10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 28, 2002
OR
[   ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

     For the transition period from                      to                     

Commission File Number: 33-96858-01	Commission File Number: 33-96858
COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION	COMMUNICATIONS & POWER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)	(Exact name of registrant as specified in its charter)
Delaware (State of Incorporation)	Delaware (State of Incorporation)
77-0407395 (I.R.S. employer identification number)	77-0405693 (I.R.S. employer identification number)
811 Hansen Way Palo Alto, California 94303-1110 (650) 846-2900 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)	811 Hansen Way Palo Alto, California 94303-1110 (650) 846-2900 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:	Securities registered pursuant to Section 12(b) of the Act:
None	None
Securities registered pursuant to Section 12(g) of the Act:	Securities registered pursuant to Section 12(g) of the Act:
None	None

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [   ].

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding for each of the Registrant’s classes of Common Stock, as of the latest practicable date: Communications & Power Industries Holding Corporation: 4,908,172 shares of Common Stock, $.01 par value, at July 31, 2002. Communications & Power Industries, Inc.: 1 share of Common Stock, $.01 par value, at July 31, 2002.

TABLE OF CONTENTS

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
	Consolidated Condensed Balance Sheets, June 28, 2002 and September 28, 2001
	Consolidated Condensed Statements of Operations for the 13-week periods ended June 28, 2002 and June 29, 2001
	Consolidated Condensed Statements of Operations for the 39-week periods ended June 28, 2002 and June 29, 2001
	Consolidated Condensed Statements of Cash Flows for the 39-week periods June 28, 2002 and June 29, 2001
COMMUNICATIONS & POWER INDUSTRIES, INC.
	Consolidated Condensed Balance Sheets, June 28, 2002 and September 28, 2001
	Consolidated Condensed Statements of Operations for the 13-week periods ended June 28, 2002 and June 29, 2001
	Consolidated Condensed Statements of Operations for the 39-week periods ended June 28, 2002 and June 29, 2001
	Consolidated Condensed Statements of Cash Flows for the 39-week periods June 28, 2002 and June 29, 2001
	Notes to Consolidated Condensed Financial Statements
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II: OTHER INFORMATION
SIGNATURES
EXHIBIT 10.11.1
EXHIBIT 10.12.1
EXHIBIT 10.13.1
EXHIBIT 10.14.1
EXHIBIT 99.1
EXHIBIT 99.2
EXHIBIT 99.3
EXHIBIT 99.4

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

PART I: FINANCIAL INFORMATION
ITEM 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
		Consolidated Condensed Balance Sheets, June 28, 2002 and September 28, 2001	2
		Consolidated Condensed Statements of Operations for the 13-week periods ended June 28, 2002 and June 29, 2001	3
		Consolidated Condensed Statements of Operations for the 39-week periods ended June 28, 2002 and June 29, 2001	4
		Consolidated Condensed Statements of Cash Flows for the 39-week periods June 28, 2002 and June 29, 2001	5
		Notes to Consolidated Condensed Financial Statements	10
	COMMUNICATIONS & POWER INDUSTRIES, INC.
		Consolidated Condensed Balance Sheets, June 28, 2002 and September 28, 2001	6
		Consolidated Condensed Statements of Operations for the 13-week periods ended June 28, 2002 and June 29, 2001	7
		Consolidated Condensed Statements of Operations for the 39-week periods ended June 28, 2002 and June 29, 2001	8
		Consolidated Condensed Statements of Cash Flows for the 39-week periods June 28, 2002 and June 29, 2001	9
		Notes to Consolidated Condensed Financial Statements	10
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			13
PART II: OTHER INFORMATION			21
SIGNATURES			22

-1-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands-unaudited)

		June 28,			September 28,
		2002			2001
ASSETS
Current Assets
	Cash and cash equivalents	$	2,459		$	2,903
	Accounts receivable, net		36,686			46,738
	Inventories		43,959			57,678
	Deferred taxes		876			3,500
	Other current assets		2,192			2,241
Total current assets			86,172			113,060
Property, plant, and equipment, net			57,267			62,698
Goodwill and other intangibles, net			23,132			23,452
Debt issue costs, net			3,649			4,857
Total assets		$	170,220		$	204,067
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current Liabilities
	Revolving credit facility	$	7,685		$	21,293
	Current portion of capital leases		151			919
	Mortgage financing		17,750			18,000
	Senior term loan		—			20,000
	Accounts payable		13,274			14,729
	Accrued expenses		20,778			17,859
	Product warranty		4,467			4,225
	Income taxes payable		3,034			407
	Accrued dividends payable		8,183			4,387
	Advance payments from customers		9,567			9,193
Total current liabilities			84,889			111,012
Senior subordinated notes			100,000			100,000
Obligations under capital leases			—			90
Total liabilities			184,889			211,102
Senior Redeemable Preferred Stock of Subsidiary			28,640			28,479
Junior Preferred Stock of Subsidiary			24,567			22,094
Commitments and contingencies
Stockholders’ Deficit
	Common stock		49			49
	Additional paid-in capital		19,111			19,111
	Accumulated deficit		(85,823	)		(75,587	)
	Stockholder loans		(1,213	)		(1,181	)
Net stockholders’ deficit			(67,876	)		(57,608	)
Total liabilities, preferred stock and stockholders’ deficit		$	170,220		$	204,067

See accompanying notes to the unaudited consolidated condensed financial statements.

-2-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				13-Week			13-Week
				period ended			period ended
				June 28,			June 29,
				2002			2001
	Sales			$	64,792		$	72,724
	Cost of sales				48,128			57,071
	Gross profit				16,664			15,653
	Operating costs and expenses:
			Research and development		1,584			1,466
			Selling and marketing		4,097			4,648
			General and administrative		4,807			5,954
	Total operating costs and expenses				10,488			12,068
	Operating income				6,176			3,585
	Interest expense				(4,228	)		(5,208	)
	Income (loss) before taxes				1,948			(1,623	)
	Income tax expense				2,987			250
	Net loss				(1,039	)		(1,873	)
Preferred dividends:
		Senior redeemable preferred stock			1,310			1,115
		Junior preferred stock			853			743
Net loss attributable to common stock				$	(3,202	)	$	(3,731	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-3-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				39-Week			39-Week
				period ended			period ended
				June 28,			June 29,
				2002			2001
	Sales			$	191,632		$	199,670
	Cost of sales				147,863			158,596
	Gross profit				43,769			41,074
	Operating costs and expenses:
			Research and development		4,356			4,395
			Selling and marketing		11,682			12,975
			General and administrative		13,950			16,216
	Total operating costs and expenses				29,988			33,586
	Operating income				13,781			7,488
	Gain on sale of property, plant and equipment				—			887
	Interest expense				(12,767	)		(15,739	)
	Income (loss) before taxes				1,014			(7,364	)
	Income tax expense				4,820			750
	Net loss				(3,806	)		(8,114	)
Preferred dividends:
		Senior redeemable preferred stock			3,796			3,233
		Junior preferred stock			2,473			2,155
Net loss attributable to common stock				$	(10,075	)	$	(13,502	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-4-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(in thousands — unaudited)

		39-Week			39-Week
		period ended			period ended
		June 28,			June 29,
		2002			2001
OPERATING ACTIVITIES
	Net cash provided by (used in) operating activities	$	36,517		$	(3,984	)
INVESTING ACTIVITIES
	Proceeds from sale of property, plant and equipment		—			1,922
	Purchase of property, plant and equipment		(2,144	)		(3,784	)
	Net cash used in investing activities		(2,144	)		(1,862	)
FINANCING ACTIVITIES
	Repayments on capital leases		(858	)		(595	)
	Payment of debt issue costs		(101	)		(2,368	)
	Repayment of terminated revolving credit facility		—			(40,000	)
	Net (repayment) proceeds from revolving credit facility		(13,608	)		25,580
	Repayments on terminated senior term loans		—			(16,049	)
	(Repayment) proceeds from senior term loan		(20,000	)		20,000
	(Repayment) proceeds from mortgage financing		(250	)		18,000
	Net cash (used in) provided by financing activities		(34,817	)		4,568
NET DECREASE IN CASH AND CASH EQUIVALENTS			(444	)		(1,278	)
Cash and cash equivalents at beginning of period			2,903			4,766
Cash and cash equivalents at end of period		$	2,459		$	3,488

See accompanying notes to the unaudited consolidated condensed financial statements.

-5-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands-unaudited)

		June 28,			September 28,
		2002			2001
ASSETS
Current Assets
	Cash and cash equivalents	$	2,459		$	2,903
	Accounts receivable, net		36,686			46,738
	Inventories		43,959			57,678
	Deferred taxes		876			3,500
	Other current assets		2,192			2,241
Total current assets			86,172			113,060
Property, plant, and equipment, net			43,725			48,672
Goodwill and other intangibles, net			23,132			23,452
Debt issue costs, net			3,558			4,715
Note receivable from parent			5,750			5,750
Total assets		$	162,337		$	195,649
LIABILITIES, REDEEMABLE PREFERRED STOCK AND DEFICIT
Current Liabilities
	Revolving credit facility	$	7,685		$	21,293
	Current portion of capital leases		151			919
	Senior term loan		—			20,000
	Accounts payable		13,274			15,175
	Accrued expenses		21,690			18,196
	Product warranty		4,467			4,225
	Income taxes payable		3,197			407
	Accrued dividends payable		8,183			4,387
	Advance payments from customers		9,567			9,193
Total current liabilities			68,214			93,795
Senior subordinated notes			100,000			100,000
Deferred income on sale-leaseback			7,417			7,735
Obligations under capital leases			—			90
Total liabilities			175,631			201,620
Senior Redeemable Preferred Stock			28,640			28,479
Commitments and contingencies
Stockholders’ Deficit:
	Junior preferred stock		2			2
	Common stock		—			—
	Additional paid-in capital		43,724			41,252
	Accumulated deficit		(84,447	)		(74,523	)
	Stockholder loans		(1,213	)		(1,181	)
Net stockholders’ deficit			(41,934	)		(34,450	)
Total liabilities, senior redeemable preferred stock and stockholders’ deficit		$	162,337		$	195,649

See accompanying notes to the unaudited consolidated condensed financial statements.

-6-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				13-Week			13-Week
				period ended			period ended
				June 28,			June 29,
				2002			2001
	Sales			$	64,792		$	72,724
	Cost of sales				48,128			57,071
	Gross profit				16,664			15,653
	Operating costs and expenses:
			Research and development		1,584			1,466
			Selling and marketing		4,097			4,648
			General and administrative		5,154			6,359
	Total operating costs and expenses				10,835			12,473
	Operating income				5,829			3,180
	Interest expense				(3,731	)		(4,530	)
	Income (loss) before taxes				2,098			(1,350	)
	Income tax expense				3,150			250
	Net loss				(1,052	)		(1,600	)
Preferred dividends:
		Senior redeemable preferred stock			1,310			1,115
		Junior preferred stock			853			743
Net loss attributable to common stock				$	(3,215	)	$	(3,458	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-7-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				39-Week			39-Week
				period ended			period ended
				June 28,			June 29,
				2002			2001
	Sales			$	191,632		$	199,670
	Cost of sales				147,863			158,596
	Gross profit				43,769			41,074
	Operating costs and expenses:
			Research and development		4,356			4,395
			Selling and marketing		11,682			12,975
			General and administrative		14,985			16,896
	Total operating costs and expenses				31,023			34,266
	Operating income				12,746			6,808
	Gain on sale of property, plant and equipment				—			887
	Interest expense				(11,257	)		(14,253	)
	Income (loss) before taxes				1,489			(6,558	)
	Income tax expense				4,983			750
	Net loss				(3,494	)		(7,308	)
Preferred dividends:
		Senior redeemable preferred stock			3,796			3,233
		Junior preferred stock			2,473			2,155
Net loss attributable to common stock				$	(9,763	)	$	(12,696	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-8-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(in thousands — unaudited)

		39-Week			39-Week
		period ended			period ended
		June 28,			June 29,
		2002			2001
OPERATING ACTIVITIES
	Net cash provided by (used in) operating activities	$	36,166		$	(3,708	)
INVESTING ACTIVITIES
	Proceeds from sale of property to parent		—			17,250
	Proceeds from sale of property, plant and equipment					1,922
	Purchase of property, plant and equipment		(2,144	)		(3,784	)
	Net cash (used in) provided by investing activities		(2,144	)		15,388
FINANCING ACTIVITIES
	Repayments on capital leases		(858	)		(595	)
	Payment of debt issue costs		—			(1,894	)
	Repayments of terminated revolving credit facility		—			(40,000	)
	Net (repayments) proceeds from revolving credit facility		(13,608	)		25,580
	Repayments of terminated senior term loans		—			(16,049	)
	(Repayments) proceeds from senior term loan		(20,000	)		20,000
	Net cash used by financing activities		(34,466	)		(12,958	)
NET DECREASE IN CASH AND CASH EQUIVALENTS			(444	)		(1,278	)
Cash and cash equivalents at beginning of period			2,903			4,766
Cash and cash equivalents at end of period		$	2,459		$	3,488

See accompanying notes to the unaudited consolidated condensed financial statements.

-9-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

NOTES TO CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
(unaudited)

1. Basis of Presentation

The accompanying unaudited consolidated condensed financial statements of Communications & Power Industries Holding Corporation (“Holding”) and Communications & Power Industries, Inc. (“CPI”, both companies together referred to as the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted and, accordingly, these financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Company’s September 28, 2001 Annual Report on Form 10-K. Management believes that these unaudited interim condensed financial statements contain all adjustments, all of which are of a normal recurring nature, necessary to present fairly the financial position of the Company, and its results of operations and cash flows for the interim period presented. The results for the interim periods reported are not necessarily indicative of the results for the complete fiscal year 2002.

2. Inventories

Inventories are stated at the lower of average cost or market (net realizable value). The main components of inventories are as follows:

	June 28,		September 28,
	2002		2001
	(In thousands)
Raw materials and parts	$	32,339	$	40,776
Work in process		8,004		14,874
Finished goods		3,616		2,028
Total inventories	$	43,959	$	57,678

3. Supplemental Cash Flow Information

	Holding				CPI
	39-Week Period Ended				39-Week Period Ended
	June 28,		June 29,		June 28,		June 29,
	2002		2001		2002		2001
	(In millions)
Cash Payments
Interest payments	$	9.0	$	11.6	$	8.3	$	10.9
Tax payments	$	0.7	$	0.6	$	0.7	$	0.6
Non-cash Financing
Unpaid cash dividends on senior preferred stock	$	8.2	$	3.2	$	8.2	$	3.2

-10-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

4. Segments and Related Information

The Company has two reportable segments: vacuum electronic devices (“VEDs”) and satcom equipment. The CEO, identified as the Chief Operating Decision Maker, evaluates performance and allocates resources based on the Company’s principal performance measure: earnings before income taxes, interest, depreciation and amortization (“EBITDA”).

Summarized financial information concerning the Company’s reportable segments is shown in the following table. Included in the “Other” column is financial information for the Company’s Solid State Products Division, which did not meet the quantitative thresholds, and certain unallocated corporate-level operating expenses. Intersegment product transfers are recorded at cost.

			Satcom
(In thousands)	VED”s		Equipment			Other			Total
For the 13-Week Period Ended June 28, 2002:
Revenues from external customers	$	54,103	$	10,015		$	674		$	64,792
Intersegment product transfers		3,531		—			229			3,760
EBITDA — Holding		11,535		541			(3,135	)		8,941
EBITDA — CPI		11,535		541			(3,642	)		8,434
For the 13-Week Period Ended June 29, 2001:
Revenues from external customers	$	52,775	$	17,124		$	2,825		$	72,724
Intersegment product transfers		6,196		—			480			6,676
EBITDA — Holding		9,108		(260	)		(1,929	)		6,919
EBITDA — CPI		9,108		(260	)		(2,495	)		6,353
For the 39-Week Period Ended June 28, 2002:
Revenues from external customers	$	152,962	$	36,920		$	1,750		$	191,632
Intersegment product transfers		8,400		—			855			9,255
EBITDA — Holding		27,724		768			(5,890	)		22,602
EBITDA — CPI		27,724		768			(7,409	)		21,083
For the 39-Week Period Ended June 29, 2001:
Revenues from external customers	$	148,819	$	44,191		$	6,660		$	199,670
Intersegment product transfers		14,936		—			1,178			16,114
EBITDA — Holding		24,189		(921	)		(4,897	)		18,371
EBITDA — CPI		24,189		(921	)		(5,911	)		17,357

-11-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

A reconciliation of EBITDA from reportable segments to Income (Loss) before Taxes is as follows:

	Holding					CPI
	13-Week Period Ended					13-Week Period Ended
(In thousands)	June 28, 2002		June 29, 2001			June 28, 2002		June 29, 2001
Segment EBITDA	$	8,941	$	6,919		$	8,434	$	6,353
Less:
Depreciation and amortization		2,765		3,334			2,605		3,173
Interest expense		4,228		5,208			3,731		4,530
Income (loss) before taxes	$	1,948	$	(1,623	)		2,098	$	(1,350	)

	Holding					CPI
	39-Week Period Ended					39-Week Period Ended
(In thousands)	June 28, 2002		June 29, 2001			June 28, 2002		June 29, 2001
Segment EBITDA	$	22,602	$	18,371		$	21,083	$	17,357
Less:
Depreciation and amortization		8,821		9,996			8,337		9,662
Interest expense		12,767		15,739			11,257		14,253
Income (loss) before taxes	$	1,014	$	(7,364	)	$	1,489	$	(6,558	)

Sales by geographic area to unaffiliated customers (based on the location of customer) are as follows:

	13-Week Period Ended				39-Week Period Ended
(In thousands)	June 28, 2002		June 29, 2001		June 28, 2002		June 29, 2001
United States	$	42,289	$	46,318	$	135,078	$	134,989
All foreign countries		22,503		26,406		56,554		64,681
Total Sales	$	64,792	$	72,724	$	191,632	$	199,670

CPI has a single customer that accounts for 10% or more of consolidated sales. Sales to this customer were $14.2 million and $11.2 million of the Company’s consolidated sales for the 13-week period ended June 28, 2002 and June 29, 2001, respectively. Sales to this customer were $34.4 million and $32.3 million of the Company’s consolidated sales for the 39-week period ended June 28, 2002 and June 29, 2001, respectively. A substantial majority of these sales were VED segment products, but this customer also purchased satcom equipment products.

5. Mortgage Refinancing

On June 1, 2002, Holding’s mortgage financing of $18.0M was refinanced. Under the terms of the refinancing, the loan was extended until June 1, 2003 and the Company agreed to pay two principal installments of $250,000 on June 1, 2002 and December 1, 2002. The mortgage bears interest at a rate of LIBOR plus 4.25%.

-12-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion reflects the condensed consolidated results of Communications & Power Industries Holding Corporation, which are materially consistent with those of CPI except as identified below and should be read in conjunction with the condensed consolidated financial statements and notes thereto:

CRITICAL ACCOUNTING POLICIES

Management is required to make judgements, assumptions and estimates in preparing its financial statements and related disclosures in conformity with accounting principles generally accepted in the United States. The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended September 28, 2001. The following critical accounting policies are those policies that management believes can affect its financial statements materially and involves subjective assumptions, judgements, or estimates.

Revenue is recognized on a sale to a customer when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectibility is reasonably assured. The Company monitors the creditworthiness of its customers and does not record revenue on sales if collection is not reasonably assured. The Company’s products are generally subject to warranties, and the Company provides for the estimated future costs of repair, replacement or customer accommodation at the time of sale as an additional cost of product.

Inventories are stated at the lower of average cost or market. The carrying value of inventory is reduced for estimated obsolescence or unmarketable inventory based upon assumptions about future demand and market conditions. If actual demand were to be substantially lower than estimated, further write-downs could be required. While these estimates require management to make assumptions and judgements, management believes its understanding of the markets and customers the Company serves as well as the mature nature of many of the products the Company manufactures provides it with the ability to make reliable estimates. Management also evaluates the carrying value of inventory for lower of cost or market on an individual product or contract basis. Analyses are performed based on the estimated costs at completion and if necessary, a provision is recorded to properly reflect the product or contract at the lower of cost or net realizable value (selling price less estimated cost of disposal). If actual contract costs were to be substantially higher than estimated, further provisions could be required.

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparison of its carrying amount to future net cash flows expected to be generated from the operation and sale of long-lived assets. If such assets are considered to be impaired, the Company’s carrying value is reduced to its estimated fair value. Adverse changes in the customers and markets served by the Company could result in future impairments of long-lived assets.

-13-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The Company assesses the recoverability of the carrying amount of goodwill by determining whether the carrying amount of goodwill can be recovered through undiscounted net cash flows of the acquired operation over the remaining amortization period. If determined to be impaired, the carrying amount is reduced to its estimated fair value which is based on an estimate of discounted future net cash flows. Adverse changes in the industries served by the Company, customer demand or other market conditions could result in future impairments of goodwill.

RESULTS OF OPERATIONS

The Company serves the communications, radar, electronic countermeasures, industrial, medical and scientific markets. In addition, the Company divides the communications market into applications for ground-based satellite uplinks for military and commercial uses (“satcom”) and broadcast sectors. The Company defines and discusses its orders and sales trends by the end markets to more clearly relate its business to outside investors. Internally, however, the Company is organized into six operating units that are differentiated based on products. Four of these operating units comprise the Company’s vacuum electronic device (“VED”) segment. The Company also has a satellite communications equipment unit, which is a separate segment, and a solid state products unit, which is not reported as a separate segment. Segment data for VED and satcom equipment segments are included in Note 4 of the Notes to Consolidated Condensed Financial Statements.

Orders during the third quarter of Fiscal 2002 were $55.2 million as compared to $57.5 million for the third quarter of Fiscal 2001. This decrease of $2.3 million for the quarter primarily reflects continued weakness in the commercial communications market (down $ 11.6 million) offset in part by fluctuations in the timing of order receipts in other non-communication markets, particularly radar, when compared to the third quarter of Fiscal 2001.

Orders for the first nine months of Fiscal 2002 of $191.9 million have declined approximately $11.5 million or 5.7% from the $203.3 million in the same period of Fiscal 2001. The decrease from Fiscal 2001 levels was expected and can be attributed primarily to the decrease in orders in the commercial communications market which were down $20.5 million from the first nine months of Fiscal 2001, as communications companies continue to delay capital spending. This situation is expected to continue into Fiscal 2003. Orders in the electronic countermeasures market decreased by $2.5 million from the comparable period last year due primarily to the timing of order releases from quarter to quarter. Industrial orders decreased $2.2 million from the first nine months of Fiscal 2001 primarily as a result of weak economic conditions. Offsetting these decreases somewhat are orders in the radar, medical and scientific markets. There is strong demand in radar market at this time; orders for the first nine months of Fiscal 2002 exceed the comparable period of Fiscal 2001 by $4.5 million and the trend is expected to continue into the fourth quarter. Medical orders are $6.5 million higher than the prior year due to the receipt of large orders for VED’s used in the treatment of cancer. Although these orders reoccur annually, their timing was accelerated and their value has increased from the prior year. Medical orders on an annual basis are expected to be consistent with Fiscal 2001. Scientific orders have increased by $2.7 million on a year-to-date basis compared to Fiscal 2001 due primarily to the receipt of the final phase on an order from a government research laboratory. Excluding this order, orders in the scientific

-14-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

market are expected to be fairly consistent with Fiscal 2001 levels. Overall, incoming order levels fluctuate significantly on a quarterly basis and a particular quarter’s order rate may not be indicative of future order levels. In addition, the Company’s sales are highly dependent upon manufacturing scheduling, performance and shipments and, accordingly, it is not possible to accurately predict when these orders will be recognized as sales.

As of June 28, 2002, the Company had order backlog of $149.0 million, representing approximately seven months of sales, compared to order backlog of $160.7 million, or approximately seven-and-a-half months of sales, as of June 29, 2001. Order backlog at the end of the third quarter also decreased slightly from $151.5 million at the end of Fiscal 2001.

Sales for the third quarter of Fiscal 2002 were $64.8 million, a decrease of $7.9 million, or 10.9%, from the same period in Fiscal 2001. This decrease was driven primarily by lower sales in the commercial communications market. Sales for the first nine months of Fiscal 2002 were $191.6 million, down $8.1 million from $199.7 million in the comparable period of Fiscal 2001. This decrease can be attributed to lower demand in the commercial communications and industrial markets with sales down $11.1 million and $4.4 million, respectively, from the comparable period of Fiscal 2001. Offsetting this decrease are sales to the radar, medical and scientific markets which have increased by $2.9 million, $1.4 million and $4.0 million, respectively from the first nine months of Fiscal 2001. Sales in the radar and scientific markets have benefited from increased military and research spending. Sales in the electronic countermeasures market were down $0.9 million from the first nine months of Fiscal 2001.

Gross margin increased 4.2% to 25.7% for the third quarter of Fiscal 2002, compared with the third quarter of Fiscal 2001. The gross margin also increased for the nine-month period from 20.6% of sales in Fiscal 2001 to 22.8% of sales in Fiscal 2002. Gross margins were negatively effected in Fiscal 2001 by start-up costs on several new satcom products. In addition, margin fluctuations are expected due to the mix of products sold during any period.

Operating costs and expenses were $10.5 million, or 16.2% of sales, for the third quarter of Fiscal 2002 as compared to $12.1 million, or 16.6 % of sales, for the third quarter of Fiscal 2001. For the nine months ended June 28, 2002, operating costs and expenses decreased $3.6 million compared with a year ago from $33.6 million, or 16.8 % of sales, in Fiscal 2001 to $30.0 million, or 15.7% of sales, in Fiscal 2002. A portion of this decrease reflects a $1.3 million reduction in costs for the first nine months of Fiscal 2002 as compared to the comparable period of Fiscal 2001 which was associated with the relocation of the Satcom Division’s production from Palo Alto, California to the Company’s facility in Ontario, Canada. Fiscal 2001 operating costs also include $0.4 million for the consolidation of the Company’s administrative offices into a single building in Palo Alto. The remainder of the decrease reflects the Company’s continuing efforts to reduce costs and improve operating efficiency.

Earnings before interest, income taxes, depreciation and amortization (“EBITDA”)¹ for the third quarter of Fiscal 2002 were $8.9 million, or 13.7% of sales, compared to $6.9 million, or 9.5% of sales, for the

¹ EBITDA is presented because some investors may use it as a financial indicator of the ability to service or incur indebtedness. EBITDA should not be considered as an alternative to net earnings (loss), as a measure of operating results, cash flows or liquidity.

-15-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

third quarter of Fiscal 2001. EBITDA for the first nine months of Fiscal 2002 were $22.6 million, or 11.8% of sales, compared to $18.4 million, or 9.2% of sales, for the first nine months of Fiscal 2001. This increase in EBITDA can be attributed to the improved margins coupled with the impact of lower operating costs.

Income tax expense for the third quarter of Fiscal 2002 was $3.0 million compared to $0.3 million for the third quarter of Fiscal 2001. For the nine months ended June 28, 2002, the income tax expense was $4.8 million compared to $0.8 million for the corresponding period of Fiscal 2001. The increase in income tax expense relates primarily to taxable income resulting from a timing difference in conjunction with the Satcom relocation to Canada.

Net loss was $1.0 million for the third quarter of Fiscal 2002 compared to a net loss of $1.9 million for the third quarter of Fiscal 2001. For the nine months ended June 28, 2002, the net loss was $3.8 million compared to a net loss of $8.1 million for the corresponding period of Fiscal 2001. The decrease in the net loss for both periods resulted from improved gross margins, decreased operating and interest expenses partially offset by the increase in income tax expense. Interest expense has decreased due to a reduction in outstanding debt as well as lower interest rates.

CPI’s operating results differ slightly from Holding due to a sale-leaseback transaction between CPI and Holding which took place in December 2000. In the first nine months of Fiscal 2002, CPI’s net income before taxes was $1.5 million, which was approximately $0.5 million higher than Holdings’ net income before taxes of $1.0 million. As a result of this transaction, operating costs for CPI were approximately $1.0 million higher than those of Holding due to rental payments paid by CPI to Holding for use of the San Carlos facility offset by amortization of the deferred gain on the sales-leaseback and additional depreciation on the San Carlos facility. Interest expense, net, for CPI was approximately $1.5 million lower than that of Holding. The decrease primarily relates to the fact that Holding’s interest expense includes interest paid on the mortgage financing of the San Carlos facility combined with CPI’s interest income on a note receivable with Holding. All other operations data for CPI is consistent with Holding’s for the third quarter of Fiscal 2002.

FINANCIAL CONDITION

Cash flows provided by operating activities for the first nine months of Fiscal 2002 were $36.5 million, compared with cash used in operating activities of $4.0 million during the first nine months of Fiscal 2001. The positive cash flow was generated primarily from reductions in accounts receivable and inventories from Fiscal 2001 balances. The Company began the year with significant amounts of accounts receivable and inventory and has made substantial progress in reducing the balances by $10.1 million and $13.7 million, respectively, contributing to improved cash performance.

Investing activities were comprised of investment in property, plant and equipment totaling $2.1 million for the first nine months of Fiscal 2002. Purchases of property, plant and equipment decreased approximately $1.7 million from the comparable period of Fiscal 2001 of which approximately $1.0 million can be attributed to the relocation of the Company’s satcom operations to its facility in Ontario, Canada. The remaining decrease is a result of the Company’s continued focus on cash management. The Company currently anticipates that capital expenditure requirements for Fiscal 2002 will be down

-16-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

significantly from the $5.8 million spent in Fiscal 2001 of which $4.4 million related to ongoing capital improvement requirements.

Financing activities during the first nine months of Fiscal 2002 were related primarily to repayment of the Company’s $20.0 million senior term loan and repayments on the Company’s secured credit facility (“Credit Facility”) of $13.6 million. The $20.0 million senior term loan was repaid in June 2002 using approximately $9.3 million in available cash and drawing $10.7 million from its line of credit.

As of June 28, 2002, the Company had $23.5 million available under its revolving line of credit that expires December 22, 2004. The following is a summary of certain obligations and commitments of the Company as of June 28, 2002:

		Due in Fiscal Years
												2007 and
(In thousands)		2002		2003		2004		2005		2006		Thereafter		Total
Debt obligations, including capital lease obligations		$	7,805	$	17,781	$	—	$	100,000	$	—	$	—	$	125,586
Noncancellable operating leases			288		593		430		294		9		—		1,614
Senior Redeemable Preferred Stock			—		—		—		—		—		28,640		28,640
	Total cash obligations	$	8,093	$	18,374	$	430	$	100,294	$	9	$	28,640	$	155,840
Standby letters of credit		$	349	$	4,528	$	18	$	—	$	—	$	—	$	4,895

The Company’s debt obligations include mortgage financing of $17.8 million which was refinanced in June 2002. Under the terms of the refinancing, the loan was extended until June 1, 2003 and the Company agreed to pay two principal installments of $250,000 on June 1, 2002 and December 1, 2002. Management expects that cash to be generated by operations and borrowing under its Credit Facility in conjunction with either extending or finding alternative financing will allow it to meet this obligation. However, there can be no assurance that the combination of cash generated by operations, borrowing availability from the Company’s Credit Facility and additional collateral-based financing will be sufficient to meet the Company’s cash requirements. If the Company is unable to satisfy such cash requirements from these sources, the Company will adopt one or more alternatives, such as reducing or delaying capital expenditures, reducing discretionary costs, negotiating an increase to the Company’s borrowing capacity under its line of credit, and selling and leasing back its facility in San Carlos, California in a transaction with an outside party.

-17-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Market Risk

The Company’s market risk disclosures set forth in its Annual Report on Form 10-K for the fiscal year ended September 28, 2001, have not changed significantly.

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets. SFAS No. 142 changes the accounting for goodwill from an amortization method to an impairment-only approach. Goodwill will be tested annually and whenever events or circumstances occur indicating that goodwill might be impaired. Upon adoption of SFAS No. 142, amortization of goodwill recorded for business combinations will cease. Companies are required to adopt SFAS No. 142 for fiscal years beginning after December 15, 2001, but early adoption is permitted. The Company plans to adopt this Statement beginning in the first quarter of Fiscal 2003 and therefore has not yet determined the impact on its consolidated financial position or results of operations. At the beginning of Fiscal 2003, the goodwill balance, net of amortization, is expected to be $21.7 million.

The FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations,” in August 2001, and SFAS No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets,” in October 2001. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002 and will require that the fair value of an asset retirement obligation be recorded as a liability in the period in which it incurs the obligation. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001. It provides a single accounting model for long-lived assets to be disposed of and replaces SFAS No. 121 “Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of.” The Company does not expect the adoption of these statements to have a material effect on the Company’s consolidated financial position or results of operations. The Company will adopt these Statements beginning in the first quarter of Fiscal 2003

In May 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” This Statement rescinds FASB Statement No. 4, “Reporting Gains and Losses from Extinguishment of Debt,” and an amendment of that Statement, FASB Statement No. 64, “Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.” This Statement amends FASB Statement No. 13, “Accounting for Leases,” to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. This Statement also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. The provisions of SFAS No. 145 are effective in fiscal years beginning after May 15, 2002, with early adoption permitted and, in general, are to be applied prospectively. The Company is currently assessing the impact of SFAS No. 145 on its financial position, results of operations and cash flows as well as timing of its adoption.

-18-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit and Disposal Activities.” This statement revises the accounting for exit and disposal activities under EITF Issue 94-3, “Liability Recognition for Certain Employee Termination Benefits and other Costs to Exit an Activity,” by spreading out the reporting of expenses related to restructuring activities. Commitment to a plan to exit an activity or dispose of long-lived assets will no longer be sufficient to record a one-time charge for most anticipated costs. Instead, companies will record exit or disposal costs when they are “incurred” and can be measured at fair value, and they will subsequently adjust the recorded liability for changes in estimated cash flows. The provisions of SFAS No. 146 are effective prospectively for exit or disposal activities initiated after December 31, 2002. Earlier adoption is encouraged. Companies may not restate previously issued financial statements for the effect of the provisions of SFAS No. 146 and liabilities that a Company previously recorded under EITF Issue 94-3 are grandfathered. The Company is currently assessing the impact of SFAS No. 146 on its financial position, results of operations and cash flows as well as timing of its adoption.

Forward-Looking Statements

This document contains forward-looking statements that relate to future events or the Company’s future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. All written and oral forward-looking statements made in connection with this report which are attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the “risk factors” and other cautionary statements included herein. The Company is under no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results or to changes in the Company’s expectations.

The information in this report is not a complete description of the Company’s business or the risks associated with an investment in the Company’s securities. We urge you to carefully review and consider the various disclosures made by the Company in this report and in the Company’s other reports filed with the SEC.

Risk Factors

You should carefully consider the various risks and uncertainties that impact the Company’s business and the other information in this report and the Company’s other filings with the SEC before you decide to invest in the Company or to maintain or increase your investment. Such risks and uncertainties include, but are not limited to, the following: product demand and market acceptance risks; the effect of general economic conditions; the impact of competitive products and pricing; new product development and commercialization; technological difficulties and the ability to increase margins; production

-19-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

interruptions due to power shutdowns and volatility in energy costs; U.S. Government export policies; changes in Governmental appropriations, national defense policies and availability of Government funds; changes in environmental regulation and legislation; availability of certain critical materials and raw material price fluctuations; the Company’s ability to generate the significant amount of cash needed to service its debt; and the Company’s ability to obtain financing in the future. Any of the foregoing factors could cause the Company’s business, results of operations, or financial condition to suffer and actual results could differ materially from those expected.

-20-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 2: CHANGES IN SECURITIES

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a)  The following exhibits are being filed as part of this report:

Exhibit No.	Description
10.11.1	Modification Agreement of Secured Loan between Holding and Wells Fargo Bank, National Association, dated June 1, 2002
10.12.1	Amended and Restated Promissory Note Secured by Deed of Trust by Holding in favor of Wells Fargo Bank, National Association, dated June 1, 2002
10.13.1	Memorandum of Modification Agreement Amending Deed of Trust by Holding in favor of Wells Fargo Bank, National Association, dated June 1, 2002
10.14.1	Junior Lienor’s Consent and Subordination Agreement by CPI in favor of Wells Fargo Bank, National Association, dated June 1, 2002
99.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.3	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.4	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)  Reports on Form 8-K:

     No reports were filed on Form 8-K during the quarter ended June 28, 2002.

-21-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
By:	/s/ O. Joe Caldarelli
	O. Joe Caldarelli Chief Executive Officer Date: August 8, 2002

By:	/s/ Joel Littman
	Joel Littman Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) Date: August 8, 2002

-22-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COMMUNICATIONS & POWER INDUSTRIES, INC.
By:	/s/ O. Joe Caldarelli
	O. Joe Caldarelli Chief Executive Officer Date: August 8, 2002

By:	/s/ Joel Littman
	Joel Littman Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) Date: August 8, 2002

-23-

EXHIBIT INDEX

Exhibit No.	Description
10.11.1	Modification Agreement of Secured Loan between Holding and Wells Fargo Bank, National Association, dated June 1, 2002
10.12.1	Amended and Restated Promissory Note Secured by Deed of Trust by Holding in favor of Wells Fargo Bank, National Association, dated June 1, 2002
10.13.1	Memorandum of Modification Agreement Amending Deed of Trust by Holding in favor of Wells Fargo Bank, National Association, dated June 1, 2002
10.14.1	Junior Lienor’s Consent and Subordination Agreement by CPI in favor of Wells Fargo Bank, National Association, dated June 1, 2002
99.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.3	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.4	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EX-10.11.1 3 f83380exv10w11w1.txt EXHIBIT 10.11.1 EXHIBIT 10.11.1 Loan No. 1440 MODIFICATION AGREEMENT SECURED LOAN THIS MODIFICATION AGREEMENT ("Agreement") dated June 1, 2002 is entered into by and between WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender"), and COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation ("Borrower"). R E C I T A L S A. Pursuant to the terms of a loan agreement between Borrower and Lender dated December 22, 2000 ("Loan Agreement"), Lender made a loan to Borrower in the principal amount of EIGHTEEN MILLION AND NO/100 DOLLARS ($18,000,000.00) ("Loan"). The Loan is evidenced by a promissory note dated as of the date of the Loan Agreement, executed by Borrower in favor of Lender, in the principal amount of the Loan ("Note"), and is further evidenced by the documents described in the Loan Agreement as "Loan Documents". The Note is secured by, among other things, a deed of trust ("Deed of Trust") dated December 22, 2000, executed by Borrower, as Trustor, to American Securities Company, as Trustee, in favor of Lender, as Beneficiary. The Deed of Trust was recorded December 22, 2000, as Document No. 2000-162764, in the Official Records of San Mateo County, California. B. As of May 31, 2002, the outstanding principal balance under the Loan was Eighteen Million and No/100 Dollars ($18,000,000.00) C. The Note, Deed of Trust, Loan Agreement, this Agreement, the other documents described in the Loan Agreement as "Loan Documents" (the "Existing Loan Documents"), together with all modifications and amendments thereto, the Modification Documents (as defined below), and any document required hereunder, are collectively referred to hereinafter as the "Loan Documents". D. By this Agreement, Borrower and Lender intend to modify and amend certain terms and provisions of the Loan Documents, which shall become effective on June 1, 2002 (the "Effective Date"). NOW, THEREFORE, Borrower and Lender agree as follows: 1. CONDITIONS PRECEDENT. The following are conditions precedent to Lender's obligations under this Agreement: 1.1 If required by Lender, receipt and approval by Lender of a date down to Title Policy No. SM-461651 dated December 22, 2000, issued by First American Title Insurance Company ("Title Company") and assurance acceptable to Lender, including, without limitation, CLTA Endorsement No. 110.5, without deletion or exception other than those expressly approved by Lender in writing, that the priority and validity of the Deed of Trust encumbering the property (the "Property") has not been and will not be impaired by this Agreement or the transactions contemplated hereby; 1.2 Receipt by Lender of the executed originals of this Agreement, the short form of this Agreement (if any) and any and all other documents (the "Modification Documents") and agreements which are required by this Agreement or by any other Loan Document, each in form and content acceptable to Lender; 1.3 Recordation in the Official Records of the County where the Property is located of (i) the short form of this Agreement (if any), and (ii) any other documents which are required to be recorded by this Agreement or by any other Loan Document (if any); 1.4 Reimbursement to Lender by Borrower of Lender's costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, including, without limitation, title insurance costs, recording fees, attorneys' fees, appraisal, engineers' and inspection fees and documentation costs and charges, whether such services are furnished by Lender's employees or agents or by independent contractors; 1.5 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 Modification Documents shall be legal, valid and binding instruments, enforceable against the makers thereof in accordance with their respective terms; (b) Borrower is duly formed and has all requisite authority to enter into the Modification Documents; and (c) such other matters, incident to the transactions contemplated hereby, as Lender may reasonably request. 1.6 The representations and warranties contained in this Agreement are true and correct; 1.7 All payments due and owing to Lender under the Loan Documents have been paid current as of the effective date of this Agreement; 1.8 Receipt and approval of an updated appraisal of the Property satisfactory to Lender; 1.9 Borrower shall purchase interest rate protection satisfactory to Lender in the form of a LIBOR Cap (based on 30-day LIBOR), for the notional amount of $17,500,000.00, at a rate not to exceed three percent (3.00%) for the six (6) month period beginning December 1, 2002 and ending June 1, 2003. 1.10 The payment to Lender of $250,000.00 to be applied as a principal paydown to the Loan. Upon receipt of said principal payment, the outstanding principal balance of the Loan shall be Seventeen Million Seven Hundred Fifty Thousand and No/100 Dollars ($17,750,000.00). 1.11 The payment to Lender of an extension fee in the amount of $45,000.00; and 1.12 The payment to Lender of a documentation fee in the amount of $1,000.00. 2. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants that no Default, breach or failure of condition has occurred, or would exist with notice or the lapse of time or both, under any of the Loan Documents (as modified by this Agreement) and that all representations and warranties herein and in the other Loan Documents are true and correct, which representations and warranties shall survive execution of this Agreement. 3. MODIFICATION OF LOAN DOCUMENTS. The Loan Documents are hereby supplemented and modified to incorporate the following, which shall supersede and prevail over any conflicting provisions of the Loan Documents: 3.1 Extension of Maturity Date. On the Effective Date, the Maturity Date recited in the Note is hereby extended to June 1, 2003. 3.2 Amended and Restated Note. On the Effective Date, the Note described in Recital A herein is superseded and replaced in its entirety by that certain Amended and Restated Promissory Note Secured by Deed of Trust executed by Borrower in the amount of SEVENTEEN MILLION SEVEN HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($17,750,000.00) of even date herewith. 3.3 Principal Payments. In addition to the principal payment required in paragraph 1.9 above, Borrower shall make an additional principal payment in the amount of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000.00) on December 1, 2002. Notwithstanding such principal payment, any outstanding principal balance under the Note on the Maturity Date shall be due and payable on the Maturity Date. Any payment(s) required hereunder shall be due and payable on the first day of the month in which it is due and shall be applied to the outstanding principal balance of the Loan. Any principal balance reductions may not be reborrowed. 3.4 Interest Rate. Except as otherwise provided herein, from and after the Effective Date, the Loan shall bear interest (based on a 360-day year basis and charged on the basis of actual days elapsed) at 4.25% percent per annum above the LIBO Rate pursuant to the terms of the Amended and Restated Promissory Note of even date herewith. 4. FORMATION AND ORGANIZATIONAL DOCUMENTS. Borrower has previously delivered to Lender all of the relevant formation and organizational documents of Borrower, of the partners or joint venturers of Borrower (if any), and of all guarantors of the Loan (if any), and all such formation documents remain in full force and effect and have not been amended or modified since they were delivered to Lender. Borrower hereby certifies that: (i) the above documents are all of the relevant formation and organizational documents of Borrower; (ii) they remain in full force and effect; and (iii) they have not been amended or modified since they were previously delivered to Lender. 5. HAZARDOUS MATERIALS; CCP SECTION 726.5; SECTION 736. Without in any way limiting any other provision of this Agreement, Borrower expressly reaffirms as of the date hereof, and continuing hereafter: (i) each and every representation and warranty in the Loan Documents respecting "Hazardous Materials"; and (ii) each and every covenant and indemnity in the Loan Documents respecting "Hazardous Materials". In addition, Borrower and Lender agree that: (i) this Section is intended as Lender's written request for information (and Borrower's response) concerning the environmental condition of the real property security under the terms of California Code of Civil Procedure Section 726.5; and (ii) each representation and/or covenant in this Agreement or any other Loan Document (together with any indemnity applicable to a breach of any such representation and/or covenant) 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. 6. WAIVERS. In further consideration of Lender entering into this Agreement, Borrower waives, with respect to the Loan, any and all rights to which Borrower is or may be entitled pursuant to Section 580a (the so-called "Fair Market Antideficiency Rule"), 580d (the so-called "Private Sale Antideficiency Rule") and 726 (the so-called "One Form of Action Rule") of the California Code of Civil Procedure, as amended or recodified from time to time, together with any other antideficiency or similar laws which limit, qualify or reduce Borrower's obligations under the Loan Documents. 7. NON-IMPAIRMENT. Except as expressly provided herein, nothing in this Agreement shall alter or affect any provision, condition, or covenant contained in the Note or other Loan Document or affect or impair any rights, powers, or remedies of Lender, it being the intent of the parties hereto that the provisions of the Note and other Loan Documents shall continue in full force and effect except as expressly modified hereby. 8. MISCELLANEOUS. This Agreement and the other Loan Documents shall be governed by and interpreted in accordance with the laws of the State of California, except if preempted by federal law. In any action brought or arising out of this Agreement or the Loan Documents, Borrower, and the general partners and joint venturers of Borrower, hereby consent to the jurisdiction of any federal or state court having proper venue within the State of California and also consent to the service of process by any means authorized by California or federal law. The headings used in this Agreement are for convenience only and shall be disregarded in interpreting the substantive provisions of this Agreement. All capitalized terms used herein, which are not defined herein, shall have the meanings given to them in the other Loan Documents. Time is of the essence of each term of the Loan Documents, including this Agreement. If any provision of this Agreement or any of the other Loan Documents shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that portion shall be deemed severed from this Agreement and the remaining parts shall remain in full force as though the invalid, illegal, or unenforceable portion had never been a part thereof. 9. INTEGRATION; INTERPRETATION. The Loan Documents, including this Agreement, 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. 10. EXECUTION IN COUNTERPARTS. To facilitate execution, this document may be executed in as many counterparts as may be convenient or required. It shall not be necessary that the signature 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. IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be duly executed as of the date first above written. "LENDER" WELLS FARGO BANK, NATIONAL ASSOCIATION By: -------------------------------- Jay Rosenberg Its: Vice President "BORROWER" COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation By: -------------------------------- Its: -------------------------------- EX-10.12.1 4 f83380exv10w12w1.txt EXHIBIT 10.12.1 EXHIBIT 10.12.1 Loan No. 1440 AMENDED AND RESTATED PROMISSORY NOTE SECURED BY DEED OF TRUST $17,750,000.00 San Francisco, California June 1, 2002 FOR VALUE RECEIVED, the undersigned COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation ("Borrower"), promise(s) to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender"), at the Disbursement and Operations Center in El Segundo, California, or at such other place as may be designated in writing by Lender, the principal sum of SEVENTEEN MILLION SEVEN HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($17,750,000.00) or so much thereof as may from time to time be owing hereunder by reason of advances by Lender to or for the benefit or account of Borrower, with interest thereon, per annum, at one or more of the Effective Rates calculated in accordance with the terms and provisions of the Fixed Rate Agreement attached hereto as Exhibit A and a Fixed Rate Notice described on Exhibit B attached hereto (based on a 360-day year and charged on the basis of actual days elapsed). All sums owing hereunder are payable in lawful money of the United States of America, in immediately available funds. Interest accrued on this note ("Note") shall be due and payable on the first day of each month commencing July 1, 2002. Borrower shall make one (1) principal payment to Lender in the amount of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000.00) on December 1, 2002; provided, however, notwithstanding such payment, any unpaid principal balance outstanding under this Note or any of the other loan documents on the Maturity Date (defined below) of this Note shall be fully due and payable on the Maturity Date. Any payments required hereunder shall be due and payable on the first day of the month(s) in which it is due and shall be applied to the outstanding principal balance of this Note. Any principal balance reductions may not be reborrowed. The outstanding principal balance of this Note, together with all accrued and unpaid interest, shall be due and payable in full on June 1, 2003 ("Maturity Date"). This Note is secured by, among other things, that certain Deed of Trust with Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing ("Deed of Trust") dated as of December 22, 2000, executed by Borrower, as trustor, to a trustee for the benefit of Lender. If any interest payment required hereunder is not received by Lender (whether by direct debit or otherwise) on or before the fifteenth (15th) calendar day of the month in which it becomes due, Borrower shall pay, at Lender's option, a late or collection charge equal to four percent (4%) of the amount of such unpaid interest payment. If: (a) Borrower shall fail to pay when due any sums payable hereunder; or (b) a Default (as defined in the Deed of Trust) occurs under the Deed of Trust or under any obligation secured thereby; or (c) the property which is subject to the Deed of Trust, or any portion thereof or interest therein, is sold, transferred, mortgaged, assigned, encumbered or leased, whether voluntarily or involuntarily or by operation of law or otherwise, other than as expressly permitted by Lender in writing; THEN Lender may, at its sole option, declare all sums owing under this Note immediately due and payable; provided, however, that if any document related to this Note provides for automatic acceleration of payment of sums owing hereunder, all sums owing hereunder shall be automatically due and payable in accordance with the terms of that document. If any attorney is engaged by Lender to enforce or defend any provision of this Note or the Deed of Trust, or as a consequence of any Default, with or without the filing of any legal action or proceeding, then Borrower shall pay to Lender immediately upon demand all attorneys' fees and all costs incurred by Lender in connection therewith, together with interest thereon from the date of such demand until paid at the rate of interest applicable to the principal balance owing hereunder as if such unpaid attorneys' fees and costs had been added to the principal. No previous waiver and no failure or delay by Lender in acting with respect to the terms of this Note or the Deed of Trust shall constitute a waiver of any breach, default, or failure of condition under this Note, the Deed of Trust or the obligations Page 1 of 7 secured thereby. A waiver of any term of this Note, the Deed of Trust or of any of the obligations secured thereby must be made in writing and shall be limited to the express written terms of such waiver. In the event of any inconsistencies between the terms of this Note and the terms of any other document related to the loan evidenced by this Note, the terms of this Note shall prevail. If this Note is executed by more than one person or entity as Borrower, the obligations of each such person or entity shall be joint and several. No person or entity shall be a mere accommodation maker, but each shall be primarily and directly liable hereunder. Except as otherwise provided in any agreement executed in connection with this Note, Borrower waives: presentment; demand; notice of dishonor; notice of default or delinquency; notice of acceleration; notice of protest and nonpayment; notice of costs, expenses or losses and interest thereon; notice of late charges; and diligence in taking any action to collect any sums owing under this Note or in proceeding against any of the rights or interests in or to properties securing payment of this Note. Time is of the essence with respect to every provision hereof. This Note shall be construed and enforced in accordance with the laws of the State of California, except to the extent that federal laws preempt the laws of the State of California, and all persons and entities in any manner obligated under this Note consent to the jurisdiction of any federal or state court within the State of California having proper venue and also consent to service of process by any means authorized by California or federal law. All notices or other communications required or permitted to be given pursuant to this Note shall be given to the Borrower or Lender at the address and in the manner provided for in the Loan Agreement. The Loan Documents contain or expressly incorporate by reference the entire agreement of the parties with respect to the matters contemplated therein and supersede all prior negotiations or agreements, written or oral. The Loan Documents shall not be modified except by written instrument executed by all parties. Any reference to the Loan Documents includes any amendments, renewals or extensions now or hereafter approved by Lender in writing. Exhibits A and B are attached hereto and incorporated herein by reference. "BORROWER" COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION a Delaware corporation By: ------------------------------ Its: ------------------------------ Page 2 of 7 EXHIBIT A Loan No. 1440 FIXED RATE AGREEMENT Exhibit A to Promissory Note Secured by Deed of Trust ("Note"), dated June 1, 2002, made by COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation, as Borrower, to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION, as Lender. R E C I T A L S Borrower has requested and Lender has agreed to provide a fixed rate option as a basis for calculating the effective rate of interest on amounts owing under this Note. Borrower acknowledges the following: (i) it understands the process of exercising the fixed rate option as provided herein; (ii) amounts owing under this Note may bear interest at different rates and for different time periods; and (iii) absent the terms and conditions hereof, it would be extremely difficult to calculate Lender's additional costs, expenses, and damages in the event of a Default or prepayment by Borrower hereunder. Given the above, Borrower agrees that the provisions herein (including, without limitation, the Fixed Rate Price Adjustment defined below) provide for a reasonable and fair method for Lender to recover its additional costs, expenses and damages in the event of a Default or prepayment by Borrower. 1. RATES AND TERMS DEFINED. Various rates and terms not otherwise defined herein are defined and described as follows: "Administration Fee" shall be FIVE HUNDRED AND NO/100THS DOLLARS ($500.00) for each Fixed Rate Period and Fixed Rate Option. "Alternate Rate" is a rate of interest per annum five percent (5%) in excess of the applicable Variable Rate in effect from time to time. "Applicable LIBO Rate" is the rate of interest, rounded upward to the nearest whole multiple of one-hundredth of one percent (.01%), equal to the sum of: (a) four and one quarter percent (4.25%) plus (b) the LIBO Rate, which rate is divided by one (1.00) minus the Reserve Percentage: Applicable LIBO Rate = 4.25% + LIBO Rate ------------------------ (1 - Reserve Percentage) "Business Day(s)" means a day of the week (but not a Saturday, Sunday or holiday) on which the offices of Lender are open to the public for carrying on substantially all of Lender's business functions. "Fixed Rate" is the Applicable LIBO Rate as accepted by Borrower as an Effective Rate for a particular Fixed Rate Period and Fixed Rate Portion. "Fixed Rate Commencement Date" means the date upon which the Fixed Rate Period commences. "Fixed Rate Notice" is a written notice in the form shown on Exhibit B attached to this Note, which confirms the Fixed Rate for a particular Fixed Rate Period, and the Fixed Rate Portion. "Fixed Rate Period" is the period or periods of: a) one month, b) two months, c) three months, d) six months; or e) any other period of not more than one month which ends at the Maturity Date, which periods are selected by Borrower and confirmed in the Fixed Rate Notice; provided that no Fixed Rate Period shall extend beyond the Maturity Date. "Fixed Rate Portion" is the entire unpaid principal balance of this Note in increments of not less than $1,000,000.00. Page 3 of 7 "LIBO Rate" is the rate of interest, rounded upward to the nearest whole multiple of one-sixteenth of one percent (.0625%), quoted by Lender as the London Inter-Bank Offered Rate for deposits in U.S. Dollars at approximately 9:00 a.m. California time, for a Fixed Rate Commencement Date or a Price Adjustment Date, as appropriate, for purposes of calculating effective rates of interest for loans or obligations making reference thereto for an amount approximately equal to a Fixed Rate Portion and for a period of time approximately equal to a Fixed Rate Period or the time remaining in a Fixed Rate Period after a Price Adjustment Date, as appropriate. "Loan Agreement" is that certain Loan Agreement dated as of December 22, 2000 between Borrower and Lender. "Loan Documents" are the documents defined as such in the Loan Agreement. "Prime Rate" is a base rate of interest which Lender establishes from time to time and which serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto. Any change in an Effective Rate due to a change in the Prime Rate shall become effective on the day each such change is announced within Lender. "Regulatory Costs" are, collectively, future, supplemental, emergency or other changes in Reserve Percentages, assessment rates imposed by the FDIC, or similar requirements or costs imposed by any domestic or foreign governmental authority and related in any manner to a Fixed Rate. "Reserve Percentage" is at any time the percentage announced within Lender as the reserve percentage under Regulation D for loans and obligations making reference to an Applicable LIBO Rate for a Fixed Rate Period or time remaining in a Fixed Rate Period on a Price Adjustment Date, as appropriate. The Reserve Percentage shall be based on Regulation D or other regulations from time to time in effect concerning reserves for Eurocurrency Liabilities as defined in Regulation D from related institutions as though Lender were in a net borrowing position, as promulgated by the Board of Governors of the Federal Reserve System, or its successor. "Taxes" are, collectively, all withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign governmental authority and related in any manner to a Fixed Rate. "Variable Rate" is a floating rate of interest per annum one and one half percent (1.50%) in excess of the Prime Rate. 2. EFFECTIVE RATE. The "Effective Rate" upon which interest shall be calculated for this Note shall be one or more of the following: 2.1 Provided no Default, breach, or failure of condition exists under the Loan Agreement or any of the Loan Documents described therein (this Note is one of the Loan Documents): (a) The Effective Rate accruing on the Fixed Rate Portions for the Fixed Rate Period thereof shall be the Fixed Rate selected by Borrower and set in accordance with the provisions hereof. 2.2 During such time as a Default, breach or failure of condition exists under the Loan Agreement or any of the Loan Documents; or from and after the date on which all sums owing under this Note become due and payable by acceleration or otherwise; or from and after the date on which the property encumbered by the Deed of Trust or any portion thereof or interest therein, is sold, transferred, mortgaged, assigned, or encumbered, whether voluntarily or involuntarily, or by operation of law or otherwise, without Lender's prior written consent (whether or not the sums owing under this Note become due and payable by acceleration); or from and after the Maturity Date, then at the option of Lender, the interest rate applicable to the then outstanding principal balance of this Note shall be the Alternate Rate. Page 4 of 7 3. SELECTION OF FIXED RATE. Provided no Default, breach or failure of condition exists under the Loan Documents, or would exist with passage of time or notice or both, Borrower, at its option and upon satisfaction of the conditions set forth herein, may request a Fixed Rate as the Effective Rate for calculating interest on the portion of the unpaid principal balance and for the period selected in accordance with and subject to the following procedures and conditions: 3.1 Borrower shall deliver to the Disbursement and Operations Center, 2120 East Park Place, Suite 100, El Segundo, California, 90245, with a copy to: Lender, 555 Montgomery Street, 16th Floor, San Francisco, California, 94111, Attention: Jay Rosenberg, or such other addresses as Lender shall designate, an original or facsimile Fixed Rate Notice no later than 9:00 A.M. (California time), and not less than three (3) nor more than five (5) Business Days prior to the proposed Fixed Rate Period for each Fixed Rate Portion. Any Fixed Rate Notice pursuant to this Section 3 is irrevocable. Lender is authorized to rely upon the telephonic request and acceptance of Joey Cory as Borrower's duly authorized agents, or such additional authorized agents as Borrower shall designate in writing to Lender. Borrower's telephonic notices, requests and acceptances shall be directed to such officers of Lender as Lender may from time to time designate. 3.2 Borrower may elect to convert a matured Fixed Rate Portion into a new Fixed Rate Portion, provided, however, that the aggregate amount of the advance being converted into or continued as a Fixed Rate Portion shall, in the aggregate, be not less than $1,000,000.00. The conversion of a matured Fixed Rate Portion to a new Fixed Rate Portion shall occur on the last Business Day of the Fixed Rate Period relating to such Fixed Rate Portion. Each Fixed Rate Notice shall specify (1) the amount of the Fixed Rate Portion, (2) the Fixed Rate Period, and (3) the Fixed Rate Commencement Date. 3.3 Upon receipt of a Fixed Rate Notice in the proper form requesting a Fixed Rate Portion advance under Sections 3.1 and 3.2 above, Lender shall determine the Fixed Rate applicable to the Fixed Rate Period for such Fixed Rate Portion two (2) Business Days prior to the beginning of such Fixed Rate Period. Each determination by Lender of the Fixed Rate shall be conclusive and binding upon the parties hereto in the absence of manifest error. Lender shall deliver to Borrower (by facsimile) an acknowledgment of receipt and confirmation of the Fixed Rate Notice; provided, however, that failure to provide such acknowledgment of receipt and confirmation of the Fixed Rate Notice to Borrower shall not affect the validity of such rate. 3.4 If Borrower does not make a timely election to convert all or a portion of a matured Fixed Rate Portion into a new Fixed Rate Portion in accordance with Section 3.2 above, such Fixed Rate Portion shall be automatically converted back to a one month Fixed Rate Period upon the expiration of the Fixed Rate Period applicable to such Fixed Rate Portion. 4. ADMINISTRATION FEE. Upon Borrower's acceptance of a Fixed Rate, Borrower shall pay to Lender an administration fee of Five Hundred Dollars ($500.00) for each Fixed Rate Portion. 5. FIXED RATE NOTICE. Borrower's selection of a Fixed Rate shall be delivered to Lender in the form of the Fixed Rate Notice shown on Exhibit B attached to this Note. Lender shall confirm and deliver to Borrower acceptance of such Fixed Rate Notice via facsimile. Lender's failure to deliver the Fixed Rate Notice shall not release Borrower from Borrower's obligation to pay interest at the Effective Rate pursuant to the terms hereof. 6. LIMITATIONS ON RIGHT TO FIX RATE. Borrower may request and accept up to six (6) Fixed Rate quotations at any one time. 7. TAXES, REGULATORY COSTS AND RESERVE PERCENTAGES. Upon Lender's demand, Borrower shall pay to Lender, in addition to all other amounts which may be, or become, due and payable under this Note and Loan Documents, any and all Taxes and Regulatory Costs, to the extent they are not internalized by calculation of a Fixed Rate. Further, at Lender's option, the Fixed Rate shall be automatically adjusted by adjusting the Reserve Percentage, as determined by Lender in its prudent banking judgment, from the date of imposition (or subsequent date Page 5 of 7 selected by Lender) of any such Regulatory Costs. Lender shall give Borrower notice of any Taxes and Regulatory Costs as soon as practicable after their occurrence, but Borrower shall be liable for any Taxes and Regulatory Costs regardless of whether or when notice is so given. 8. FIXED RATE PRICE ADJUSTMENT. Borrower acknowledges that prepayment or acceleration of a Fixed Rate Portion during a Fixed Rate Period shall result in Lender's incurring additional costs, expenses and/or liabilities and that it is extremely difficult and impractical to ascertain the extent of such costs, expenses and/or liabilities. Therefore, on the date a Fixed Rate Portion is prepaid or the date all sums payable hereunder become due and payable, by acceleration or otherwise ("Price Adjustment Date"), Borrower will pay Lender (in addition to all other sums then owing to Lender) an amount ("Fixed Rate Price Adjustment") equal to the then present value of (a) the amount of interest that would have accrued on the Fixed Rate Portion for the remainder of the Fixed Rate Period at the Fixed Rate set on the Fixed Rate Commencement Date, less (b) the amount of interest that would accrue on the same Fixed Rate Portion for the same period if the Fixed Rate were set on the Price Adjustment Date at the Applicable LIBO Rate in effect on the Price Adjustment Date. The present value shall be calculated by using as a discount rate the LIBO Rate quoted on the Price Adjustment Date. By initialing this provision where indicated below, Borrower confirms that Lender's agreement to make the loan evidenced by this Note at the interest rates and on the other terms set forth herein and in the other Loan Documents constitutes adequate and valuable consideration, given individual weight by Borrower, for this agreement. BORROWER'S INITIALS: ------------ 9. PURCHASE, SALE AND MATCHING OF FUNDS. Borrower understands, agrees and acknowledges the following: (a) Lender has no obligation to purchase, sell and/or match funds in connection with the use of a LIBO Rate as a basis for calculating a Fixed Rate or Fixed Rate Price Adjustment; (b) a LIBO Rate is used merely as a reference in determining a Fixed Rate and Fixed Rate Price Adjustment; and (c) Borrower has accepted a LIBO Rate as a reasonable and fair basis for calculating a Fixed Rate and a Fixed Rate Price Adjustment. Borrower further agrees to pay the Fixed Rate Price Adjustment, Taxes and Regulatory Costs, if any, whether or not Lender elects to purchase, sell and/or match funds. 10. MISCELLANEOUS. As used in this Exhibit, the plural shall mean the singular and the singular shall mean the plural as the context requires. Addresses for the Fixed Rate Notice shall be the same as those for notices under the Loan Agreement executed in connection with this Note. This Agreement is executed concurrently with and as part of this Note referred to and described first above. "BORROWER" COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION a Delaware corporation By: -------------------------------- Its: -------------------------------- ------------ Page 6 of 7 EXHIBIT B FIXED RATE NOTICE TODAY'S DATE: LOAN MATURITY DATE: June 1, 2003 ----------------------- ---------------- TO: WELLS FARGO BANK, N.A. LOAN ADMINISTRATOR: Robin Dixon DISBURSEMENT AND OPERATIONS CENTER --------------- FAX # (310) 615-1014 or (310) 615-1016 RELATIONSHIP MANAGER: Jay Rosenberg ATTENTION: RATE OPTION DESK -------------- ================================================================================ BORROWER INTEREST RATE OPTION REQUEST Rate Quote Line (888) 293-2362 x:472 Use One Form Per Transaction LOAN #: 1440 ---- BORROWER NAME: Communications & Power Industries Holding Corporation ----------------------------------------------------- RATE SET DATE: FIXED RATE COMMENCEMENT DATE: (1350) ------------ --------------- FIXED RATE PERIOD (TERM): (i.e. 1, 2, 3 months , etc. as allowed per Note) ----- INDEX: LIBO RATE: % + SPREAD ABOVE LIBO = #'s% (1350) ------ ------- ----------------- --------------- Quote Spread Applicable Rate FIXED RATE PORTION EXPIRING ON: $ ------------------ ------------------- 1. AMOUNT ROLLING OVER $ FROM OBLGN#: -------- ------ 2. ADD: AMT TRANSFERRED FROM VARIABLE RATE PORTION $ FROM OBLGN#: TO OBLGN#: -------- ------ -------- (5522) (5020) 3. ADD: AMT TRANSFERRED FROM OTHER FIXED RATE PORTION $ FROM OBLGN#: TO OBLGN#: -------- ------ -------- (5522) (5020) ADD: AMT TRANSFERRED FROM OTHER FIXED RATE PORTION $ FROM OBLGN#: TO OBLGN#: -------- ------ -------- (5522) (5020) 4. LESS: AMT TRANSFERRED TO VARIABLE RATE PORTION $ FROM OBLGN#: TO OBLGN#: -------- ------ -------- (5522) (5020) TOTAL FIXED RATE PORTION: $ ------------------------------------------------ ADMINISTRATION FEE DUE: $500.00 --------------- CHARGE FEES TO DDA#: YES, charge DDA DDA#: ------- -------------------- NO, to be remitted PLEASE REMIT FEE TO: ------- 2120 E. PARK PLACE, SUITE 100 EL SEGUNDO, CA 90245 Borrower confirms, represents and warrants to Lender, (a) that this selection of a Fixed Rate is subject to the terms and conditions of the Note, Fixed Rate Agreement and Loan Documents (as applicable), and (b) that terms, words and phrases used but not defined in this Notice have the meanings attributed thereto in the Note, Fixed Rate Agreement and Loan Documents (as applicable), and (c) that no breach, failure of condition, or Default has occurred or exists, or would exist after notice or passage of time or both, under the Note or the Loan Documents. REQUESTED BY (as allowed per documents): TELEPHONE #:( ) ----------- --- ----------- PRINT NAME: FAX #:( ) --------------------------------------- --- ----------- ================================================================================ WELLS FARGO BANK ACKNOWLEDGMENT OF RECEIPT AND CONFIRMATION FIXED RATE EXPIRATION DATE: (2301) ---------------- REQUEST VERIFIED BY: DATE: ------------------------ ---------------------- REQUEST APPROVED BY: DATE: ------------------------ ---------------------- CONFIRMATION FAXED TO CUSTOMER BY: DATE: TIME: ---------- -------- -------- ================================================================================ WELLS FARGO BANK OPERATIONS USE ONLY TRACKING #: LOAN AU: LOAN SU: OBLIGOR #: ------- --------- -------- ---------- CHARGE CODE: 100 BASIS: EARN TYPE: 0 BAL TYPE: 000 (1350) ----- --------- ------- ----- SPECIAL PRODUCT TYPE CODE: (If change required) (2305) ------------------------- TDR: NO YES (Fax to loan acctg) UPDATE BILLING SCHEDULE: NO YES (1370) --- --- --- --- DATA ENTRY COMPLETED BY: DATE: BATCH ID: ------------------- ------------ -------- DATA ENTRY AUDITED BY: DATE: ------------------------------------- -------- Page 7 of 7 EX-10.13.1 5 f83380exv10w13w1.txt EXHIBIT 10.13.1 EXHIBIT 10.13.1 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: WELLS FARGO BANK, NATIONAL ASSOCIATION Real Estate Merchant Banking (AU 2034) 555 Montgomery Street, 16th Floor San Francisco, CA 94111 Attn: Robin Dixon Loan #: 1440 ================================================================================ MEMORANDUM OF MODIFICATION AGREEMENT AMENDING DEED OF TRUST The undersigned declare that they have entered into a modification agreement dated of even date herewith, wherein provision is made for (a) amendment of that certain deed of trust dated December 22, 2000 and executed by COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation, as Trustor, to AMERICAN SECURITIES COMPANY, a corporation, as Trustee, in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, as Beneficiary, which was recorded on December 22, 2000, as Document No. 2000-16276, in the Official Records of San Mateo County, California, and/or (b) amendment of certain obligations secured by that deed of trust. This instrument is a memorandum of the modification agreement, and the same is incorporated herein by this reference with the same effect and as though set forth herein in its entirety. This Memorandum may be executed in any number of counterparts. All counterparts shall collectively constitute a single document. Dated as of: June 1, 2002 "LENDER" WELLS FARGO BANK, NATIONAL ASSOCIATION By: -------------------------------- Jay Rosenberg Its: Vice President "TRUSTOR/BORROWER" COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation By: -------------------------------- Its: -------------------------------- (ALL SIGNATURES MUST BE ACKNOWLEDGED) Page 1 of 3 JUNIOR LIENOR'S CONSENT AND SUBORDINATION AGREEMENT NOTICE: THIS JUNIOR LIENOR CONSENT AND SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY REMAINING SUBJECT TO AND OF A LOWER PRIORITY THAN THE LIEN OF THE DEED OF TRUST AS MODIFIED BY THE FOREGOING MODIFICATION AGREEMENT. The undersigned ("Junior Lienor"), as owner and holder of a security interest ("Junior Security Interest") evidenced by that certain unrecorded lease dated December 1, 2000, which is junior, subordinate and subject to the terms, covenants, conditions and restrictions of the Deed of Trust, as modified by the foregoing Modification Agreement, hereby acknowledges its consent to the terms and provisions of the foregoing Modification Agreement and the transactions contemplated thereby. The undersigned further reaffirms the full force and effectiveness of that certain Subordination Agreement, dated December 22, 2000, between the undersigned and Communications and Power Industries Holding Corporation, a Delaware corporation, and acknowledges that the Junior Security Interest is junior, subordinate and subject to the Deed of Trust, as modified by the foregoing Modification Agreement. NOTICE: THE LOAN DOCUMENTS MAY CONTAIN A PROVISION WHICH MAY ALLOW THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO EXPEND A PORTION OF THE LOAN FOR OTHER PURPOSES THAN IMPROVEMENT OF THE PROPERTY. Agreed and Acknowledged: Dated as of: June 1, 2002 "JUNIOR LIENOR" COMMUNICATIONS & POWER INDUSTRIES, INC., a Delaware corporation By: -------------------------------- Its: ------------------------------- (ALL SIGNATURES MUST BE ACKNOWLEDGED) Page 2 of 3 STATE OF CALIFORNIA COUNTY OF SS. ------------------------ On this _______ day of _______________ , 20__ , 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 _______________ , 20__ , before me, __________________ a 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 _______________ , 20__ , before me, __________________ a 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 . -------------- EX-10.14.1 6 f83380exv10w14w1.txt EXHIBIT 10.14.1 EXHIBIT 10.14.1 Loan No. 1440 JUNIOR LIENOR'S CONSENT AND SUBORDINATION AGREEMENT NOTICE: THIS JUNIOR LIENOR CONSENT AND SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY REMAINING SUBJECT TO AND OF A LOWER PRIORITY THAN THE LIEN OF THE DEED OF TRUST AS MODIFIED BY THE FOREGOING MODIFICATION AGREEMENT. The undersigned ("Junior Lienor"), as owner and holder of a security interest ("Junior Security Interest") evidenced by that certain unrecorded Lease, which is junior, subordinate and subject to the terms, covenants, conditions and restrictions of the Deed of Trust, as modified by the foregoing Modification Agreement, hereby acknowledges its consent to the terms and provisions of the foregoing Modification Agreement and the transactions contemplated thereby. The undersigned further reaffirms the full force and effectiveness of that certain Subordination Agreement, dated December 22, 2000, between the undersigned and Communications & Power Industries Holding Corporation, a Delaware corporation and acknowledges that the Junior Security Interest is junior, subordinate and subject to the Deed of Trust, as modified by the foregoing Modification Agreement. NOTICE: THE LOAN DOCUMENTS MAY CONTAIN A PROVISION WHICH MAY ALLOW THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO EXPEND A PORTION OF THE LOAN FOR OTHER PURPOSES THAN IMPROVEMENT OF THE PROPERTY. Agreed and Acknowledged: Dated as of: June 1, 2002 "JUNIOR LIENOR" COMMUNICATIONS & POWER INDUSTRIES, INC., a Delaware corporation By: -------------------------------- Its: ------------------------------- EX-99.1 7 f83380exv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Communications & Power Industries Holding Corporation (the "Company") on Form 10-Q for the period ending June 28, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, O. Joe Caldarelli, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ O. Joe Caldarelli O. Joe Caldarelli Chief Executive Officer August 8, 2002 EX-99.2 8 f83380exv99w2.txt EXHIBIT 99.2 EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Communications & Power Industries Holding Corporation (the "Company") on Form 10-Q for the period ending June 28, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Joel Littman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Joel Littman Joel Littman Chief Financial Officer August 8, 2002 EX-99.3 9 f83380exv99w3.txt EXHIBIT 99.3 EXHIBIT 99.3 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Communications & Power Industries, Inc. (the "Company") on Form 10-Q for the period ending June 28, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, O. Joe Caldarelli, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ O. Joe Caldarelli O. Joe Caldarelli Chief Executive Officer August 8, 2002 EX-99.4 10 f83380exv99w4.txt EXHIBIT 99.4 EXHIBIT 99.4 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Communications & Power Industries, Inc. (the "Company") on Form 10-Q for the period ending June 28, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Joel Littman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Joel Littman Joel Littman Chief Financial Officer August 8, 2002 -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.11.1

                                                                 EXHIBIT 10.11.1

                                                                   Loan No. 1440


                             MODIFICATION AGREEMENT

                                  SECURED LOAN

THIS MODIFICATION AGREEMENT ("Agreement") dated June 1, 2002 is entered into by
and between WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender"), and
COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation
("Borrower").

                                 R E C I T A L S

A.      Pursuant to the terms of a loan agreement between Borrower and Lender
        dated December 22, 2000 ("Loan Agreement"), Lender made a loan to
        Borrower in the principal amount of EIGHTEEN MILLION AND NO/100 DOLLARS
        ($18,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
        dated as of the date of the Loan Agreement, executed by Borrower in
        favor of Lender, in the principal amount of the Loan ("Note"), and is
        further evidenced by the documents described in the Loan Agreement as
        "Loan Documents". The Note is secured by, among other things, a deed of
        trust ("Deed of Trust") dated December 22, 2000, executed by Borrower,
        as Trustor, to American Securities Company, as Trustee, in favor of
        Lender, as Beneficiary. The Deed of Trust was recorded December 22,
        2000, as Document No. 2000-162764, in the Official Records of San Mateo
        County, California.

B.      As of May 31, 2002, the outstanding principal balance under the Loan was
        Eighteen Million and No/100 Dollars ($18,000,000.00)

C.      The Note, Deed of Trust, Loan Agreement, this Agreement, the other
        documents described in the Loan Agreement as "Loan Documents" (the
        "Existing Loan Documents"), together with all modifications and
        amendments thereto, the Modification Documents (as defined below), and
        any document required hereunder, are collectively referred to
        hereinafter as the "Loan Documents".

D.      By this Agreement, Borrower and Lender intend to modify and amend
        certain terms and provisions of the Loan Documents, which shall become
        effective on June 1, 2002 (the "Effective Date").

NOW, THEREFORE, Borrower and Lender agree as follows:

1.      CONDITIONS PRECEDENT. The following are conditions precedent to Lender's
        obligations under this Agreement:

        1.1     If required by Lender, receipt and approval by Lender of a date
                down to Title Policy No. SM-461651 dated December 22, 2000,
                issued by First American Title Insurance Company ("Title
                Company") and assurance acceptable to Lender, including, without
                limitation, CLTA Endorsement No. 110.5, without deletion or
                exception other than those expressly approved by Lender in
                writing, that the priority and validity of the Deed of Trust
                encumbering the property (the "Property") has not been and will
                not be impaired by this Agreement or the transactions
                contemplated hereby;

        1.2     Receipt by Lender of the executed originals of this Agreement,
                the short form of this Agreement (if any) and any and all other
                documents (the "Modification Documents") and agreements which
                are required by this Agreement or by any other Loan Document,
                each in form and content acceptable to Lender;

        1.3     Recordation in the Official Records of the County where the
                Property is located of (i) the short form of this Agreement (if
                any), and (ii) any other documents which are required to be
                recorded by this Agreement or by any other Loan Document (if
                any);

        1.4     Reimbursement to Lender by Borrower of Lender's costs and
                expenses incurred in connection with this Agreement and the
                transactions contemplated hereby, including, without limitation,
                title insurance costs, recording fees, attorneys' fees,
                appraisal, engineers' and inspection fees and documentation
                costs and charges, whether such services are furnished by
                Lender's employees or agents or by independent contractors;

        1.5     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 Modification Documents shall be legal, valid and binding
                instruments, enforceable



                against the makers thereof in accordance with their respective
                terms; (b) Borrower is duly formed and has all requisite
                authority to enter into the Modification Documents; and (c) such
                other matters, incident to the transactions contemplated hereby,
                as Lender may reasonably request.

        1.6     The representations and warranties contained in this Agreement
                are true and correct;

        1.7     All payments due and owing to Lender under the Loan Documents
                have been paid current as of the effective date of this
                Agreement;

        1.8     Receipt and approval of an updated appraisal of the Property
                satisfactory to Lender;

        1.9     Borrower shall purchase interest rate protection satisfactory to
                Lender in the form of a LIBOR Cap (based on 30-day LIBOR), for
                the notional amount of $17,500,000.00, at a rate not to exceed
                three percent (3.00%) for the six (6) month period beginning
                December 1, 2002 and ending June 1, 2003.

        1.10    The payment to Lender of $250,000.00 to be applied as a
                principal paydown to the Loan. Upon receipt of said principal
                payment, the outstanding principal balance of the Loan shall be
                Seventeen Million Seven Hundred Fifty Thousand and No/100
                Dollars ($17,750,000.00).

        1.11    The payment to Lender of an extension fee in the amount of
                $45,000.00; and

        1.12    The payment to Lender of a documentation fee in the amount of
                $1,000.00.

2.      REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants
        that no Default, breach or failure of condition has occurred, or would
        exist with notice or the lapse of time or both, under any of the Loan
        Documents (as modified by this Agreement) and that all representations
        and warranties herein and in the other Loan Documents are true and
        correct, which representations and warranties shall survive execution of
        this Agreement.

3.      MODIFICATION OF LOAN DOCUMENTS. The Loan Documents are hereby
        supplemented and modified to incorporate the following, which shall
        supersede and prevail over any conflicting provisions of the Loan
        Documents:

        3.1     Extension of Maturity Date. On the Effective Date, the Maturity
                Date recited in the Note is hereby extended to June 1, 2003.

        3.2     Amended and Restated Note. On the Effective Date, the Note
                described in Recital A herein is superseded and replaced in its
                entirety by that certain Amended and Restated Promissory Note
                Secured by Deed of Trust executed by Borrower in the amount of
                SEVENTEEN MILLION SEVEN HUNDRED FIFTY THOUSAND AND NO/100
                DOLLARS ($17,750,000.00) of even date herewith.

        3.3     Principal Payments. In addition to the principal payment
                required in paragraph 1.9 above, Borrower shall make an
                additional principal payment in the amount of TWO HUNDRED FIFTY
                THOUSAND AND NO/100 DOLLARS ($250,000.00) on December 1, 2002.
                Notwithstanding such principal payment, any outstanding
                principal balance under the Note on the Maturity Date shall be
                due and payable on the Maturity Date. Any payment(s) required
                hereunder shall be due and payable on the first day of the month
                in which it is due and shall be applied to the outstanding
                principal balance of the Loan. Any principal balance reductions
                may not be reborrowed.

        3.4     Interest Rate. Except as otherwise provided herein, from and
                after the Effective Date, the Loan shall bear interest (based on
                a 360-day year basis and charged on the basis of actual days
                elapsed) at 4.25% percent per annum above the LIBO Rate pursuant
                to the terms of the Amended and Restated Promissory Note of even
                date herewith.

4.      FORMATION AND ORGANIZATIONAL DOCUMENTS. Borrower has previously
        delivered to Lender all of the relevant formation and organizational
        documents of Borrower, of the partners or joint venturers of Borrower
        (if any), and of all guarantors of the Loan (if any), and all such
        formation documents remain in full force and effect and have not been
        amended or modified since they were delivered to Lender. Borrower hereby
        certifies that: (i) the above



        documents are all of the relevant formation and organizational documents
        of Borrower; (ii) they remain in full force and effect; and (iii) they
        have not been amended or modified since they were previously delivered
        to Lender.

5.      HAZARDOUS MATERIALS; CCP SECTION 726.5; SECTION 736. Without in any way
        limiting any other provision of this Agreement, Borrower expressly
        reaffirms as of the date hereof, and continuing hereafter: (i) each and
        every representation and warranty in the Loan Documents respecting
        "Hazardous Materials"; and (ii) each and every covenant and indemnity in
        the Loan Documents respecting "Hazardous Materials". In addition,
        Borrower and Lender agree that: (i) this Section is intended as Lender's
        written request for information (and Borrower's response) concerning the
        environmental condition of the real property security under the terms of
        California Code of Civil Procedure Section 726.5; and (ii) each
        representation and/or covenant in this Agreement or any other Loan
        Document (together with any indemnity applicable to a breach of any such
        representation and/or covenant) 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.

6.      WAIVERS. In further consideration of Lender entering into this
        Agreement, Borrower waives, with respect to the Loan, any and all rights
        to which Borrower is or may be entitled pursuant to Section 580a (the
        so-called "Fair Market Antideficiency Rule"), 580d (the so-called
        "Private Sale Antideficiency Rule") and 726 (the so-called "One Form of
        Action Rule") of the California Code of Civil Procedure, as amended or
        recodified from time to time, together with any other antideficiency or
        similar laws which limit, qualify or reduce Borrower's obligations under
        the Loan Documents.

7.      NON-IMPAIRMENT. Except as expressly provided herein, nothing in this
        Agreement shall alter or affect any provision, condition, or covenant
        contained in the Note or other Loan Document or affect or impair any
        rights, powers, or remedies of Lender, it being the intent of the
        parties hereto that the provisions of the Note and other Loan Documents
        shall continue in full force and effect except as expressly modified
        hereby.

8.      MISCELLANEOUS. This Agreement and the other Loan Documents shall be
        governed by and interpreted in accordance with the laws of the State of
        California, except if preempted by federal law. In any action brought or
        arising out of this Agreement or the Loan Documents, Borrower, and the
        general partners and joint venturers of Borrower, hereby consent to the
        jurisdiction of any federal or state court having proper venue within
        the State of California and also consent to the service of process by
        any means authorized by California or federal law. The headings used in
        this Agreement are for convenience only and shall be disregarded in
        interpreting the substantive provisions of this Agreement. All
        capitalized terms used herein, which are not defined herein, shall have
        the meanings given to them in the other Loan Documents. Time is of the
        essence of each term of the Loan Documents, including this Agreement. If
        any provision of this Agreement or any of the other Loan Documents shall
        be determined by a court of competent jurisdiction to be invalid,
        illegal or unenforceable, that portion shall be deemed severed from this
        Agreement and the remaining parts shall remain in full force as though
        the invalid, illegal, or unenforceable portion had never been a part
        thereof.

9.      INTEGRATION; INTERPRETATION. The Loan Documents, including this
        Agreement, 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.



10.     EXECUTION IN COUNTERPARTS. To facilitate execution, this document may be
        executed in as many counterparts as may be convenient or required. It
        shall not be necessary that the signature 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.

IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be duly
executed as of the date first above written.

                                       "LENDER"

                                       WELLS FARGO BANK,
                                       NATIONAL ASSOCIATION

                                       By:
                                               --------------------------------
                                               Jay Rosenberg
                                       Its:    Vice President

                                       "BORROWER"

                                       COMMUNICATIONS & POWER INDUSTRIES
                                       HOLDING CORPORATION,
                                       a Delaware corporation

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

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

EX-10.12.1

                                                                 EXHIBIT 10.12.1

                                                                   Loan No. 1440

                              AMENDED AND RESTATED
                    PROMISSORY NOTE SECURED BY DEED OF TRUST

$17,750,000.00                                         San Francisco, California
                                                                    June 1, 2002

FOR VALUE RECEIVED, the undersigned COMMUNICATIONS & POWER INDUSTRIES HOLDING
CORPORATION, a Delaware corporation ("Borrower"), promise(s) to pay to the order
of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender"), at the Disbursement and
Operations Center in El Segundo, California, or at such other place as may be
designated in writing by Lender, the principal sum of SEVENTEEN MILLION SEVEN
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($17,750,000.00) or so much thereof as
may from time to time be owing hereunder by reason of advances by Lender to or
for the benefit or account of Borrower, with interest thereon, per annum, at one
or more of the Effective Rates calculated in accordance with the terms and
provisions of the Fixed Rate Agreement attached hereto as Exhibit A and a Fixed
Rate Notice described on Exhibit B attached hereto (based on a 360-day year and
charged on the basis of actual days elapsed). All sums owing hereunder are
payable in lawful money of the United States of America, in immediately
available funds.

Interest accrued on this note ("Note") shall be due and payable on the first day
of each month commencing July 1, 2002.

Borrower shall make one (1) principal payment to Lender in the amount of TWO
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000.00) on December 1, 2002;
provided, however, notwithstanding such payment, any unpaid principal balance
outstanding under this Note or any of the other loan documents on the Maturity
Date (defined below) of this Note shall be fully due and payable on the Maturity
Date. Any payments required hereunder shall be due and payable on the first day
of the month(s) in which it is due and shall be applied to the outstanding
principal balance of this Note. Any principal balance reductions may not be
reborrowed.

The outstanding principal balance of this Note, together with all accrued and
unpaid interest, shall be due and payable in full on June 1, 2003 ("Maturity
Date").

This Note is secured by, among other things, that certain Deed of Trust with
Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing
("Deed of Trust") dated as of December 22, 2000, executed by Borrower, as
trustor, to a trustee for the benefit of Lender.

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

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

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

No previous waiver and no failure or delay by Lender in acting with respect to
the terms of this Note or the Deed of Trust shall constitute a waiver of any
breach, default, or failure of condition under this Note, the Deed of Trust or
the obligations


                                  Page 1 of 7



secured thereby. A waiver of any term of this Note, the Deed of Trust or of any
of the obligations secured thereby must be made in writing and shall be limited
to the express written terms of such waiver. In the event of any inconsistencies
between the terms of this Note and the terms of any other document related to
the loan evidenced by this Note, the terms of this Note shall prevail.

If this Note is executed by more than one person or entity as Borrower, the
obligations of each such person or entity shall be joint and several. No person
or entity shall be a mere accommodation maker, but each shall be primarily and
directly liable hereunder. Except as otherwise provided in any agreement
executed in connection with this Note, Borrower waives: presentment; demand;
notice of dishonor; notice of default or delinquency; notice of acceleration;
notice of protest and nonpayment; notice of costs, expenses or losses and
interest thereon; notice of late charges; and diligence in taking any action to
collect any sums owing under this Note or in proceeding against any of the
rights or interests in or to properties securing payment of this Note.

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

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

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

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

                                             "BORROWER"

                                             COMMUNICATIONS & POWER INDUSTRIES
                                             HOLDING CORPORATION
                                             a Delaware corporation

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


                                  Page 2 of 7



                                                                       EXHIBIT A
                                                                   Loan No. 1440

                              FIXED RATE AGREEMENT

Exhibit A to Promissory Note Secured by Deed of Trust ("Note"), dated June 1,
2002, made by COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware
corporation, as Borrower, to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Lender.

                                 R E C I T A L S

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

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

                "Administration Fee" shall be FIVE HUNDRED AND NO/100THS DOLLARS
                ($500.00) for each Fixed Rate Period and Fixed Rate Option.

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

                "Applicable LIBO Rate" is the rate of interest, rounded upward
                to the nearest whole multiple of one-hundredth of one percent
                (.01%), equal to the sum of: (a) four and one quarter percent
                (4.25%) plus (b) the LIBO Rate, which rate is divided by one
                (1.00) minus the Reserve Percentage:

                        Applicable LIBO Rate = 4.25% +        LIBO Rate
                                                       ------------------------
                                                       (1 - Reserve Percentage)

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

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

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

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

                "Fixed Rate Period" is the period or periods of: a) one month,
                b) two months, c) three months, d) six months; or e) any other
                period of not more than one month which ends at the Maturity
                Date, which periods are selected by Borrower and confirmed in
                the Fixed Rate Notice; provided that no Fixed Rate Period shall
                extend beyond the Maturity Date.

                "Fixed Rate Portion" is the entire unpaid principal balance of
                this Note in increments of not less than $1,000,000.00.


                                  Page 3 of 7



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

                "Loan Agreement" is that certain Loan Agreement dated as of
                December 22, 2000 between Borrower and Lender.

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

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

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

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

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

                "Variable Rate" is a floating rate of interest per annum one and
                one half percent (1.50%) in excess of the Prime Rate.

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

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

                (a)     The Effective Rate accruing on the Fixed Rate Portions
                        for the Fixed Rate Period thereof shall be the Fixed
                        Rate selected by Borrower and set in accordance with the
                        provisions hereof.

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


                                  Page 4 of 7



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

        3.1     Borrower shall deliver to the Disbursement and Operations
                Center, 2120 East Park Place, Suite 100, El Segundo, California,
                90245, with a copy to: Lender, 555 Montgomery Street, 16th
                Floor, San Francisco, California, 94111, Attention: Jay
                Rosenberg, or such other addresses as Lender shall designate, an
                original or facsimile Fixed Rate Notice no later than 9:00 A.M.
                (California time), and not less than three (3) nor more than
                five (5) Business Days prior to the proposed Fixed Rate Period
                for each Fixed Rate Portion. Any Fixed Rate Notice pursuant to
                this Section 3 is irrevocable.

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

        3.2     Borrower may elect to convert a matured Fixed Rate Portion into
                a new Fixed Rate Portion, provided, however, that the aggregate
                amount of the advance being converted into or continued as a
                Fixed Rate Portion shall, in the aggregate, be not less than
                $1,000,000.00. The conversion of a matured Fixed Rate Portion to
                a new Fixed Rate Portion shall occur on the last Business Day of
                the Fixed Rate Period relating to such Fixed Rate Portion. Each
                Fixed Rate Notice shall specify (1) the amount of the Fixed Rate
                Portion, (2) the Fixed Rate Period, and (3) the Fixed Rate
                Commencement Date.

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

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

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

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

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

7.      TAXES, REGULATORY COSTS AND RESERVE PERCENTAGES. Upon Lender's demand,
        Borrower shall pay to Lender, in addition to all other amounts which may
        be, or become, due and payable under this Note and Loan Documents, any
        and all Taxes and Regulatory Costs, to the extent they are not
        internalized by calculation of a Fixed Rate. Further, at Lender's
        option, the Fixed Rate shall be automatically adjusted by adjusting the
        Reserve Percentage, as determined by Lender in its prudent banking
        judgment, from the date of imposition (or subsequent date


                                  Page 5 of 7



        selected by Lender) of any such Regulatory Costs. Lender shall give
        Borrower notice of any Taxes and Regulatory Costs as soon as practicable
        after their occurrence, but Borrower shall be liable for any Taxes and
        Regulatory Costs regardless of whether or when notice is so given.

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

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

                        BORROWER'S INITIALS:
                                             ------------

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

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

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

                                           "BORROWER"

                                           COMMUNICATIONS & POWER INDUSTRIES
                                           HOLDING CORPORATION
                                           a Delaware corporation

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

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


                                  Page 6 of 7



                                                                       EXHIBIT B

                                FIXED RATE NOTICE

TODAY'S DATE:                                LOAN MATURITY DATE: June 1, 2003
             -----------------------                            ----------------
TO: WELLS FARGO BANK, N.A.                   LOAN ADMINISTRATOR: Robin Dixon
    DISBURSEMENT AND OPERATIONS CENTER                           ---------------
    FAX # (310) 615-1014 or (310) 615-1016   RELATIONSHIP MANAGER: Jay Rosenberg
    ATTENTION: RATE OPTION DESK                                   --------------

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


LOAN #: 1440
        ----
BORROWER NAME: Communications & Power Industries Holding Corporation
               -----------------------------------------------------

RATE SET DATE:               FIXED RATE COMMENCEMENT DATE:                (1350)
              ------------                                ---------------

FIXED RATE PERIOD (TERM):      (i.e.  1, 2, 3 months , etc. as allowed per Note)
                         -----

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

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

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

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

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

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

REQUESTED BY (as allowed per documents):            TELEPHONE #:(   )
                                        -----------              --- -----------
PRINT NAME:                                               FAX #:(   )
            ---------------------------------------              --- -----------

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

FIXED RATE EXPIRATION DATE:                   (2301)
                             ----------------
REQUEST VERIFIED BY:                                DATE:
                     ------------------------            ----------------------
REQUEST APPROVED BY:                                DATE:
                     ------------------------            ----------------------
CONFIRMATION FAXED TO CUSTOMER BY:                  DATE:         TIME:
                                   ----------            --------      --------

================================================================================
                      WELLS FARGO BANK OPERATIONS USE ONLY

TRACKING #:         LOAN AU:           LOAN SU:          OBLIGOR #:
           -------          ---------          --------            ----------

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

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

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

DATA ENTRY COMPLETED BY:                    DATE:             BATCH ID:
                        -------------------      ------------          --------
DATA ENTRY AUDITED BY:                                            DATE:
                        -------------------------------------          --------


                                  Page 7 of 7

EX-10.13.1

                                                                 EXHIBIT 10.13.1

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

WELLS FARGO BANK, NATIONAL ASSOCIATION
Real Estate Merchant Banking (AU 2034)
555 Montgomery Street, 16th Floor
San Francisco, CA 94111

Attn:   Robin Dixon
Loan #:  1440

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

                      MEMORANDUM OF MODIFICATION AGREEMENT
                             AMENDING DEED OF TRUST

The undersigned declare that they have entered into a modification agreement
dated of even date herewith, wherein provision is made for (a) amendment of that
certain deed of trust dated December 22, 2000 and executed by COMMUNICATIONS &
POWER INDUSTRIES HOLDING CORPORATION, a Delaware corporation, as Trustor, to
AMERICAN SECURITIES COMPANY, a corporation, as Trustee, in favor of WELLS FARGO
BANK, NATIONAL ASSOCIATION, as Beneficiary, which was recorded on December 22,
2000, as Document No. 2000-16276, in the Official Records of San Mateo County,
California, and/or (b) amendment of certain obligations secured by that deed of
trust. This instrument is a memorandum of the modification agreement, and the
same is incorporated herein by this reference with the same effect and as though
set forth herein in its entirety.

This Memorandum may be executed in any number of counterparts. All counterparts
shall collectively constitute a single document.

Dated as of: June 1, 2002

                                      "LENDER"

                                      WELLS FARGO BANK,
                                      NATIONAL ASSOCIATION

                                      By:
                                              --------------------------------
                                              Jay Rosenberg
                                      Its:    Vice President

                                      "TRUSTOR/BORROWER"

                                      COMMUNICATIONS & POWER INDUSTRIES
                                      HOLDING CORPORATION,
                                      a Delaware corporation

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

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

                      (ALL SIGNATURES MUST BE ACKNOWLEDGED)


                                  Page 1 of 3




               JUNIOR LIENOR'S CONSENT AND SUBORDINATION AGREEMENT

        NOTICE: THIS JUNIOR LIENOR CONSENT AND SUBORDINATION AGREEMENT RESULTS
        IN YOUR SECURITY INTEREST IN THE PROPERTY REMAINING SUBJECT TO AND OF A
        LOWER PRIORITY THAN THE LIEN OF THE DEED OF TRUST AS MODIFIED BY THE
        FOREGOING MODIFICATION AGREEMENT.

The undersigned ("Junior Lienor"), as owner and holder of a security interest
("Junior Security Interest") evidenced by that certain unrecorded lease dated
December 1, 2000, which is junior, subordinate and subject to the terms,
covenants, conditions and restrictions of the Deed of Trust, as modified by the
foregoing Modification Agreement, hereby acknowledges its consent to the terms
and provisions of the foregoing Modification Agreement and the transactions
contemplated thereby. The undersigned further reaffirms the full force and
effectiveness of that certain Subordination Agreement, dated December 22, 2000,
between the undersigned and Communications and Power Industries Holding
Corporation, a Delaware corporation, and acknowledges that the Junior Security
Interest is junior, subordinate and subject to the Deed of Trust, as modified by
the foregoing Modification Agreement.

        NOTICE: THE LOAN DOCUMENTS MAY CONTAIN A PROVISION WHICH MAY ALLOW THE
        PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO EXPEND A PORTION OF
        THE LOAN FOR OTHER PURPOSES THAN IMPROVEMENT OF THE PROPERTY.

Agreed and Acknowledged:


Dated as of:  June 1, 2002             "JUNIOR LIENOR"

                                       COMMUNICATIONS & POWER INDUSTRIES, INC.,
                                        a Delaware corporation

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


                      (ALL SIGNATURES MUST BE ACKNOWLEDGED)


                                  Page 2 of 3



STATE OF CALIFORNIA
COUNTY OF                          SS.
          ------------------------

On this _______ day of _______________ , 20__ , 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 _______________ , 20__ , before me, __________________ a
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 _______________ , 20__ , before me, __________________ a
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               .
                      --------------

EX-10.14.1

                                                                 EXHIBIT 10.14.1

                                                                   Loan No. 1440

              JUNIOR LIENOR'S CONSENT AND SUBORDINATION AGREEMENT

        NOTICE: THIS JUNIOR LIENOR CONSENT AND SUBORDINATION AGREEMENT RESULTS
        IN YOUR SECURITY INTEREST IN THE PROPERTY REMAINING SUBJECT TO AND OF A
        LOWER PRIORITY THAN THE LIEN OF THE DEED OF TRUST AS MODIFIED BY THE
        FOREGOING MODIFICATION AGREEMENT.

The undersigned ("Junior Lienor"), as owner and holder of a security interest
("Junior Security Interest") evidenced by that certain unrecorded Lease, which
is junior, subordinate and subject to the terms, covenants, conditions and
restrictions of the Deed of Trust, as modified by the foregoing Modification
Agreement, hereby acknowledges its consent to the terms and provisions of the
foregoing Modification Agreement and the transactions contemplated thereby. The
undersigned further reaffirms the full force and effectiveness of that certain
Subordination Agreement, dated December 22, 2000, between the undersigned and
Communications & Power Industries Holding Corporation, a Delaware corporation
and acknowledges that the Junior Security Interest is junior, subordinate and
subject to the Deed of Trust, as modified by the foregoing Modification
Agreement.

        NOTICE: THE LOAN DOCUMENTS MAY CONTAIN A PROVISION WHICH MAY ALLOW THE
        PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO EXPEND A PORTION OF
        THE LOAN FOR OTHER PURPOSES THAN IMPROVEMENT OF THE PROPERTY.

Agreed and Acknowledged:


Dated as of:  June 1, 2002              "JUNIOR LIENOR"

                                        COMMUNICATIONS & POWER INDUSTRIES, INC.,
                                        a Delaware corporation

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

EX-99.1

                                                                    EXHIBIT 99.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Communications & Power Industries
Holding Corporation (the "Company") on Form 10-Q for the period ending June 28,
2002 as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), I, O. Joe Caldarelli, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

        (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

        (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.



/s/ O. Joe Caldarelli

O. Joe Caldarelli
Chief Executive Officer
August 8, 2002

EX-99.2

                                                                    EXHIBIT 99.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Communications & Power Industries
Holding Corporation (the "Company") on Form 10-Q for the period ending June 28,
2002 as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), I, Joel Littman, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

        (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

        (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.



/s/ Joel Littman

Joel Littman
Chief Financial Officer
August 8, 2002

EX-99.3

                                                                    EXHIBIT 99.3

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Communications & Power Industries,
Inc. (the "Company") on Form 10-Q for the period ending June 28, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, O. Joe Caldarelli, Chief Executive Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.



/s/ O. Joe Caldarelli

O. Joe Caldarelli
Chief Executive Officer
August 8, 2002

EX-99.4

                                                                    EXHIBIT 99.4

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Communications & Power Industries,
Inc. (the "Company") on Form 10-Q for the period ending June 28, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Joel Littman, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

        (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

        (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.



/s/ Joel Littman

Joel Littman
Chief Financial Officer
August 8, 2002