-signer;

                      (iv) To be discharged if any of the terms, conditions or
provisions of the Credit are altered in any respect;

                      (v) To be discharged upon acceptance by Lender of anything
in partial satisfaction of the Credit, and/or if Lender designates portion of
the Credit to be satisfied;

                      (vi) To be discharged upon any modification of the Credit
or the release by Lender of Debtor or any other guarantor, endorser or
co-signer, or if any remedies against any such person are suspended or impaired;

                      (vii) To require Lender to proceed against Debtor, or any
other guarantor, endorser, co-signer, or other person, or to pursue or refrain
from pursuing any other remedy in Lender's power;

                      (viii) To receive the benefit of or participate in any and
all security for repayment and/or performance of the Credit;

                      (ix) To have any security for the Credit first applied to
satisfy or discharge the Credit;

                      (x) That any arbitration award rendered against Debtor not
constitute an award against Guarantor;

                      (xi) To be discharged based upon any failure by Lender to
perfect or continue perfection of any lien, use due diligence to collect all or
any Credit, or if recovery against Debtor becomes barred by any statute of
limitations, or if Debtor is not liable for any deficiency after Lender realizes
upon any collateral; and

                      (xii) To be discharged due to the release or discharge of
any collateral for any Credit or guaranty, or relating to the validity, value or
enforceability of any collateral.

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           (b) Without in any way limiting the foregoing, and in addition
thereto, to the maximum extent permitted by law, Guarantor waives: (i) any
defense based upon or arising out of any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or dissolution proceeding
commenced by or against Debtor or any other guarantor or any endorser, co-maker
or other person, including without limitation any discharge of, or bar against
collecting, any of the Credit (including without limitation any interest
thereon), in or as a result of any such proceeding; (ii) any defense arising by
reason of any disability or other defense of Debtor or any other guarantor or
any endorser, co-maker or other person or by reason of the cessation from any
cause whatsoever of the liability of Debtor or any other guarantor or any
endorser, co-maker or other person with respect to all or any part of the
Credit; (iii) any defense arising as a result of any election by Lender under
Section 1111(b) of Title 11 of the U.S. Code; or (iv) any defense based on any
borrowing or grant of a security interest under Section 364 of Title 11 of the
U.S. Code.

           (c) Guarantor also waives all rights and defenses that Guarantor may
have because the Debtor's debt is secured by real property. This means, among
other things: (1) Lender may collect from Guarantor without first foreclosing on
any real or personal property collateral pledged by Debtor; and (2) if Lender
forecloses on any real property collateral pledged by the Debtor: (A) the amount
of the debt may be reduced only by the price for which that collateral is sold
at the foreclosure sale, even if the collateral is worth more than the sale
price, and (B) Lender may collect from Guarantor even if Lender, by foreclosing
on the real property collateral, has destroyed any right Guarantor may have to
collect from Debtor. This is an unconditional and irrevocable waiver of any
rights and defenses Guarantor may have because Debtor's debt is secured by real
property. These rights and defenses include, but are not limited to, any rights
or defenses directly or indirectly based upon Section 580a, 580b, 580d, or 726
of the California Code of Civil Procedure (or any comparable provision of
applicable state law).

           (d) Guarantor also waives all rights and defenses arising out of an
election of remedies by Lender, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a guaranteed obligation,
has destroyed Guarantor's rights of subrogation and reimbursement against the
principal by the operation of Section 580d of the California Code of Civil
Procedure (or any comparable provision of applicable state law) or otherwise.

           (e) To the maximum extent permitted by law, Guarantor further waives
any and all rights to receive any notice of judicial or nonjudicial sale or
foreclosure of any real or personal property that may be the subject of any
security instruments or that may secure obligations of any other guarantor to
Lender, and Guarantor's failure to receive any such notice shall not impair or
affect Guarantor's liability. Notwithstanding any foreclosure of the lien of any
security instrument given with respect to the Credit or any other guaranty,
whether by the exercise of the power of sale contained therein, by any action
for judicial foreclosure, or by any acceptance of a deed or other transfer in
lieu of foreclosure, whether or not such method of foreclosure or transfer in
lieu of foreclosure was for a consideration equal to or greater than the fair
market value of the security property, Guarantor shall remain bound under this
Agreement for the Credit and shall be liable to Lender for any and all of the
Credit remaining unpaid after any such foreclosure.

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           (f) If for any reason Debtor is under no legal obligation to
discharge any of the Credit, or if any of the Credit have become irrecoverable
from Debtor for any reason, this Agreement shall nevertheless be binding on
Guarantor to the same extent as if the Guarantor at all times had been the
primary obligor on all such Credit.

           (g) In the event (i) Debtor defaults in the payment of any of the
Credit or (ii) acceleration of the time for payment of any of the Credit is
stayed upon the insolvency, bankruptcy or reorganization of the Debtor, or for
any other reason, all such amounts otherwise subject to acceleration under the
agreement evidencing such Credit, shall be immediately due and payable by
Guarantor. Guarantor waives all presentments, demands for performance, notices
of nonperformance, protests, notices of protest, dishonor and acceptance of this
Agreement.

        7. Notwithstanding anything to the contrary contained in this Agreement,
this Agreement shall be void ab initio to the extent that the execution or
delivery of this Agreement by Guarantor is restricted or prohibited by the
internal laws of the jurisdiction in which Guarantor is organized.

        8. [INTENTIONALLY LEFT BLANK]

        9. Guarantor represents and warrants to Lender that: (a) Lender has made
no representation to Guarantor in regard to Debtor, the Credit or any matters
pertaining thereto, upon which Guarantor is relying in giving this Agreement;
and (b) Guarantor has established adequate means and assumes the responsibility
for being and keeping informed of the financial condition of the Debtor and of
all other circumstances bearing upon the risk of nonpayment of the debt which
diligent inquiry would reveal and Lender shall have no duty to advise Guarantor
of information known to it regarding such condition or any such circumstance.

        10. In addition to all liens upon and rights of setoff against the
money, securities or other property of Guarantor given to Lender by law or
otherwise as security for this Agreement, Guarantor hereby pledges to Lender and
grants Lender a security interest in, and Lender shall have a right of setoff
against, all money, securities and other property of Guarantor now or hereafter
in the possession of or on deposit with Lender, whether held in general or
special account or deposit or for safekeeping or otherwise; and each such
security interest or right of setoff may be exercised without demand upon, or
notice to, Guarantor. No action or lack of action by Lender with respect to any
security interest or right of setoff or otherwise shall be deemed a waiver
thereof, and every right of setoff or security interest or otherwise shall
continue in full force and effect until specifically released by Lender in
writing. The security interests created hereby shall secure all Guarantor's
obligations to Lender under this Agreement, any subsequent guaranty executed by
Guarantor and any other Loan Documents to which Guarantor is a party.

        11. Any and all indebtedness of Debtor now or hereafter owed to
Guarantor and all claims whenever arising of Guarantor against Debtor are hereby
subordinated to the Credit and assigned to Lender as additional collateral. If
Lender so requests, any note or other instrument

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evidencing such indebtedness and all claims of Guarantor against Debtor shall be
delivered to Lender, and such indebtedness and all claims of Guarantor against
Debtor shall be collected, enforced and received by Guarantor as trustee for
Lender and be paid over to Lender on account of the Credit but without reducing
or affecting in any manner the liability of Guarantor hereunder. Should
Guarantor fail to collect proceeds of debt owed to it by Debtor and pay the
proceeds to Lender, Lender as Guarantor's attorney-in-fact may do such acts and
sign such documents in Guarantor's name as Lender considers necessary, at its
discretion, to effect such collection, and Guarantor hereby irrevocably appoints
Lender as Guarantor's attorney-in-fact for such purposes. If Debtor is a
corporation, partnership, or limited liability company, Guarantor will not
withdraw or accept without Lender's prior written consent any return of any
capital invested or equity interest in Debtor.

        12. Guarantor agrees that to the extent Debtor makes a payment or
payments or is credited for any payment or payments made for the account of or
on behalf of Debtor to Lender, which payment or payments, or any part thereof,
is subsequently invalidated, determined to be fraudulent or preferential,
voided, set aside and/or required to be repaid to any trustee, receiver,
assignee or any other party whether under any bankruptcy, state or federal law,
common law or equitable cause or otherwise, then to the extent thereof, the
obligation or part thereof intended to be satisfied thereby, together with the
guaranty thereof hereunder, shall be revived, reinstated and continued in full
force and effect as if said payment or payments had not originally been made by
or for the account of or on behalf of Debtor.

        13. Guarantor agrees that to the extent Guarantor makes a payment or
payments or is credited for any payment or payments made for the account of or
on behalf of Guarantor to Lender, which payment or payments, or any part
thereof, is subsequently invalidated, determined to be fraudulent or
preferential, voided, set aside and/or required to be repaid to any trustee,
receiver, assignee or any other party whether under any bankruptcy, state or
federal law, common law or equitable cause or otherwise, then to the extent
thereof, the obligation or part thereof intended to be satisfied thereby, shall
be revived, reinstated and continued in full force and effect as if said payment
or payments had not originally been made by or for the account of or on behalf
of Guarantor.

        14. Guarantor's obligations hereunder are not contingent upon and are
independent of the obligations of Debtor, or any other guarantor or surety of
the Credit. This Agreement is not made in consideration of the liability of any
other guarantor or surety of the Credit. The release or death of any guarantor
of the Credit or the revocation of this Agreement or any other guaranty shall
not release or otherwise affect the liability of any other non-revoking
guarantor. A separate action or actions may be brought and prosecuted against
Guarantor whether action is brought against Debtor or any other guarantor or
whether Debtor or any other guarantor be joined in any such action or actions.
To the maximum extent permitted by law, Guarantor specifically waives the
benefit of the statute of limitations affecting its liability hereunder or the
enforcement hereof, or the collection of any Credit. Any partial payment by
Debtor which operates to toll any statute of limitation as to Debtor shall
likewise toll the statute of limitations as to Guarantor.

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        15. Should any one or more provisions of this Agreement be determined to
be illegal or unenforceable, all other provisions shall remain effective. In the
event of any inconsistency between the terms of this Agreement and those of the
Loan Agreement, the terms of the Loan Agreement shall control.

        16. Lender may, with or without notice, assign this Agreement in whole
or in part provided, however, that any such assignment shall be in connection
with a permitted assignment of Lender's respective rights and obligations under
the Loan Agreement. This Agreement shall inure to the benefit of Lender, its
successors and assigns, and shall bind Guarantor and Guarantor's successors and
assigns; provided, however, that nothing herein shall be understood to mean that
Guarantor may assign this Agreement or any rights or duties hereunder without
Foothill's prior written consent.

        17. Guarantor agrees to pay Lender on demand reasonable and documented
out-of-pocket attorneys' fees and all other reasonable and documented
out-of-pocket costs and expenses which may be incurred in the collection or
attempted collection from Debtor of any Credit and in the enforcement or
attempted enforcement by Lender of this Agreement or any collateral therefor,
whether or not legal proceedings or suit are instituted, together with interest
thereon at the rate applicable to the Credit and including, without limitation,
all reasonable and documented out-of-pocket attorneys' fees and related costs of
enforcement of any and all judgments and awards and upon any appeal relating
thereto.

        18. Guarantor warrants and represents to Lender that:

            (a) All financial statements and other financial information
furnished or to be furnished to Lender are or will be true and correct and do
and will fairly represent the financial condition of Guarantor (including all
contingent liabilities) as of the dates thereof; and

            (b) There has been no material adverse change in Guarantor's
financial condition since the dates of the financial statements and other
information furnished to Lender, except as previously disclosed to Lender in
writing.

        19. [INTENTIONALLY LEFT BLANK]

        20. [INTENTIONALLY LEFT BLANK]

        21. If Debtor is a corporation, partnership, or limited liability
company, Lender need not inquire into the power of Debtor or the authority of
its officers, directors, partners, members, managers, or agents acting or
purporting to act in its behalf, and any Credit granted in reliance upon the
purported exercise of such power or authority is guaranteed hereunder.

        22. Receipt of a true copy of this Agreement is hereby acknowledged by
each Guarantor. Guarantor understands and agrees that Lender's acceptance of
this Agreement shall not constitute a commitment of any nature whatsoever by
Lender to extend, renew or hereafter

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extend Credit to Debtor. Guarantor agrees that this Agreement shall be effective
with or without notice from Lender of its acceptance of the Agreement.

        23. If Guarantor has executed more than one guaranty of the indebtedness
of Debtor owed to Lender, any limits of liability thereunder and hereunder shall
be cumulative, and a subsequent guaranty executed by Guarantor shall not
supersede or replace this Agreement.

        24. GUARANTOR WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING INSTITUTED BY LENDER OR GUARANTOR WHICH PERTAINS DIRECTLY OR
INDIRECTLY TO THIS AGREEMENT, THE CREDIT, THE COLLATERAL THEREFOR OR ANY MATTER
ARISING THEREFROM OR RELATING HERETO OR THERETO.

        25. Guarantor waives all rights to interpose any setoffs or
counterclaims of any nature in any action or proceeding instituted by Lender
with respect to this Agreement, the collateral therefor, or any matter arising
therefrom or relating thereto and the posting of any bond which may otherwise be
required, and waives any and all benefits of cross-demands pursuant to section
431.70 of the California Code of Civil Procedure (or similar state law).

        26. Guarantor hereby irrevocably submits and consents to the
jurisdiction of any competent federal or state court within the County of New
York, State of New York in connection with any action or proceeding arising out
of or relating to this Agreement. In any such litigation, Guarantor consents to
service of process by any means authorized by New York or federal law or as
otherwise agreed in writing between Lender and Guarantor.

        27. All rights, remedies, powers and benefits granted to Lender under
this Agreement, the Credit, any oral or other written agreement or applicable
law whether expressly granted or implied in law or otherwise, are cumulative and
not exclusive, and are enforceable alternatively, successively, or concurrently
on any one or more occasions at Lender's discretion.

        28. Lender shall not, by any act, delay, omission or otherwise be deemed
to have expressly or impliedly waived any security interest granted to Lender
hereunder or Lender's rights, powers and/or remedies hereunder (including any
right of setoff) unless such waiver shall be in writing and signed by an
authorized officer of Lender. Any such waiver shall be enforceable only to the
extent specifically set forth therein. A waiver by Lender of any default, right,
power and/or remedy on any one occasion shall not be construed as a bar to or
waiver of any such default, right, power and/or remedy which Lender would
otherwise have on any future occasion whether similar in kind or otherwise. Any
failure by Lender to file or enforce a claim against the estate (whether in
administration, bankruptcy, probate or other proceeding) of Debtor or of any
others, shall not affect Guarantor's liability hereunder.

        29. This Agreement, together with the other Loan Documents to which
Guarantor is a party, constitutes the entire agreement between the parties with
respect to the subject matter of the Agreement and supersedes any and all
previous or contemporaneous correspondence,

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statements, or agreements by or between the parties hereto with respect to the
subject matter. This Agreement may be modified only by a written instrument
signed by the parties hereto. Neither this Agreement or any related agreement,
document or instrument nor any provision hereof or thereof shall be amended,
modified or discharged orally or by course of conduct, but only by a written
agreement signed by an authorized officer of Lender expressly referring to this
Agreement and to the provisions so amended, modified or discharged.

        30. Lender's books and records showing the account(s) between Lender and
Debtor shall be admissible in evidence in any action or proceeding as prima
facie proof of the items set forth therein. Lender's statements rendered to
Debtor, to the extent to which no objection is made within thirty (30) days
after date thereof, shall be deemed conclusively correct and constitute an
account stated, which shall be binding on Guarantor whether or not Guarantor
receives a copy of any such statement or notice thereof.

        31. This is a continuing guaranty of the Credit, including those arising
after any repayment and reborrowing and under any successive and future
transactions which may increase, renew or continue the original Credit. To the
maximum extent permitted by law, Guarantor waives all rights to revoke this
Agreement, whether under California Civil Code Section 2815 (or similar state
law) or otherwise. If at any time under applicable law, the foregoing waiver by
Guarantor is not valid or enforceable to any extent, then the remaining portion
of this paragraph is applicable. Revocation of this Agreement, if required to be
permitted by applicable law, shall be effective only after written notice
thereof is received by an officer of Lender by certified or registered mail,
return receipt requested at its address set forth in Section 12 of the Loan
Agreement, or at any other office of Lender designated in a written notice
mailed by Lender to Guarantor at its address set forth below. Any such
revocation shall be effective only as to the revoking party and shall not affect
that party's obligations with respect to Credit existing before the revocation
becomes effective or as to any renewals, extensions or modifications of any such
Credit, whether such renewal, extension or modification is made prior to or
after revocation, including those evidenced by a new or additional instrument or
agreement or which change the rate of interest on any Credit, or for
post-revocation interest and collection expenses accruing or incurred by Lender
with respect thereto. Notwithstanding any revocation hereof, this Agreement
shall not be terminated until Lender has received indefeasible payment in full
of all Credit which is guaranteed hereby. Credit existing before revocation
becomes effective shall be deemed to include, without limitation, all Credit or
advances which Lender has committed to make to Debtor in reliance upon this
Agreement, even though the amount of such Credit or advances has not been
advanced as of the effective date of revocation, and even though Lender may have
defenses or defaults which would relieve it of such commitment, if asserted.

        32. The provisions of this Agreement shall be construed and interpreted
and all rights and obligations hereunder determined in accordance with the laws
of the State of New York.

        33. GUARANTOR ACKNOWLEDGES THAT LENDER HAS OR MAY IN THE FUTURE EXTEND
CREDIT TO THE DEBTOR IN RELIANCE ON GUARANTOR'S UNCONDITIONAL PROMISE TO REPAY
ANY AND ALL CREDIT AND LENDER IS

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RELYING ON THE WAIVERS, WARRANTIES AND PROMISES MADE BY GUARANTOR IN THIS
AGREEMENT. GUARANTOR AGREES THAT EACH OF THE WAIVERS, WARRANTIES AND PROMISES
SET FORTH IN THIS AGREEMENT ARE MADE WITH GUARANTOR'S UNDERSTANDING OF THEIR
SIGNIFICANCE AND CONSEQUENCES AND THAT THEY ARE REASONABLE. IF ANY WAIVERS,
WARRANTIES AND PROMISES ARE DETERMINED TO BE CONTRARY TO ANY APPLICABLE LAW OR
PUBLIC POLICY, SUCH WAIVERS, WARRANTIES AND PROMISES SHALL BE EFFECTIVE TO THE
MAXIMUM EXTENT PERMITTED BY LAW. BEFORE SIGNING THE AGREEMENT, GUARANTOR HAS
EITHER SOUGHT THE ADVICE OF COUNSEL TO EXPLAIN THE WAIVERS OF ITS RIGHTS AND
DEFENSES AS STATED HEREIN AND THE EFFECT THEREOF, OR HAS HAD THE OPPORTUNITY TO
SEEK SUCH COUNSEL, AND IN ANY EVENT, INTENDS THIS AGREEMENT TO BE AS
UNRESTRICTED AS POSSIBLE. GUARANTOR HAS THEREFORE CONSCIOUSLY AND INTENTIONALLY
WAIVED ALL DEFENSES OF GUARANTOR AND RIGHTS WHICH COULD EXONERATE GUARANTOR
HEREUNDER TO THE FULL EXTENT PERMITTED BY THE LAW OF THE STATE OF NEW YORK,
WHETHER OR NOT EACH AND EVERY DEFENSE, RIGHT OR WAIVER IS EXPLAINED OR DESCRIBED
IN DETAIL IN THIS AGREEMENT.

        34. GUARANTOR ACKNOWLEDGES THAT NEITHER LENDER NOR ANY OF LENDER'S
OFFICERS OR EMPLOYEES HAS MADE ANY PROMISE OR REPRESENTATION, NOT INCORPORATED
HEREIN, WHETHER ORAL, WRITTEN OR IMPLIED, TO CAUSE GUARANTOR TO SIGN THIS
AGREEMENT. GUARANTOR IS NOT SIGNING THIS AGREEMENT IN RELIANCE ON ANY PROMISE,
CONDITION OR THE OCCURRENCE OF ANY EVENT, AND THERE ARE NO ORAL UNDERSTANDINGS,
STATEMENTS OR AGREEMENTS WHICH HAVE NOT BEEN INCLUDED IN THIS AGREEMENT.
GUARANTOR UNDERSTANDS THAT LENDER HAS THE RIGHT TO ENFORCE PAYMENT OF THE CREDIT
AGAINST DEBTOR OR GUARANTOR IN ANY ORDER AND LENDER IS NOT OBLIGATED TO OBTAIN
ANY OTHER OR ADDITIONAL GUARANTORS OF THE CREDIT OR TO TAKE ANY OTHER COURSE OF
ACTION.

"Guarantor":

-------------------------------------

By:
    ---------------------------------
Name:
     --------------------------------
Title:
      -------------------------------

                                      -10-<PAGE>   1

                                                                    EXHIBIT 10.9

                             INTERCREDITOR AGREEMENT

               THIS INTERCREDITOR AGREEMENT (this "Agreement"), dated as of
December 15, 2000, is made among the CPI Parties (as defined below) and FOOTHILL
CAPITAL CORPORATION, a California corporation, as Agent for itself and other
Lenders ("Agent").

               WHEREAS, certain of the CPI Parties, Agent and the Lenders named
therein are parties to that certain Loan and Security Agreement, dated as of
even date herewith (as amended, modified, renewed, extended, or replaced from
time to time, the "Loan Agreement"), pursuant to which Lenders has agreed to
make certain financial accommodations to Communications & Power Industries,
Inc., a Delaware corporation ("Borrower").

               WHEREAS, each CPI Party has made or may make certain loans or
advances from time to time to one or more other CPI Parties;

               WHEREAS, in order to induce the Lender Group to enter into the
Loan Agreement, each CPI Party has agreed to the subordination of such
Indebtedness of each other CPI Party to such CPI Party, upon the terms and
subject to the conditions set forth in this Agreement.

               NOW, THEREFORE, in consideration of the mutual promises,
covenants, conditions, representations, and warranties set forth herein and for
other good and valuable consideration, the parties hereto agree as follows:

               SECTION 1     Definitions; Interpretation.

               (a) Terms Defined in Loan Agreement. All capitalized terms used
in this Agreement and not otherwise defined herein shall have the meanings
assigned to them in the Loan Agreement.

               (b) Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:

               "Agent" has the meaning set forth in the recitals to this
Agreement.

               "Agreement" has the meaning set forth in the preamble to this
Agreement.

               "CPI Party" means, collectively, Parent, Borrower, CPI Subsidiary
Holdings and each of its Subsidiaries.

               "Insolvency Event" has the meaning set forth in Section 3.

<PAGE>   2

               "Senior Debt" means the Obligations and other indebtedness and
liabilities of the CPI Parties to the Lender Group under or in connection with
the Loan Agreement and the other Loan Documents, including all unpaid principal
of the Advances and the Term Loan, all interest accrued thereon (including all
interest that, but for the provisions of the Bankruptcy Code, would have
accrued), all fees due under the Loan Agreement and the other Loan Documents
(including all fees that, but for the provisions of the Bankruptcy Code, would
have accrued), and all other amounts payable by the CPI Parties to any of the
Lender Group thereunder or in connection therewith, whether now existing or
hereafter arising, and whether due or to become due, absolute or contingent,
liquidated or unliquidated, determined or undetermined.

               "Subordinated Debt" means, with respect to each CPI Party, all
indebtedness, liabilities, and other obligations of any other CPI Party owing to
such CPI Party in respect of any and all loans or advances made by such CPI
Party to such other CPI Party whether now existing or hereafter arising, and
whether due or to become due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, including all fees and all other
amounts payable by any other CPI Party to such CPI Party under or in connection
with any documents or instruments related thereto.

               "Subordinated Debt Payment" means any payment or distribution by
or on behalf of the CPI Parties, directly or indirectly, of assets of the CPI
Parties of any kind or character, whether in cash, property, or securities,
including on account of the purchase, redemption, or other acquisition of
Subordinated Debt, as a result of any collection, sale, or other disposition of
collateral, or by setoff, exchange, or in any other manner, for or on account of
the Subordinated Debt.

               (c) Interpretation. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the term "including" is not limiting, and the
term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Section,
subsection, clause, schedule, and exhibit references are to this Agreement
unless otherwise specified. References to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto. References to statutes or regulations are to be construed
as including all statutory and regulatory provisions consolidating, amending, or
replacing the statute or regulation referred to. The captions and headings are
for convenience of reference only and shall not affect the construction of this
Agreement.

               SECTION 2 Subordination to Payment of Senior Debt. As to each CPI
Party, all payments on account of the Subordinated Debt shall be subject,
subordinate, and junior, in right of payment and exercise of remedies, to the
extent and in the manner set forth herein, to the prior payment, in full, in
cash or cash equivalents of the Senior Debt.

                                      -2-
<PAGE>   3

               SECTION 3 Subordination Upon Any Distribution of Assets of the
CPI Parties. As to each CPI Party, in the event of any payment or distribution
of assets of any other CPI Party of any kind or character, whether in cash,
property, or securities, upon the dissolution, winding up, or total or partial
liquidation or reorganization, readjustment, arrangement, or similar proceeding
relating to such other CPI Party or its property, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership, arrangement, or similar
proceedings or upon an assignment for the benefit of creditors, or upon any
other marshaling or composition of the assets and liabilities of such other CPI
Party, or otherwise (such events, collectively, the "Insolvency Events"): (i)
all amounts owing on account of the Senior Debt shall first be paid, in full, in
cash, or payment provided for in cash or in cash equivalents, before any
Subordinated Debt Payment is made; and (ii) to the extent permitted by
applicable law, any Subordinated Debt Payment to which such CPI Party would be
entitled except for the provisions hereof, shall be paid or delivered by the
trustee in bankruptcy, receiver, assignee for the benefit of creditors, or other
liquidating agent making such payment or distribution directly to Lender for
application to the payment of the Senior Debt in accordance with clause (i),
after giving effect to any concurrent payment or distribution or provision
therefor to Lender in respect of such Senior Debt.

               SECTION 4 Payments on Subordinated Debt.

               (a) Permitted Payments. So long as no Event of Default has
occurred and is continuing, each CPI Party may make, and each other CPI Party
shall be entitled to accept and receive, payments on account of the Subordinated
Debt in the ordinary course of business.

               (b) No Payment Upon Senior Debt Defaults. Upon the occurrence of
any Event of Default, and until such Event of Default is cured or waived, each
CPI Party shall not make, and each other CPI Party shall not accept or receive,
any Subordinated Debt Payment.

               SECTION 5 Subordination of Remedies. As long as any Senior Debt
shall remain outstanding and unpaid, following the occurrence of any Event of
Default and until such Event of Default is cured or waived, each CPI Party shall
not, without the prior written consent of Lender:

               (a) accelerate, make demand, or otherwise make due and payable
prior to the original due date thereof any Subordinated Debt or bring suit or
institute any other actions or proceedings to enforce its rights or interests in
respect of the obligations of any other CPI Party owing to such CPI Party;

               (b) exercise any rights under or with respect to guaranties of
the Subordinated Debt, if any;

               (c) exercise any rights to set-offs and counterclaims in respect
of any indebtedness, liabilities, or obligations of such CPI Party to any other
CPI Party against any of the Subordinated Debt; or

                                      -3-
<PAGE>   4

               (d) commence, or cause to be commenced, or join with any creditor
other than the Lender Group in commencing, any bankruptcy, insolvency, or
receivership proceeding against the other CPI Party.

               SECTION 6 Payment Over to Lender. In the event that,
notwithstanding the provisions of Sections 3, 4, and 5, any Subordinated Debt
Payments shall be received in contravention of such Sections 3, 4, and 5 by any
CPI Party before all Senior Debt is paid, in full, in cash or cash equivalents,
such Subordinated Debt Payments shall be held in trust for the benefit of the
Lender Group and shall be paid over or delivered to Agent for application to the
payment, in full, in cash or cash equivalents of all Senior Debt remaining
unpaid to the extent necessary to give effect to such Sections 3, 4, and 5,
after giving effect to any concurrent payments or distributions to the Lender
Group in respect of the Senior Debt.

               SECTION 7 Authorization to Lender. If, while any Subordinated
Debt is outstanding, any Insolvency Event shall occur and be continuing with
respect to the other CPI Party or its property: (i) Agent hereby is irrevocably
authorized and empowered (in the name of each CPI Party or otherwise), but shall
have no obligation, to demand, sue for, collect, and receive every payment or
distribution in respect of the Subordinated Debt and give acquittance therefor
and to file claims and proofs of claim and take such other action (including
voting the Subordinated Debt) as it may deem necessary or advisable for the
exercise or enforcement of any of the rights or interests of the Lender Group;
and (ii) each CPI Party shall promptly take such action as Agent reasonably may
request (A) to collect the Subordinated Debt for the account of the Lender Group
and to file appropriate claims or proofs of claim in respect of the Subordinated
Debt, (B) to execute and deliver to Agent such powers of attorney, assignments,
and other instruments as it may request to enable it to enforce any and all
claims with respect to the Subordinated Debt, and (C) to collect and receive any
and all Subordinated Debt Payments.

               SECTION 8 Certain Agreements of Each CPI Party.

               (a) No Benefits. Each CPI Party understands that there may be
various agreements between the Lender Group and any other CPI Party evidencing
and governing the Senior Debt, and each CPI Party acknowledges and agrees that
such agreements are not intended to confer any benefits on such CPI Party and
that the Lender Group shall have no obligation to such CPI Party or any other
Person to exercise any rights, enforce any remedies, or take any actions which
may be available to them under such agreements.

               (b) No Interference. Each CPI Party acknowledges that certain CPI
Parties have granted to the Lender Group security interests in all of such other
CPI Party's assets, and agrees not to interfere with or in any manner oppose a
disposition of any Collateral by the Lender Group in accordance with applicable
law.

               (c) Reliance by Lender. Each CPI Party acknowledges and agrees
that the Lender Group will have relied upon and will continue to rely upon the
subordination provisions provided for herein and the other provisions hereof in
entering into the Loan Documents and

                                      -4-
<PAGE>   5

making or issuing the Advances, the Term Loan, the Letters of Credit, or other
financial accommodations thereunder.

               (d) Waivers. Except as provided under the Loan Agreement, each
CPI Party hereby waives any and all notice of the incurrence of the Senior Debt
or any part thereof and any right to require marshaling of assets.

               (e) Obligations of Each CPI Party Not Affected. Each CPI Party
hereby agrees that at any time and from time to time, without notice to or the
consent of such CPI Party, without incurring responsibility to such CPI Party,
and without impairing or releasing the subordination provided for herein or
otherwise impairing the rights of the Lender Group hereunder: (i) the time for
any other CPI Party's performance of or compliance with any of its agreements
contained in the Loan Documents may be extended or such performance or
compliance may be waived by the Lender Group; (ii) the agreements of any other
CPI Party with respect to the Loan Documents may from time to time be modified
by such other CPI Party and the Lender Group for the purpose of adding any
requirements thereto or changing in any manner the rights and obligations of
such other CPI Party or the Lender Group thereunder; (iii) the manner, place, or
terms for payment of Senior Debt or any portion thereof may be altered or the
terms for payment extended, or the Senior Debt may be renewed in whole or in
part; (iv) the maturity of the Senior Debt may be accelerated in accordance with
the terms of any present or future agreement by any other CPI Party and the
Lender Group; (v) any Collateral may be sold, exchanged, released, or
substituted and any Lien in favor of the Lender Group may be terminated,
subordinated, or fail to be perfected or become unperfected; (vi) any Person
liable in any manner for Senior Debt may be discharged, released, or
substituted; and (vii) all other rights against the other CPI Party, any other
Person, or with respect to any Collateral may be exercised (or the Lender Group
may waive or refrain from exercising such rights).

               (f) Rights of Lender Not to Be Impaired. No right of the Lender
Group to enforce the subordination provided for herein or to exercise its other
rights hereunder shall at any time in any way be prejudiced or impaired by any
act or failure to act by any other CPI Party or the Lender Group hereunder or
under or in connection with the other Loan Documents or by any noncompliance by
the other CPI Party with the terms and provisions and covenants herein or in any
other Loan Document, regardless of any knowledge thereof the Lender Group may
have or otherwise be charged with.

               (g) Financial Condition of the CPI Parties. Except as provided
under the Loan Agreement, each CPI Party shall not have any right to require the
Lender Group to obtain or disclose any information with respect to: (i) the
financial condition or character of any other CPI Party or the ability of the
other CPI Party to pay and perform Senior Debt; (ii) the Senior Debt; (iii) the
Collateral or other security for any or all of the Senior Debt; (iv) the
existence or nonexistence of any guarantees of, or any other subordination
agreements with respect to, all or any part of the Senior Debt; (v) any action
or inaction on the part of the Lender Group or any other Person; or (vi) any
other matter, fact, or occurrence whatsoever.

                                      -5-
<PAGE>   6

               (h) Acquisition of Liens or Guaranties. Other than purchases of
inventory and licenses of intellectual property rights in the ordinary course of
business as heretofore conducted and other transfers of Collateral in accordance
with the terms of the Loan Agreement, each CPI Party shall not, without the
prior consent of Agent, acquire any right or interest in or to any Collateral
not owned by such CPI Party or accept any guaranties for the Subordinated Debt.

               SECTION 9 Subrogation.

               (a) Subrogation. Until the payment in full in cash of all Senior
Debt, each CPI Party shall not have, and shall not directly or indirectly
exercise, any rights that it may acquire by way of subrogation under this
Agreement, by any payment or distribution to the Lender Group hereunder or
otherwise. Upon the payment in full in cash of all Senior Debt, each CPI Party
shall be subrogated to the rights of the Lender Group to receive payments or
distributions applicable to the Senior Debt until the Subordinated Debt shall be
paid in full. For the purposes of the foregoing subrogation, no payments or
distributions to the Lender Group of any cash, property, or securities to which
any CPI Party would be entitled except for the provisions of Section 3, 4, or 5
shall, as among such CPI Party, its creditors (other than the Lender Group), and
the other CPI Parties, be deemed to be a payment by the other CPI Parties to or
on account of the Senior Debt.

               (b) Payments Over to the CPI Parties. If any payment or
distribution to which any CPI Party would otherwise have been entitled but for
the provisions of Section 3, 4, or 5 shall have been applied pursuant to the
provisions of Section 3, 4, or 5 to the payment of all amounts payable under the
Senior Debt, such CPI Party shall be entitled to receive from the Lender Group
any payments or distributions received by the Lender Group in excess of the
amount sufficient to pay in full in cash all amounts payable under or in respect
of the Senior Debt. If any such excess payment is made to the Lender Group,
Agent shall cause the Lender Group promptly to remit such excess to such CPI
Party and until so remitted shall hold such excess payment for the benefit of
such CPI Party.

               SECTION 10 Continuing Agreement; Reinstatement.

               (a) Continuing Agreement. This Agreement is a continuing
agreement of subordination and shall continue in effect and be binding upon each
CPI Party until payment and performance in full in cash of the Senior Debt. The
subordinations, agreements, and priorities set forth herein shall remain in full
force and effect regardless of whether any party hereto in the future seeks to
rescind, amend, terminate, or reform, by litigation or otherwise, its respective
agreements with the other CPI Parties.

               (b) Reinstatement. This Agreement shall continue to be effective
or shall be reinstated, as the case may be, if, for any reason, any payment of
the Senior Debt by or on behalf of any other CPI Party shall be rescinded or
must otherwise be restored by the Lender Group, whether as a result of an
Insolvency Event or otherwise.

                                      -6-
<PAGE>   7

               SECTION 11 Transfer of Subordinated Debt. Each CPI Party may not
assign or transfer its rights and obligations in respect of the Subordinated
Debt without the prior written consent of Agent, and any such transferee or
assignee, as a condition to acquiring an interest in the Subordinated Debt shall
agree to be bound hereby, in form satisfactory to Agent.

               SECTION 12 Obligations of the CPI Parties Not Affected. The
provisions of this Agreement are intended solely for the purpose of defining the
relative rights of each CPI Party against the other CPI Parties, on the one
hand, and of the Lender Group against the CPI Parties, on the other hand.
Nothing contained in this Agreement shall (i) impair, as between each CPI Party
and the other CPI Parties, the obligation of the other CPI Parties to pay their
respective obligations with respect to the Subordinated Debt as and when the
same shall become due and payable, or (ii) otherwise affect the relative rights
of each CPI Party against the other CPI Parties, on the one hand, and of the
creditors (other than the Lender Group) of the other CPI Parties against the
other CPI Parties, on the other hand.

               SECTION 13 Endorsement of CPI Party Documents; Further Assurances
and Additional Acts.

               (a) Endorsement of CPI Party Documents. At the request of Agent,
all documents and instruments evidencing any of the Subordinated Debt, if any,
shall be endorsed with a legend noting that such documents and instruments are
subject to this Agreement, and each CPI Party shall promptly deliver to Agent
evidence of the same.

               (b) Further Assurances and Additional Acts. Each CPI Party shall
execute, acknowledge, deliver, file, notarize, and register at its own expense
all such further agreements, instruments, certificates, financing statements,
documents, and assurances, and perform such acts as Agent reasonably shall deem
necessary or appropriate to effectuate the purposes of this Agreement, and
promptly provide Agent with evidence of the foregoing reasonably satisfactory in
form and substance to Agent.

               SECTION 14 Notices. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including by
facsimile transmission) and shall be mailed, sent, or delivered in accordance
with the notice provisions contained in the Loan Agreement.

               SECTION 15 No Waiver; Cumulative Remedies. No failure on the part
of the Lender Group to exercise, and no delay in exercising, any right, remedy,
power, or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, remedy, power, or privilege
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power, or privilege. The rights and remedies under this Agreement
are cumulative and not exclusive of any rights, remedies, powers, and privileges
that may otherwise be available to the Lender Group.

               SECTION 16 Costs and Expenses.

                                      -7-
<PAGE>   8

               (a) Payments by the CPI Party. Each of the CPI Parties, jointly
and severally, agrees to pay to Agent on demand the reasonable and documented
out-of-pocket costs and expenses of the Lender Group, and the reasonable and
documented out-of-pocket fees and disbursements of counsel to Agent, in
connection with the negotiation, preparation, execution, delivery, and
administration of this Agreement, and any amendments, modifications, or waivers
of the terms thereof.

               (b) Payments by the CPI Parties. Each of the CPI Parties, jointly
and severally, agrees to pay to Agent on demand all reasonable and documented
out-of-pocket expenses of the Lender Group, and the reasonable and documented
out-of-pocket fees and disbursements of counsel, in connection with the
enforcement or attempted enforcement of, and preservation of rights or interests
under, this Agreement, including any losses and reasonable and documented
out-of-pocket costs and expenses sustained by the Lender Group as a result of
any failure by any CPI Party to perform or observe its obligations contained in
this Agreement.

               SECTION 17 Survival. All covenants, agreements, representations
and warranties made in this Agreement shall, except to the extent otherwise
provided herein, survive the execution and delivery of this Agreement, and shall
continue in full force and effect so long as any Senior Debt remains unpaid.
Without limiting the generality of the foregoing, the obligations of each CPI
Party under Section 16 shall survive the satisfaction of the Senior Debt.

               SECTION 18 Benefits of Agreement. This Agreement is entered into
for the sole protection and benefit of the parties hereto and their successors
and assigns, and no other Person shall be a direct or indirect beneficiary of,
or shall have any direct or indirect cause of action or claim in connection
with, this Agreement.

               SECTION 19 Binding Effect. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by each CPI Party and the Lender
Group and their respective successors and permitted assigns.

               SECTION 20 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

               SECTION 21 SUBMISSION TO JURISDICTION. EACH CPI PARTY HEREBY (i)
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
THE FEDERAL COURTS OF THE UNITED STATES SITTING IN THE COUNTY OF NEW YORK, STATE
OF NEW YORK, FOR THE PURPOSE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS, OR AT THE SOLE
OPTION OF AGENT, IN ANY OTHER COURT IN WHICH AGENT SHALL INITIATE LEGAL OR
EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE

                                      -8-
<PAGE>   9

MATTER IN CONTROVERSY, (iii) IRREVOCABLY WAIVES (TO THE EXTENT PERMITTED BY
APPLICABLE LAW) ANY OBJECTION WHICH IT NOW OR HEREAFTER MAY HAVE TO THE LAYING
OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY OF THE FOREGOING
COURTS, AND ANY OBJECTION ON THE GROUND THAT ANY SUCH ACTION OR PROCEEDING IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND (iv) AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PERMITTED BY LAW.

               SECTION 22 Entire Agreement; Amendments and Waivers.

               (a) Entire Agreement. This Agreement constitutes the entire
agreement of each of the CPI Parties and the Lender Group with respect to the
matters set forth herein and supersedes any prior agreements, commitments,
drafts, communications, discussions, and understandings, oral or written, with
respect thereto.

               (b) Amendments and Waivers. No amendment to any provision of this
Agreement shall in any event be effective unless the same shall be in writing
and signed by each of the CPI Parties and Agent; and no waiver of any provision
of this Agreement, or consent to any departure by any CPI Party therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Agent. Any such amendment, waiver, or consent shall be effective only in the
specific instance and for the specific purpose for which given.

               SECTION 23 Conflicts. In case of any conflict or inconsistency
between any terms of this Agreement, on the one hand, and any documents or
instruments in respect of the Subordinated Debt, on the other hand, then the
terms of this Agreement shall control.

               SECTION 24 Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under all applicable laws and regulations. If, however, any provision of this
Agreement shall be prohibited by or invalid under any such law or regulation in
any jurisdiction, it shall, as to such jurisdiction, be deemed modified to
conform to the minimum requirements of such law or regulation, or, if for any
reason it is not deemed so modified, it shall be ineffective and invalid only to
the extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement or the validity or effectiveness of such provision
in any other jurisdiction.

               SECTION 25 Interpretation. This Agreement is the result of
negotiations between, and have been reviewed by the respective counsel to, the
CPI Parties and Agent and is the product of all parties hereto. Accordingly,
this Agreement shall not be construed against the Lender Group merely because of
the Lender Group's involvement in the preparation hereof.

               SECTION 26 Counterparts; Telefacsimile Execution. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts,

                                      -9-
<PAGE>   10

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 this Agreement by telefacsimile shall be equally
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile also
shall deliver an original executed counterpart of this Agreement but the failure
to deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.

               SECTION 27 Termination of Agreement. Upon payment and performance
in full in cash of the Senior Debt, this Agreement shall terminate and Agent
shall promptly execute and deliver to each CPI Party such documents and
instruments as shall be reasonably necessary to evidence such termination;
provided, however, that the obligations of each CPI Party under Section 16 shall
survive such termination.

               IN WITNESS WHEREOF, the undersigned has executed and delivered
this Agreement as of the date first written above.

                                     COMMUNICATIONS & POWER INDUSTRIES, INC., a
                                     Delaware corporation

                                     By:___________________________________

                                     Title:________________________________

                                     COMMUNICATIONS & POWER INDUSTRIES HOLDING
                                     CORPORATION, a Delaware corporation

                                     By:___________________________________

                                     Title:________________________________

                                     CPI SUBSIDIARY HOLDINGS  INC., a Delaware
                                     corporation

                                     By:___________________________________

                                     Title:________________________________

                                      -10-
<PAGE>   11

                                     COMMUNICATIONS & POWER INDUSTRIES
                                     INTERNATIONAL INC., a Delaware corporation

                                     By:___________________________________

                                     Title:________________________________

                                     COMMUNICATIONS & POWER INDUSTRIES ASIA
                                     INC., a Delaware corporation

                                     By:___________________________________

                                     Title:________________________________

                                     COMMUNICATIONS & POWER INDUSTRIES CANADA,
                                     INC., an Ontario corporation

                                     By:___________________________________

                                     Title:________________________________

                                     COMMUNICATIONS & POWER INDUSTRIES ITALIA
                                     S.R.L., an Italian company

                                     By:___________________________________

                                     Title:________________________________

                                     COMMUNICATIONS & POWER INDUSTRIES EUROPE
                                     LIMITED, a United Kingdom company

                                     By:___________________________________

                                     Title:________________________________

                                      -11-
<PAGE>   12

                                     COMMUNICATIONS & POWER INDUSTRIES AUSTRALIA
                                     PTY LIMITED, an Australian company

                                     By:___________________________________

                                     Title:________________________________

                                     FOOTHILL CAPITAL CORPORATION, a California
                                     corporation, as Agent

                                     By:___________________________________

                                     Title:________________________________

                                      -12-

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