Document:

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                                                                   EXHIBIT 10.10

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Irell & Manella LLP
1800 Avenue of the Stars
Suite 900
Los Angeles, California 90067
Attn:  J. Christopher Kennedy, Esq.
--------------------------------------------------------------------------------

                            FOURTH AMENDMENT OF LEASE

               THIS FOURTH AMENDMENT OF LEASE ("Amendment") is entered into as
of December 15, 2000, by and between THE BOARD OF TRUSTEES OF THE LELAND
STANFORD JUNIOR UNIVERSITY, a body having corporate powers under the laws of the
State of California, hereinafter referred to as "Lessor", and COMMUNICATIONS &
POWER INDUSTRIES, INC., a Delaware corporation, hereinafter referred to as
"Lessee".

                                    RECITALS:

               A. Lessor and Varian Associates, a California corporation
(predecessor-in-interest to Lessee as lessee under the Lease, as defined below)
entered into a Lease dated October 1, 1951, and recorded on October 11, 1951 in
Book 2297, Page 448 of the Official Records of Santa Clara County, California
(the "Official Records") as amended by (i) a Lease dated October 1, 1952, and
recorded on October 14, 1952 in Book 2504, Page 94 of the Official Records, (ii)
a Supplemental Indenture and Agreement dated July 24, 1953, and recorded on
October 1, 1953 in Book 2732, Page 231 of the Official Records, (iii) a Third
Amendment of Lease dated October 7, 1975, and recorded on October 9, 1975 in
Book B656, Page 236 of the Official Records, and Lessor and Lessee entered into
(iv) an Agreement Adding Land to Lease dated March 30, 1999, and recorded on
March 30, 1999 under Series No. 14729320, and (v) this Amendment, all pertaining
to the leasing of certain premises (the "Premises") located in the City of Palo
Alto, County of Santa Clara, State of California (as amended, hereinafter
collectively referred to as the "Lease").

               B. Lessee desires to encumber Lessee's leasehold estate (as
defined in Paragraph 25(a) of the Lease) in the Premises, and pursuant to
Paragraph 25 of the Lease, Lessor and Lessee desire by this Amendment to amend
the Lease as hereinafter provided in order to meet the reasonable requirements
of Lessee's Lender (as defined in Paragraph 25(a) of the Lease).

               NOW, THEREFORE, Lessor and Lessee agree as follows:

               1. Notwithstanding anything to the contrary contained in
Paragraph 6 or any other provisions of the Lease, Lessor agrees that Lessee may
absolutely and

<PAGE>   2

unconditionally assign to a Lender all insurance and/or condemnation proceeds to
which Lessee may be entitled (and the Lender shall have the right to participate
with Lessee in any settlement or adjustment of losses for which insurance and/or
condemnation proceeds are available) and proceeds may be delivered to and held
by the Lender to be applied to the Lender's expenses in settling, prosecuting or
defending any insurance and/or condemnation claim, and then to the restoration
of the Premises upon satisfaction of reasonable Lender conditions, which
conditions may include, without limitation, the following: (i) that an event
which is, or with notice or the passage of time or both would constitute, an
event of default under the Lender's loan documents shall not have occurred (or
if the same has occurred, Lessee has either caused same to be theretofore cured
or, within the time provided under the loan documents for cure, causes same to
be fully cured), (ii) the Lender's security is not materially impaired by reason
of application of proceeds to restoration, (iii) all income from the Premises
(from leases or otherwise) required to pay all debt service and operating
expenses of the Premises during such restoration and thereafter will be equal to
or greater than the income which was required to pay such debt service and
operating expenses prior to the casualty, (iv) Lessee evidences to the
satisfaction of the Lender that the insurance required to be maintained under
the Lender's loan documents will be available to Lessee during restoration and
thereafter, (v) the Lender shall have approved the plans and specifications for
such restoration, (vi) the Lender shall have received, at Lessee's expense, any
and all endorsements or modifications to its policy of title insurance requested
by the Lender, and (vii) in the event that in the Lender's sole but good faith
judgment the insurance and/or condemnation proceeds are not sufficient to
restore the Premises to substantially the same condition as preceded the
casualty, Lessee deposits with the Lender, within ten (10) business days of
demand by the Lender, the additional amounts necessary to accomplish
restoration; provided, however, that the Lender's loan documents shall further
provide that if any of the foregoing conditions shall not be satisfied, the
Lender shall provide Lessor with written notice thereof and Lessor shall have
not less than thirty (30) days to cause any such failed condition(s) to be
satisfied.

               2. Notwithstanding Paragraph 1 above, In the event of a taking of
all or any portion of the Premises by eminent domain, any Lender shall have the
right to participate in any legal proceedings therefor (and negotiations
relating thereto) and in any award, to the extent of its interest.

               3. In accordance with the terms of Paragraph 25 of the Lease, in
the event that any Lender, its successors or assigns, or any purchaser at a
foreclosure sale, shall acquire title to Lessee's interest in the Lease by
foreclosure (judicial or nonjudicial), deed in lieu of foreclosure or otherwise,
any such acquisition shall not require the consent of Lessor, and such Lender,
its successors or assigns, or any purchaser at a foreclosure sale, shall have
the right to assign its interest under the Lease without the approval of Lessor,
and (without limiting any other provisions of the Lease as amended by this
Amendment) upon any such assignment, such assignor shall not be liable as a
guarantor of the performance of its assignee under the Lease.

                                      -2-
<PAGE>   3

               4. If requested to do so by any Lender, Lessor agrees to execute
a non-disturbance and attornment agreement with any Lender and/or any sublessee
in form and substance approved by Lessor and any Lender, which approval shall
not be unreasonably withheld, conditioned or delayed.

               5. In no event shall a Lender become liable to perform the
obligations of the Lessee under the Lease unless and until Lender acquires
Lessee's leasehold estate by foreclosure, deed in lieu of foreclosure or other
appropriate proceedings, and in the event of any such acquisition, the Lender
shall be liable only to the extent of its interest in the leasehold estate.

                  (a) With respect to any Lender, the indemnifications of Lessee
contained in the Lease shall apply only to acts or omissions by the Lender
committed while such Lender is the Lessee under the Lease.

               6. (a) Notwithstanding any default by Lessee in the performance
or observance of any agreement, covenant or condition of the Lease on the part
of Lessee to be performed or observed, Lessor shall have no right to terminate
the Lease or interfere with the occupancy, use and enjoyment of the Premises
unless (i) a default shall have occurred and be continuing, (ii) Lessor shall
have given any Lender written notice of such default, and (iii) the Lender shall
have failed to remedy such default, acquire Lessee's leasehold estate, or
commence foreclosure or other appropriate proceedings, all as set forth in, and
within the time specified by, this Paragraph 6. Lessor agrees that, if Lender
exercises any of its rights under its loan documents or the Lease such that
Lender shall acquire title to Lessee's interest in the Lease, the Lease shall
continue in full force and effect as a direct lease between Lessor and Lender
and Lessor shall not disturb Lender's right of quiet possession of the Premises,
subject to all of the terms, covenants and conditions of the Lease.

                  (b) Any Lender shall have the right, but not the obligation,
at any time prior to termination of the Lease and without payment of any
penalty, to pay all of the rents due under the Lease, to effect any insurance,
to pay any taxes and assessments, to make any repairs and improvements, to do
any other act or thing required of Lessee under the Lease, and to do any act or
thing which may be necessary and proper to be done in the performance and
observance of the agreements, covenants and conditions of the Lease to prevent
termination of the Lease. All payments so made and all things so done and
performed by a Lender shall be as effective to prevent a termination of the
Lease as the same would have been if made, done and performed by Lessee instead
of by a Lender.

                  (c) Should any default under the Lease occur, Lessor shall
give written notice specifying the nature of such default to the Lender and
afford to the Lender the opportunity after receipt of the notice to: (i) cure
the default within thirty (30) days after the later to occur of (A) the receipt
of such notice, or (B) the expiration of Lessee's cure

                                      -3-
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period, if the default can be cured by the payment of money, (ii) cure the
default within sixty (60) days after the later to occur of (A) the receipt of
such notice, or (B) the expiration of Lessee's cure period, if the default must
be cured by action other than the payment of money and can be cured within that
time, or (iii) cure the default within such reasonable time as may be required
if action other than the payment of money is required to cure the default and
which action cannot be fully performed within the period specified in
subparagraph 6(c)(ii) above, provided that action to cure the default is
commenced within that time period and is thereafter diligently and in good faith
continued by the Lender to completion. If a non-monetary default is such that
possession of the Premises may be reasonably necessary to remedy the default,
the Lender shall have a reasonable additional time after the expiration of the
period specified in subparagraph 6(c)(ii) above within which to remedy such
default, provided that (x) the Lender commences foreclosure or other appropriate
proceedings to acquire the leasehold estate within the period specified in
subparagraph 6(c)(ii) above, (y) such proceedings are, after having been
commenced, diligently pursued in the manner required by law to completion, and
(z) the Lender pays all rent and other charges that shall accrue until such
proceedings are complete. Nothing contained in this Lease shall prevent the
Lender from naming Lessee in any foreclosure or other action or proceeding
initiated in order for the Lender to avail itself of and complete any such
foreclosure or other remedy.

                  (d) Any default under the Lease which is not susceptible to
remedy by anyone other than Lessee ("Personal Default") shall be deemed to be
waived if (i) the Lender shall comply with the provisions of subparagraphs
6(c)(x), (y) and (z) above, and (ii) after gaining possession of the Premises,
the Lender shall perform all obligations of Lessee under the Lease (other than
curing the Personal Default) as and when the same are due.

                  (e) If a Lender is prohibited by any process or injunction
issued by any court or by reason of any action by any court having jurisdiction
of any bankruptcy or insolvency proceeding involving Lessee from commencing or
prosecuting foreclosure or other appropriate proceedings or from making payments
of rent or other sums to Lessor, the times specified in subparagraphs 6(c) and
(d) above for commencing or prosecuting such foreclosure or other proceedings or
making such payments of rent or other sums to Lessor shall be extended for the
period of such prohibition.

               7. If the Lease shall terminate for any reason or be rejected or
disaffirmed pursuant to bankruptcy law or other law affecting creditors' rights,
to the extent permitted by applicable law, any Lender or a person designated by
such Lender, shall have the right, exercisable by notice to Lessor, within sixty
(60) days after the effective date of such termination, to enter into a new
lease ("New Lease") of the Premises with Lessor. The term of said New Lease
shall begin on the date of the execution of such New Lease and shall continue
for the remainder of the term. Such New Lease shall otherwise contain the same
terms and conditions as those set forth in the Lease as amended by this
Amendment, except for requirements which are no longer applicable or have
already been performed, provided that such Lender shall have remedied all
defaults on the part of Lessee under the Lease which are susceptible of being
remedied by the payment of money. It is the intention of Lessor and Lessee that
such New Lease shall have the same priority relative to other rights or
interests to or in the Premises as the Lease, and Lessor covenants to discharge
or cause to be subordinated

                                      -4-
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to such New Lease any lien or encumbrance which was subject to the Lease at the
time of such termination. The provisions of this Paragraph shall survive the
termination of the Lease and shall continue in full force and effect thereafter
to the same extent as if this Paragraph was a separate and independent contract
among Lessor, Lessee and any Lender. From the date on which the Lender shall
serve upon Lessor the aforesaid notice of the exercise of its right to a New
Lease, such Lender may use and enjoy the Premises without hindrance by Lessor.

               8. Lessor and Lessee acknowledge that any Lender may rely on the
terms, covenants, conditions and representations contained in this Lease when
making a loan or otherwise extending credit to Lessee and such Lender shall be
deemed to be a third party beneficiary with respect to the Third Amendment of
Lease and this Amendment. Lessor and Lessee agree that the Lease shall not be
modified, amended, supplemented, voluntarily surrendered, terminated by Lessee
or mutually terminated without the prior written consent of any Lender.

               9. Lessor and Lessee agree to deliver copies of any notices under
the Lease to any Lender concurrently with the delivery of any such notice to the
other party under the Lease. Lessee shall at all times keep Lessor informed in
writing of the name and mailing address of any Lender and any changes in the
Lender's address for notices.

               10. If both Lessor's and Lessee's estate in the Premises or the
improvements or both become vested in the same owner, the Lease shall
nevertheless not be destroyed by application of the doctrine of merger except at
the express election of the owner and consent of the Lender.

               11. Upon request of a Lender, Lessor shall execute, acknowledge
and deliver to the Lender its certificate certifying (i) that the Lease is in
full force and effect and has not been modified (or, if there have been
modifications, that the Lease is in full force and effect, as modified, and
stating the modifications), (ii) the dates, if any, to which the minimum rent
and other monetary obligations have been paid, (iii) whether to Lessor's
knowledge there are then existing any defaults by Lessee in the performance or
observance by Lessee of any agreement, covenant or condition of the Lease on the
part of Lessee to be performed or observed (and, if so, specifying the same),
and (iv) such other matters reasonably requested by a Lender. Any such
certificate may be relied upon by the Lender.

               12. In the event any Lender desires to elect to exercise its
rights to acquire Lessee's leasehold interest in the Premises, or to transfer
the leasehold interest in the Premises by foreclosure sale or deed in lieu of
foreclosure or other means, the Lender shall provide Lessor not less than thirty
(30) days prior notice of its intention to exercise such rights. Lessor shall
have the right, exercisable within thirty (30) days after receipt of such
written notice to elect to acquire the entire interest in the Lender's loan and
Lender's leasehold mortgage for a price equal to the sum of the outstanding
unpaid balance of the Lender's loan secured by the leasehold mortgage, together
with any applicable prepayment fees and any other amounts due and unpaid under
the leasehold mortgage (collectively, the "Purchase Price"). In the event

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Lessor makes such election, the closing of the acquisition (the "Closing") shall
occur within thirty (30) days after the date of such election through escrow at
a title company selected by Lessor and reasonably acceptable to Lender (the
"Title Company"). At the Closing Lessor shall deliver to Lender through escrow
the Purchase Price and Lender shall assign to Lessor all of its right, title and
interest in Lender's loan and the leasehold mortgage pursuant to documentation
satisfactory to Lender, Lessor and the Title Company. If Lessor fails to deliver
into escrow the required funds within said thirty (30) day period with
instructions to deliver said funds to Lender conditioned only upon receipt of
the documentation necessary to enable the Title Company to insure Lessor as the
sole beneficiary of the leasehold mortgage, Lender shall be entitled to pursue
its rights to acquire or transfer the leasehold estate pursuant to the Lease. If
Lessor delivers said funds as required herein, Lender's rights under the Lease
shall terminate and be of no further force or effect.

               13. If any term, covenant, condition or provision of the Lease or
this Amendment is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the Lease or this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
as a result thereof.

               14. This Amendment may be executed in one or more counterparts,
each of which shall constitute an original and all of which shall be one and the
same agreement.

               15. Except as herein modified, the Lease shall remain unchanged
and in full force and effect.

                                      -6-
<PAGE>   7

               16. The provisions of this Amendment shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto.

               IN WITNESS WHEREOF, Lessor and Lessee have executed this Fourth
Amendment of Lease the day and year first above written.

                                           "LESSOR"

                                           THE BOARD OF TRUSTEES OF
                                           THE LELAND STANFORD JUNIOR
                                           UNIVERSITY

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

                                           "LESSEE"

                                           COMMUNICATIONS & POWER
                                           INDUSTRIES, INC., a Delaware
                                           corporation

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

                                      -7-
<PAGE>   8

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

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

                                      -8-<PAGE>   1

                                                                   EXHIBIT 10.11

                                 LOAN AGREEMENT

                                     between

             COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION,
                             a Delaware corporation

                                       and

                     WELLS FARGO BANK, NATIONAL ASSOCIATION

                        Executed as of December __, 2000

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                         <C>
ARTICLE 1.  DEFINITIONS.....................................................................1
        1.1 DEFINED TERMS...................................................................1
        1.2 EXHIBITS INCORPORATED...........................................................2

ARTICLE 2.  LOAN............................................................................2
        2.1 LOAN............................................................................2
        2.2 LOAN FEE........................................................................3
        2.3 LOAN DOCUMENTS..................................................................3
        2.4 EFFECTIVE DATE..................................................................3
        2.5 MATURITY DATE...................................................................3
        2.6 CREDIT FOR PRINCIPAL PAYMENTS...................................................3
        2.7 INTENTIONALLY OMITTED...........................................................3
        2.8 INTENTIONALLY OMITTED...........................................................3
        2.9 FULL REPAYMENT AND RECONVEYANCE.................................................3
        2.10 LIMITATION ON BORROWER'S LIABILITY.............................................3

ARTICLE 3.  DISBURSEMENT....................................................................4
        3.1 CONDITIONS PRECEDENT............................................................4
        3.2 ACCOUNT, PLEDGE AND ASSIGNMENT, AND DISBURSEMENT AUTHORIZATION..................4

ARTICLE 4.  INTENTIONALLY OMITTED...........................................................4

ARTICLE 5.  INSURANCE.......................................................................5
        5.1 TITLE INSURANCE.................................................................5
        5.2 PROPERTY INSURANCE..............................................................5
        5.3 FLOOD HAZARD INSURANCE..........................................................5
        5.4 LIABILITY INSURANCE.............................................................5
        5.5 GENERAL.........................................................................5

ARTICLE 6.  REPRESENTATIONS AND WARRANTIES..................................................5
        6.1 AUTHORITY/ENFORCEABILITY........................................................5
        6.2 BINDING OBLIGATIONS.............................................................5
        6.3 FORMATION AND ORGANIZATIONAL DOCUMENTS..........................................5
        6.4 NO VIOLATION....................................................................5
        6.5 COMPLIANCE WITH LAWS............................................................6
        6.6 INTENTIONALLY OMITTED...........................................................6
        6.7 FINANCIAL CONDITION.............................................................6
        6.8 INTENTIONALLY OMITTED...........................................................6
        6.9 ACCURACY........................................................................6
        6.10 AMERICANS WITH DISABILITIES ACT COMPLIANCE.....................................6
        6.11 BUSINESS LOAN..................................................................6

ARTICLE 7.  HAZARDOUS MATERIALS.............................................................6
        7.1 SPECIAL REPRESENTATIONS AND WARRANTIES..........................................6
            (a) Hazardous Materials.........................................................6
            (b) Hazardous Materials Laws....................................................7
            (c) Hazardous Materials Claims..................................................7
        7.2 HAZARDOUS MATERIALS COVENANTS...................................................7
            (a) No Hazardous Activities.....................................................7
            (b) Compliance..................................................................7
            (c) Notices.....................................................................7
            (d) Remedial Action.............................................................7
        7.3 INSPECTION BY LENDER............................................................7
        7.4 INTENTIONALLY OMITTED...........................................................7
        7.5 LEGAL EFFECT OF SECTION.........................................................8

ARTICLE 8.  COVENANTS OF BORROWER...........................................................8
        8.1 EXPENSES........................................................................8
        8.2 ERISA COMPLIANCE................................................................8
        8.3 LEASING.........................................................................8
        8.4 APPROVAL OF LEASES..............................................................8
        8.5 INTENTIONALLY OMITTED...........................................................8
        8.6 INTENTIONALLY OMITTED...........................................................8
        8.7 INTENTIONALLY OMITTED...........................................................8
        8.8 OPINION OF LEGAL COUNSEL........................................................8
        8.9 FURTHER ASSURANCES..............................................................9
        8.10 ASSIGNMENT.....................................................................9
        8.11 MANAGEMENT OF PROPERTY.........................................................9
        8.12    SECURITY DEPOSITS...........................................................9

ARTICLE 9.  REPORTING COVENANTS.............................................................9
        9.1 FINANCIAL INFORMATION...........................................................9
        9.2 BOOKS AND RECORDS...............................................................9

ARTICLE 10.  DEFAULTS AND REMEDIES.........................................................10
        10.1 DEFAULT.......................................................................10
             (a) Monetary..................................................................10
             (b) Performance of Obligations................................................10
             (c) Use.......................................................................10
             (d) Condemnation; Attachment..................................................10
             (e) Representations and Warranties............................................10
             (f) Voluntary Bankruptcy; Insolvency; Dissolution.............................10
             (g) Involuntary Bankruptcy....................................................10
             (h) Loss of Priority..........................................................10
             (i) Hazardous Materials.......................................................10
        10.2 ACCELERATION UPON DEFAULT; REMEDIES...........................................10
        10.3 DISBURSEMENTS TO THIRD PARTIES................................................11
        10.4 REPAYMENT OF FUNDS ADVANCED...................................................11
        10.5 RIGHTS CUMULATIVE, NO WAIVER..................................................11
        10.6   POST-DEFAULT ACCESS.........................................................11

ARTICLE 11.  MISCELLANEOUS PROVISIONS......................................................11
        11.1 INDEMNITY.....................................................................11
        11.2 FORM OF DOCUMENTS.............................................................12
        11.3 NO THIRD PARTIES BENEFITED....................................................12
        11.4 NOTICES.......................................................................12
        11.5 ATTORNEY-IN-FACT..............................................................12
        11.6 ACTIONS.......................................................................12
        11.7 RIGHT OF CONTEST..............................................................12
        11.8 RELATIONSHIP OF PARTIES.......................................................12
        11.9 DELAY OUTSIDE LENDER'S CONTROL................................................12
        11.10 ATTORNEYS' FEES AND EXPENSES; ENFORCEMENT....................................13
        11.11 IMMEDIATELY AVAILABLE FUNDS..................................................13
        11.12 LENDER'S CONSENT.............................................................13
        11.13 LOAN SALES AND PARTICIPATION; DISCLOSURE OF INFORMATION......................13
        11.14 CAPITAL ADEQUACY.............................................................13
        11.15 LENDER'S AGENTS..............................................................13
        11.16 TAX SERVICE..................................................................14
        11.17 ARBITRATION..................................................................14
             (a) Arbitration...............................................................14
             (b) Governing Rules...........................................................14
             (c) No Waiver; Provisional Remedies, Self-Help and Foreclosure................14
             (d) Arbitrator Qualifications and Powers; Awards..............................14
             (e) Judicial Review...........................................................15
             (f) Real Property Collateral; Judicial Reference..............................15
             (g) Miscellaneous.............................................................15
        11.18 WAIVER OF RIGHT TO TRIAL BY JURY.............................................15
        11.19 SEVERABILITY.................................................................16
        11.20 HEIRS, SUCCESSORS AND ASSIGNS................................................16
        11.21 TIME.........................................................................16
        11.22 HEADINGS.....................................................................16
        11.23 GOVERNING LAW................................................................16
        11.24 INTEGRATION; INTERPRETATION..................................................16
        11.25 JOINT AND SEVERAL LIABILITY..................................................16
        11.26 COUNTERPARTS.................................................................16

EXHIBIT A - DESCRIPTION OF PROPERTY........................................................19

EXHIBIT B - DOCUMENTS......................................................................20
</TABLE>

<PAGE>   3

                                                                   Loan No. 1440

                                 LOAN AGREEMENT

THIS LOAN AGREEMENT ("Agreement") is executed as of December __, 2000, by and
between COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware
corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender").

                                 R E C I T A L S

A.   Borrower owns or will own certain real property described in Exhibit A
     hereto and all improvements now or hereafter existing thereon
     (collectively, the "Property").

B.   Borrower desires to borrow from Lender, and Lender agrees to loan to
     Borrower, the amounts described below.

NOW, THEREFORE, Borrower and Lender agree as follows:

                             ARTICLE 1. DEFINITIONS

     1.1  DEFINED TERMS. The following capitalized terms generally used in this
          Agreement shall have the meanings defined or referenced below. Certain
          other capitalized terms used only in specific sections of this
          Agreement are defined in such sections.

          "Account" - means an account with Lender, account number #4518-100995,
          in the name of Borrower or Borrower's designee into which Loan
          proceeds will be deposited.

          "ADA" - means the Americans with Disabilities Act, 42 U.S.C. Sections
          12101, et. seq. as now or hereafter amended or modified.

          "Agreement" - shall have the meaning ascribed to such term in the
          preamble hereto.

          "Applicable LIBO Rate" - shall have the meaning ascribed to such term
          in the Note.

          "Bankruptcy Code" - means the Bankruptcy Reform Act of 1978 (11 USC
          Section 101-1330) as now or hereafter amended or recodified.

          "Border Zone Property" - means any property designated as "border zone
          property" under the provisions of California Health and Safety Code,
          Sections 25220 et seq., or any regulation adopted in accordance
          therewith.

          "Borrower" - means COMMUNICATIONS & POWER INDUSTRIES HOLDING
          CORPORATION, a Delaware corporation.

          "Business Day" - 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. Unless
          specifically referenced in this Agreement as a Business Day, all
          references to "days" shall be to calendar days.

          "Deed of Trust" - means that certain Deed of Trust with Absolute
          Assignment of Leases and Rents, Security Agreement and Fixture Filing
          of even date herewith executed by Borrower, as Trustor, to American
          Securities Company, a California corporation, as Trustee, for the
          benefit of Lender, as Beneficiary, as hereafter amended, supplemented,
          replaced or modified.

          "Default" - shall have the meaning ascribed to such term in Section
          10.1.

          "Effective Date" - means the date the Deed of Trust is recorded in the
          Office of the County Recorder of the county where the Property is
          located.

                                     Page 1
<PAGE>   4

          "Hazardous Materials" - shall have the meaning ascribed to such term
          in Section 7.1 (a).

          "Hazardous Materials Claims" - shall have the meaning ascribed to such
          term in Section 7.1 (c).

          "Hazardous Materials Laws" - shall have the meaning ascribed to such
          term in Section 7.1 (b).

          "Lender" - means WELLS FARGO BANK, NATIONAL ASSOCIATION.

          "LIBO Rate" - shall have the meaning ascribed to such term in the
          Note.

          "Loan" - means the principal sum that Lender agrees to lend and
          Borrower agrees to borrow pursuant to the terms and conditions of this
          Agreement: EIGHTEEN MILLION AND NO/100THS DOLLARS ($18,000,000.00).

          "Loan Documents" - means those documents, as hereafter amended,
          supplemented, replaced or modified, properly executed and in
          recordable form, if necessary, listed in Exhibit B as Loan Documents.

          "Loan-to-Value Percentage" - shall have the meaning ascribed to such
          term in Section 2.7.

          "Maturity Date" - means June 1, 2002.

          "Non-Borrower Trustor" - not applicable.

          "Note" - means that certain Promissory Note Secured by Deed of Trust
          of even date herewith, in the original principal amount of the Loan,
          executed by Borrower and payable to the order of Lender, as hereafter
          amended, supplemented, replaced or modified.

          "Original Maturity Date" - means the Maturity Date.

          "Other Related Documents" - means those documents, as hereafter
          amended, supplemented, replaced or modified from time to time,
          properly executed and in recordable form, if necessary, listed in
          Exhibit B as Other Related Documents.

          "Participant" - shall have the meaning ascribed to such term in
          Section 11.13.

          "Property" - shall have the meaning ascribed to such term in Recital
          A.

          "Reserve Percentage" - shall have the meaning ascribed to such term in
          the Note.

          "Secured Obligations" - shall have the meaning ascribed to such term
          in the Deed of Trust.

          "Title Policy" - means the ALTA Lender's Policy of Title Insurance as
          issued by First American Title Company.

     1.2  EXHIBITS INCORPORATED. Exhibits A and B, attached hereto, are hereby
          incorporated into this Agreement.

                                 ARTICLE 2. LOAN

     2.1  LOAN. Subject to the terms of this Agreement, Lender agrees to lend to
          Borrower and Borrower agrees to borrow from Lender the principal sum
          of EIGHTEEN MILLION AND NO/100THS DOLLARS ($18,000,000.00); said sum
          to be evidenced by the Note of even date herewith. The Note shall be
          secured, in part, by the Deed of Trust, of even date herewith,
          encumbering certain real property and improvements as legally defined
          therein. Amounts disbursed to or on behalf of Borrower pursuant to the
          Note shall be used for financing purposes.

                                     Page 2
<PAGE>   5

     2.2  LOAN FEE. Borrower shall pay to Lender, at Loan closing, a loan fee in
          the amount of $225,000.

     2.3  LOAN DOCUMENTS. Borrower shall deliver to Lender concurrently with
          this Agreement each of the documents, properly executed and in
          recordable form, as applicable, described in Exhibit B as Loan
          Documents, together with those documents described in Exhibit B as
          Other Related Documents.

     2.4  EFFECTIVE DATE. The date of the Loan Documents is for reference
          purposes only. The Effective Date of delivery and transfer to Lender
          of the security under the Loan Documents and of Borrower's and
          Lender's obligations under the Loan Documents is the date the Deed of
          Trust is recorded in the Office of the County Recorder of the county
          where the Property is located.

     2.5  MATURITY DATE. The Maturity Date of the Loan shall be June 1, 2002, at
          which time all sums due and owing under this Agreement and the other
          Loan Documents shall be repaid in full. All payments due to Lender
          under this Agreement, whether at the Maturity Date or otherwise, shall
          be paid in immediately available funds.

     2.6  CREDIT FOR PRINCIPAL PAYMENTS. Any payment made upon the outstanding
          principal balance of the Loan shall be credited as of the Business Day
          received, provided such payment is received by Lender no later than
          11:00 a.m. (Pacific Standard Time or Pacific Daylight Time, as
          applicable) and constitutes immediately available funds. Any principal
          payment received after said time or which does not constitute
          immediately available funds shall be credited upon such funds having
          become unconditionally and immediately available to Lender.

     2.7  INTENTIONALLY OMITTED.

     2.8  INTENTIONALLY OMITTED.

     2.9  FULL REPAYMENT AND RECONVEYANCE. Upon receipt of all sums owing and
          outstanding under the Loan Documents, Lender shall issue a full
          reconveyance of the Property from the lien of the Deed of Trust, and
          all related documents of record evidencing the lien of the Deed of
          Trust shall be terminated; provided, however, that all of the
          following conditions shall be satisfied at the time of, and with
          respect to, such reconveyance: (a) Lender shall have received all
          reasonable out-of-pocket escrow, closing and recording costs, the
          costs of preparing and delivering such reconveyance and any sums then
          due and payable under the Loan Documents; and (b) Lender shall have
          received a written release satisfactory to Lender of any set aside
          letter, letter of credit or other form of undertaking which Lender has
          issued to any surety, governmental agency or any other party in
          connection with the Loan and/or the Property. Lender's obligation to
          make further disbursements under the Loan shall terminate as to any
          portion of the Loan undisbursed as of the date of issuance of such
          release or reconveyance, and any commitment of Lender to lend any
          undisbursed portion of the Loan shall be canceled.

     2.10 LIMITATION ON BORROWER'S LIABILITY. Lender's recovery against Borrower
          under the Loan Documents shall be limited solely to the collateral
          given to Lender as security for Borrower's performance under the Loan
          Documents and such recovery shall not be a lien, or the basis of a
          claim of lien or levy of execution, against the general assets of
          Borrower. Notwithstanding the foregoing, Borrower and the general
          assets of Borrower shall be fully liable to Lender to the same extent
          that Borrower would be liable absent the foregoing limitation of this
          paragraph for: (a) fraud or willful misrepresentation; (b) waste; (c)
          failure to pay income taxes or other taxes, assessments or other
          charges attributable to Borrower which can create liens on any portion
          of the Property (to the full extent of any such taxes, assessments or
          other charges); (d) the amount of any money or value of any property
          distributed to any partner of Borrower as a distribution of earnings
          or income from the Property if such distribution was prohibited under
          the terms of this Agreement (to the full extent of such distribution);
          or (e) any breach by Borrower of any covenant under Article 7,
          entitled HAZARDOUS MATERIALs, any representation or warranty of
          Borrower under such Article proving to have been untrue when made, or
          the presence of any significant Hazardous Materials in, on or about
          the Property which are discovered subsequent to the Effective Date. In
          addition, the limitations hereof shall not be deemed to limit: (i) any
          right Lender might otherwise have to obtain injunctive relief against
          Borrower; (ii) any suit or action in connection with the preservation,
          enforcement or foreclosure of the liens, mortgages, assignments and
          security interests now or at any time hereafter securing the payment

                                     Page 3
<PAGE>   6

          and performance of all sums and obligations under this Agreement or
          any of the Loan Documents; or (iii) the collection of amounts which
          may become owing or payable under or on account of insurance,
          condemnation awards or damages for other public actions or surety
          bonds maintained or provided by Borrower; provided, however, that the
          assertion by Lender of any such right, suit, action or collection of
          amounts shall not result in a monetary claim upon the general assets
          of Borrower except as otherwise provided herein.

                             ARTICLE 3. DISBURSEMENT

     3.1  CONDITIONS PRECEDENT. Lender's obligation to make any disbursements or
          take any other action under the Loan Documents shall be subject at all
          times to satisfaction of each of the following conditions precedent:

          (a)  There exists no Default, as defined in this Agreement, or Default
               as defined in any of the other Loan Documents or in the Other
               Related Documents, or event, omission or failure of condition
               which would constitute a Default after notice or lapse of time,
               or both;

          (b)  Lender shall have received all Loan Documents, other documents,
               instruments, policies, and forms of evidence or other materials
               requested by Lender under the terms of this Agreement or any of
               the other Loan Documents;

          (c)  The Deed of Trust is a valid lien upon the Property and is prior
               and superior to all other liens and encumbrances thereon except
               those approved by Lender in writing;

          (d)  Lender shall have received a written appraisal prepared in
               conformance with the requirements of the Comptroller of the
               Currency confirming to the satisfaction of Lender that the Loan
               amount as a percentage of the fair market value of the Property
               (after adjustment for senior liens and regular and special tax
               assessments) does not exceed sixty percent (60%) ("Loan-to-Value
               Percentage"); The valuation date of such appraisal shall be
               within thirty (30) days of the date hereof. Any principal balance
               reduction shall reduce Lender's commitment by a like amount;

          (e)  There are no claims, actions, suits, or proceedings pending, or
               to Borrower's knowledge, threatened against Borrower or affecting
               the Property; and

          (f)  There has been no material adverse change in the financial
               condition of Borrower since the dates of the latest financial
               statements furnished to Lender and, except as otherwise disclosed
               to Lender in writing, Borrower has not entered into any material
               transaction which is not disclosed in such financial statements.

     3.2  ACCOUNT, PLEDGE AND ASSIGNMENT, AND DISBURSEMENT AUTHORIZATION. The
          proceeds of the Loan, when qualified for disbursement, shall be
          deposited into the Account or otherwise disbursed to or for the
          benefit or account of Borrower under the terms of this Agreement;
          provided, however, that any direct disbursements from the Loan which
          are made by means of wire transfer, shall be subject to the provisions
          of any funds transfer agreement which is identified in Exhibit B
          hereto. Disbursements hereunder may be made by Lender upon the written
          request of any person who has been authorized by Borrower to request
          such disbursements until such time as written notice of Borrower's
          revocation of such authority is received by Lender at the address
          herein. As additional security for Borrower's performance under the
          Loan Documents, Borrower hereby irrevocably pledges and assigns to
          Lender all monies at any time deposited in the Account.

                        ARTICLE 4. INTENTIONALLY OMITTED

                                     Page 4
<PAGE>   7

                              ARTICLE 5. INSURANCE

Borrower shall, while any obligation of Borrower remains outstanding, maintain
at Borrower's sole expense, with licensed insurers approved by Lender, the
following policies of insurance in form and substance satisfactory to Lender:

     5.1  TITLE INSURANCE. A Title Policy, together with any endorsements which
          Lender may require, insuring Lender, in the principal amount of the
          Loan, of the validity and the priority of the lien of the Deed of
          Trust upon the Property, subject only to matters approved by Lender in
          writing.

     5.2  PROPERTY INSURANCE. A Casualty Insurance policy, in form and substance
          reasonably acceptable to Lender, including, without limitation, any
          endorsement Lender may reasonably require, insuring Lender against
          damage to the Property in an amount acceptable to Lender. Lender shall
          be named on the policy under a Lender's Loss Payable Endorsement (form
          #438BFU or equivalent).

     5.3  FLOOD HAZARD INSURANCE. A policy of flood insurance, as required by
          applicable governmental regulations, or as deemed necessary by Lender.

     5.4  LIABILITY INSURANCE. A policy of comprehensive general liability
          insurance with limits as required by Lender, insuring against
          liability for injury and/or death to any person and/or damage to any
          property occurring on the Property and/or in from any cause
          whatsoever. No liability or other insurance required to be maintained
          hereunder by Borrower shall be required to provide coverage with
          respect to Hazardous Materials, Hazardous Materials Laws or Hazardous
          Materials Claims.

     5.5  GENERAL. Borrower shall provide to Lender certificates evidencing the
          existence of all required insurance policies, or other evidence of
          insurance acceptable to Lender. All insurance policies shall provide
          that the insurance shall not be cancelable or materially changed
          without ten (10) days prior written notice to Lender. Lender shall be
          named under a Lender's Loss Payable Endorsement (form #438BFU or
          equivalent) on all insurance policies which Borrower actually
          maintains with respect to the Property. Borrower shall provide to
          Lender evidence of any other hazard insurance Lender may deem
          necessary at any time during the Loan.

                    ARTICLE 6. REPRESENTATIONS AND WARRANTIES

As a material inducement to Lender's entry into this Agreement, Borrower
represents and warrants to Lender as of the Effective Date and continuing
thereafter that:

     6.1  AUTHORITY/ENFORCEABILITY. Borrower is in material compliance with all
          laws and regulations applicable to its organization, existence and
          transaction of business and has all necessary rights and powers to
          own, improve and operate the Property as contemplated by the Loan
          Documents.

     6.2  BINDING OBLIGATIONS. Borrower is authorized to execute, deliver and
          perform its obligations under the Loan Documents, and such obligations
          shall be valid and binding obligations of Borrower.

     6.3  FORMATION AND ORGANIZATIONAL DOCUMENTS. Borrower has delivered to
          Lender all formation and organizational documents of Borrower and all
          such formation and organizational documents remain in full force and
          effect and have not been amended or modified since they were delivered
          to Lender. Borrower shall immediately provide Lender with copies of
          any amendments or modifications of the formation or organizational
          documents.

     6.4  NO VIOLATION. Borrower's execution, delivery, and performance under
          the Loan Documents do not: (a) require any consent or approval not
          heretofore obtained under any partnership agreement, operating
          agreement, articles of incorporation, bylaws or other document; (b)
          materially violate any governmental requirement applicable to the
          Property or any other statute, law, regulation or ordinance or any
          order or ruling of any court or governmental entity; (c) materially
          conflict with, or constitute a breach or default or permit the
          acceleration of obligations under any agreement, contract, lease, or
          other document by which

                                     Page 5
<PAGE>   8

          the Borrower is or the Property is bound or regulated; or (d)
          materially violate any statute, law, regulation or ordinance, or any
          order of any court or governmental entity.

     6.5  COMPLIANCE WITH LAWS. Borrower has, and at all times shall have
          obtained, all material permits, licenses, exemptions, and approvals
          necessary to occupy, operate and market the Property, and shall
          maintain material compliance with all governmental requirements
          applicable to the Property and all other applicable statues, laws,
          regulations and ordinances necessary for the transaction of its
          business. The Property is a legal parcel lawfully created in full
          compliance with all subdivision laws and ordinances.

     6.6  INTENTIONALLY OMITTED.

     6.7  FINANCIAL CONDITION. All financial statements and information
          heretofore and hereafter delivered to Lender by Borrower, including,
          without limitation, information relating to the financial condition of
          Borrower, the Property, the partners, joint venturers or members of
          Borrower, and/or any Guarantors, fairly and accurately represent the
          financial condition of the subject thereof and have been prepared
          (except as noted therein) in accordance with generally accepted
          accounting principles consistently applied. Borrower acknowledges and
          agrees that Lender may request and obtain additional information from
          third parties regarding any of the above, including, without
          limitation, credit reports.

     6.8  INTENTIONALLY OMITTED.

     6.9  ACCURACY. All reports, documents, instruments, information and forms
          of evidence delivered to Lender concerning the Loan or security for
          the Loan or required by the Loan Documents are accurate, correct and
          complete in all material respects and do not contain any material
          misrepresentation or omission.

     6.10 AMERICANS WITH DISABILITIES ACT COMPLIANCE. Borrower represents and
          warrants to Lender that, except as previously disclosed to Lender, the
          Property shall be hereafter maintained in full and strict compliance
          with the requirements and regulations of the Americans With
          Disabilities Act, of July 26, 1990, Pub. L. No. 101-336, 104 Stat.
          327, 42 U.S.C. Section 12191, et seq., as hereafter amended. At
          Lender's written request from time to time, Borrower shall provide
          Lender with written evidence of such compliance satisfactory to
          Lender. Borrower shall be solely responsible for all such ADA costs of
          compliance and reporting.

     6.11 BUSINESS LOAN. The Loan is a business loan transaction in the stated
          amount solely for the purpose of carrying on the business of Borrower
          and none of the proceeds of the Loan will be used for the personal,
          family or agricultural purposes of the Borrower.

                         ARTICLE 7. HAZARDOUS MATERIALS

     7.1  SPECIAL REPRESENTATIONS AND WARRANTIES. This Article 7 contains the
          exclusive representations and warranties of Borrower to Lender with
          respect to Hazardous Materials, Hazardous Materials Laws and Hazardous
          Materials Claims on, about or under the Property. Borrower hereby
          specially represents and warrants to the best of Borrower's knowledge
          as of the date of this Agreement as follows:

          (a)  HAZARDOUS MATERIALS. Except as previously disclosed to Lender in
               that certain Expanded Phase I Environmental Site Assessment
               report dated October 6, 2000, the Property is not and has not
               been a site for the use, generation, manufacture, storage,
               treatment, release, threatened release, discharge, disposal,
               transportation or presence of any oil, flammable explosives,
               asbestos, urea formaldehyde insulation, radioactive materials,
               hazardous wastes, toxic or contaminated substances or similar
               materials, including, without limitation, any substances which
               are "hazardous substances," "hazardous wastes," "hazardous
               materials," "toxic substances," "wastes," "regulated substances,"
               "industrial solid wastes," or "pollutants" under the Hazardous
               Materials Laws, as described below, and/or other applicable
               environmental laws, ordinances and regulations (collectively, the
               "Hazardous Materials"). "Hazardous Materials" shall not include
               commercially reasonable amounts of such materials used in the
               ordinary course of operation of the Property

                                     Page 6
<PAGE>   9

               which are used and stored in accordance with all applicable
               environmental laws, ordinances and regulations.

          (b)  HAZARDOUS MATERIALS LAWS. Except as previously disclosed to
               Lender in that certain Expanded Phase I Environmental Site
               Assessment report dated October 6, 2000, the Property is in
               compliance with all laws, ordinances and regulations relating to
               Hazardous Materials ("Hazardous Materials Laws"), including,
               without limitation: the Clean Air Act, as amended, 42 U.S.C.
               Section 7401 et seq.; the Federal Water Pollution Control Act, as
               amended, 33 U.S.C. Section 1251 et seq.; the Resource
               Conservation and Recovery Act of 1976, as amended, 42 U.S.C.
               Section 6901 et seq.; the Comprehensive Environment Response,
               Compensation and Liability Act of 1980, as amended (including the
               Superfund Amendments and Reauthorization Act of 1986, "CERCLA"),
               42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act,
               as amended, 15 U.S.C. Section 2601 et seq.; the Occupational
               Safety and Health Act, as amended, 29 U.S.C. Section 651, the
               Emergency Planning and Community Right-to-Know Act of 1986, 42
               U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of
               1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe
               Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq.;
               and all comparable state and local laws, laws of other
               jurisdictions or orders and regulations.

          (c)  HAZARDOUS MATERIALS CLAIMS. Except as previously disclosed to
               Lender in that certain Expanded Phase I Environmental Site
               Assessment report dated October 6, 2000, there are no claims or
               actions ("Hazardous Materials Claims") pending or threatened
               against Borrower by any governmental entity or agency or by any
               other person or entity relating to Hazardous Materials or
               pursuant to the Hazardous Materials Laws.

     7.2  HAZARDOUS MATERIALS COVENANTS. Borrower agrees as follows:

          (a)  NO HAZARDOUS ACTIVITIES. Except as previously disclosed to Lender
               in that certain Expanded Phase I Environmental Site Assessment
               report dated October 6, 2000, Borrower shall not cause or permit
               the Property to be used as a site for the use, generation,
               manufacture, storage, treatment, release, discharge, disposal,
               transportation or presence of any Hazardous Materials.

          (b)  COMPLIANCE. Except as previously disclosed to Lender, Borrower
               shall comply and cause the Property to comply with all Hazardous
               Materials Laws in all material respects.

          (c)  NOTICES. Other than as has been previously disclosed to Lender,
               Borrower shall immediately notify Lender in writing of: (i) the
               discovery of any material amounts of Hazardous Materials on,
               under or about the Property; (ii) any knowledge by Borrower that
               the Property does not comply with any Hazardous Materials Laws in
               all material respects; and (iii) any Hazardous Materials Claims
               against Borrower.

          (d)  REMEDIAL ACTION. In response to the presence of any Hazardous
               Materials on, under or about the Property, other than those
               previously disclosed to Lender in that certain Expanded Phase I
               Environmental Site Assessment report dated October 6, 2000,
               Borrower shall immediately take, at Borrower's sole expense, all
               remedial action required by any Hazardous Materials Laws or any
               judgment, consent decree, settlement or compromise in respect to
               any Hazardous Materials Claims.

     7.3  INSPECTION BY LENDER. Upon a reasonable suspicion that a violation
          exists, and upon reasonable prior notice to Borrower, Lender, its
          employees and agents, may (whether before or after the commencement of
          a nonjudicial or judicial foreclosure proceeding) enter and inspect
          the Property for the purpose of determining the existence, location,
          nature and magnitude of any past or present release or threatened
          release of any Hazardous Materials into, onto, beneath or from the
          Property. Absent the existence of a Default or an emergency, Lender
          shall be limited to entering the Property for the foregoing purposes
          to one time a year.

     7.4  INTENTIONALLY OMITTED.

                                     Page 7
<PAGE>   10

     7.5  LEGAL EFFECT OF SECTION. Borrower and Lender agree that: (a) this
          Article 7 is intended as Lender's written request for information (and
          Borrower's response) concerning the environmental condition of the
          real property security as required by California Code of Civil
          Procedure Section 726.5; and (b) each provision in this Article
          (together with any indemnity applicable to a breach of any such
          provision) with respect to the environmental condition of the real
          property security is intended by Lender and Borrower to be an
          "environmental provision" for purposes of California Code of Civil
          Procedure Section 736, and as such it is expressly understood that
          Borrower's duty to indemnify Lender hereunder shall survive: (a) any
          judicial or non-judicial foreclosure under the Deed of Trust, or
          transfer of the Property in lieu thereof, (b) the release and
          reconveyance or cancellation of the Deed of Trust; and (c) the
          satisfaction of all of Borrower's obligation under the Loan Documents.

                        ARTICLE 8. COVENANTS OF BORROWER

     8.1  EXPENSES. Borrower shall immediately pay Lender upon demand all
          reasonable out-of-pocket costs and expenses incurred by Lender in
          connection with: (a) the preparation of this Agreement, all other Loan
          Documents and Other Related Documents contemplated hereby; (b) the
          administration of this Agreement, the other Loan Documents and Other
          Related Documents for the term of the Loan; and (c) the enforcement or
          satisfaction by Lender of any of Borrower's obligations under this
          Agreement, the other Loan Documents or the Other Related Documents.
          For all purposes of this Agreement, Lender's costs and expenses shall
          include, without limitation, all reasonable out-of-pocket appraisal
          fees, cost engineering and inspection fees, legal fees and expenses,
          accounting fees, environmental consultant fees, auditor fees, and the
          cost to Lender of any title insurance premiums, title surveys,
          reconveyance and notary fees.

     8.2  ERISA COMPLIANCE. Borrower shall at all times comply in all material
          respects with the provisions of ERISA with respect to any retirement
          or other employee benefit plan to which it is a party as employer, and
          as soon as possible after Borrower knows, or has reason to know, that
          any Reportable Event (as defined in ERISA) with respect to any such
          plan of Borrower has occurred, it shall furnish to Lender a written
          statement setting forth details as to such Reportable Event and the
          action, if any, which Borrower proposes to take with respect thereto,
          together with a copy of the notice of such Reportable Event furnished
          to the Pension Benefit Guaranty Corporation.

     8.3  LEASING. Borrower shall keep the current lease with Communications &
          Power Industries, Inc. as tenant in full force and effect and shall
          not terminate or amend said lease without the prior written consent of
          Lender, which consent shall not be unreasonably withheld.

     8.4  APPROVAL OF LEASES. All leases of all or any part of the Property,
          other than the lease with Communications & Power Industries, Inc.,
          shall: (a) be upon terms and with tenants approved by Lender prior to
          Borrower's execution of any such lease, such approval not to be
          unreasonably withheld; and (b) include estoppel, subordination,
          attornment and mortgagee protection provisions reasonably satisfactory
          to Lender. All standard lease forms and any material deviation from
          any form, shall be approved by Lender prior to execution of any lease
          using such form. All amendments to leases and any termination of
          leases shall not be made without Lender's prior written consent.

     8.5  INTENTIONALLY OMITTED.

     8.6  INTENTIONALLY OMITTED.

     8.7  INTENTIONALLY OMITTED.

     8.8  OPINION OF LEGAL COUNSEL. Borrower shall provide, at Borrower's
          expense, an opinion of legal counsel in form and content satisfactory
          to Lender to the effect that: (a) upon due authorization, execution
          and recordation or filing as may be specified in the opinion, each of
          the Loan Documents shall be legal, valid and binding instruments,
          enforceable against the makers thereof in accordance with their
          respective terms, subject to customary exceptions and assumptions; (b)
          upon the consummation of a properly conducted non-judicial foreclosure
          sale under the Deed of Trust, all rights of redemption of Borrower
          shall be extinguished; and (c) the interest rate terms do not violate
          any applicable usury laws.

                                     Page 8
<PAGE>   11

     8.9  FURTHER ASSURANCES. Upon Lender's reasonable request and at Borrower's
          sole cost and expense, Borrower shall execute, acknowledge and deliver
          any other instruments and perform any other acts necessary, desirable
          or proper, as reasonably determined by Lender, to carry out the
          purposes of this Agreement and the other Loan Documents or to perfect
          and preserve any liens created by the Loan Documents. Furthermore,
          Borrower agrees (i) to keep Lender fully informed of any and all
          developments relating to that certain Stock Sale Agreement by and
          between Varian Associates, Inc. and Communications & Power Industries
          Holding Corporation, dated as of June 9, 1995, as amended, including
          without limitation, those certain rights under Section 10.2 thereof
          (the "Indemnity Agreement"), solely, however, as such Indemnity
          Agreement relates to the Property, and (ii) to consider in good faith
          any suggestion made by Lender with respect to such Indemnity
          Agreement, solely as it pertains to the Property.

     8.10 ASSIGNMENT. Without the prior written consent of Lender, Borrower
          shall not assign Borrower's interest under any of the Loan Documents,
          or in any monies due or to become due thereunder, and any assignment
          without such consent shall be void.

     8.11 MANAGEMENT OF PROPERTY. Without the prior written consent of Lender,
          Borrower shall not enter into any agreement providing for the
          management, leasing or operation of the Property.

     8.12 SECURITY DEPOSITS. To the extent applicable, Borrower shall maintain
          all deposits, security deposits, letters of credit, lease bonds,
          substitute deposits, credit enhancements and other like items
          ("Security Deposits") under or relating to Leases in a separately
          designated account ("Security Deposit Account") with Lender or
          Lender's agent, under Lender's sole dominion and control. Borrower
          shall cause tenants who have delivered Security Deposits in the form
          of letters of credit, lease bonds or like items to have such letters
          of credit, lease bonds or like items amended to provide for Lender as
          beneficiary thereunder. Lender or Lender's agent may cause all such
          letters of credit, lease bonds or like items to be held during the
          term of the Loan by Lender, by Lender's agent or any other Person
          requested by Lender. Borrower agrees that all future Security Deposits
          shall be deposited in the Security Deposit Account if in cash or
          delivered to Lender or Lender's designee in the form of a letter of
          credit, lease bonds or like items (with Lender named as the sole
          beneficiary thereunder). Borrower agrees that the Security Deposits
          and all other tenant Security Deposits placed in the Security Deposit
          Account (i) shall be maintained as required by the applicable legal
          requirements and (ii) shall be returned if and when required by the
          applicable Leases and legal requirements, provided that, Borrower
          shall be solely responsible for compliance with the terms of the
          applicable Lease and legal requirements and Lender and Lender's agent
          shall in no event be liable for any failure of Borrower to so comply.
          All Security Deposits received by Borrower with respect to new Leases
          or existing Leases (if not already so deposited) shall promptly be
          deposited into the Security Deposit Account if in cash, or delivered
          to Lender or Lender's designee if in the form of a letter of credit,
          lease bonds or like items (with Lender named as sole beneficiary
          thereunder). Borrower shall hereafter direct all tenants to make all
          additional cash Security Deposit payments directly to the Security
          Deposit Account.

                         ARTICLE 9. REPORTING COVENANTS

     9.1  FINANCIAL INFORMATION. Borrower shall deliver to Lender, as soon as
          available, but in no event later than one hundred twenty (120) days
          after Borrower's fiscal year end, a current financial statement
          (including, without limitation, an income and expense statement and
          balance sheet) signed by the Chief Financial Officer of Borrower
          together with any Securities and Exchange Commission filings for the
          following entities:

               Borrower, and
               Communications & Power Industries, Inc.

     9.2  BOOKS AND RECORDS. Borrower shall maintain complete books of account
          and other records for the Property and for disbursement and use of the
          proceeds of the Loan, and the same shall be available for inspection
          and copying by Lender upon reasonable prior notice.

                                     Page 9
<PAGE>   12

                        ARTICLE 10. DEFAULTS AND REMEDIES

     10.1 DEFAULT. The occurrence of any one or more of the following shall
          constitute an event of default ("Default") under this Agreement and
          the other Loan Documents:

          (a)  MONETARY. Borrower's failure to pay when due any sums payable
               under the Note or any of the other Loan Documents; or

          (b)  PERFORMANCE OF OBLIGATIONS. Borrower's failure to perform any
               obligation in addition to those in Section 10.1 (a) above under
               any of the Loan Documents; provided, however, that if a cure
               period is provided for the remedy of such failure, Borrower's
               failure to perform will not constitute a Default until such date
               as the specified cure period expires; or

          (c)  USE. The prohibition, enjoining or interruption of Borrower's
               right to occupy, use or lease the Property for a continuous
               period of more than sixty (60) days; or

          (d)  CONDEMNATION; ATTACHMENT. (i) The condemnation, seizure or
               appropriation of, or occurrence of an uninsured casualty with
               respect to any material portion of the Property; or (ii) the
               sequestration or attachment of, or any levy or execution upon any
               of the Property, any other collateral provided by Borrower under
               any of the Loan Documents, or any substantial portion of the
               other assets of Borrower, which sequestration, attachment, levy
               or execution is not released, expunged or dismissed prior to the
               earlier of sixty (60) days thereafter or the sale of the assets
               affected thereby; or

          (e)  REPRESENTATIONS AND WARRANTIES. (i) The failure of any
               representation or warranty of Borrower in any of the Loan
               Documents and the continuation of such failure for more than ten
               (10) days after written notice to Borrower from Lender requesting
               that Borrower cure such failure; or

          (f)  VOLUNTARY BANKRUPTCY; INSOLVENCY; DISSOLUTION. (i) The filing of
               a petition by Borrower for relief under the Bankruptcy Code, or
               under any other present or future state or federal law regarding
               bankruptcy, reorganization or other debtor relief law; (ii) the
               filing of any pleading or an answer by Borrower in any
               involuntary proceeding under the Bankruptcy Code or other debtor
               relief law which admits the jurisdiction of the court or the
               petition's material allegations regarding Borrower's insolvency;
               (iii) a general assignment by Borrower for the benefit of
               creditors; or (iv) Borrower applying for, or the appointment of,
               a receiver, trustee, custodian or liquidator of Borrower or any
               of its property; or

          (g)  INVOLUNTARY BANKRUPTCY. The failure of Borrower to effect a full
               dismissal of any involuntary petition under the Bankruptcy Code
               or under any other debtor relief law that is filed against
               Borrower or in any way restrains or limits Borrower or Lender
               regarding the Loan or the Property, prior to the earlier of the
               entry of any court order granting relief sought in such
               involuntary petition, or sixty (60) days after the date of filing
               of such involuntary petition; or

          (h)  LOSS OF PRIORITY. The failure at any time of the Deed of Trust to
               be a valid first lien upon the Property or any portion thereof,
               other than as a result of any release or reconveyance of the Deed
               of Trust with respect to all or any portion of the Property
               pursuant to the terms and conditions of this Agreement; or

          (i)  HAZARDOUS MATERIALS. The discovery of any new significant
               Hazardous Materials in, on or about the Property subsequent to
               the Effective Date that were not previously disclosed to Lender.
               Any such Hazardous Materials shall be "significant" for this
               purpose if said Hazardous Materials, in Lender's sole, but
               reasonable, discretion, have a materially adverse impact on the
               value of the Property.

     10.2 ACCELERATION UPON DEFAULT; REMEDIES. Upon the occurrence and during
          the continuation of a Default specified in Section 10.1(f) or
          Obligations shall automatically become immediately due and payable,
          without presentment, demand,

                                    Page 10
<PAGE>   13

          protest, notice or other requirements of any kind, all of which are
          hereby expressly waived by Borrower. Upon the occurrence and during
          the continuation of any Default specified in this Article, other than
          a Default under Section 10.1(f) or Section 10.1(g), Lender may, at its
          sole option, declare all sums owing to Lender under the Note, this
          Agreement and the other Loan Documents immediately due and payable.
          Upon such acceleration, Lender may, in addition to all other remedies
          permitted under this Agreement and the other Loan Documents and at law
          or equity, apply any sums in the Account to the sums owing under the
          Loan Documents and any and all obligations of Lender to fund further
          disbursements under the Loan shall terminate.

     10.3 DISBURSEMENTS TO THIRD PARTIES. Upon the occurrence and during the
          continuation of a Default occasioned by Borrower's failure to pay
          money to a third party as required by this Agreement, Lender may but
          shall not be obligated to make such payment from the Loan proceeds or
          other funds of Lender. If such payment is made from proceeds of the
          Loan, Borrower shall immediately deposit with Lender, upon written
          demand, an amount equal to such payment. If such payment is made from
          funds of Lender, Borrower shall immediately repay such funds upon
          written demand of Lender. In either case, the Default with respect to
          which any such payment has been made by Lender shall not be deemed
          cured until such deposit or repayment (as the case may be) has been
          made by Borrower to Lender.

     10.4 REPAYMENT OF FUNDS ADVANCED. Any funds expended by Lender in the
          exercise of its rights or remedies under this Agreement and the other
          Loan Documents shall be payable to Lender upon demand, together with
          interest at the rate applicable to the principal balance of the Note
          from the date the funds were expended.

     10.5 RIGHTS CUMULATIVE, NO WAIVER. All Lender's rights and remedies
          provided in this Agreement and the other Loan Documents, together with
          those granted by law or at equity, are intended to be cumulative and
          may, to the full extent permitted by law, be exercised by Lender at
          any time. Lender's exercise of any right or remedy shall not
          constitute a cure of any Default unless all sums then due and payable
          to Lender under the Loan Documents are repaid and Borrower has cured
          all other Defaults. No waiver shall be implied from any failure of
          Lender to take, or any delay by Lender in taking, action concerning
          any Default or failure of condition under the Loan Documents, or from
          any previous waiver of any similar or unrelated Default or failure of
          condition. Any waiver or approval under any of the Loan Documents must
          be in writing and shall be limited to its specific terms.

     10.6 POST-DEFAULT ACCESS. Upon the commencement of a nonjudicial or
          judicial foreclosure, Foothill Capital Corporation, as agents for the
          lender to Communications & Power Industries, Inc. ("Tenant's Lender"),
          shall have up to sixty (60) calendar days in which to enter the
          Property and remove the personal property of Communications & Power
          Industries, Inc., but not that of Borrower, provided that Tenant's
          Lender (i) pays rent to Lender at a fair market rate for its occupancy
          of the Property on a pro rated daily basis; (ii) agrees to defend,
          indemnify and hold harmless Lender, it's directors, officers,
          employees, agents, successors and assigns from and against any and all
          direct losses, claims, damages and liabilities (excluding
          consequential or incidental damages) which Lender may incur as a
          result of Tenant's Lender's actions or omissions while in occupancy;
          and (iii) immediately repairs and restores, at its sole cost and
          expense, any and all damage caused by the removal of said personal
          property.

                      ARTICLE 11. MISCELLANEOUS PROVISIONS

     11.1 INDEMNITY. SUBJECT TO THE PROVISIONS OF SECTION 2.10 CONTAINED HEREIN,
          BORROWER HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS LENDER,
          ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS
          FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS,
          ACTIONS, JUDGMENTS, COURT COSTS AND LEGAL OR OTHER EXPENSES
          (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES AND EXPENSES) WHICH
          LENDER MAY INCUR AS A DIRECT OR INDIRECT CONSEQUENCE OF: (A) THE
          PURPOSE TO WHICH BORROWER APPLIES THE LOAN PROCEEDS; (B) THE FAILURE
          OF BORROWER TO PERFORM ANY OBLIGATIONS AS AND WHEN REQUIRED BY THIS
          AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; (C) ANY FAILURE AT ANY
          TIME OF ANY OF BORROWER'S REPRESENTATIONS OR WARRANTIES TO BE TRUE AND
          CORRECT; OR (D) ANY ACT OR OMISSION BY BORROWER, CONSTITUENT PARTNER
          OR MEMBER OF BORROWER, ANY

                                    Page 11
<PAGE>   14

          CONTRACTOR, SUBCONTRACTOR OR MATERIAL SUPPLIER, ENGINEER, ARCHITECT OR
          OTHER PERSON OR ENTITY WITH RESPECT TO ANY OF THE PROPERTY. SUBJECT TO
          THE PROVISIONS OF SECTION 2.10 CONTAINED HEREIN, BORROWER SHALL
          IMMEDIATELY PAY TO LENDER UPON DEMAND ANY AMOUNTS OWING UNDER THIS
          INDEMNITY, TOGETHER WITH INTEREST FROM THE DATE THE INDEBTEDNESS
          ARISES UNTIL PAID AT THE RATE OF INTEREST APPLICABLE TO THE PRINCIPAL
          BALANCE OF THE NOTE.

     11.2 FORM OF DOCUMENTS. The form and substance of all documents,
          instruments, and forms of evidence to be delivered to Lender under the
          terms of this Agreement and any of the other Loan Documents shall be
          subject to Lender's approval and shall not be modified, superseded or
          terminated in any respect without Lender's prior written approval.

     11.3 NO THIRD PARTIES BENEFITED. No person other than Lender and Borrower
          and their permitted successors and assigns shall have any right of
          action under any of the Loan Documents.

     11.4 NOTICES. All notices, demands, or other communications under this
          Agreement and the other Loan Documents shall be in writing and shall
          be delivered to the appropriate party at the address set forth on the
          signature page of this Agreement (subject to change from time to time
          by written notice to all other parties to this Agreement). All
          notices, demands or other communications 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; 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.

     11.5 ATTORNEY-IN-FACT. Borrower hereby irrevocably appoints and authorizes
          Lender, as Borrower's attorney-in-fact, which agency is coupled with
          an interest, to execute and/or record in Lender's or Borrower's name
          any notices, instruments or documents that Lender deems appropriate to
          protect Lender's interest under any of the Loan Documents.

     11.6 ACTIONS. Borrower agrees that Lender, in exercising the rights, duties
          or liabilities of Lender or Borrower under the Loan Documents, may
          commence, appear in or defend any action or proceeding purporting to
          affect the Property, or the Loan Documents and Borrower shall
          immediately reimburse Lender upon demand for all reasonable
          out-of-pocket expenses so incurred or paid by Lender, including,
          without limitation, reasonable out-of-pocket attorneys' fees and
          expenses and court costs.

     11.7 RIGHT OF CONTEST. Borrower may contest in good faith any claim,
          demand, levy or assessment by any person other than Lender which would
          constitute a Default if: (a) Borrower pursues the contest diligently,
          in a manner which Lender determines is not prejudicial to Lender, and
          does not impair the rights of Lender under any of the Loan Documents;
          and (b) Borrower deposits with Lender any funds or other forms of
          assurance which Lender in good faith determines from time to time
          appropriate to protect Lender from the consequences of the contest
          being unsuccessful. Borrower's compliance with this Section shall
          operate to prevent such claim, demand, levy or assessment from
          becoming a Default.

     11.8 RELATIONSHIP OF PARTIES. The relationship of Borrower and Lender under
          the Loan Documents is, and shall at all times remain, solely that of
          borrower and lender, and Lender neither undertakes nor assumes any
          responsibility or duty to Borrower or to any third party with respect
          to the Property, except as expressly provided in this Agreement and
          the other Loan Documents.

     11.9 DELAY OUTSIDE LENDER'S CONTROL. Lender shall not be liable in any way
          to Borrower or any third party for Lender's failure to perform or
          delay in performing under the Loan Documents if such failure to
          perform or delay in performing results directly or indirectly from, or
          is based upon, the action, inaction, or purported action, of any
          governmental or local authority, or because of war, rebellion,
          insurrection, strike, lock-out, boycott or blockade (whether presently
          in effect, announced or in the reasonable judgment of Lender deemed
          probable), or from any Act of God or other cause or event beyond
          Lender's control.

                                    Page 12
<PAGE>   15

    11.10 ATTORNEYS' FEES AND EXPENSES; ENFORCEMENT. If any attorney is engaged
          by Lender to enforce or defend any provision of this Agreement, any of
          the other Loan Documents or Other Related Documents, or as a
          consequence of any Default under the Loan Documents, with or without
          the filing of any legal action or proceeding, and including, without
          limitation, any reasonable out-of-pocket fees and expenses incurred in
          any bankruptcy proceeding of the Borrower, then Borrower shall
          immediately pay to Lender, upon demand, the amount of all reasonable
          out-of-pocket attorneys' fees and expenses and all reasonable
          out-of-pocket 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 of the
          Note as specified therein.

    11.11 IMMEDIATELY AVAILABLE FUNDS. Unless otherwise expressly provided for
          in this Agreement, all amounts payable by Borrower to Lender shall be
          payable only in United States currency, immediately available funds.

    11.12 LENDER'S CONSENT. Wherever in this Agreement there is a requirement
          for Lender's consent and/or a document to be provided or an action
          taken "to the satisfaction of Lender", it is understood by such phrase
          that Lender shall exercise its consent, right or judgment in a
          reasonable manner given the specific facts and circumstance applicable
          at the time.

    11.13 LOAN SALES AND PARTICIPATION; DISCLOSURE OF INFORMATION. Borrower
          agrees that Lender may elect, at any time, to sell, assign or grant
          participation in all or any portion of its rights and obligations
          under the Loan Documents, and that any such sale, assignment or
          participation may be to one or more financial institutions, private
          investors, and/or other entities, at Lender's sole discretion
          ("Participant"). Borrower further agrees that Lender may disseminate
          to any such actual or potential purchaser(s), assignee(s) or
          participant(s) all documents and information (including, without
          limitation, all financial information) which has been or is hereafter
          provided to or known to Lender with respect to: (a) the Property and
          its operation; (b) any party connected with the Loan (including,
          without limitation, the Borrower, any partner of Borrower, any
          constituent partner or member of Borrower; and/or (c) any lending
          relationship other than the Loan which Lender may have with any party
          connected with the Loan. In the event of any such sale, assignment or
          participation, Lender and the parties to such transaction shall share
          in the rights and obligations of Lender as set forth in the Loan
          Documents only as and to the extent they agree among themselves. In
          connection with any such sale, assignment or participation, Borrower
          further agrees that the Loan Documents shall be sufficient evidence of
          the obligations of Borrower to each purchaser, assignee, or
          participant, and upon written request by Lender, Borrower shall enter
          into such amendments or modifications to the Loan Documents as may be
          reasonably required in order to evidence any such sale, assignment or
          participation. The indemnity obligations of Borrower under the Loan
          Documents shall also apply with respect to any purchaser, assignee or
          participant.

    11.14 CAPITAL ADEQUACY. If Lender or any Participant in the Loan, or either
          of them, determines that compliance with any law or regulation or with
          any guideline or request from any central bank or other governmental
          agency (whether or not having the force of law) affects or would
          affect the amount of capital required or expected to be maintained by
          Lender or such Participant, or any corporation controlling Lender or
          such Participant, as a consequence of, or with reference to, Lender's
          or such Participant's or such corporation's commitments or its making
          or maintaining advances below the rate which Lender or such
          Participant or such corporation controlling Lender could have achieved
          but for such compliance (taking into account the policies of Lender or
          such Participant or corporation with regard to capital), then Borrower
          shall, from time to time, within thirty (30) calendar days after
          written demand by Lender or such Participant, pay to Lender or such
          Participant additional amounts sufficient to compensate Lender or such
          Participant or such corporation controlling Lender to the extent that
          Lender determines such increase in capital is allocable to Lender's
          obligations hereunder, provided that such demand is made of similar
          borrowers under loan documents containing similar provisions as those
          contained in the Loan Documents. A certificate as to such amounts,
          submitted to Borrower by Lender or such Participant, shall be
          conclusive and binding for all purposes, absent manifest error.

    11.15 LENDER'S AGENTS. Lender may designate an agent or independent
          contractor to exercise any of Lender's rights under this Agreement and
          any of the other Loan Documents. Any reference to Lender in any of the
          Loan Documents shall include Lender's agents, employees or independent
          contractors.

                                    Page 13
<PAGE>   16

          Borrower shall pay the costs of such agent or independent contractor
          either directly to such person or to Lender in reimbursement of such
          costs, as applicable.

    11.16 TAX SERVICE. Lender is authorized to secure, at Borrower's expense, a
          tax service contract with a third party vendor which shall provide tax
          information on the Property satisfactory to Lender.

    11.17 ARBITRATION.

          (a)  ARBITRATION. Upon the demand of any party, any dispute shall be
               resolved by binding arbitration (except as set forth in
               Paragraphs 11.17(e) and 11.17(f) below) in accordance with the
               terms of this Agreement. A "Dispute" shall mean any action,
               dispute, claim or controversy of any kind, whether in contract or
               tort, statutory or common law, legal or equitable, now existing
               or hereafter arising under or in connection with, or in any way
               pertaining to, this Agreement and each other document, contract
               and instrument required hereby or now or hereafter delivered to
               Lender in connection herewith, or any past, present or future
               extensions of credit and other activities, transactions or
               obligations of any kind related directly or indirectly to any of
               the foregoing documents, including without limitation, any of the
               foregoing arising in connection with the exercise of any
               self-help, ancillary or other remedies pursuant to any of the
               foregoing documents. Any party may by summary proceedings bring
               an action in court to compel arbitration of a Dispute. Any party
               who fails or refuses to submit to arbitration following a lawful
               demand by any other party shall bear all costs and expenses
               incurred by such other party in compelling arbitration of any
               Dispute.

          (b)  GOVERNING RULES. Arbitration proceedings shall be administered by
               the American Arbitration Association ("AAA") or such other
               administrator as the parties shall mutually agree upon in
               accordance with the AAA Commercial Arbitration Rules. All
               Disputes submitted to arbitration shall be resolved in accordance
               with the Federal Arbitration Act (Title 9 of the United States
               Code), notwithstanding any conflicting choice of law provision in
               any of the foregoing documents. The arbitration shall be
               conducted at a location in California selected by the AAA or
               other administrator. If there is any inconsistency between the
               terms hereof and any such rules, the terms and procedures set
               forth herein shall control. All statutes of limitation applicable
               to any Dispute shall apply to any arbitration proceeding. All
               discovery activities shall be expressly limited to matters
               directly relevant to the Dispute being arbitrated. Judgment upon
               any award rendered in an arbitration may be entered in any court
               having jurisdiction; provided however, that nothing contained
               herein shall be deemed to be a waiver by any party that is a bank
               of the protections afforded to it under Section 91 of Title 12 of
               the United States Code or any similar applicable state law.

          (c)  NO WAIVER; PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
               provision hereof shall limit the right of any party to exercise
               self-help remedies such as setoff, foreclosure against or sale of
               any real or personal property collateral or security, or to
               obtain provisional or ancillary remedies, including without
               limitation, injunctive relief, sequestration, attachment,
               garnishment or the appointment of a receiver from a court of
               competent jurisdiction before, after or during the pendency of
               any arbitration or other proceeding. The exercise of any such
               remedy shall not waive the right of any party to compel
               arbitration or reference hereunder.

          (d)  ARBITRATOR QUALIFICATIONS AND POWERS; AWARDS. Arbitrators must be
               active members of the California State Bar or retired judges of
               the state or federal judiciary of California, with expertise in
               the substantive law applicable to the subject matter of the
               Dispute. Arbitrators are empowered to resolve Disputes by summary
               rulings in response to motions filed prior to the final
               arbitration hearing. Arbitrators (i) shall resolve all Disputes
               in accordance with the substantive law of the State of
               California, (ii) may grant any remedy or relief that a court of
               the State of California could order or grant within the scope
               hereof and such ancillary relief as is necessary to make
               effective any award, and (iii) shall have the power to award
               recovery of all costs and fees, to impose sanctions and to take
               such other actions as they deem necessary to the same extent a
               judge could pursuant to the Federal Rules of Civil Procedure, the
               California Rules of Civil Procedure or other applicable law. Any
               Dispute in which the amount in controversy is $5,000,000 or less
               shall be decided by a single arbitrator who shall not render an
               award of greater than $5,000,000 (including damages, costs, fees
               and expenses). By submission to a single arbitrator, each party
               expressly waives any right or

                                    Page 14
<PAGE>   17

               claim to recover more than $5,000,000. Any Dispute in which the
               amount in controversy exceeds $5,000,000 shall be decided by
               majority vote of a panel of three arbitrators; provided however,
               that all three arbitrators must actively participate in all
               hearings and deliberations.

          (e)  JUDICIAL REVIEW. Notwithstanding anything herein to the contrary,
               in any arbitration in which the amount in controversy exceeds
               $25,000,000, the arbitrators shall be required to make specific,
               written findings of fact and conclusions of law. In such
               arbitrations (i) the arbitrators shall not have the power to make
               any award which is not supported by substantial evidence or which
               is based on legal error, (ii) an award shall not be binding upon
               the parties unless the findings of fact are supported by
               substantial evidence and the conclusions of law are not erroneous
               under the substantive law of the State of California, and (iii)
               the parties shall have in addition to the grounds referred to in
               the Federal Arbitration Act for vacating, modifying or correcting
               an award the right to judicial review of (1) whether the findings
               of fact rendered by the arbitrators are supported by substantial
               evidence, and (2) whether the conclusions of law are erroneous
               under the substantive law of the State of California. Judgment
               confirming an award in such a proceeding may be entered only if a
               court determines the award is supported by substantial evidence
               and not based on legal error under the substantive law of the
               State of California.

          (f)  REAL PROPERTY COLLATERAL; JUDICIAL REFERENCE. Notwithstanding
               anything herein to the contrary, no Dispute shall be submitted to
               arbitration if the Dispute concerns indebtedness secured directly
               or indirectly, in whole or in part, by any real property unless
               (i) the holder of the mortgage, lien or security interest
               specifically elects in writing to proceed with the arbitration,
               or (ii) all parties to the arbitration waive any rights or
               benefits that might accrue to them by virtue of the single action
               rule statute of California, thereby agreeing that all
               indebtedness and obligations of the parties, and all mortgages,
               liens and security interests securing such indebtedness and
               obligations, shall remain fully valid and enforceable. If any
               such Dispute is not submitted to arbitration, the Dispute shall
               be referred to a referee in accordance with California Code of
               Civil Procedure Section 638 et seq., and this general reference
               agreement is intended to be specifically enforceable in
               accordance with said Section 638. A referee with the
               qualifications required herein for arbitrators shall be selected
               pursuant to the AAA's selection procedures. Judgment upon the
               decision rendered by a referee shall be entered in the court in
               which such proceeding was commenced in accordance with California
               Code of Civil Procedure Sections 644 and 645.

          (g)  MISCELLANEOUS. To the maximum extent practicable, the AAA, the
               arbitrators and the parties shall take all action required to
               conclude any arbitration proceeding within 180 days of the filing
               of the Dispute with the AAA. No arbitrator or other party to an
               arbitration proceeding may disclose the existence, content or
               results thereof, except for disclosures of information by a party
               required in the ordinary course of its business, by applicable
               law or regulation, or to the extent necessary to exercise any
               judicial review rights set forth herein. If more than one
               agreement for arbitration by or between the parties potentially
               applies to a Dispute, the arbitration provision most directly
               related to the foregoing documents or the subject matter of the
               Dispute shall control. This Agreement may be amended or modified
               only in writing signed by Lender and Borrower. If any provision
               of this Agreement shall be held to be prohibited by or invalid
               under applicable law, such provision shall be ineffective only to
               the extent of such prohibition or invalidity, without
               invalidating the remainder of such provision or any remaining
               provisions of this Agreement. This arbitration provision shall
               survive termination, amendment or expiration of any of the
               foregoing documents or any relationship between the parties.

    11.18 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY
          EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
          ACTION OR CAUSE OF ACTION (a) ARISING UNDER THE LOAN DOCUMENTS,
          INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION
          THEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
          THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE
          LOAN DOCUMENTS (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT,
          DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR
          THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH
          CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER
          ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
          EACH PARTY HEREBY

                                    Page 15
<PAGE>   18

          AGREES AND CONSENTS THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
          ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
          WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
          ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.

    11.19 SEVERABILITY. If any provision or obligation under this Agreement and
          the other Loan Documents shall be determined by a court of competent
          jurisdiction to be invalid, illegal or unenforceable, that provision
          shall be deemed severed from the Loan Documents and the validity,
          legality and enforceability of the remaining provisions or obligations
          shall remain in full force as though the invalid, illegal, or
          unenforceable provision had never been a part of the Loan Documents,
          provided, however, that if the rate of interest or any other amount
          payable under the Note or this Agreement or any other Loan Document,
          or the right of collectibility therefore, are declared to be or become
          invalid, illegal or unenforceable, Lender's obligations to make
          advances under the Loan Documents shall not be enforceable by
          Borrower.

    11.20 HEIRS, SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
          under the terms and conditions of this Agreement, the terms of the
          Loan Documents shall bind and inure to the benefit of the heirs,
          successors and assigns of the parties.

    11.21 TIME. Time is of the essence of each and every term of this
          Agreement.

    11.22 HEADINGS. All article, section or other headings appearing in this
          Agreement and any of the other Loan Documents are for convenience of
          reference only and shall be disregarded in construing this Agreement
          and any of the other Loan Documents.

    11.23 GOVERNING LAW. This Agreement shall be governed by, and construed and
          enforced in accordance with the laws of the State of California,
          except to the extent preempted by federal laws. Borrower and all
          persons and entities in any manner obligated to Lender under the Loan
          Documents 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.

    11.24 INTEGRATION; INTERPRETATION. 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.

    11.25 JOINT AND SEVERAL LIABILITY. The liability of all persons and
          entities obligated in any manner under this Agreement and any of the
          Loan Documents shall be joint and several.

    11.26 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 of, or on behalf of, each party, or
          that the signature of all persons required to bind any 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, each of the
          parties hereto. Any signature page to any counterpart may be detached
          from such counterpart without impairing the legal effect of the
          signatures thereon and thereafter attached to another counterpart
          identical thereto except having attached to it additional signature
          pages.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                    Page 16
<PAGE>   19

IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as of the
date appearing on the first page of this Agreement.

                                        "LENDER"

                                        WELLS FARGO BANK,
                                        NATIONAL ASSOCIATION

                                        By:
                                           -------------------------------------

                                        Name:
                                             -----------------------------------

                                        Its:
                                            ------------------------------------

Lender's Address                        With a copy to:

WELLS FARGO BANK, NATIONAL ASSOCIATION  WELLS FARGO BANK, NATIONAL ASSOCIATION
Real Estate Group (AU# 2034)            Disbursement and Operations Center
555 Montgomery Street                   2120 East Park Place, Suite 100
16th Floor                              El Segundo, CA  90245
San Francisco, CA 94111
                                        Attention:  Marissa Santos
Attention:  Robin L. Dixon

                                        "BORROWER"

                                        COMMUNICATIONS & POWER INDUSTRIES
                                        HOLDING CORPORATION,
                                        a Delaware corporation

                                        By:
                                           -------------------------------------

                                        Name:
                                             -----------------------------------

                                        Its:
                                            ------------------------------------

                                    Page 17
<PAGE>   20

                                        Borrower's Address:
                                        607 Hansen Way
                                        Palo Alto, CA 94303-1110

                                        Attention: Lynn E. Harvey, CFO

                                        With a copy to:
                                        Leonard Green & Partners, L.P.
                                        11111 Santa Monica Boulevard, Suite 2000
                                        Los Angeles, California 90025

                                        Attention: Greg Annick

                                        With a copy to:
                                        Irell & Manella LLP
                                        1800 Avenue of the Stars, Suite 900
                                        Los Angeles, California 90067-4276

                                        Attention: Chris Kennedy

                                    Page 18
<PAGE>   21

                                                                       EXHIBIT A
                                                                   Loan No. 1440

                       EXHIBIT A - DESCRIPTION OF PROPERTY

Exhibit A to LOAN AGREEMENT between COMMUNICATIONS & POWER INDUSTRIES HOLDING
CORPORATION, a Delaware corporation, as "Borrower", and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Lender", dated as of December __, 2000.

The land referred to herein is situated in the County of San Mateo, State of
California, and is described as follows:

All that certain real property located in the City of San Carlos, County of San
Mateo, State of California, all of Parcel 1 as shown on the Parcel Map recorded
in Volume 20 of Parcel Maps at page 23 in the Records of said County, described
in metes as follows:

Beginning at Northerly corner of said Parcel; thence through the following
numbered courses:

1)   South 37 degrees 56' 04" East 739.82 feet to a curve to the right with a
     radius of 447.00 feet

2)   along said curve through a central angle of 33 degrees 54' 48" an arc
     distance of 264.58 feet

3)   South 04 degrees 01' 16" East 182.93 feet to a curve to the left with a
     radius of 553.00 feet

4)   along said curve through a central angle of 02 degrees 38' 43" an arc
     distance of 25.53 feet

5)   South 46 degrees 51' 36" West 476.39 feet

6)   North 42 degrees 08' 24" West 1153.65 feet

7)   North 47 degrees 51' 36" East 752.91 feet to the point of beginning.

A.P. No.: 046-051-020                   JPN     046 005 051 02 A
          046-051-070                           046 005 051 07 A

                                    Page 19
<PAGE>   22

                                                                       EXHIBIT B
                                                                   Loan No. 1440

                              EXHIBIT B - DOCUMENTS

Exhibit B to LOAN AGREEMENT between COMMUNICATIONS & POWER INDUSTRIES HOLDING
CORPORATION, a Delaware corporation, as "Borrower", and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Lender", dated as of December __, 2000.

1.   Loan Documents. The documents listed below, numbered 1.1 through 1.5,
     inclusive, and amendments, modifications and supplements thereto which have
     received the prior written consent of Lender, together with any documents
     executed in the future that are approved by Lender and that recite that
     they are "Loan Documents" for purposes of this Agreement are collectively
     referred to herein as the Loan Documents.

     1.1  This Agreement.

     1.2  The Promissory Note Secured by Deed of Trust of even date herewith in
          the original principal amount of the Loan made by Borrower payable to
          the order of Lender.

     1.3  The Deed of Trust with Absolute Assignment of Leases and Rents,
          Security Agreement and Fixture Filing of even date herewith executed
          by Non-Borrower Trustor, as Trustor, to American Securities Company, a
          California corporation, as Trustee, for the benefit of Lender, as
          Beneficiary.

     1.4  Uniform Commercial Code - National Financing Statement - Form UCC-1,
          dated December __, 2000, executed by Borrower as Debtor and Lender as
          Secured Party.

     1.5  Corporate Resolution authorizing borrowing and hypothecation of
          property of even date herewith certified by the Secretary of
          COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware
          corporation.

Other Related Documents (Which Are Not Loan Documents):

     i.   Funds Transfer Agreement for Disbursement of Loan Proceeds dated
          December __, 2000, executed by and between Borrower and Wells Fargo
          Bank, National Association.

     ii.  Agreement For Disbursement Prior To Recording And Amendment To Note of
          even date herewith executed by and between Borrower and Lender.

     iii. Unsecured Hazardous Materials Indemnity Agreement dated December __,
          2000 executed by and between Borrower and Lender.

     iv.  Opinion of Borrower's Legal Counsel dated December __, 2000, executed
          by Irell & Manella LLP.

                                    Page 20

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