Document:

<PAGE>   1

                                                                   EXHIBIT 10.12

                    PROMISSORY NOTE SECURED BY DEED OF TRUST

$18,000,000.00                                           Los Angeles, California
                                                               December __, 2000

FOR VALUE RECEIVED, the undersigned COMMUNICATIONS & POWER INDUSTRIES HOLDING
CORPORATION, a Delaware corporation ("Borrower"), promise(s) to pay to the order
of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender"), at the Disbursement and
Operations Center in El Segundo, California, or at such other place as may be
designated in writing by Lender, the principal sum of EIGHTEEN MILLION AND
NO/100THS DOLLARS ($18,000,000.00) or so much thereof as may from time to time
be owing hereunder by reason of advances by Lender to or for the benefit or
account of Borrower, with interest thereon, per annum, at one or more of the
Effective Rates calculated in accordance with the terms and provisions of the
Rate Agreement attached hereto as Exhibit A (based on a 360-day year and charged
on the basis of actual days elapsed). All sums owing hereunder are payable in
lawful money of the United States of America, in immediately available funds.

Interest accrued on this note ("Note") shall be due and payable on the first day
of each month commencing with the first month after the date of this Note.

The outstanding principal balance of this Note, together with all accrued and
unpaid interest, shall be due and payable in full on June 1, 2002 ("Maturity
Date").

This Note is secured by, among other things, that certain Deed of Trust with
Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing
("Deed of Trust") dated as of December __, 2000, executed by Borrower, as
trustor, to a trustee for the benefit of Lender.

If any interest payment required hereunder is not received by Lender (whether by
direct debit or otherwise) on or before the fifteenth (15th) calendar day of the
month in which it becomes due, Borrower shall pay, at Lender's option, a late or
collection charge equal to four percent (4%) of the amount of such unpaid
interest payment.

If: (a) Borrower shall fail to pay when due any sums payable hereunder; or (b) a
Default (as defined in the Deed of Trust) occurs under the Deed of Trust or
under any obligation secured thereby; or (c) the property which is subject to
the Deed of Trust, or any portion thereof or interest therein, is sold,
transferred, mortgaged, assigned, encumbered or leased, whether voluntarily or
involuntarily or by operation of law or otherwise, other than as expressly
permitted by Lender in writing; THEN Lender may, at its sole option, declare all
sums owing under this Note immediately due and payable; provided, however, that
if any document related to this Note provides for automatic acceleration of
payment of sums owing hereunder, all sums owing hereunder shall be automatically
due and payable in accordance with the terms of that document.

If any attorney is engaged by Lender to enforce or defend any provision of this
Note or the Deed of Trust, or as a consequence of any Default, with or without
the filing of any legal action or proceeding, then Borrower shall pay to Lender
immediately upon demand all attorneys' fees and all costs incurred by Lender in
connection therewith, together with interest thereon from the date of such
demand until paid at the rate of interest applicable to the principal balance
owing hereunder as if such unpaid attorneys' fees and costs had been added to
the principal.

No previous waiver and no failure or delay by Lender in acting with respect to
the terms of this Note or the Deed of Trust shall constitute a waiver of any
breach, default, or failure of condition under this Note, the Deed of Trust or
the obligations secured thereby. A waiver of any term of this Note, the Deed of
Trust or of any of the obligations secured thereby must be made in writing and
shall be limited to the express written terms of such waiver. In the event of
any inconsistencies between the terms of this Note and the terms of any other
document related to the loan evidenced by this Note, the terms of this Note
shall prevail.

If this Note is executed by more than one person or entity as Borrower, the
obligations of each such person or entity shall be joint and several. No person
or entity shall be a mere accommodation maker, but each shall be primarily and
directly liable hereunder. Except as otherwise provided in any agreement
executed in connection with this Note, Borrower waives:

                                     Page 1
<PAGE>   2

presentment; demand; notice of dishonor; notice of default or delinquency;
notice of acceleration; notice of protest and nonpayment; notice of costs,
expenses or losses and interest thereon; notice of late charges; and diligence
in taking any action to collect any sums owing under this Note or in proceeding
against any of the rights or interests in or to properties securing payment of
this Note.

Time is of the essence with respect to every provision hereof. This Note shall
be construed and enforced in accordance with the laws of the State of
California, except to the extent that federal laws preempt the laws of the State
of California, and all persons and entities in any manner obligated under this
Note consent to the jurisdiction of any federal or state court within the State
of California having proper venue and also consent to service of process by any
means authorized by California or federal law.

All notices or other communications required or permitted to be given pursuant
to this Note shall be given to the Borrower or Lender at the address and in the
manner provided for in the Loan Agreement.

The Loan Documents contain or expressly incorporate by reference the entire
agreement of the parties with respect to the matters contemplated therein and
supersede all prior negotiations or agreements, written or oral. The Loan
Documents shall not be modified except by written instrument executed by all
parties. Any reference to the Loan Documents includes any amendments, renewals
or extensions now or hereafter approved by Lender in writing.

Exhibits A and B are attached hereto and incorporated herein by reference.

                                       "BORROWER"

                                       COMMUNICATIONS & POWER INDUSTRIES HOLDING
                                       CORPORATION, a Delaware corporation

                                       By:
                                           -------------------------------------
                                       Name:
                                              ----------------------------------
                                       Its:
                                            ------------------------------------

                                     Page 2
<PAGE>   3

                                 RATE AGREEMENT

Exhibit A to Promissory Note Secured by Deed of Trust ("Note"), dated December
__, 2000, made by COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a
Delaware corporation, as Borrower, to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Lender.

                                 R E C I T A L S

Borrower has requested and Lender has agreed to provide a fixed rate option as a
basis for calculating the effective rate of interest on amounts owing under this
Note. Borrower acknowledges the following: (i) it understands the process of
exercising the fixed rate option as provided herein; (ii) amounts owing under
this Note may bear interest at different rates and for different time periods;
and (iii) absent the terms and conditions hereof, it would be extremely
difficult to calculate Lender's additional costs, expenses, and damages in the
event of a Default or prepayment by Borrower hereunder. Given the above,
Borrower agrees that the provisions herein (including, without limitation, the
Fixed Rate Price Adjustment defined below) provide for a reasonable and fair
method for Lender to recover its additional costs, expenses and damages in the
event of a Default or prepayment by Borrower.

1.      RATES AND TERMS DEFINED. Various rates and terms not otherwise defined
        herein are defined and described as follows:

                "Administration Fee" shall be FIVE HUNDRED AND NO/100THS DOLLARS
                ($500.00).

                "Alternate Rate" is a rate of interest per annum five percent
                (5%) in excess of the applicable Effective Rate in effect from
                time to time.

                "Applicable LIBO Rate" is the rate of interest, rounded upward
                to the nearest whole multiple of one-hundredth of one percent
                (.01%), equal to the sum of: (a) three and twenty-five one
                hundredths percent (3.25%) plus (b) the LIBO Rate, which rate is
                divided by one (1.00) minus the Reserve Percentage:

<TABLE>
                <S>                             <C>
                Applicable LIBO Rate = 3.25% +             LIBO Rate
                                                --------------------------------
                                                    (1 - Reserve Percentage)
</TABLE>

                "Business Day(s)" means a day of the week (but not a Saturday,
                Sunday or holiday) on which the offices of Lender are open to
                the public for carrying on substantially all of Lender's
                business functions.

                "Fixed Rate" is the Applicable LIBO Rate as accepted by Borrower
                as an Effective Rate for a particular Fixed Rate Period and
                Fixed Rate Portion.

                "Fixed Rate Commencement Date" means the date upon which the
                Fixed Rate Period commences.

                "Fixed Rate Notice" is a written notice in the form shown on
                Exhibit B attached to this Note which confirms the Fixed Rate
                for a particular Fixed Rate Period, the Fixed Rate Portion and
                the Administration Fee.

                "Fixed Rate Period" is the period or periods of (a) one (1)
                month, two (2) months, three (3) months, six (6) months, nine
                (9) months or twelve (12) months; or (b) any other period of at
                least one (1) month which ends at the Maturity Date, which
                periods are selected by Borrower and confirmed in the Fixed Rate
                Notice; provided that no Fixed Rate Period shall extend beyond
                the Maturity Date.

                "Fixed Rate Portion" is the portion or portions of the principal
                balance of this Note which Borrower selects to have subject to a
                Fixed Rate, each of which is an amount: (a) equal to the unpaid
                principal balance of this Note not subject to a Fixed Rate; or
                (b) if less than the principal balance of this Note not subject
                to a Fixed Rate, is not less than ONE MILLION AND NO/100THS
                DOLLARS ($1,000,000) and is an even multiple of ONE MILLION AND
                NO/100THS DOLLARS ($1,000,000). In the event Borrower is subject
                to a principal amortization

                                     Page 3
<PAGE>   4

                schedule under the terms and conditions of the Loan Documents,
                the Fixed Rate Portion shall in no event exceed the maximum
                outstanding principal balance which will be permissible on the
                last day of the Fixed Rate Period selected.

                "LIBO Rate" is the rate of interest, rounded upward to the
                nearest whole multiple of one-sixteenth of one percent (.0625%),
                quoted by Lender as the London Inter-Bank Offered Rate for
                deposits in U.S. Dollars at approximately 9:00 a.m. California
                time, for a Fixed Rate Commencement Date or a Price Adjustment
                Date, as appropriate, for purposes of calculating effective
                rates of interest for loans or obligations making reference
                thereto for an amount approximately equal to a Fixed Rate
                Portion and for a period of time approximately equal to a Fixed
                Rate Period or the time remaining in a Fixed Rate Period after a
                Price Adjustment Date, as appropriate.

                "Loan Agreement" is that certain Loan Agreement dated as of
                December __, 2000, between Borrower and Lender.

                "Loan Documents" are the documents defined as such in the Loan
                Agreement.

                "Prime Rate" is a base rate of interest which Lender establishes
                from time to time and which serves as the basis upon which
                effective rates of interest are calculated for those loans
                making reference thereto. Any change in an Effective Rate due to
                a change in the Prime Rate shall become effective on the day
                each such change is announced within Lender.

                "Regulatory Costs" are, collectively, future, supplemental,
                emergency or other changes in Reserve Percentages, assessment
                rates imposed by the FDIC, or similar requirements or costs
                imposed by any domestic or foreign governmental authority and
                related in any manner to a Fixed Rate.

                "Reserve Percentage" is at any time the percentage announced
                within Lender as the reserve percentage under Regulation D for
                loans and obligations making reference to an Applicable LIBO
                Rate for a Fixed Rate Period or time remaining in a Fixed Rate
                Period on a Price Adjustment Date, as appropriate. The Reserve
                Percentage shall be based on Regulation D or other regulations
                from time to time in effect concerning reserves for Eurocurrency
                Liabilities as defined in Regulation D from related institutions
                as though Lender were in a net borrowing position, as
                promulgated by the Board of Governors of the Federal Reserve
                System, or its successor.

                "Taxes" are, collectively, all withholdings, interest
                equalization taxes, stamp taxes or other taxes (except income
                and franchise taxes) imposed by any domestic or foreign
                governmental authority and related in any manner to a Fixed
                Rate.

                "Variable Rate" is the Prime Rate.

2.      EFFECTIVE RATE. The "Effective Rate" upon which interest shall be
        calculated for this Note shall be one or more of the following:

        2.1     Provided no Default, breach, or failure of condition exists
                under the Loan Agreement or any of the Loan Documents described
                therein (this Note is one of the Loan Documents):

                (a)     for those portions of the principal balance of this Note
                        which are not Fixed Rate Portions, the Effective Rate
                        shall be the Variable Rate; and

                (b)     for those portions of the principal balance of this Note
                        which are Fixed Rate Portions, the Effective Rate for
                        the Fixed Rate Period thereof shall be the Fixed Rate
                        selected by Borrower and set in accordance with the
                        provisions hereof, provided, however, if any of the
                        transactions necessary for the calculation of interest
                        at any Fixed Rate requested or selected by Borrower
                        should be or become prohibited or unavailable to Lender,
                        or, if in Lender's good faith judgment, it is not
                        possible or practical for Lender to set a Fixed Rate for
                        a Fixed Rate Portion and Fixed Rate Period as requested
                        or selected by Borrower, the Effective Rate for such
                        Fixed Rate Portion shall remain at or revert to the
                        Variable Rate.

                                     Page 4
<PAGE>   5

        2.2     During such time as a Default, breach or failure of condition
                exists under the Loan Agreement or any of the Loan Documents; or
                from and after the date on which all sums owing under this Note
                become due and payable by acceleration or otherwise; or from and
                after the date on which the property encumbered by the Deed of
                Trust or any portion thereof or interest therein, is sold,
                transferred, mortgaged, assigned, or encumbered, whether
                voluntarily or involuntarily, or by operation of law or
                otherwise, without Lender's prior written consent (whether or
                not the sums owing under this Note become due and payable by
                acceleration); or from and after the Maturity Date, then at the
                option of Lender, the interest rate applicable to the then
                outstanding principal balance of this Note shall be the
                Alternate Rate.

3.      SELECTION OF FIXED RATE. Provided no Default, breach or failure of
        condition exists under the Loan Documents, or would exist with passage
        of time or notice or both, Borrower, at its option and upon satisfaction
        of the conditions set forth herein, may request a Fixed Rate as the
        Effective Rate for calculating interest on the portion of the unpaid
        principal balance and for the period selected in accordance with and
        subject to the following procedures and conditions:

        3.1     Borrower shall give to the Disbursement and Operations Center,
                2120 East Park Place, Suite 100, El Segundo, California, 90245,
                or such other addresses as Lender shall designate, an original
                or facsimile Fixed Rate Notice no later than 9:00 A.M.
                (California time), and not less than three (3) nor more than
                five (5) Business Days prior to the proposed Fixed Rate Period
                for each Fixed Rate Portion. Any Fixed Rate Notice pursuant to
                this Section 3 is irrevocable.

                Lender is authorized to rely upon the telephonic request and
                acceptance of Joey Cory as Borrower's duly authorized agents, or
                such additional authorized agents as Borrower shall designate in
                writing to Lender. Borrower's telephonic notices, requests and
                acceptances shall be directed to such officers of Lender as
                Lender may from time to time designate.

        3.2     Borrower may elect (A) to convert Variable Rate advances to a
                Fixed Rate Portion, or (B) to convert a matured Fixed Rate
                Portion into a new Fixed Rate Portion, provided, however, that
                the aggregate amount of the advance being converted into or
                continued as a Fixed Rate Portion shall, in the aggregate, be
                not less than $1,000,000 and is an even multiple of $1,000,000.
                The conversion of a matured Fixed Rate Portion back to a
                Variable Rate or to a new Fixed Rate Portion shall occur on the
                last Business Day of the Fixed Rate Period relating to such
                Fixed Rate Portion. Each Fixed Rate Notice shall specify (1) the
                amount of the Fixed Rate Portion, (2) the Fixed Rate Period, and
                (3) the Fixed Rate Commencement Date.

        3.3     Upon receipt of a Fixed Rate Notice in the proper form
                requesting a Fixed Rate Portion advance under Sections 3.1 and
                3.2 above, Lender shall determine the Fixed Rate applicable to
                the Fixed Rate Period for such Fixed Rate Portion two (2)
                Business Days prior to the beginning of such Fixed Rate Period.
                Each determination by Lender of the Fixed Rate shall be
                conclusive and binding upon the parties hereto in the absence of
                manifest error. Lender will give Borrower (by facsimile) an
                acknowledgment of receipt and confirmation of the Fixed Rate
                Notice; provided, however, that failure to give such
                acknowledgment of receipt and confirmation of the Fixed Rate
                Notice to Borrower shall not affect the validity of such rate.

        3.4     If Borrower does not make a timely election to convert all or a
                portion of a matured Fixed Rate Portion into a new Fixed Rate
                Portion in accordance with Section 3.2 above, such Fixed Rate
                Portion shall be automatically converted back to a Variable Rate
                upon the expiration of the Fixed Rate Period applicable to such
                Fixed Rate Portion.

4.      ADMINISTRATION FEE. Upon Borrower's acceptance of a Fixed Rate, Borrower
        shall pay to Lender an administration fee of Five Hundred Dollars
        ($500.00) for each Fixed Rate Portion subject to such Fixed Rate.

5.      FIXED RATE NOTICE. Borrower's selection of a Fixed Rate shall be
        delivered to Lender in the form of the Fixed Rate Notice shown on
        Exhibit B attached to this Note. Lender shall confirm and deliver to
        Borrower acceptance of such Fixed Rate Notice via facsimile. Lender's
        failure to deliver the Fixed Rate Notice shall not release Borrower from
        Borrower's obligation to pay interest at the Effective Rate pursuant to
        the terms hereof.

                                     Page 5
<PAGE>   6

6.      LIMITATIONS ON RIGHT TO FIX RATE. Borrower may request and accept up to
        six (6) Fixed Rate quotations at any one time.

7.      TAXES, REGULATORY COSTS AND RESERVE PERCENTAGES. Upon Lender's demand,
        Borrower shall pay to Lender, in addition to all other amounts which may
        be, or become, due and payable under this Note and Loan Documents, any
        and all Taxes and Regulatory Costs, to the extent they are not
        internalized by calculation of a Fixed Rate. Further, at Lender's
        option, the Fixed Rate shall be automatically adjusted by adjusting the
        Reserve Percentage, as determined by Lender in its prudent banking
        judgment, from the date of imposition (or subsequent date selected by
        Lender) of any such Regulatory Costs. Lender shall give Borrower notice
        of any Taxes and Regulatory Costs as soon as practicable after their
        occurrence, but Borrower shall be liable for any Taxes and Regulatory
        Costs regardless of whether or when notice is so given. Notwithstanding
        the provisions of this Section 7, no demand or adjustment shall be made
        unless such demand or adjustment is generally made of similar borrowers
        under loan documents containing similar provisions as those contained in
        the Loan Documents.

8.      FIXED RATE PRICE ADJUSTMENT. Borrower acknowledges that prepayment or
        acceleration of a Fixed Rate Portion during a Fixed Rate Period shall
        result in Lender's incurring additional costs, expenses and/or
        liabilities and that it is extremely difficult and impractical to
        ascertain the extent of such costs, expenses and/or liabilities.
        Therefore, on the date a Fixed Rate Portion is prepaid or the date all
        sums payable hereunder become due and payable, by acceleration or
        otherwise ("Price Adjustment Date"), Borrower will pay Lender (in
        addition to all other sums then owing to Lender) an amount ("Fixed Rate
        Price Adjustment") equal to the then present value of (a) the amount of
        interest that would have accrued on the Fixed Rate Portion for the
        remainder of the Fixed Rate Period at the Fixed Rate set on the Fixed
        Rate Commencement Date, less (b) the amount of interest that would
        accrue on the same Fixed Rate Portion for the same period if the Fixed
        Rate were set on the Price Adjustment Date at the Applicable LIBO Rate
        in effect on the Price Adjustment Date. The present value shall be
        calculated by using as a discount rate the LIBO Rate quoted on the Price
        Adjustment Date.

        By initialing this provision where indicated below, Borrower confirms
        that Lender's agreement to make the loan evidenced by this Note at the
        interest rates and on the other terms set forth herein and in the other
        Loan Documents constitutes adequate and valuable consideration, given
        individual weight by Borrower, for this agreement.

                      BORROWER'S INITIALS: _______________

9.      PURCHASE, SALE AND MATCHING OF FUNDS. Borrower understands, agrees and
        acknowledges the following: (a) Lender has no obligation to purchase,
        sell and/or match funds in connection with the use of a LIBO Rate as a
        basis for calculating a Fixed Rate or Fixed Rate Price Adjustment; (b) a
        LIBO Rate is used merely as a reference in determining a Fixed Rate and
        Fixed Rate Price Adjustment; and (c) Borrower has accepted a LIBO Rate
        as a reasonable and fair basis for calculating a Fixed Rate and a Fixed
        Rate Price Adjustment. Borrower further agrees to pay the Fixed Rate
        Price Adjustment, Taxes and Regulatory Costs, if any, whether or not
        Lender elects to purchase, sell and/or match funds.

10.     MISCELLANEOUS. As used in this Exhibit, the plural shall mean the
        singular and the singular shall mean the plural as the context requires.
        Addresses for the Fixed Rate Notice shall be the same as those for
        notices under the Loan Agreement executed in connection with this Note.

                                     Page 6
<PAGE>   7

This Agreement is executed concurrently with and as part of this Note referred
to and described first above.

                                                     "BORROWER"

                                       COMMUNICATIONS & POWER INDUSTRIES HOLDING
                                       CORPORATION, a Delaware corporation

                                       By:
                                           -------------------------------------
                                       Name:
                                              ----------------------------------
                                       Its:
                                            ------------------------------------

                                     Page 7
<PAGE>   8

                                FIXED RATE NOTICE

                                                                       EXHIBIT B
                                                                   LOAN NO. 1440

<TABLE>
<S>                                          <C>
TODAY'S DATE:                                LOAN MATURITY DATE: June 1, 2002
             --------------                                     --------------------

TO: WELLS FARGO BANK, N.A.                   LOAN ADMINISTRATOR: Robin L. Dixon
    DISBURSEMENT AND OPERATIONS CENTER
    FAX # (310) 615-1014  or  (310) 615-1016
    ATTENTION:  RATE OPTION DESK

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

                                             RELATIONSHIP MANAGER: Jay Rosenberg
                                                                  ------------------
</TABLE>

================================================================================

                      BORROWER INTEREST RATE OPTION REQUEST
        Rate Quote Line (888) 293-2362 x:472 Use One Form Per Transaction

LOAN #:   1440         BORROWER NAME: COMMUNICATIONS & POWER INDUSTRIES HOLDING
                                       CORPORATION, a Delaware corporation
        --------                       -----------------------------------------

<TABLE>
<S>                                          <C>                  <C>                         <C>
RATE SET DATE:                                     FIXED RATE COMMENCEMENT DATE:                                 (1350)
               ----------------------------------                                 -------------------------------
FIXED RATE PERIOD (TERM):                                      (i.e.  1, 2, 3 months , etc. as allowed per Note)
                          ------------------------------------

INDEX:      LIBO             RATE:        %        +      SPREAD ABOVE LIBO       =             #'s%              (1350)
       --------------------        ---------------   ----------------------------   -----------------------------
                                       Quote                   Spread                      Applicable Rate

FIXED RATE PORTION EXPIRING ON:                                                  $
                                 --------------------------------               -------------------------------------------

1. AMOUNT ROLLING OVER                       $                    FROM OBLGN#:
                                             --------------------                 -------------

2. ADD: AMT TRANSFERRED FROM VARIABLE RATE
   PORTION                                   $                    FROM OBLGN#:                  TO OBLGN# :
                                             --------------------                 -------------               -------------
                                                                                     (5522)                       (5020)
3. ADD: AMT TRANSFERRED FROM OTHER FIXED
   RATE PORTION                              $                    FROM OBLGN#:                  TO OBLGN# :
                                             --------------------                 -------------               -------------
                                                                                     (5522)                       (5020)
   ADD: AMT TRANSFERRED FROM OTHER FIXED
   RATE PORTION                              $                    FROM OBLGN#:                  TO OBLGN# :
                                             --------------------                 -------------               -------------
                                                                                     (5522)                       (5020)
4. LESS: AMT TRANSFERRED TO VARIABLE RATE
   PORTION                                   $                    FROM OBLGN#:                  TO OBLGN# :
                                             --------------------                 -------------               -------------
                                                                                     (5522)                       (5020)
   TOTAL FIXED RATE PORTION:                 $
                                             ------------------------------------------------------------------------------

ADMINISTRATION  FEE DUE:                     $500.00
                                             --------------------
CHARGE FEES TO DDA#:                         YES, charge DDA                    DDA#:
                     -------------                                                    -------------------------------------
                                             NO, to be remitted          PLEASE REMIT FEE TO: 2120 E. PARK PLACE, SUITE 100
                     -------------                                                                EL SEGUNDO, CA  90245
</TABLE>

Borrower confirms, represents and warrants to Lender, (a) that this selection of
a Fixed Rate is subject to the terms and conditions of the Note, Fixed Rate
Agreement and Loan Documents (as applicable), and (b) that terms, words and
phrases used but not defined in this Notice have the meanings attributed thereto
in the Note, Fixed Rate Agreement and Loan Documents (as applicable), and (c)
that no breach, failure of condition, or Default has occurred or exists, or
would exist after notice or passage of time or both, under the Note or the Loan
Documents.

<TABLE>
<S>                                                                   <C>
REQUESTED BY (as allowed per documents):                              TELEPHONE #: (     )
                                         ---------------------------               ----------------------------------
PRINT NAME:                                                                 FAX #: (     )
            --------------------------------------------------------               ----------------------------------
</TABLE>

================================================================================
           WELLS FARGO BANK ACKNOWLEDGMENT OF RECEIPT AND CONFIRMATION

                                     Page 8
<PAGE>   9

<TABLE>
<S>                                                                <C>
FIXED RATE EXPIRATION DATE:                            (2301)

REQUEST VERIFIED BY:                                               DATE:
                     ----------------------------------------            ---------------------------------------
REQUEST APPROVED BY:                                               DATE:
                     ----------------------------------------            ---------------------------------------
CONFIRMATION FAXED TO CUSTOMER BY:                                 DATE:                     TIME:
                                   --------------------------            --------------            -------------
</TABLE>

================================================================================

                      WELLS FARGO BANK OPERATIONS USE ONLY

<TABLE>
<S>                             <C>                        <C>                       <C>
TRACKING #:                     LOAN AU:  2034             LOAN SU:                  OBLIGOR #:
            -----------------            ------------               -------------               ----------------

CHARGE CODE:      100             BASIS:                EARN TYPE:      0           BAL TYPE:    000      (1350)
             -------------               -----------              -------------              ----------

SPECIAL PRODUCT TYPE CODE: (If change required)                                                           (2305)
                                                -------------------------------------------------------

TDR:   NO        YES       (Fax to loan acctg) UPDATE BILLING SCHEDULE:            NO         YES         (1370)
         ------     ------                                                           ------      ------

DATA ENTRY COMPLETED BY:                            DATE:                             BATCH ID:
                         ---------------------            ---------------------                 ----------------
DATA ENTRY AUDITED BY:                                                                    DATE:
                       --------------------------------------------------------                  ---------------
</TABLE>

                                     Page 9<PAGE>   1

                                                                   EXHIBIT 10.13

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars, 10th Floor
Los Angeles, California 90067
Attn:  Joel J. Berman, Esq.

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

THIS DEED OF TRUST SECURES A LOAN AGREEMENT WHICH PROVIDES FOR A VARIABLE
INTEREST RATE

                                  DEED OF TRUST
                  WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS,
                      SECURITY AGREEMENT AND FIXTURE FILING

THE PARTIES TO THIS DEED OF TRUST WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust"), made as of December 15
2000, are COMMUNICATIONS & POWER INDUSTRIES, INC., a Delaware corporation
("Trustor"), First American Title Company, a California corporation ("Trustee"),
and FOOTHILL CAPITAL CORPORATION, a California corporation, as Agent for itself
and the other Lenders (as hereinafter defined) ("Beneficiary").

                            ARTICLE 1. GRANT IN TRUST

        1.1     GRANT. For the purposes of and upon the terms and conditions in
                this Deed of Trust, Trustor irrevocably grants, conveys and
                assigns to Trustee, in trust for the benefit of Beneficiary,
                with power of sale and right of entry and possession, all of
                that real property located in the County of Santa Clara, State
                of California, described on Exhibit A attached hereto, together
                with all right, title, interest, and privileges of Trustor in
                and to all streets, ways, roads, and alleys used in connection
                with or pertaining to such real property, all development rights
                or credits, air rights, water, water rights and water stock
                related to the real property, and all minerals, oil and gas, and
                other hydrocarbon substances in, on or under the real property,
                and all appurtenances, easements, rights and rights of way
                appurtenant or related thereto; all buildings, other
                improvements and fixtures now or hereafter located on the real
                property, including, but not limited to, all water wells,
                pipelines, irrigation systems, pumps, fuel tanks and other crop
                fixtures, and all apparatus, equipment, and appliances used in
                the operation or occupancy of the real property, it being
                intended by the parties that all such items shall be
                conclusively considered to be a part of the real property,
                whether or not attached or affixed to the real property (the
                "Improvements"); all interest or estate which Trustor may
                hereafter acquire in the property described above, and all
                additions and accretions thereto, and the proceeds of any of the
                foregoing; (all of the foregoing being collectively referred to
                as the "Subject Property"). The listing of specific rights or
                property shall not be interpreted as a limit of general terms.

                         ARTICLE 2. OBLIGATIONS SECURED

        2.1     OBLIGATIONS SECURED. Trustor makes this Deed of Trust for the
                purpose of securing the following obligations ("Secured
                Obligations"):

                                  Page 1 of 24
<PAGE>   2

                (a)     Payment to Beneficiary of all sums at any time owing and
                        performance of all covenants and obligations on the part
                        of Trustor under that certain Loan and Security
                        Agreement ("Loan Agreement") of even date herewith by
                        and among Trustor, Beneficiary, the other Lenders named
                        therein and other Obligors named therein, relating to a
                        loan in the principal amount of Sixty-One Million
                        Dollars ($61,000,000.00); and

                (b)     Payment and performance of all covenants and obligations
                        of Trustor under this Deed of Trust; and

                (c)     Payment and performance of all covenants and
                        obligations, if any, of any rider attached as an Exhibit
                        to this Deed of Trust; and

                (d)     Payment and performance of all future advances and other
                        obligations that the then record owner of all or part of
                        the Subject Property may agree to pay and/or perform
                        (whether as principal, surety or guarantor) for the
                        benefit of Beneficiary, when such future advance or
                        obligation is evidenced by a writing which recites that
                        it is secured by this Deed of Trust; and

                (e)     All modifications, extensions and renewals of any of the
                        obligations secured hereby, however evidenced,
                        including, without limitation: (i) modifications of the
                        required principal payment dates or interest payment
                        dates or both, as the case may be, deferring or
                        accelerating payment dates wholly or partly; or (ii)
                        modifications, extensions or renewals at a different
                        rate of interest.

        2.2     OBLIGATIONS. The term "obligations" is used herein in its
                broadest and most comprehensive sense and shall be deemed to
                include, without limitation, all interest and charges,
                prepayment charges (if any), late charges and loan fees at any
                time accruing or assessed on any of the Secured Obligations.

        2.3     INCORPORATION. All terms of the Secured Obligations and the
                documents evidencing such obligations are incorporated herein by
                this reference. All persons who may have or acquire an interest
                in the Subject Property shall be deemed to have notice of the
                terms of the Secured Obligations and to have notice, if provided
                therein, that: (a) the Loan Agreement may permit borrowing,
                repayment and re-borrowing so that repayments shall not reduce
                the amounts of the Secured Obligations; and (b) the rate of
                interest on one or more Secured Obligations may vary from time
                to time.

        2.4     DEFINED TERMS. Capitalized terms which are used herein but not
                defined herein shall have the meanings ascribed to them in the
                Loan Agreement. "Lenders" means, collectively, Foothill Capital
                Corporation, a California corporation, and Ableco Finance LLC, a
                Delaware limited liability company, together with their
                respective successors and assigns, and shall include any other
                Person made a party to the Loan Agreement in accordance with the
                provisions of Section 14.1 thereof.

                    ARTICLE 3. ASSIGNMENT OF LEASES AND RENTS

        3.1     ASSIGNMENT. Trustor hereby irrevocably assigns to Beneficiary
                all of Trustor's right, title and interest in, to and under: (a)
                all leases of the Subject Property or any portion thereof, and
                all other agreements of any kind relating to the use or
                occupancy of the Subject Property or any portion thereof,
                whether now existing or entered into after the date hereof
                ("Leases"); and (b) the rents, revenue, income, issues, deposits
                and profits of the Subject Property, including, without
                limitation, all amounts payable and all rights and benefits
                accruing to Trustor under the Leases ("Payments"). The term
                "Leases" shall also include all guarantees of and security for
                the lessees' performance thereunder, and all amendments,
                extensions, renewals or modifications thereto which are
                permitted hereunder. This is a present and absolute assignment,
                not an assignment for security purposes only, and Beneficiary's
                right to the Leases and Payments is not contingent upon, and may
                be exercised without possession of, the Subject Property.

                                  Page 2 of 24
<PAGE>   3

        3.2     GRANT OF LICENSE. Beneficiary confers upon Trustor a license
                ("License") to collect and retain the Payments as they become
                due and payable, until the occurrence of a Default (as
                hereinafter defined). Upon a Default, the License shall be
                automatically revoked and so long as the Default continues, the
                License shall remain revoked and Beneficiary may collect and
                apply the Payments pursuant to Section 6.4 without notice and
                without taking possession of the Subject Property. Trustor
                hereby irrevocably authorizes and directs the lessees under the
                Leases to rely upon and comply with any notice or demand by
                Beneficiary for the payment to Beneficiary of any rental or
                other sums which may at any time become due under the Leases, or
                for the performance of any of the lessees' undertakings under
                the Leases, and the lessees shall have no right or duty to
                inquire as to whether any Default has actually occurred or is
                then existing hereunder. Trustor hereby relieves the lessees
                from any liability to Trustor by reason of relying upon and
                complying with any such notice or demand by Beneficiary.

        3.3     EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall
                not cause Beneficiary to be: (a) a mortgagee in possession; (b)
                responsible or liable for the control, care, management or
                repair of the Subject Property or for performing any of the
                terms, agreements, undertakings, obligations, representations,
                warranties, covenants and conditions of the Leases; or (c)
                responsible or liable for any waste committed on the Subject
                Property by the lessees under any of the Leases or any other
                parties; for any dangerous or defective condition of the Subject
                Property; or for any negligence in the management, upkeep,
                repair or control of the Subject Property resulting in loss or
                injury or death to any lessee, licensee, employee, invitee or
                other person. Beneficiary and Trustee shall not directly or
                indirectly be liable to Trustor or any other person as a
                consequence of: (i) the exercise or failure to exercise by
                Beneficiary or Trustee, or any of their respective employees,
                agents, contractors or subcontractors, any of the rights,
                remedies or powers granted to Beneficiary or Trustee hereunder;
                or (ii) the failure or refusal of Beneficiary to perform or
                discharge any obligation, duty or liability of Trustor arising
                under the Leases.

        3.4     REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants
                that: (a) the Schedule of Leases attached hereto as Schedule 1
                is, as of the date hereof, a true, accurate and complete list of
                all Leases; (b) all existing Leases are in full force and effect
                and are enforceable in accordance with their respective terms,
                and no breach or default, or event which would constitute a
                breach or default after notice or the passage of time, or both,
                exists under any existing Leases on the part of any party; (c)
                no rent or other payment under any existing Lease has been paid
                by any lessee for more than one (1) month in advance; and (d)
                none of the lessor's interests under any of the Leases has been
                transferred or assigned.

        3.5     COVENANTS. The provisions of this Section 3.5 and Section 3.6
                shall only be applicable to Leases wherein Trustor is lessor.
                Trustor covenants and agrees at Trustor's sole cost and expense
                to: (a) perform the obligations of lessor contained in the
                Leases and subject to the exercise of Trustor's good faith
                business judgment, enforce by all available remedies performance
                by the lessees of the obligations of the lessees contained in
                the Leases; (b) give Beneficiary prompt written notice of any
                default which occurs with respect to any of the Leases, whether
                the default be that of the lessee or of the lessor; (c) deliver
                to Beneficiary fully executed, counterpart original(s) of each
                and every Lease if requested to do so; and (d) execute and
                record such additional assignments of any Lease or specific
                subordinations (or subordination, attornment and non-disturbance
                agreements executed by the lessor and lessee) of any Lease to
                the Deed of Trust, in form and substance acceptable to
                Beneficiary, as Beneficiary may request. Trustor shall not,
                without Beneficiary's prior written consent or as otherwise
                permitted by any provision of the Loan Agreement: (i) enter into
                any Leases after the date thereof, except for Leases of space no
                longer needed for use in Trustor's business operations, which
                Leases are to Persons who are not Affiliates of Trustor, are
                negotiated on an arm's length basis, and are at market rental;
                (ii) execute any other assignment relating to any of the Leases;
                (iii) discount any rent or other sums due under the Leases or
                collect the same in advance, other than to collect rentals one
                (1) month in advance of the time when it becomes due; (iv)
                except in the exercise of Trustor's good faith

                                  Page 3 of 24
<PAGE>   4
                business judgment at times when no Event of Default has occurred
                or is continuing, terminate, modify or amend any of the terms of
                the Leases or in any manner release or discharge the lessees
                from any obligations thereunder; (v) except in the exercise of
                Trustor's good faith business judgment at times when no Event of
                Default has occurred or is continuing, consent to any assignment
                or subletting by any lessee; or (vi) subordinate or agree to
                subordinate any of the Leases to any other deed of trust or
                encumbrance. Any such attempted action in violation of the
                provisions of this Section 3.5 shall be null and void.

        3.6     ESTOPPEL CERTIFICATES. Within thirty (30) days after written
                request by Beneficiary, Trustor shall deliver to Beneficiary and
                to any party designated by Beneficiary estoppel certificates
                executed by Trustor and by each of the lessees, in recordable
                form, certifying (if such be the case): (a) that the foregoing
                assignment and the Leases are in full force and effect; (b) the
                date of each lessee's most recent payment of rent; (c) that
                there are no defenses or offsets outstanding, or stating those
                claimed by Trustor or lessees under the foregoing assignment or
                the Leases, as the case may be; and (d) any other information
                reasonably requested by Beneficiary.

                ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING

        4.1     SECURITY INTEREST. Trustor hereby grants and assigns to
                Beneficiary as of the Closing Date a security interest, to
                secure payment and performance of all of the Secured
                Obligations, in all of the following described personal property
                in which Trustor now or at any time hereafter has any interest
                (collectively, the "Collateral"):

                    All goods, building and other materials, supplies, work in
                    process, equipment, machinery, fixtures, furniture,
                    furnishings, signs and other personal property (including,
                    without limitation, all water wells, pipelines, irrigation
                    systems, pumps, fuel tanks and other crop fixtures),
                    wherever situated, which are or are to be incorporated into,
                    used in connection with, or appropriated for use on (i) the
                    real property described on Exhibit A attached hereto and
                    incorporated by reference herein (to the extent the same are
                    not effectively made a part of the real property pursuant to
                    Section 1.1 above), or (ii) the Improvements (which real
                    property and Improvements are collectively referred to
                    herein as the Subject Property); together with all timber,
                    crops and other plantings, growing or to be grown, and the
                    products thereof; all rents (to the extent, if any, they are
                    not subject to Article 3); all inventory, accounts, cash
                    receipts, deposit accounts, accounts receivable, contract
                    rights, licenses, agreements, general intangibles, chattel
                    paper, instruments, documents, notes, drafts, letters of
                    credit, insurance policies, insurance and condemnation
                    awards and proceeds, any other rights to the payment of
                    money, trade names, trademarks and service marks arising
                    from or related to the ownership, management, leasing or
                    operation of the Subject Property or any business now or
                    hereafter conducted thereon by Trustor; all permits,
                    consents, approvals, licenses, authorizations and other
                    rights granted by, given by or obtained from, any
                    governmental entity with respect to the Subject Property;
                    all deposits or other security now or hereafter made with or
                    given to utility companies by Trustor with respect to the
                    Subject Property; all advance payments of insurance premiums
                    made by Trustor with respect to the Subject Property; all
                    plans, drawings and specifications relating to the Subject
                    Property; all loan funds held by Beneficiary, whether or not
                    disbursed; all funds deposited with Beneficiary pursuant to
                    any loan agreement; all reserves, deferred payments,
                    deposits, accounts, refunds, cost savings and payments of
                    any kind related to the Subject Property or any portion
                    thereof; together with all replacements and proceeds of, and
                    additions and accessions to, any of the foregoing; together
                    with all books, records and files relating to any of the
                    foregoing.

                    As to all of the above described personal property which is
                    or which hereafter becomes a "fixture" under applicable law,
                    this Deed of Trust constitutes a fixture filing under

                                  Page 4 of 24
<PAGE>   5
                    Sections 9313 and 9402(6) of the California Uniform
                    Commercial Code, as amended or recodified from time to time.

        4.2     REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants
                that: (a) Trustor has, or will have, good title to the
                Collateral; (b) Trustor has not previously assigned or
                encumbered the Collateral, and no financing statement covering
                any of the Collateral has been delivered to any other person or
                entity; and (c) Trustor's principal place of business is located
                at the address shown in Section 7.11.

        4.3     RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a
                "Secured Party" under the California Uniform Commercial Code, as
                amended or recodified from time to time ("UCC"), Beneficiary
                may, but shall not be obligated to, at any time without notice
                and at the expense of Trustor: (a) give notice to any person of
                Beneficiary's rights hereunder and enforce such rights at law or
                in equity; (b) insure, protect, defend and preserve the
                Collateral or any rights or interests of Beneficiary therein;
                (c) inspect the Collateral; and (d) endorse, collect and receive
                any right to payment of money owing to Trustor under or from the
                Collateral. Notwithstanding the above, in no event shall
                Beneficiary be deemed to have accepted any property other than
                cash in satisfaction of any obligation of Trustor to Beneficiary
                unless Beneficiary shall make an express written election of
                said remedy under UCC Section 9505, or other applicable law.

        4.4     RIGHTS OF BENEFICIARY ON DEFAULT. Upon the occurrence and during
                the continuance of a Default (hereinafter defined) under this
                Deed of Trust, then in addition to all of Beneficiary's rights
                as a "Secured Party" under the UCC or otherwise at law:

                (a)     Beneficiary may (i) upon written notice, require Trustor
                        to assemble any or all of the Collateral and make it
                        available to Beneficiary at a place designated by
                        Beneficiary; (ii) without prior notice, enter upon the
                        Subject Property or other place where any of the
                        Collateral may be located and take possession of,
                        collect, sell, and dispose of any or all of the
                        Collateral, and store the same at locations acceptable
                        to Beneficiary at Trustor's expense; (iii) sell, assign
                        and deliver at any place or in any lawful manner all or
                        any part of the Collateral and bid and become the
                        purchaser at any such sales; and

                (b)     Beneficiary may, for the account of Trustor and at
                        Trustor's expense: (i) operate, use, consume, sell or
                        dispose of the Collateral as Beneficiary deems
                        appropriate for the purpose of performing any or all of
                        the Secured Obligations; (ii) subject to the terms of
                        the Loan Agreement, enter into any agreement,
                        compromise, or settlement, including insurance claims,
                        which Beneficiary may deem desirable or proper with
                        respect to any of the Collateral; and (iii) endorse and
                        deliver evidences of title for, and receive, enforce and
                        collect by legal action or otherwise, all indebtedness
                        and obligations now or hereafter owing to Trustor in
                        connection with or on account of any or all of the
                        Collateral.

                        Notwithstanding any other provision hereof, Beneficiary
                        shall not be deemed to have accepted any property other
                        than cash in satisfaction of any obligation of Trustor
                        to Beneficiary unless Trustor shall make an express
                        written election of said remedy under UCC Section 9505,
                        or other applicable law.

        4.5     POWER OF ATTORNEY. Trustor hereby irrevocably appoints
                Beneficiary as Trustor's attorney-in-fact (such agency being
                coupled with an interest), and as such attorney-in-fact
                Beneficiary may, without the obligation to do so, in
                Beneficiary's name, or in the name of Trustor, prepare, execute
                and file or record financing statements, continuation
                statements, applications for registration and like papers
                necessary to create, perfect or preserve any of Beneficiary's
                security interests and rights in or to any of the Collateral,
                and, upon the occurrence and during the continuance of a Default
                hereunder, take any other action required of Trustor; provided,
                however, that Beneficiary as such attorney-in-fact shall be
                accountable only for such funds as are actually received by
                Beneficiary.

                                  Page 5 of 24
<PAGE>   6

        4.6     POSSESSION AND USE OF COLLATERAL. Except as otherwise provided
                in this Section or the other Loan Documents, so long as no
                Default exists under this Deed of Trust or any of the Loan
                Documents, Trustor may possess, use, move, transfer or dispose
                of any of the Collateral in the ordinary course of Trustor's
                business and in accordance with the Loan Agreement.

                   ARTICLE 5. RIGHTS AND DUTIES OF THE PARTIES

        5.1     TITLE. Trustor represents and warrants that, except as disclosed
                to Beneficiary in a writing which refers to this warranty,
                Trustor lawfully holds and possesses fee simple title to the
                Subject Property without limitation on the right to encumber,
                and that this Deed of Trust is a first and prior lien on the
                Subject Property.

        5.2     TAXES AND ASSESSMENTS. Subject to Trustor's rights to contest
                payment of taxes as may be provided in the Loan Agreement,
                Trustor shall pay prior to delinquency all taxes, assessments,
                levies and charges imposed by any public or quasi-public
                authority or utility company which are or which may become a
                lien upon or cause a loss in value of the Subject Property or
                any interest therein. Trustor shall also pay prior to
                delinquency all taxes, assessments, levies and charges imposed
                by any public authority upon Beneficiary by reason of its
                interest in any Secured Obligation or in the Subject Property,
                or by reason of any payment made to Beneficiary pursuant to any
                Secured Obligation; provided, however, Trustor shall have no
                obligation to pay taxes which may be imposed from time to time
                upon Beneficiary and which are measured by and imposed upon
                Beneficiary's net income.

        5.3     TAX AND INSURANCE IMPOUNDS. At any time following the occurrence
                of a Default and during the continuance thereof, at
                Beneficiary's option and upon its demand, Trustor, shall, until
                all Secured Obligations have been paid in full, pay to
                Beneficiary monthly, annually or as otherwise directed by
                Beneficiary an amount estimated by Beneficiary to be equal to:
                (a) all taxes, assessments, levies and charges imposed by any
                public or quasi-public authority or utility company which are or
                may become a lien upon the Subject Property or Collateral and
                will become due for the tax year during which such payment is so
                directed; and (b) premiums for fire, hazard and insurance
                required or requested pursuant to the Loan Documents when same
                are next due. If Beneficiary determines that any amounts paid by
                Trustor are insufficient for the payment in full of such taxes,
                assessments, levies, charges and/or insurance premiums,
                Beneficiary shall notify Trustor of the increased amounts
                required to pay all amounts when due, whereupon Trustor shall
                pay to Beneficiary within thirty (30) days thereafter the
                additional amount as stated in Beneficiary's notice. All sums so
                paid shall not bear interest, except to the extent and in any
                minimum amount required by law; and Beneficiary shall, unless
                Trustor is otherwise in Default hereunder or under any Loan
                Document, apply said funds to the payment of, or at the sole
                option of Beneficiary release said funds to Trustor for the
                application to and payment of, such sums, taxes, assessments,
                levies, charges, and insurance premiums. Upon Default by Trustor
                hereunder or under any Secured Obligation, Beneficiary may apply
                all or any part of said sums to any Secured Obligation and/or to
                cure such Default, in which event Trustor shall be required to
                restore all amounts so applied, as well as to cure any other
                events or conditions of Default not cured by such application.
                Upon assignment of this Deed of Trust, Beneficiary shall have
                the right to assign all amounts collected and in its possession
                to its assignee whereupon Beneficiary and the Trustee shall be
                released from all liability with respect thereto. Within
                ninety-five (95) days following full repayment of the Secured
                Obligations (other than full repayment of the Secured
                Obligations as a consequence of a foreclosure or conveyance in
                lieu of foreclosure of the liens and security interests securing
                the Secured Obligations) or at such earlier time as Beneficiary
                may elect, the balance of all amounts collected and in
                Beneficiary's possession shall be paid to Trustor and no other
                party shall have any right or claim thereto.

        5.4     PERFORMANCE OF SECURED OBLIGATIONS. Trustor shall promptly pay
                and perform each Secured Obligation when due.

                                  Page 6 of 24
<PAGE>   7

        5.5     LIENS, ENCUMBRANCES AND CHARGES. Trustor shall immediately
                discharge any lien not approved by Beneficiary in writing that
                has or may attain priority over this Deed of Trust. Subject to
                the provisions of the Loan Agreement regarding mechanics' liens,
                Trustor shall pay when due all obligations secured by or which
                may become liens and encumbrances which shall now or hereafter
                encumber or appear to encumber all or any part of the Subject
                Property or Collateral, or any interest therein, whether senior
                or subordinate hereto.

        5.6     DAMAGES; INSURANCE AND CONDEMNATION PROCEEDS.

                (a)     The following (whether now existing or hereafter
                        arising) are all absolutely and irrevocably assigned by
                        Trustor to Beneficiary and, at the request of
                        Beneficiary, shall be paid directly to Beneficiary: (i)
                        all awards of damages and all other compensation payable
                        directly or indirectly by reason of a condemnation or
                        proposed condemnation for public or private use
                        affecting all or any part of, or any interest in, the
                        Subject Property or Collateral; (ii) all other claims
                        and awards for damages to, or decrease in value of, all
                        or any part of, or any interest in, the Subject Property
                        or Collateral; (iii) all proceeds of any insurance
                        policies payable by reason of loss sustained to all or
                        any part of the Subject Property or Collateral; and (iv)
                        all interest which may accrue on any of the foregoing.
                        Subject to applicable law, and without regard to any
                        requirement contained in Section 5.7(d), Beneficiary may
                        at its discretion apply all or any of the proceeds it
                        receives to its reasonable and documented out-of-pocket
                        expenses in settling, prosecuting or defending any
                        claim. In the event of the occurrence and continuance of
                        a Default or an impairment (in Beneficiary's sole good
                        faith judgment) of Beneficiary's security hereunder,
                        Beneficiary may apply the balance to the Secured
                        Obligations in any order acceptable to Beneficiary. In
                        the absence of the occurrence and continuance of a
                        Default or an impairment (in Beneficiary's sole good
                        faith judgment) of Beneficiary's security hereunder,
                        Beneficiary shall release the balance of the proceeds to
                        Trustor for repair or restoration upon such reasonable
                        conditions as Beneficiary may impose. Beneficiary may
                        commence, appear in, defend or prosecute any assigned
                        claim or action and may adjust, compromise, settle and
                        collect all claims and awards assigned to Beneficiary;
                        provided, however, in no event shall Beneficiary be
                        responsible for any failure to collect any claim or
                        award, regardless of the cause of the failure,
                        including, without limitation, any malfeasance or
                        nonfeasance by Beneficiary or its employees or agents.

                (b)     When required to do so pursuant to the provisions of
                        Section 5.6(a), Beneficiary shall, and at all other
                        times, Beneficiary may, permit insurance or condemnation
                        proceeds held by Beneficiary to be used for repair or
                        restoration but may condition such application upon
                        reasonable conditions, including, without limitation:
                        (i) the deposit with Beneficiary of such additional
                        funds which Beneficiary reasonably determines are needed
                        to pay all costs of the repair or restoration,
                        (including, without limitation, taxes, financing
                        charges, insurance and rent during the repair period);
                        (ii) the establishment of an arrangement for lien
                        releases and disbursement of funds acceptable to
                        Beneficiary; (iii) the delivery to Beneficiary of plans
                        and specifications for the work, a contract for the work
                        signed by a contractor acceptable to Beneficiary, a cost
                        breakdown for the work and a payment and performance
                        bond for the work, all of which shall be reasonably
                        acceptable to Beneficiary; and (iv) the delivery to
                        Beneficiary of evidence reasonably acceptable to
                        Beneficiary of the satisfaction of any additional
                        conditions that Beneficiary may reasonably establish to
                        protect its security. Trustor hereby acknowledges that
                        the conditions described above are reasonable, and, if
                        such conditions have not been satisfied within ninety
                        (90) days of receipt by Beneficiary of such insurance or
                        condemnation proceeds, then Beneficiary may apply such
                        insurance or condemnation proceeds to pay the Secured
                        Obligations in such order and amounts as Beneficiary in
                        its sole discretion may choose.

                                  Page 7 of 24
<PAGE>   8

        5.7     MAINTENANCE AND PRESERVATION OF THE SUBJECT PROPERTY. Subject to
                the provisions of the Loan Agreement, Trustor covenants: (a) to
                insure the Subject Property and Collateral against such risks as
                Beneficiary may require and, at Beneficiary's request, to
                provide evidence of such insurance to Beneficiary, and to comply
                with the requirements of any insurance companies providing such
                insurance; (b) to keep the Subject Property and Collateral in
                good condition and repair; (c) not to remove or demolish the
                Subject Property or Collateral or any part thereof, not to
                alter, restore or add to the Subject Property or Collateral and
                not to initiate or acquiesce in any change in any zoning or
                other land classification which affects the Subject Property
                without Beneficiary's prior written consent (which consent shall
                not be unreasonably withheld) or as provided in the Loan
                Agreement; (d) to complete or restore promptly and in good and
                workmanlike manner the Subject Property and Collateral, or any
                part thereof which may be damaged or destroyed, provided that if
                Beneficiary is required to release insurance proceeds for repair
                or restoration in accordance with Section 5.6, Beneficiary so
                releases such proceeds; (e) to comply with all laws, ordinances,
                regulations and standards, and all covenants, conditions,
                restrictions and equitable servitudes, whether public or
                private, of every kind and character which affect the Subject
                Property or Collateral and pertain to acts committed or
                conditions existing thereon, including, without limitation, any
                work, alteration, improvement or demolition mandated by such
                laws, covenants or requirements; (f) not to commit or permit
                waste of the Subject Property or Collateral; and (g) to do all
                other acts which from the character or use of the Subject
                Property or Collateral may be reasonably necessary to maintain
                and preserve its value.

        5.8     DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. At Trustor's
                sole expense, Trustor shall protect, preserve and defend the
                Subject Property and Collateral and title to and right of
                possession of the Subject Property and Collateral, the security
                hereof and the rights and powers of Beneficiary and Trustee
                hereunder against all adverse claims. Trustor shall give
                Beneficiary and Trustee prompt notice in writing of the
                assertion of any claim, of the filing of any action or
                proceeding, of the occurrence of any damage to the Subject
                Property or Collateral and of any condemnation offer or action.

        5.9     ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE.

                (a)     Trustee accepts this trust when this Deed of Trust is
                        recorded. Except as may be required by applicable law,
                        Trustee or Beneficiary may from time to time apply to
                        any court of competent jurisdiction for aid and
                        direction in the execution of the trust hereunder and
                        the enforcement of the rights and remedies available
                        hereunder, and may obtain orders or decrees directing or
                        confirming or approving acts in the execution of said
                        trust and the enforcement of said remedies.

                (b)     Trustee shall not be required to take any action toward
                        the execution and enforcement of the trust hereby
                        created or to institute, appear in, or defend any
                        action, suit, or other proceeding in connection
                        therewith where, in his opinion, such action would be
                        likely to involve him in expense or liability, unless
                        requested so to do by a written instrument signed by
                        Beneficiary and, if Trustee so requests, unless Trustee
                        is tendered security and indemnity satisfactory to
                        Trustee against any and all cost, expense, and liability
                        arising therefrom. Trustee shall not be responsible for
                        the execution, acknowledgment, or validity of the Loan
                        Documents, or for the proper authorization thereof, or
                        for the sufficiency of the lien and security interest
                        purported to be created hereby, and Trustee makes no
                        representation in respect thereof or in respect of the
                        rights, remedies, and recourses of Beneficiary.

                (c)     With the approval of Beneficiary, Trustee shall have the
                        right to take any and all of the following actions: (i)
                        to select, employ, and advise with counsel (who may be,
                        but need not be, counsel for Beneficiary) upon any
                        matters arising hereunder, including the preparation,
                        execution, and interpretation of the Loan Documents, and
                        shall be fully protected in relying as to legal matters
                        on the advice of counsel, (ii) to execute any of the
                        trusts and powers hereof and to perform any duty
                        hereunder either directly or through his agents or
                        attorneys, (iii) to select and employ, in

                                  Page 8 of 24
<PAGE>   9

                        and about the execution of his duties hereunder,
                        suitable accountants, engineers and other experts,
                        agents and attorneys-in-fact, either corporate or
                        individual, not regularly in the employ of Trustee, and
                        Trustee shall not be answerable for any act, default,
                        negligence, or misconduct of any such accountant,
                        engineer or other expert, agent or attorney-in-fact, if
                        selected with reasonable care, or for any error of
                        judgment or act done by Trustee in good faith, or be
                        otherwise responsible or accountable under any
                        circumstances whatsoever, except for Trustee's gross
                        negligence or bad faith, and (iv) any and all other
                        lawful action as Beneficiary may instruct Trustee to
                        take to protect or enforce Beneficiary's rights
                        hereunder. Trustee shall not be personally liable in
                        case of entry by Trustee, or anyone entering by virtue
                        of the powers herein granted to Trustee, upon the
                        Subject Property for debts contracted for or liability
                        or damages incurred in the management or operation of
                        the Subject Property. Trustee shall have the right to
                        rely on any instrument, document, or signature
                        authorizing or supporting any action taken or proposed
                        to be taken by Trustee hereunder, believed by Trustee in
                        good faith to be genuine. Trustee shall be entitled to
                        reimbursement for expenses incurred by Trustee in the
                        performance of Trustee's duties hereunder and to
                        reasonable compensation for such of Trustee's services
                        hereunder as shall be rendered. TRUSTOR WILL, FROM TIME
                        TO TIME, PAY THE COMPENSATION DUE TO TRUSTEE HEREUNDER
                        AND REIMBURSE TRUSTEE FOR, AND INDEMNIFY AND HOLD
                        HARMLESS TRUSTEE AGAINST, ANY AND ALL LIABILITY AND
                        REASONABLE AND DOCUMENTED OUT-OF-POCKET EXPENSES WHICH
                        MAY BE INCURRED BY TRUSTEE IN THE PERFORMANCE OF
                        TRUSTEE'S DUTIES.

                (d)     All moneys received by Trustee shall, until used or
                        applied as herein provided, be held in trust for the
                        purposes for which they were received, but need not be
                        segregated in any manner from any other moneys (except
                        to the extent required by applicable law) and Trustee
                        shall be under no liability for interest on any moneys
                        received by Trustee hereunder.

                (e)     Should any deed, conveyance, or instrument of any nature
                        be required from Trustor by any Trustee or substitute
                        Trustee to more fully and certainly vest in and confirm
                        to the Trustee or substitute Trustee such estates,
                        rights, powers, and duties, then, upon request by the
                        Trustee or substitute Trustee, any and all such deeds,
                        conveyances and instruments shall be made, executed,
                        acknowledged, and delivered and shall be caused to be
                        recorded and/or filed by Trustor.

                (f)     By accepting or approving anything required to be
                        observed, performed, or fulfilled or to be given to
                        Trustee pursuant to the Loan Documents, including
                        without limitation, any deed, conveyance, instrument,
                        officer's certificate, balance sheet, statement of
                        profit and loss or other financial statement, survey,
                        appraisal, or insurance policy, Trustee shall not be
                        deemed to have warranted, consented to, or affirmed the
                        sufficiency, legality, effectiveness, or legal effect of
                        the same, or of any term, provision, or condition
                        thereof, and such acceptance or approval thereof shall
                        not be or constitute any warranty or affirmation with
                        respect thereto by Trustee.

        5.10    COMPENSATION; EXCULPATION; INDEMNIFICATION.

                (a)     Trustor shall pay Trustee's fees and reimburse Trustee
                        for reasonable and documented out-of-pocket expenses in
                        the administration of this trust, including reasonable
                        and documented out-of-pocket attorneys' fees. Trustor
                        shall pay to Beneficiary reasonable compensation for
                        services rendered concerning this Deed of Trust,
                        including without limit any statement of amounts owing
                        under any Secured Obligation. Beneficiary shall not
                        directly or indirectly be liable to Trustor or any other
                        person as a consequence of (i) the exercise of the
                        rights, remedies or powers granted to Beneficiary in
                        this Deed of Trust; (ii) the failure or refusal of
                        Beneficiary to perform or discharge any obligation or
                        liability of Trustor under any agreement related to the
                        Subject Property or Collateral or under this Deed of
                        Trust; or (iii) any loss sustained by Trustor or any
                        third party resulting from Beneficiary's failure
                        (whether by malfeasance, nonfeasance or refusal

                                  Page 9 of 24
<PAGE>   10

                        to act) to lease the Subject Property after a Default
                        (hereinafter defined) or from any other act or omission
                        (regardless of whether same constitutes negligence) of
                        Beneficiary in managing the Subject Property after a
                        Default unless the loss is caused by the gross
                        negligence or willful misconduct of Beneficiary and no
                        such liability shall be asserted against or imposed upon
                        Beneficiary, and all such liability is hereby expressly
                        waived and released by Trustor.

                (b)     TRUSTOR INDEMNIFIES TRUSTEE AND BENEFICIARY AGAINST, AND
                        HOLDS TRUSTEE AND BENEFICIARY HARMLESS FROM, ALL LOSSES,
                        DAMAGES, LIABILITIES, CLAIMS, CAUSES OF ACTION,
                        JUDGMENTS, COURT COSTS, REASONABLE AND DOCUMENTED
                        OUT-OF-POCKET ATTORNEYS' FEES AND OTHER LEGAL EXPENSES,
                        COST OF EVIDENCE OF TITLE, COST OF EVIDENCE OF VALUE,
                        AND OTHER REASONABLE AND DOCUMENTED OUT-OF-POCKET
                        EXPENSES WHICH EITHER MAY SUFFER OR INCUR: (i) BY REASON
                        OF THIS DEED OF TRUST; (ii) BY REASON OF THE EXECUTION
                        OF THIS TRUST OR IN PERFORMANCE OF ANY ACT REQUIRED OR
                        PERMITTED HEREUNDER OR BY LAW; (iii) AS A RESULT OF ANY
                        FAILURE OF TRUSTOR TO PERFORM TRUSTOR'S OBLIGATIONS; OR
                        (iv) BY REASON OF ANY ALLEGED OBLIGATION OR UNDERTAKING
                        ON BENEFICIARY'S PART TO PERFORM OR DISCHARGE ANY OF THE
                        REPRESENTATIONS, WARRANTIES, CONDITIONS, COVENANTS OR
                        OTHER OBLIGATIONS CONTAINED IN ANY OTHER DOCUMENT
                        RELATED TO THE SUBJECT PROPERTY. THE ABOVE OBLIGATION OF
                        TRUSTOR TO INDEMNIFY AND HOLD HARMLESS TRUSTEE AND
                        BENEFICIARY SHALL SURVIVE THE RELEASE AND CANCELLATION
                        OF THE SECURED OBLIGATIONS AND THE RELEASE AND
                        RECONVEYANCE OR PARTIAL RELEASE AND RECONVEYANCE OF THIS
                        DEED OF TRUST.

                (c)     TRUSTOR shall pay all amounts and indebtedness arising
                        under this Section 5.10 immediately upon demand by
                        Trustee or Beneficiary together with interest thereon
                        from the date the indebtedness arises at the rate of
                        interest then applicable to the principal balance under
                        the Loan Agreement as specified therein.

        5.11    SUBSTITUTION OF TRUSTEES. From time to time, by a writing,
                signed and acknowledged by Beneficiary and recorded in the
                Office of the Recorder of the County in which the Subject
                Property is situated, Beneficiary may appoint another trustee to
                act in the place and stead of Trustee or any successor. Such
                writing shall set forth any information required by law. The
                recordation of such instrument of substitution shall discharge
                Trustee herein named and shall appoint the new trustee as the
                trustee hereunder with the same effect as if originally named
                Trustee herein. A writing recorded pursuant to the provisions of
                this Section 5.11 shall be conclusive proof of the proper
                substitution of such new Trustee.

        5.12    DUE ON SALE OR ENCUMBRANCE. Except as otherwise expressly
                permitted in the Loan Agreement, if the Subject Property or any
                interest therein shall be sold, transferred (including, without
                limitation, through sale or transfer of a majority or
                controlling interest of the corporate stock or general
                partnership interests or limited liability company interests of
                Trustor), mortgaged, assigned, further encumbered or leased,
                whether directly or indirectly, whether voluntarily,
                involuntarily or by operation of law, without the prior written
                consent of Beneficiary, THEN Beneficiary, in its sole
                discretion, may declare all Secured Obligations immediately due
                and payable.

        5.13    RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY.
                Without notice to or the consent, approval or agreement of any
                persons or entities having any interest at any time in the
                Subject Property and Collateral or in any manner obligated under
                the Secured Obligations ("Interested Parties"), Beneficiary may,
                from time to time, release any person or entity from liability
                for the payment or performance of any Secured Obligation, take
                any action or make any agreement extending the maturity or
                otherwise altering the terms or increasing the amount of any
                Secured Obligation, or accept additional security or release all
                or a portion of the Subject Property and Collateral and other
                security for the Secured Obligations. None of the foregoing
                actions shall release or reduce the personal liability

                                 Page 10 of 24
<PAGE>   11

                of any of said Interested Parties, or release or impair the
                priority of the lien of and security interests created by this
                Deed of Trust upon the Subject Property and Collateral.

        5.14    RECONVEYANCE. Upon Beneficiary's written request, and upon
                surrender to Trustee for cancellation of this Deed of Trust or a
                certified copy thereof and any note, instrument, or instruments
                setting forth all obligations secured hereby, Trustee shall
                reconvey, without warranty, the Subject Property or that portion
                thereof then held hereunder. To the extent permitted by law, the
                reconveyance may describe the grantee as "the person or persons
                legally entitled thereto" and the recitals of any matters or
                facts in any reconveyance executed hereunder shall be conclusive
                proof of the truthfulness thereof. Neither Beneficiary nor
                Trustee shall have any duty to determine the rights of persons
                claiming to be rightful grantees of any reconveyance. When the
                Subject Property has been fully reconveyed, the last such
                reconveyance shall operate as a reassignment of all future
                rents, issues and profits of the Subject Property to the person
                or persons legally entitled thereto.

        5.15    SUBROGATION. Beneficiary shall be subrogated to the lien of all
                encumbrances, whether released of record or not, paid in whole
                or in part by Beneficiary pursuant to the Loan Documents or by
                the proceeds of any loan secured by this Deed of Trust.

        5.16    RIGHT OF INSPECTION. Subject to the provisions of the Loan
                Agreement, Beneficiary, its agents and employees, may enter the
                Subject Property at any reasonable time for the purpose of
                inspecting the Subject Property and Collateral and ascertaining
                Trustor's compliance with the terms hereof.

                          ARTICLE 6. DEFAULT PROVISIONS

        6.1     DEFAULT. For all purposes hereof, the term "Default" shall mean
                (a) at Beneficiary's option, the failure of Trustor to make any
                payment of principal or interest under the Loan Agreement or to
                pay any other amount due hereunder or under the Loan Agreement
                when the same is due and payable, whether at maturity, by
                acceleration or otherwise; (b) the failure of Trustor to perform
                any non-monetary obligation hereunder, or the failure to be true
                of any representation or warranty of Trustor contained herein
                and the continuance of such failure for ten (10) days after
                notice, or within any longer grace period, if any, allowed in
                the Loan Agreement for such failure, or (c) the existence of any
                Event of Default as defined in the Loan Agreement.

        6.2     RIGHTS AND REMEDIES. At any time after Default and during the
                continuance thereof, Beneficiary and Trustee shall each have all
                the following rights and remedies:

                (a)     With or without notice, to declare all Secured
                        Obligations immediately due and payable; without
                        limiting the foregoing, Beneficiary may, in addition, at
                        its option, demand cash collateral in the full amount of
                        the obligations under all L/C's and L/C Undertakings,
                        whether or not then due and payable by Beneficiary;

                (b)     With or without notice, and without releasing Trustor
                        from any Secured Obligation, and without becoming a
                        mortgagee in possession, to cure any breach or Default
                        of Trustor and, in connection therewith, to enter upon
                        the Subject Property and do such acts and things as
                        Beneficiary or Trustee deem necessary or desirable to
                        protect the security hereof, including, without
                        limitation: (i) to appear in and defend any action or
                        proceeding purporting to affect the security of this
                        Deed of Trust or the rights or powers of Beneficiary or
                        Trustee under this Deed of Trust; (ii) to pay, purchase,
                        contest or compromise any encumbrance, charge, lien or
                        claim of lien which, in the sole judgment of either
                        Beneficiary or Trustee, is or may be senior in priority
                        to this Deed of Trust, the judgment of Beneficiary or
                        Trustee being conclusive as between the parties hereto;
                        (iii) to obtain insurance; (iv) to pay any premiums or
                        charges with respect to

                                 Page 11 of 24
<PAGE>   12
                        insurance required to be carried under this Deed of
                        Trust; or (v) to employ counsel, accountants,
                        contractors and other appropriate persons.

                (c)     To commence and maintain an action or actions in any
                        court of competent jurisdiction to foreclose this
                        instrument as a mortgage or to obtain specific
                        enforcement of the covenants of Trustor hereunder, and
                        Trustor agrees that such covenants shall be specifically
                        enforceable by injunction or any other appropriate
                        equitable remedy and that for the purposes of any suit
                        brought under this subparagraph, Trustor waives the
                        defense of laches and any applicable statute of
                        limitations;

                (d)     To apply to a court of competent jurisdiction for and
                        obtain appointment of a receiver of the Subject Property
                        as a matter of strict right and without regard to the
                        adequacy of the security for the repayment of the
                        Secured Obligations, the existence of a declaration that
                        the Secured Obligations are immediately due and payable,
                        or the filing of a notice of default, and Trustor hereby
                        consents to such appointment;

                (e)     To enter upon, possess, manage and operate the Subject
                        Property or any part thereof, to take and possess all
                        documents, books, records, papers and accounts of
                        Trustor or the then owner of the Subject Property, to
                        make, terminate, enforce or modify Leases of the Subject
                        Property upon such terms and conditions as Beneficiary
                        deems proper, to make repairs, alterations and
                        improvements to the Subject Property as necessary, in
                        Trustee's or Beneficiary's sole judgment, to protect or
                        enhance the security hereof;

                (f)     To execute a written notice of such Default and of its
                        election to cause the Subject Property to be sold to
                        satisfy the Secured Obligations. As a condition
                        precedent to any such sale, Trustee shall give and
                        record such notice as the law then requires. When the
                        minimum period of time required by law after such notice
                        has elapsed, Trustee, without notice to or demand upon
                        Trustor except as required by law, shall sell the
                        Subject Property at the time and place of sale fixed by
                        it in the notice of sale, at one or several sales,
                        either as a whole or in separate parcels and in such
                        manner and order, all as Beneficiary in its sole
                        discretion may determine, at public auction to the
                        highest bidder for cash, in lawful money of the United
                        States, payable at time of sale. Neither Trustor nor any
                        other person or entity other than Beneficiary shall have
                        the right to direct the order in which the Subject
                        Property is sold. Subject to requirements and limits
                        imposed by law, Trustee may from time to time postpone
                        sale of all or any portion of the Subject Property by
                        public announcement at such time and place of sale.
                        Trustee shall deliver to the purchaser at such sale a
                        deed conveying the Subject Property or portion thereof
                        so sold, but without any covenant or warranty, express
                        or implied. The recitals in the deed of any matters or
                        facts shall be conclusive proof of the truthfulness
                        thereof. Any person, including Trustee, Trustor or
                        Beneficiary may purchase at the sale;

                (g)     To resort to and realize upon the security hereunder and
                        any other security now or later held by Beneficiary
                        concurrently or successively and in one or several
                        consolidated or independent judicial actions or lawfully
                        taken non-judicial proceedings, or both, and to apply
                        the proceeds received upon the Secured Obligations all
                        in such order and manner as Trustee and Beneficiary, or
                        either of them, determine in their sole discretion.

                (h)     Upon sale of the Subject Property at any judicial or
                        non-judicial foreclosure, Beneficiary may credit bid (as
                        determined by Beneficiary in its sole and absolute
                        discretion) all or any portion of the Secured
                        Obligations. In determining such credit bid, Beneficiary
                        may, but is not obligated to, take into account all or
                        any of the following: (i) appraisals of the Subject
                        Property as such appraisals may be discounted or
                        adjusted by Beneficiary in its sole and absolute
                        underwriting discretion; (ii) expenses and costs
                        incurred by Beneficiary with respect to the Subject
                        Property prior to foreclosure; (iii) expenses and costs
                        which Beneficiary anticipates will be incurred with

                                 Page 12 of 24
<PAGE>   13

                        respect to the Subject Property after foreclosure, but
                        prior to resale, including, without limitation, costs of
                        structural reports and other due diligence, costs to
                        carry the Subject Property prior to resale, costs of
                        resale (e.g. commissions, attorneys' fees, and taxes),
                        costs of any hazardous materials clean-up and
                        monitoring, costs of deferred maintenance, repair,
                        refurbishment and retrofit, costs of defending or
                        settling litigation affecting the Subject Property, and
                        lost opportunity costs (if any), including the time
                        value of money during any anticipated holding period by
                        Beneficiary; (iv) declining trends in real property
                        values generally and with respect to properties similar
                        to the Subject Property; (v) anticipated discounts upon
                        resale of the Subject Property as a distressed or
                        foreclosed property; (vi) the fact of additional
                        collateral (if any), for the Secured Obligations; and
                        (vii) such other factors or matters that Beneficiary (in
                        its sole and absolute discretion) deems appropriate. In
                        regard to the above, Trustor acknowledges and agrees
                        that: (w) Beneficiary is not required to use any or all
                        of the foregoing factors to determine the amount of its
                        credit bid; (x) this Section does not impose upon
                        Beneficiary any additional obligations that are not
                        imposed by law at the time the credit bid is made; (y)
                        the amount of Beneficiary's credit bid need not have any
                        relation to any loan-to-value ratios specified in the
                        Loan Documents or previously discussed between Trustor
                        and Beneficiary; and (z) Beneficiary's credit bid may be
                        (at Beneficiary's sole and absolute discretion) higher
                        or lower than any appraised value of the Subject
                        Property.

        6.3     APPLICATION OF FORECLOSURE SALE PROCEEDS. After deducting all
                costs, fees and expenses of Trustee, and of this trust,
                including, without limitation, cost of evidence of title and
                attorneys' fees in connection with sale and costs and expenses
                of sale and of any judicial proceeding wherein such sale may be
                made, Trustee shall apply all proceeds of any foreclosure sale:
                (a) to payment of all sums expended by Beneficiary under the
                terms hereof and not then repaid, with accrued interest at the
                rate of interest specified in the Loan Agreement to be
                applicable on or after maturity or acceleration of the
                indebtedness under the Loan Agreement; (b) to payment of all
                other Secured Obligations; and (c) the remainder, if any, to the
                person or persons legally entitled thereto.

        6.4     APPLICATION OF OTHER SUMS. All sums received by Beneficiary
                under Section 6.2 or Section 3.2, less all costs and expenses
                incurred by Beneficiary or any receiver under Section 6.2 or
                Section 3.2, including, without limitation, attorneys' fees,
                shall be applied in payment of the Secured Obligations in such
                order as Beneficiary shall determine in its sole discretion;
                provided, however, Beneficiary shall have no liability for funds
                not actually received by Beneficiary.

        6.5     NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any
                receiver's entry upon and taking possession of all or any part
                of the Subject Property and Collateral, nor any collection of
                rents, issues, profits, insurance proceeds, condemnation
                proceeds or damages, other security or proceeds of other
                security, or other sums, nor the application of any collected
                sum to any Secured Obligation, nor the exercise or failure to
                exercise of any other right or remedy by Beneficiary or Trustee
                or any receiver shall cure or waive any breach, Default or
                notice of default under this Deed of Trust, or nullify the
                effect of any notice of default or sale (unless all Secured
                Obligations then due have been paid and performed and Trustor
                has cured all other defaults), or impair the status of the
                security, or prejudice Beneficiary or Trustee in the exercise of
                any right or remedy, or be construed as an affirmation by
                Beneficiary of any tenancy, lease or option or a subordination
                of the lien of or security interests created by this Deed of
                Trust.

        6.6     PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees
                to pay to Beneficiary immediately and without demand all
                reasonable and documented out-of-pocket costs and expenses
                incurred by Trustee and Beneficiary pursuant to Section 6.2
                (including, without limitation, court costs and reasonable and
                documented out-of-pocket attorneys' fees, whether incurred in
                litigation or not) with interest from the date of expenditure
                until said sums have been paid at the rate of interest then
                applicable to the principal balance under the Loan Agreement as
                specified therein. In addition, Trustor shall pay to Trustee all
                Trustee's fees hereunder and shall reimburse Trustee for all
                reasonable and

                                 Page 13 of 24
<PAGE>   14

                documented out-of-pocket expenses incurred in the administration
                of this trust, including, without limitation, any attorneys'
                fees.

        6.7     POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby
                irrevocably appoints Beneficiary and its successors and assigns,
                as its attorney-in-fact, which agency is coupled with an
                interest, (a) to execute and/or record any notices of
                completion, cessation of labor, or any other notices that
                Beneficiary deems appropriate to protect Beneficiary's interest,
                (b) upon the issuance of a deed pursuant to the foreclosure of
                the lien of this Deed of Trust or the delivery of a deed in lieu
                of foreclosure, to execute all instruments of assignment or
                further assurance with respect to the Subject Property and
                Collateral, Leases and Payments in favor of the grantee of any
                such deed, as may be necessary or desirable for such purpose,
                (c) to prepare, execute and file or record financing statements,
                continuation statements, applications for registration and like
                papers necessary to create, perfect or preserve Beneficiary's
                security interests and rights in or to any of the Subject
                Property and Collateral, and (d) upon the occurrence of an
                event, act or omission which, with notice or passage of time or
                both, would constitute a Default, Beneficiary may perform any
                obligation of Trustor hereunder; provided, however, that: (i)
                Beneficiary as such attorney-in-fact shall only be accountable
                for such funds as are actually received by Beneficiary; and (ii)
                Beneficiary shall not be liable to Trustor or any other person
                or entity for any failure to act (whether such failure
                constitutes negligence) by Beneficiary under this Section.

                       ARTICLE 7. MISCELLANEOUS PROVISIONS

        7.1     ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate
                by reference the entire agreement of the parties with respect to
                matters contemplated herein and supersede all prior
                negotiations. The Loan Documents grant further rights to
                Beneficiary and contain further agreements and affirmative and
                negative covenants by Trustor which apply to this Deed of Trust
                and to the Subject Property and Collateral and such further
                rights and agreements are incorporated herein by this reference.

        7.2     MERGER. No merger shall occur as a result of Beneficiary's
                acquiring any other estate in, or any other lien on, the Subject
                Property unless Beneficiary consents to a merger in writing.

        7.3     OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one
                person has executed this Deed of Trust as "Trustor", the
                obligations of all such persons hereunder shall be joint and
                several.

        7.4     RECOURSE TO SEPARATE PROPERTY. Any married person who executes
                this Deed of Trust as a Trustor agrees that any money judgment
                which Beneficiary or Trustee obtains pursuant to the terms of
                this Deed of Trust or any other obligation of that married
                person secured by this Deed of Trust may be collected by
                execution upon that person's separate property, and any
                community property of which that person is a manager.

        7.5     WAIVER OF MARSHALLING RIGHTS. Trustor, for itself and for all
                parties claiming through or under Trustor, and for all parties
                who may acquire a lien on or interest in the Subject Property
                and Collateral, hereby waives all rights to have the Subject
                Property and Collateral and/or any other property, which is now
                or later may be security for any Secured Obligation ("Other
                Property") marshalled upon any foreclosure of the lien of this
                Deed of Trust or on a foreclosure of any other lien or security
                interest against any security for any of the Secured
                Obligations. Beneficiary shall have the right to sell, and any
                court in which foreclosure proceedings may be brought shall have
                the right to order a sale of, the Subject Property and any or
                all of the Collateral or Other Property as a whole or in
                separate parcels, in any order that Beneficiary may designate.

                                 Page 14 of 24
<PAGE>   15

        7.6     RULES OF CONSTRUCTION. When the identity of the parties or other
                circumstances make it appropriate the masculine gender includes
                the feminine and/or neuter, and the singular number includes the
                plural. The term "Subject Property" and "Collateral" means all
                and any part of the Subject Property and Collateral,
                respectively, and any interest in the Subject Property and
                Collateral, respectively.

        7.7     SUCCESSORS IN INTEREST. The terms, covenants, and conditions
                herein contained shall be binding upon and inure to the benefit
                of the heirs, successors and assigns of the parties hereto;
                provided, however, that this Section 7.7 does not waive or
                modify the provisions of Section 5.12.

        7.8     EXECUTION IN COUNTERPARTS. To facilitate execution, this
                document may be executed in as many counterparts as may be
                convenient or required. It shall not be necessary that the
                signature or acknowledgment of, or on behalf of, each party, or
                that the signature of all persons required to bind any party, or
                the acknowledgment of such party, appear on each counterpart.
                All counterparts shall collectively constitute a single
                document. It shall not be necessary in making proof of this
                document to produce or account for more than a single
                counterpart containing the respective signatures of, or on
                behalf of, and the respective acknowledgments of, each of the
                parties hereto. Any signature or acknowledgment page to any
                counterpart may be detached from such counterpart without
                impairing the legal effect of the signatures or acknowledgments
                thereon and thereafter attached to another counterpart identical
                thereto except having attached to it additional signature or
                acknowledgment pages.

        7.9     GOVERNING LAW. This Deed of Trust shall be construed, governed
                and enforced in accordance with the laws of the State of New
                York, except as to matters relating to the creation, perfection,
                priority and enforcement of the liens on and security interests
                in the Subject Property and the Collateral, which shall be
                construed, governed and enforced in accordance with the laws of
                the State of California, and except to the extent that federal
                laws preempt the laws of either the State of New York or the
                State of California.

        7.10    INCORPORATION. Exhibits A and B and Schedule 1, as attached, are
                incorporated into this Deed of Trust by this reference.

        7.11    NOTICES. All notices, demands or other communications required
                or permitted to be given pursuant to the provisions of this Deed
                of Trust shall be in writing and shall be considered as properly
                given if delivered personally or sent by first class United
                States Postal Service mail, postage prepaid, except that notice
                of Default may be sent by certified mail, return receipt
                requested, or by Overnight Express Mail or by overnight
                commercial courier service, charges prepaid. Notices so sent
                shall be effective three (3) days after mailing, if mailed by
                first class mail, and otherwise upon receipt at the address set
                forth below; provided, however, that non-receipt of any
                communication as the result of any change of address of which
                the sending party was not notified or as the result of a refusal
                to accept delivery shall be deemed receipt of such
                communication. For purposes of notice, the address of the
                parties shall be:

                                 Page 15 of 24
<PAGE>   16

<TABLE>
<S>                      <C>
Trustor:                 Communications & Power Industries, Inc.
                         607 Hansen Way
                         Palo Alto, California 94303
                         Attn:  Lynn E. Harvey, Chief Financial Officer

Trustee:                 First American Title Company
                         520 North Central Avenue
                         Glendale, California 91203

Beneficiary:             FOOTHILL CAPITAL CORPORATION. as Agent
                         2450 Colorado Avenue
                         Suite 3000 West
                         Santa Monica, California 90404
                         Attn:  Business Finance Division Manager
</TABLE>

Any party shall have the right to change its address for notice hereunder to any
other location within the continental United States by the giving of thirty (30)
days notice to the other party in the manner set forth hereinabove. Trustor
shall forward to Beneficiary, without delay, any notices, letters or other
communications delivered to the Subject Property or to Trustor naming
Beneficiary, "Lender" or any similar designation as addressee, or which could
reasonably be deemed to affect the ability of Trustor to perform its obligations
to Beneficiary under the Loan Agreement.

        7.12    CONFLICT AMONG AGREEMENTS. In the event of any conflict between
                the provisions of this Deed of Trust and the provisions of the
                Loan Agreement, the provisions of the Loan Agreement shall
                prevail, and Trustor shall be bound by such provisions of the
                Loan Agreement fully to the same extent as if they were set
                forth herein in their entirety.

                                 Page 16 of 24
<PAGE>   17

IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.

                                                       "TRUSTOR"

                                       COMMUNICATIONS & POWER INDUSTRIES, INC.,
                                       a Delaware corporation

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

                      (ALL SIGNATURES MUST BE ACKNOWLEDGED)

                                 Page 17 of 24
<PAGE>   18

                                    EXHIBIT A

                         DESCRIPTION OF SUBJECT PROPERTY

Exhibit A to Deed of Trust with Absolute Assignment of Leases and Rents,
Security Agreement and Fixture Filing executed by COMMUNICATIONS & POWER
INDUSTRIES, INC., a Delaware corporation, as Trustor, to First American Title
Company, as Trustee, for the benefit of FOOTHILL CAPITAL CORPORATION, a
California corporation, as Agent for itself and the other Lenders, as
Beneficiary, dated as of December 15, 2000.

All the certain real property located in the County of Santa Clara, State of
California, described as follows:

                               See Page 16A Hereof

                                 Page 18 of 24
<PAGE>   19

                                    EXHIBIT B

                        LEASEHOLD RIDER TO DEED OF TRUST

THIS LEASEHOLD RIDER TO DEED OF TRUST ("Rider") is attached to and forms a part
of that certain Deed of Trust with Absolute Assignment of Leases and Rents,
Security Agreement and Fixture Filing dated December 15, 2000, and executed by
the undersigned, as Trustor, in favor of FIRST AMERICAN TITLE COMPANY, as
Trustee, for the benefit of FOOTHILL CAPITAL CORPORATION, a California
corporation, as Agent for itself and the other Lenders, as Beneficiary (the
"Deed of Trust"). Capitalized terms used in this Rider and not otherwise defined
herein shall have the same meaning as in the Deed of Trust.

1. LEASEHOLD ESTATE. All or a portion of Trustor's interest in the Subject
Property consists of one or more leasehold or subleasehold estates created
pursuant to one or more leases or subleases in which Trustor is the tenant or
subtenant. Such lease or leases are identified on Exhibit A to this Deed of
Trust and are hereinafter referred to as the "Ground Lease". The landlord or
sublandlord under any Ground Lease is hereinafter referred to as "Landlord".

2. REPRESENTATIONS OF TRUSTOR. Trustor hereby represents and warrants that: (i)
the Ground Lease is unmodified except as indicated on Exhibit A to this Deed of
Trust and is in full force and effect; (ii) all rents and other charges to be
paid by Trustor as tenant under the Ground Lease are current; (iii) Trustor is
not in default under any of the provisions of the Ground Lease and no
circumstances exist which would constitute a default by Trustor under the Ground
Lease or would otherwise permit Landlord to cancel, terminate or otherwise limit
the Ground Lease in any manner; (iv) Trustor is not aware of any default by
Landlord under the Ground Lease or the existence of circumstances which would
constitute a default by Landlord under the Ground Lease; (v) Trustor's interest
in the Ground Lease is subject to no liens or encumbrances except as previously
disclosed to Beneficiary in writing; and (vi) Trustor owns and holds the Ground
Lease and the entire leasehold estate created by the Ground Lease and has the
right under the Ground Lease or has received all appropriate consents required
in order for Trustor to execute this Deed of Trust.

3. PERFORMANCE. In no event shall Trustor do or permit to be done or omit to do
or permit the omission of any act, the doing or omission of which would impair
the security of this Deed of Trust or would constitute grounds for the
termination of the Ground Lease or would entitle Landlord to declare a
forfeiture or termination of the Ground Lease or to re-enter the Subject
Property. Trustor agrees to pay, keep and perform all covenants, conditions,
agreements and obligations of the tenant set forth in the Ground Lease, and not
to commit or permit any breach thereof.

4. NOTICES. Trustor shall promptly (i) send to Beneficiary a copy of any notice
from Landlord claiming the existence of a default by Trustor under the Ground
Lease or the existence of any circumstances which would constitute such a
default, and (ii) notify Beneficiary in writing of the existence of any default
by Landlord under the Ground Lease or the existence of any circumstances which
would constitute such a default.

5. INDEPENDENT OBLIGATION. Trustor agrees that the provisions hereof shall be
deemed to be obligations of Trustor in addition to Trustor's obligations as
tenant with respect to similar matters contained in the Ground Lease; provided,
however, the inclusion herein of any covenants relating to similar matters under
which Trustor is obligated under the Ground Lease shall not restrict or limit
Trustor's duties and obligations to keep and perform promptly all of its
covenants as tenant under the Ground Lease, and nothing in this Deed of Trust
shall be construed as requiring the taking of or the omitting to take any action
by Trustor or Beneficiary which would cause a default under the Ground Lease.
Trustor further agrees that no release or forbearance of any of Trustor's
obligations under the Ground Lease, pursuant to the Ground Lease or otherwise,
shall release Trustor from any of its obligations under this Deed of Trust.

                                 Page 19 of 24
<PAGE>   20

6. NO MERGER. Trustor agrees that so long as this Deed of Trust is in effect,
there shall be no merger of the Ground Lease or any interest therein, nor of the
leasehold estate created thereby with the fee estate in the Subject Property or
any portion thereof, by reason of the fact that the Ground Lease may be held
directly or indirectly by or for the account of any person who shall hold the
fee estate in the Subject Property. If Trustor acquires the fee title or any
other estate, title or interest in the Subject Property, this Deed of Trust
shall attach to and be a lien upon the fee title or such other estate so
acquired, and such fee title or other estate shall, without further assignment,
mortgage or conveyance, become and be subject to the lien of this Deed of Trust.
Trustor shall notify Beneficiary of any such acquisition by Trustor and, on
written request by Beneficiary, shall cause to be executed and recorded such
further documents or instruments as may in the sole discretion of Beneficiary be
necessary or desirable to carry out the intent hereof.

7. NO MODIFICATION OR SURRENDER. Trustor agrees that (i) no surrender or
termination of the Ground Lease (except a surrender upon the expiration of the
term of the Ground Lease or the termination by Landlord pursuant to the
provisions thereof) shall be valid or effective, and (ii) neither the Ground
Lease nor the terms thereof may be amended, supplemented, surrendered or
cancelled, or subordinated to any fee mortgage, to any lease, or to any other
interest, either orally or in writing, without the prior written consent of
Beneficiary, and Trustor agrees that any such action, without the prior written
consent of Beneficiary, shall be void and constitute an Event of Default under
this Deed of Trust.

8. ARBITRATION PROCEEDINGS. Trustor shall promptly notify Beneficiary in writing
upon the initiation of any arbitration or appraisal proceedings under and
pursuant to the provisions of the Ground Lease. Trustor shall not designate,
appoint or select an arbitrator or appraiser in any such proceedings without the
prior written consent of Beneficiary.

9. TRUSTOR'S DEFAULT UNDER GROUND LEASE.

        9.1 BENEFICIARY'S ADDITIONAL RIGHTS. If Trustor shall default under the
Ground Lease, in addition to all the rights and remedies provided for in this
Deed of Trust and available at law, Beneficiary may, at its option but without
any obligation to do so, take any action necessary or desirable to cure any
default by Trustor in the performance of any of the terms, covenants and
conditions of the Ground Lease. Trustor shall, upon demand, pay to Beneficiary
all reasonable and documented out-of-pocket costs incurred by Beneficiary in
curing or attempting to cure such default, together with interest on such costs
from the date of expenditure at the rate applicable pursuant to the Debt
Instrument, and all such sums shall be secured by this Deed of Trust. Upon
receipt by Beneficiary of any written notice of default by Trustor under the
Ground Lease, Beneficiary may rely thereon and take any action to cure such
default even though the existence or nature of the default may be disputed by
Trustor. Trustor hereby grants to Beneficiary, and agrees that Beneficiary shall
have, the absolute and immediate right to enter in and upon the Subject Property
or any part thereof to such extent and as often as Beneficiary, in its sole
discretion, deems necessary or desirable in order to prevent or cure any default
by Trustor. Notwithstanding the foregoing nor anything to the contrary contained
in this Rider, this Deed of Trust shall not constitute a present assignment of
the Ground Lease and Beneficiary does not hereby assume, nor shall Beneficiary
be deemed to assume or otherwise be responsible for, performance of the
obligations of Trustor as tenant under the Ground Lease. Beneficiary shall be
liable for the obligations of the Trustor as tenant under the Ground Lease only
during the period of time which Beneficiary is in possession of the Subject
Property or has acquired, by foreclosure or otherwise, and is holding, all of
Trustor's right, title and interest in the Ground Lease.

        9.2 ADDITIONAL EVENT OF DEFAULT. Any breach or default by Trustor of any
term, condition or covenant contained in the Ground Lease or the occurrence of
any circumstances which would permit Landlord to cancel, terminate or otherwise
limit the Ground Lease in any manner shall constitute an Event of Default under
this Deed of Trust.

10. NOTICE TO LANDLORD. Promptly after the execution and delivery of this Deed
of Trust, Trustor shall notify Landlord in writing of such execution and
delivery and provide Landlord with a copy of this Deed of Trust.

                                 Page 20 of 24
<PAGE>   21

11. ESTOPPEL CERTIFICATE. Trustor shall promptly furnish to Beneficiary all
information that Beneficiary may request concerning the performance by Trustor
of its obligations under the Ground Lease. Promptly upon demand by Beneficiary,
Trustor shall obtain from Landlord and furnish to Beneficiary an estoppel
certificate executed by Landlord stating, among other things, the date through
which rent has been paid, whether or not there are any defaults under the Ground
Lease, and the nature of such defaults.

12. NEW LEASE. Trustor agrees that, if the Ground Lease is for any reason
whatsoever terminated prior to the natural expiration of its term and
Beneficiary or its designee shall acquire from Landlord a new lease of the
Subject Property or any part thereof, Trustor shall have no right, title or
interest in or to such new lease or the leasehold estate created thereby.

13. NOTICE OF BANKRUPTCY. Trustor shall promptly notify Beneficiary orally of
any filing by or against Landlord or Trustor of a petition under the Bankruptcy
Code, Title 11 of the United States Code (as the same may be amended or
recodified from time to time, the "Bankruptcy Code"). Trustor shall promptly
thereafter give written notice of such filing to Beneficiary, setting forth any
information available to Trustor including the date of such filing, the court in
which such petition was filed, and the relief sought therein. Trustor shall
promptly deliver to Beneficiary, any and all notices, summonses, pleadings,
applications and other documents received by Trustor in connection with any such
petition and any proceedings relating thereto.

14. RESTRICTION ON ACTIONS UNDER BANKRUPTCY CODE. Trustor shall not commence any
action, suit, proceeding or case, or file any application or make any motion in
respect of the Ground Lease in any such case, without the prior written consent
of Beneficiary.

15. BANKRUPTCY OF LANDLORD.

        15.1 ELECTION IN BANKRUPTCY. Trustor acknowledges that, pursuant to
Section 365 of the Bankruptcy Code, it is possible that a trustee in bankruptcy
of Landlord or Landlord as a debtor-in-possession could reject the Ground Lease,
in which case Trustor, as tenant, would have the election described in Section
365(h) of the Bankruptcy Code (which election, as the same may be amended,
revised or recodified from time to time, and together with any comparable right
under any other state or federal law relating to bankruptcy, reorganization or
other relief for debtors, whether now or hereafter in effect, is herein called
the "Election") to treat the Ground Lease as terminated by such rejection or, in
the alternative, to remain in possession for the balance of the term of such
Ground Lease and any renewal or extension thereof that is enforceable by the
tenant under applicable non-bankruptcy law. Trustor covenants that it will not
suffer or permit the termination of the Ground Lease by exercise of the Election
or otherwise without the prior written consent of Beneficiary. Trustor
acknowledges that, since the Ground Lease is a primary part of Beneficiary's
security for the obligations secured under this Deed of Trust, Beneficiary does
not anticipate that it would consent to termination of the Ground Lease and
shall not under any circumstances be obliged to give such consent.

        15.2 ASSIGNMENT OF ELECTION. In order to secure the covenants made in
Section 15.1 and as security for the other obligations secured under this Deed
of Trust, Trustor assigns the Election to Trustee and Beneficiary. Trustor
acknowledges and agrees that Trustee and Beneficiary may use the Election at any
time in order to protect and preserve the rights and interests of Trustee and
Beneficiary under this Deed of Trust, since exercise of the Election in favor of
terminating the Ground Lease would constitute waste hereunder.

        15.3 EFFECT OF ASSIGNMENT. Trustor acknowledges and agrees that the
Election is in the nature of a remedy and is not a Subject Property interest
which Trustor can separate from the Ground Lease. Therefore, Trustor agrees that
exercise of the Election in favor of preserving the right to possession under
the Ground Lease shall not be deemed to constitute a taking or sale of the
Subject Property by Trustee or Beneficiary and shall not entitle Trustor to any
credit against the obligations secured by this Deed of Trust.

                                 Page 21 of 24
<PAGE>   22

        15.4 RIGHT TO POSSESSION. Trustor acknowledges and agrees that, in the
event the Election is exercised in favor of Trustor remaining in possession,
Trustor's resulting right to possession and use of (and rents and profits from)
the Subject Property, as adjusted by the effect of Section 365 of the Bankruptcy
Code, whether or not all or any part of the Subject Property has been subleased,
shall then be part of the Trust Estate and shall be subject to the lien created
by this Deed of Trust. However, Trustor acknowledges and agrees that said right
to possession and use of the Subject Property as so adjusted shall not be
equivalent to the leasehold interest which is included in the Trust Estate at
the time of execution of this Deed of Trust.

        15.5 ASSIGNMENT OF RIGHTS ARISING FROM REJECTION OF GROUND LEASE.
Trustor hereby unconditionally assigns, transfers and sets over to Beneficiary
all of Trustor's claims and rights to the payment of damages arising from any
rejection by Landlord of the Ground Lease under the Bankruptcy Code. Beneficiary
shall have the right to proceed in its own name or in the name of Trustor in
respect of any claim, suit, action or proceeding relating to the rejection of
the Ground Lease, including, without limitation, the right to file and prosecute
any proofs of claim, complaints, motions, applications, notices and other
documents. This assignment constitutes a present, irrevocable and unconditional
assignment of the foregoing claims, rights and remedies, and shall continue in
effect until all of the obligations secured by this Deed of Trust shall have
been fully satisfied and discharged. Any amounts received by Beneficiary as
damages arising out of the rejection of the Ground Lease shall be applied first
to all costs and expenses of Beneficiary (including, without limitation,
attorneys' fees) incurred in connection with the exercise of any of its rights
or remedies under this Section 15 and then to the indebtedness secured hereby.

16. BANKRUPTCY OF TRUSTOR.

        16.1 ASSUMPTION OF LEASE BY BENEFICIARY. If there shall be filed by or
against Trustor a petition under the Bankruptcy Code, and Trustor, as tenant
under the Ground Lease, shall determine to reject the Ground Lease pursuant to
the Bankruptcy Code, Trustor shall give Beneficiary not less than thirty (30)
days' prior notice of the date on which Trustor shall apply to the Bankruptcy
Court for authority to reject the Ground Lease. Beneficiary shall have the
right, but not the obligation, to serve upon Trustor within such thirty (30) day
period a notice stating that (i) Beneficiary demands that Trustor assume and
assign the Ground Lease to Beneficiary pursuant to Section 365 of the Bankruptcy
Code, and (ii) Beneficiary agrees to cure or provide adequate assurance of
prompt cure of all defaults reasonably susceptible of cure by Beneficiary and
provides adequate assurance of future performance under the Ground Lease. If
Beneficiary serves upon Trustor the notice described in the preceding sentence,
Trustor shall not seek the rejection of the Ground Lease and shall comply with
the demand provided for in clause (i) of the preceding sentence within thirty
(30) days after the notice shall have been given, subject to the performance by
Beneficiary of the agreement provided for in clause (ii) of the preceding
sentence.

        16.2 BENEFICIARY'S RIGHT TO FILE FOR EXTENSION. Effective upon the entry
of an order for relief in respect of Trustor under the Bankruptcy Code, Trustor
hereby assigns and transfers to Beneficiary a non-exclusive right to apply to
the Bankruptcy Court for an order extending the period during which the Ground
Lease may be rejected or assumed.

Trustor has caused this Rider to be executed as of the day and year first above
written.

TRUSTOR:

COMMUNICATIONS & POWER INDUSTRIES, INC.,
a Delaware corporation

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

                                 Page 22 of 24
<PAGE>   23

                                   SCHEDULE 1

                               SCHEDULE OF LEASES

Schedule 1 to Deed of Trust with Absolute Assignment of Leases and Rents,
Security Agreement and Fixture Filing executed by COMMUNICATIONS & POWER
INDUSTRIES, INC., a Delaware corporation, as Trustor, to First American Title
Company, as Trustee, for the benefit of FOOTHILL CAPITAL CORPORATION, a
California corporation, as Agent for itself and the other Lenders, as
Beneficiary, dated as of December 15, 2000.

<TABLE>
<CAPTION>
                                                           Initial
          Tenant                   Commencement Date   Termination Date
------------------------------     -----------------   ----------------
<S>                                <C>                 <C>
Pillsbury, Madison & Sutro LLP         4/14/2000          4/14/2001

Varian Associates, Inc.                4/15/1999          4/15/2002

Weil, Gotshal & Manges LLP             11/15/2000         8/31/2001
</TABLE>

                                 Page 23 of 24
<PAGE>   24

STATE OF CALIFORNIA
COUNTY OF _____________________________________ ss.

On this ____ day of December, 2000, before me ____________________, a Notary
Public in and for the State of California, personally appeared
____________________ personally known to me (or proved on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.

WITNESS my hand and official seal

Signature
          ------------------------------

My commission expires                   .
                     -------------------

                                 Page 24 of 24

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