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<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As filed with
the Securities and Exchange Commission on May 26, 2006</font></p>

<p align="right" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Registration No. 333-</font></p>

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<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION</font></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Washington,
DC 20549</font></b></p>

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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">FORM S-8</font></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">REGISTRATION STATEMENT<br>
UNDER<br>
THE SECURITIES ACT OF 1933</font></b></p>

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<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">CPI INTERNATIONAL, INC.</font></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Exact Name of
Registrant as Specified in Its Charter)</font></p>

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<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Delaware</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">75-3142681</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or
  Other Jurisdiction of Incorporation or<br>
  Organization)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(I.R.S.
  Employer<br>
  Identification No.)</font></p>
  </td>
 </tr>
</table>

</div>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">811 Hansen
Way<br>
Palo Alto, California 94303-1110<br></font></b>(Address of Principal Executive Offices, Including Zip
Code)</p>

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<div align="center" style="margin:0in 0in .0001pt;text-align:center;"><hr size="1" width="25%" noshade color="black" align="center"></div>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">CPI
International, Inc. 2006 Equity and Performance Incentive Plan</font></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Full Title of
the Plan)</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Joel A.
Littman<br>
811 Hansen Way<br>
Palo Alto, California 94303-1110<br></font></b>(Name and Address of Agent For Service)</p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(650)
846-2900</font></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Telephone
Number, Including Area Code, of Agent For Service</font></p>

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<div align="center" style="margin:0in 0in .0001pt;text-align:center;"><hr size="1" width="25%" noshade color="black" align="center"></div>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Copy to:</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Richard C.
Wirthlin, Esq.<br>
Irell &amp; Manella LLP<br>
1800 Avenue of the Stars, Suite 900<br>
Los Angeles, California 90067<br>
(310) 277-1010</font></b></p>

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<div align="center" style="margin:0in 0in .0001pt;text-align:center;"><hr size="1" width="25%" noshade color="black" align="center"></div>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">CALCULATION
OF REGISTRATION FEE</font></b></p>

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<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="31%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:31.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Title of
  Each Class of<br>
  Securities to be Registered</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="15%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:15.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Amount
  to be<br>
  registered(1)</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="15%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:15.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Proposed
  Maximum<br>
  Offering Price Per<br>
  Share(2)(3)</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="15%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:15.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Proposed
  Maximum<br>
  Aggregate Offering<br>
  Price(2)(3)</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="15%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:15.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Amount
  of<br>
  Registration Fee</font></b></p>
  </td>
  <td width="1%" valign="top" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="31%" valign="bottom" style="border:none;padding:0in 0in 0in 0in;width:31.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common Stock,
  par<br>
  value $0.01 per share</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="15%" valign="bottom" style="border:none;padding:0in 0in 0in 0in;width:15.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,401,144</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="15%" valign="bottom" style="border:none;padding:0in 0in 0in 0in;width:15.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$&nbsp;&nbsp;17.02</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="15%" valign="bottom" style="border:none;padding:0in 0in 0in 0in;width:15.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$&nbsp;&nbsp;23,847,470.88</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="15%" valign="bottom" style="border:none;padding:0in 0in 0in 0in;width:15.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$&nbsp;&nbsp;2,551.73</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

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<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>This Registration Statement will also cover
any additional shares of Common Stock that become issuable under the
above-mentioned plans by reason of any stock dividend, stock split,
recapitalization, reorganization or other similar transaction effected without
the Registrant&#146;s receipt of consideration that results in an increase in the
number of outstanding shares of the Registrant&#146;s Common Stock.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Estimated solely for purposes of calculating
the registration fee.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt .25in;page-break-after:auto;text-align:left;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Computed in accordance
with Rule 457(h) under the Securities Act of 1933, on the basis of $17.02 per
share, which was the average of the high and low prices of the Common Stock as
quoted on the Nasdaq National Market on May 25, 2006. </p>

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</div>

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</div>
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<p style="margin:0in 0in .0001pt .25in;page-break-after:auto;text-align:center;text-indent:-.25in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PART I</font></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">INFORMATION REQUIRED IN
THE SECTION 10(a) PROSPECTUS</font></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The document(s) containing the information required
in Part I of Form S-8 will be sent or given to participants as specified by
Rule 428(b)(1) of the Securities Act of 1933, as amended (the &#147;<b><font style="font-weight:bold;">Securities Act</font></b>&#148;). These documents and the documents
incorporated by reference to this Registration Statement pursuant to Item 3 of
Part II, taken together, constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Registration Statement includes two forms of
prospectus. The documents constituting the prospectus under Part I of this Registration
Statement (the &#147;<b><font style="font-weight:bold;">Plan Prospectus</font></b>&#148;) will be sent or
given to participants in the CPI International, Inc. 2006 Equity and Performance
Incentive Plan (the &#147;<b><font style="font-weight:bold;">Plan</font></b>&#148;) as
specified by Rule 428(b)(1) under the Securities Act. The second prospectus
(the &#147;<b><font style="font-weight:bold;">Resale Prospectus</font></b>&#148;) may be used in
connection with reoffers and resales, made on a delayed or continuous basis in
the future, as provided by Rule 415 under the Securities Act, of shares of our
common stock acquired by certain Plan participants prior to the date of this
Registration Statement. The Plan Prospectus has been omitted from this
Registration Statement as permitted by Part I of Form S-8. The Resale Prospectus
is filed as part of this Registration Statement as required by Form S-8.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>

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</div>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RESALE
PROSPECTUS</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">CPI
International, Inc.</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">811
Hansen Way</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Palo
Alto, California&#160; 94303</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(650)
846-2900</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">9,999
SHARES OF COMMON STOCK</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This resale prospectus relates to the offer and sale
of up to 9,999 shares of our common stock from time to time by the selling
stockholders identified beginning on page 16 of this resale prospectus.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our common stock is traded on the Nasdaq Stock
Market&#146;s Nasdaq National Market under the symbol &#147;CPII.&#148;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will not receive any of the proceeds from the
sales by the selling stockholders. The selling stockholders may sell the shares
of our common stock offered under this prospectus in the open market at
prevailing market prices, or in private transactions at negotiated prices. They
may sell the shares directly, or may sell them through underwriters, brokers or
dealers. Underwriters, brokers, or dealers may receive discounts, concessions
or commissions from the selling stockholders or from the purchasers, and this
compensation might be in excess of the compensation customary in the type of
transaction involved. See &#147;Plan of Distribution.&#148;&#160; However, the selling stockholders are not
obligated to sell their shares of common stock at all.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Upon any sale of our common stock by a selling
stockholder, any participating agents, brokers, dealers or market makers may be
deemed to be underwriters as that term is defined in the Securities Act of
1933, as amended, and commissions or discounts or any profit realized on the
resale of such securities purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act of 1933.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No underwriter is being utilized in connection with
this offering. We will pay all expenses incurred in connection with this
offering and the preparation of this resale prospectus. Brokerage commissions
and similar selling expenses, if any, attributable to the offer or sale of the shares
will be borne by the selling stockholders.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. PLEASE SEE &#147;RISK
FACTORS&#148; BEGINNING ON PAGE 6.</font></b></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS RESALE PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.</font></b></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
date of this resale prospectus is May 26, 2006</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="2" width="100%" noshade color="gray" align="left"></div>

</div>
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<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">TABLE
OF CONTENTS</font></u></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="8%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:8.2%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Page</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#WhereYouCanFindMoreInformation_092715">Where You Can Find More
  Information</a></font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#WhereYouCanFindMoreInformation_092715">3</a></font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#InformationIncorporatedByReferenc_092722">Information
  Incorporated by Reference</a></font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#InformationIncorporatedByReferenc_092722">4</a></font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#SpecialNoteRegardingForwardlookin_092744">Special
  Note Regarding Forward-Looking Statements</a></font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#SpecialNoteRegardingForwardlookin_092744">5</a></font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#NoteRegardingStockSplit_092746">Note
  Regarding Stock Split</a></font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#NoteRegardingStockSplit_092746">5</a></font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#RiskFactors_092809">Risk Factors</a></font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#RiskFactors_092809">6</a></font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#UseOfProceeds_092821">Use of Proceeds</a></font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#UseOfProceeds_092821">16</a></font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#SellingStockholders_092824">Selling
  Stockholders</a></font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#SellingStockholders_092824">16</a></font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#PlanOfDistribution_092830">Plan of
  Distribution</a></font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#PlanOfDistribution_092830">18</a></font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#LegalMatters_092836">Legal Matters</a></font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#LegalMatters_092836">19</a></font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="91%" valign="top" style="padding:0in 0in 0in 0in;width:91.8%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Experts_092839">Experts</a></font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.2%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Experts_092839">19</a></font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You should only rely on the information incorporated
by reference or provided in this resale prospectus or any supplement. Neither
we nor the selling stockholders have authorized anyone else to provide you with
different information. The common stock offered hereby is not being offered in
any state where the offer is not permitted. You should not assume that the
information in this resale prospectus or any supplement is accurate as of any
date other than the date on the front of this resale prospectus or such supplement.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">WHERE YOU CAN FIND MORE INFORMATION</font></b><a name="WhereYouCanFindMoreInformation_092715"></a></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are subject to the requirements of the Securities
Exchange Act of 1934. Accordingly, we file proxy statements and annual,
quarterly and special reports with the Securities and Exchange Commission (the &#147;<b><font style="font-weight:bold;">Commission</font></b>&#148;). You may read and copy this information, for a
copying fee, at the Commission&#146;s Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549. You may obtain information on the operation of the Public Reference
Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an
Internet web site at http://www.sec.gov that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the Commission. We also make available, free of charge
through our Internet web site our annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K, and all amendments to
those reports, as soon as reasonably practicable after that material is filed
with or furnished to the Commission. Our Internet web site address is
http://www.cpii.com. Please note that we have not incorporated by reference
into this resale prospectus the information on our website, and you should not
consider it to be a part of this resale prospectus.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We have filed with the Commission a Registration Statement
on Form S-8 under the Securities Act of 1933, as amended, to register
with the Commission the resale of the shares of the common stock described in
this resale prospectus. This resale prospectus is part of that Registration Statement,
and provides you with a general description of the shares of the common stock being
registered, but does not include all of the information you can find in the Registration
Statement or the exhibits. You should refer to the Registration Statement and
its exhibits for more information about us and the shares of common stock being
registered.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="2" width="100%" noshade color="gray" align="left"></div>

</div>
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<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">INFORMATION INCORPORATED BY REFERENCE</font></b><a name="InformationIncorporatedByReferenc_092722"></a></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Commission allows us to &#147;incorporate by
reference&#148; information into this resale prospectus, which means that we can
disclose important information to you by referring to another document filed
separately by us with the Commission. The information incorporated by reference
is deemed to be part of this resale prospectus, except for information
superseded by this resale prospectus. This resale prospectus incorporates by
reference the documents set forth below that we have previously filed with the Commission
as of their respective filing dates. These documents contain important
information about us and our finances.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our annual report on Form 10-K for the fiscal
year ended September 30, 2005, and our Form 10-K/A for such fiscal year;</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our quarterly report on Form 10-Q for the
quarter ended December 30, 2005;</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our quarterly report on Form 10-Q for the
quarter ended March 31, 2006;</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our current report on Form 8-K filed on
February 16, 2006;</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our current report on Form 8-K filed on May
3, 2006;</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our prospectus dated April 27, 2006, as filed
by us under Rule 424(b)(4) on May 1, 2006; and</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The description of our common stock set
forth, or incorporated by reference, in our Registration Statement on Form 8-A
filed pursuant to Section 12 of the Securities Exchange Act of 1934 on April
24, 2006, and any amendment or report filed for the purpose of updating any
such description.</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are also incorporating by reference additional
documents that we may file with the Commission in the future under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the
termination of this offering. Nothing in this resale prospectus shall or shall
be deemed to incorporate information furnished by us, but not filed with the
Commission, pursuant to Item 2.02, Item 7.01 or Item 9.01 of Form 8-K.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Any statement contained herein or in a document
incorporated or deemed to be incorporated herein by reference shall be deemed
to be modified or superseded for purposes hereof to the extent that a statement
contained herein or in any subsequently filed document which also is
incorporated or deemed to be incorporated herein by reference modifies or
supersedes such prior statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part
hereof.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will provide, without charge, to each person, including
any beneficial owner, to whom this resale prospectus is delivered, upon written
or oral request of such person, a copy of any document incorporated by
reference into this resale prospectus (not including exhibits to such documents
unless such exhibits are specifically incorporated by reference into the information
incorporated into this resale prospectus). Request for such information should
be directed to:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel
A. Littman<br>
Chief Financial Officer</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CPI
International, Inc.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">811
Hansen Way</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Palo
Alto, California</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Telephone:
(650) 846-2900</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</font></b><a name="SpecialNoteRegardingForwardlookin_092744"></a></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This resale prospectus and the documents
incorporated by reference herein contain forward-looking statements. Forward-looking
statements provide our current expectations or forecasts of future events.
Forward-looking statements include statements about our expectations, beliefs,
plans, objectives, intentions, assumptions and other statements that are not
historical facts. Words or phrases such as &#147;anticipate,&#148; &#147;believe,&#148; &#147;continue,&#148;
&#147;ongoing,&#148; &#147;estimate,&#148; &#147;expect,&#148; &#147;intend,&#148; &#147;may,&#148; &#147;plan,&#148; &#147;potential,&#148; &#147;predict,&#148;
&#147;project&#148; or similar words or phrases, or the negatives of those words or
phrases, may identify forward-looking statements, but the absence of these
words does not necessarily mean that a statement is not forward-looking.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Forward-looking statements are subject to known and
unknown risks and uncertainties and are based on potentially inaccurate
assumptions that could cause actual results to differ materially from those
expected or implied by the forward-looking statements. Our actual results could
differ materially from those anticipated in forward-looking statements for many
reasons, including the factors described in the section entitled &#147;Risk factors&#148;
in this prospectus. Accordingly, you should not unduly rely on these
forward-looking statements, which speak only as of the date of this resale prospectus.
We undertake no obligation to publicly revise any forward-looking statement to
reflect circumstances or events after the date of this resale prospectus or to
reflect the occurrence of unanticipated events.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE REGARDING STOCK SPLIT</font></b><a name="NoteRegardingStockSplit_092746"></a></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On April 7, 2006 we effected a 3.059 for one stock
split. All references in this resale prospectus to numbers of shares of our common
stock and to related per-share prices (including references to periods prior to
the effective date of the stock split) reflect the stock split.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RISK FACTORS</font></b><a name="RiskFactors_092809"></a></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Before you invest in our common
stock, you should carefully consider the following risks as well as other information
set forth in this resale prospectus. If any of the following risks actually
occurs, our business, financial condition or results of operations may suffer.
As a result, the trading price of our common stock could decline, and you could
lose all or part of your investment.</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RISKS RELATING TO OUR BUSINESS</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We face competition in the
markets in which we sell our products</font></b>.</p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The U.S. and foreign markets
in which we sell our products are competitive. Our ability to compete in these
markets depends on our ability to provide high quality products with short lead
times at competitive prices, as well our ability to create innovative new products.
In addition, our competitors could introduce new products with greater
capabilities, which could have a material adverse effect on our business.
Certain of our competitors are owned by companies that have substantially
greater financial resources than we do. Also, our foreign competitors are not
subject to U.S. Government export restrictions, which may make it easier in
certain circumstances for them to sell to foreign customers. If we are unable
to compete successfully against our current or future competitors, our business
and sales will be harmed.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">The end markets in which we
operate are subject to technological change, and changes in technology could
adversely affect our sales</font></b>.</p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Both our defense and
commercial end markets are subject to technological change. Advances in
existing technology, or the development of new technology, could adversely
affect our business and results of operations. Historically, we have relied on
a combination of internal research and development and customer-funded research
activities. To succeed in the future, we must continually engage in effective
and timely research and development efforts in order to introduce innovative
new products for technologically sophisticated customers and end markets and
benefit from activities of our customers. We may not be able to continue to
allocate sufficient financial and other resources to our research and
development activities or receive customer funding for research and
development. If we fail to adapt successfully to technological changes or fail
to obtain access to important technologies, our sales could suffer.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">If we are unable to retain key
management and other personnel, our business and results of operations could be
adversely affected.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our business and future
performance depends on the continued contributions of key management personnel.
Our current management team has an average of 25 years experience with us in
various capacities. Since assuming their current leadership roles in 2002, this
team has increased our sales, reduced our costs and grown our business. The
unanticipated departure of any key member of our management team could have an
adverse effect on our business and our results of operations. In addition, some
of our technical personnel, such as our key engineers, could be difficult to
replace.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">A significant portion of our
sales is, and is expected to continue to be, from contracts with the U.S.
Government, and any significant reduction in the U.S. defense budget or any
disruption or decline in U.S. Government expenditures could negatively affect
our results of operations and cash flows.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Over 31%, 37% and 34% of our
sales in our 2005, 2004 and 2003 fiscal years, respectively, were made to the
U.S. Government either directly or indirectly through prime contractors or subcontractors.
Because U.S. Government contracts are dependent on the U.S. defense budget, any
significant disruption or decline in U.S. Government expenditures in the
future, changes in U.S. Government spending priorities, other legislative
changes, or a change in our relationship with the U.S. Government could result
in the loss of some or all of our government contracts, which, in turn would
result in a decrease in our earnings and cash flow.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, U.S. Government
contracts are also conditioned upon continuing congressional approval and the
appropriation of necessary funds. Congress usually appropriates funds for a
given program each fiscal year even though contract periods of performance may
exceed one year. Consequently, at the outset of a major program, multi-year
contracts are usually funded for only the first year, and additional monies are
normally committed to the contract by the procuring agency only as Congress
makes appropriations for future fiscal years. We cannot ensure that any of our
government contracts will continue to be funded from year to year. If such
contracts are not funded, our sales may decline, which could negatively affect
our results of operations and result in decreased cash flows.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We are subject to risks
particular to companies supplying defense-related equipment and services to the
U.S. Government. The occurrence of any of these risks could cause a loss of or
decline in our sales to the U.S. Government.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">U.S. Government contracts contain termination provisions and are subject
to audit and modification</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The U.S. Government has the
ability unilaterally to:</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>terminate existing contracts, including for
the convenience of the government or because of a default in our performance of
the contract;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>reduce the value of existing contracts;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>cancel multi-year contracts or programs;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>audit our contract related costs and fees,
including allocated indirect costs;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>suspend or debar us from receiving new
contracts pending resolution of alleged violations of procurement laws or
regulations; and</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>control and potentially prohibit the export
of our products, technology or other data.</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All of our U.S. Government
contracts can be terminated by the U.S. Government either for its convenience
or if we default by failing to perform under the contract. Termination for
convenience provisions provide only for our recovery of costs incurred or
committed, settlement expenses and profit on the work completed prior to
termination. Termination for default provisions provide for the contractor to
be liable for excess costs incurred by the U.S. Government in procuring
undelivered items from another source. Our contracts with foreign governments
generally contain similar provisions relating to termination at the convenience
of the customer.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The U.S. Government may
review or audit our direct and indirect costs and performance on certain
contracts, as well as our accounting and general business practices for
compliance with complex statutes and regulations, including the Truth in
Negotiations Act, Federal Acquisition Regulations, Cost Accounting Standards,
and other administrative regulations. Like most government contractors, the
U.S. Government audits our costs and performance on a continual basis, and we
have outstanding audits. Based on the results of these audits, the U.S.
Government may reduce our contract related costs and fees, including allocated
indirect costs. In addition, under U.S. Government regulations, some of our
costs, including certain financing costs, research and development costs, and
marketing expenses, may not be reimbursable under U.S. Government contracts.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We are subject to laws and regulations related to our U.S. Government
contracts business, which may impose additional costs on our business.</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As a U.S. Government
contractor, we must comply with and are affected by laws and regulations
related to our performance of our government contracts and our business. These
laws and regulations may impose additional costs on our business. In addition,
we are subject to audits, reviews and investigations of our compliance with
these laws and regulations. If we are found to have failed to comply with these
laws and regulations, then we may be fined, we may not be reimbursed for costs
incurred in performing the contracts, our contracts may be terminated, and we
may be unable to obtain new contracts. Any of these actions would cause our
revenue to decrease. If a government</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">review, audit, or investigation
uncovers improper or illegal activities, then we may be subject to civil or
criminal penalties and administrative sanctions, including forfeiture of claims
and profits, suspension of payments, statutory penalties, fines, and suspension
or debarment.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, many of our
U.S. Government contracts require our employees to maintain various levels of
security clearances, and we are required to maintain certain facility
clearances. Complex regulations and requirements apply to obtaining and maintaining
security clearances and facility clearances, and obtaining such clearances can
be a lengthy process. To the extent we are not able to obtain or maintain
security clearances or facility clearances, we also may not be able to seek or
perform future classified contracts. If we are unable to do any of the foregoing,
we will not be able to maintain or grow our business, and our revenue may
decline.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">As a result of our U.S. Government business, we may be subject to false
claim suits, and a judgment against us in any of these suits could cause us to
be liable for substantial damages.</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our business with the U.S.
Government, subjects us to &#147;qui tam,&#148; or whistle blower, suits brought by
private plaintiffs in the name of the U.S. Government upon the allegation that
we submitted a false claim to the U.S. Government, as well as to false claim
suits brought by the U.S. Government. A judgment against us in a qui tam or
false claim suit could cause us to be liable for substantial damages (including
treble damages and monetary penalties) and could carry penalties of suspension
or debarment, which would make us ineligible to receive any U.S. Government
contracts for a period of up to three years. Any material judgment, or any
suspension or debarment, could result in increased costs, which could
negatively affect our results of operations. In addition, any of the foregoing
could cause a loss of customer confidence and could negatively harm our
business and our future prospects.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Some of our sole-provider business from the U.S. Government in the
future may be subject to competitive bidding.</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Some of the business that we
will seek from the U.S. Government in the future may be awarded through a
competitive bidding process. Competitive bidding on government contracts
presents risks that are not common to certain commercial contracts, such as:</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the need to bid on programs in advance of
contract performance, which may result in unforeseen performance issues and
costs; and</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the expense and delay that may arise if our
competitors protest or challenge the award made to us, which could result in a
reprocurement, modified contract, or reduced work.</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If we fail to win
competitively bid contracts, or fail to perform these contracts in a profitable
manner, our sales and results of operations will suffer.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We generate sales from contracts
with foreign governments, and significant changes in policies or to
appropriations of those governments could have an adverse effect on our
business, results of operations and financial condition.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Approximately 19% of our
fiscal year 2005 sales were made directly or indirectly to foreign governments.
Significant changes to appropriations or national defense policies, disruptions
of our relationships with foreign governments or terminations of our foreign
government contracts could have an adverse effect on our business, results of
operations and financial condition.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our international operations
subject us to the social, political and economic risks of doing business in
foreign countries.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We conduct a substantial
portion of our business, employ a substantial number of employees, and use
external sales organizations, in Canada and in other countries outside of the
United States. Direct sales to customers located outside the United States were
33%, 30% and 34% in fiscal years 2005, 2004 and 2003, respectively. As a
result, we</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">are subject to risks of
doing business internationally. Circumstances and developments related to international
operations that could negatively affect our business, results of operations and
financial condition include the following:</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>difficulties and costs of staffing and
managing international operations;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>currency restrictions, which may prevent the
transfer of capital and profits to the United States;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>changes in currency rates with respect to the
U.S. dollar;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>changes in regulatory requirements;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>U.S. and foreign government policies;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>potentially adverse tax consequences;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>restrictions imposed by the U.S. Government
on the export of certain products and technology;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the responsibility of complying with multiple
and potentially conflicting laws;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the impact of regional or country specific
business cycles and economic instability; and</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>geopolitical developments and conditions,
including international hostilities, acts of terrorism and governmental
reactions, trade relationships and military and political alliances.</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Limitations on imports,
currency exchange control regulations, transfer pricing regulations and tax
laws and regulations could adversely affect our international operations,
including the ability of our non-U.S. subsidiaries to declare dividends or
otherwise transfer cash among our subsidiaries to pay interest and principal on
our debt.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Laws and regulations restricting
the sale of our products to foreign customers could impair our ability to make
sales to foreign customers.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Licenses for the export of
many of our products are required from government agencies in accordance with
various regulations, including the United States Export Administration
Regulations and the International Traffic In Arms Regulations. Under these
regulations, we must obtain a license or permit from the U.S. Government before
making foreign sales of certain of our products that have been designated as
important for national security. These laws and regulations could adversely
impact our sales and business for the following reasons:</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>In order to obtain the license for the sale
of such a product, we are required to obtain information from the potential
customer and provide it to the U.S. Government. If the U.S. Government
determines that the sale presents national security risks, it may not approve
the sale.</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Delays caused by the requirement to obtain
the required license may cause us to lose potential foreign sales to overseas
competitors who may not be subject to comparable restrictions and delays.</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>If we make a sale in violation of these laws
and regulations, we could be subject to fines or penalties.</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our business, results of
operations and financial condition may be adversely affected by increased or
unexpected costs incurred by us on our contracts and sales orders.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The terms of virtually all
of our contracts and sales orders require us to perform the work under the
contract or sales order for a predetermined fixed price. As a result, we bear
the risk of increased or unexpected costs associated with a contract or sales
order, which may reduce our profit or cause us to sustain losses. Future
increased or unexpected</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">costs on a significant
number of our contracts and sales orders could adversely affect our results of
operations and financial condition.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Environmental laws and
regulations and other obligations relating to environmental matters could
subject us to liability for fines, clean-ups and other damages, require us to
incur significant costs to modify our operations and increase our manufacturing
costs.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Environmental laws and regulations could limit our ability to operate
as we are currently operating and could result in additional costs.</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are subject to a variety
of U.S. federal, state and local, as well as foreign, environmental laws and
regulations relating, among other things, to wastewater discharge, air
emissions, handling of hazardous materials, disposal of solid and hazardous
wastes, and remediation of soil and groundwater contamination. We use a number
of chemicals or similar substances, and generate wastes, that are classified as
hazardous. We require environmental permits to conduct many of our operations.
Violations of environmental laws and regulations could result in substantial
fines, penalties, and other sanctions. Changes in environmental laws or
regulations (or in their enforcement) affecting or limiting, for example, our
chemical uses, certain of our manufacturing processes, or our disposal
practices, could restrict our ability to operate as we are currently operating
or impose additional costs. In addition, we may experience releases of certain
chemicals or discover existing contamination, which could cause us to incur
material cleanup costs or other damages.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We could be subject to significant liabilities if Varian Medical
Systems does not satisfy the obligations associated with existing environmental
contamination.</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">When we purchased our
electron devices business in 1995, Varian Medical Systems agreed to indemnify
us for various environmental liabilities relating to the business prior to the
sale, with certain exceptions and limitations. Varian Medical Systems is
undertaking the environmental investigation and remedial work at the remaining
two of our manufacturing facilities that are known to require environmental
remediation, Palo Alto, California and Beverly, Massachusetts. In addition,
Varian Medical Systems has been sued or threatened with suit with respect to
environmental obligations related to these manufacturing facilities. If Varian
Medical Systems does not comply fully with its indemnification obligations to
us or does not continue to have the financial resources to comply fully with
those obligations, we could be subject to significant liabilities.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We could be subject to significant liabilities if existing
environmental insurance and indemnification payments from Varian Medical
Systems are not sufficient to satisfy the obligations associated with existing
environmental contamination at our former San Carlos, California facility.</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our San Carlos, California
facility is under contract for sale and redevelopment. This facility has
preexisting soil and groundwater contamination that has been the subject of
some remediation and is expected to undergo additional remediation by the
purchaser after the sale closes. In connection with the pending sale of that
facility, we released Varian Medical Systems from certain of its pre-existing
environmental indemnity obligations related to that property, although the
purchaser of the property has acquired pollution liability insurance that is
intended to cover the expected remediation costs of that property. If the
combination of the proceeds of this insurance and the amounts to be paid by
Varian Medical Systems under its remaining indemnification obligations are not
sufficient to cover the remediation costs and pollution liability associated
with the San Carlos property, we could be subject to significant costs and
liabilities.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We have only a limited ability to
protect our intellectual property rights, which are important to our success.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our success depends, in
part, upon our ability to protect our proprietary technology and other
intellectual property. We rely on a combination of trade secrets,
confidentiality policies, nondisclosure and other contractual arrangements, and
patent, copyright and trademark laws to protect our intellectual property
rights. The steps we take to protect our intellectual property may not be
adequate to prevent or deter infringement or other violation of our
intellectual property, and we may not be able to detect unauthorized use or
take appropriate and timely steps to enforce our intellectual property rights.
In addition, we cannot be certain that our processes and products do not or</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">will not infringe or
otherwise violate the intellectual property rights of others. Infringement or
other violations of intellectual property rights could cause us to incur
significant costs and prevent us from selling our products and could have a
material adverse effect on our business, results of operations and financial
condition.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our inability to obtain certain
necessary raw materials and key components could disrupt the manufacture of our
products and cause our sales and results of operations to suffer.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We obtain certain raw
materials and key components necessary for the manufacture of our products, such
as molybdenum, cupronickel, OFHC copper, and some cathodes from a limited group
of, or occasionally sole, suppliers. If any of our suppliers fails to meet our
needs, we may not have readily available alternatives. Delays in component
deliveries could cause delays in product shipments and require the redesign of
certain products. If we are unable to obtain necessary raw materials and key
components from our suppliers under favorable purchase terms and on a timely
basis, or to develop alternative sources, our ability to manufacture products
could be disrupted or delayed, and our sales and results of operations could
suffer.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We may not be successful in
implementing part of our growth strategy if we are unable to identify and
acquire suitable acquisition targets or integrate acquired companies
successfully.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Finding and consummating
acquisitions is one of the components of our growth strategy. Our ability to
grow by acquisition depends on the availability of acquisition candidates at
reasonable prices and our ability to obtain additional acquisition financing on
acceptable terms. We may experience competition in making acquisitions from
larger companies with significantly greater resources. We are likely to use
significant amounts of cash, issue additional equity securities or incur
additional debt in connection with future acquisitions, each of which could
have a material adverse effect on our business. There can be no assurance that
we will be able to obtain the necessary funds to carry out acquisitions on commercially
reasonable terms, or at all.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, future
acquisitions could place demands on our management and our operational and
financial resources and could cause or result in the following:</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>difficulties in assimilating and integrating
the operations, technologies and products acquired;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the diversion of our management&#146;s attention
from other business concerns;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>our operating and financial systems and
controls being inadequate to deal with our growth;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>our entering markets in which we have limited
or no prior experience; and</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the potential loss of key employees.</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our backlog is subject to
modifications and terminations of orders, which could negatively impact our
sales.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Backlog represents firm
orders for which goods and services are yet to be provided, including with
respect to government contracts that are cancelable at will. As of March 31,
2006, we had an order backlog of $197.7 million. Although historically the
amount of modifications and terminations of our orders has not been material
compared to our total contract volume, customers can, and sometimes do,
terminate or modify these orders. Cancellations of purchase orders or
reductions of product quantities in existing contracts could substantially and
materially reduce our backlog and consequently, our future revenues. Our
failure to replace canceled or reduced backlog could negatively impact our sales
and results of operations.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We are in the process of
relocating our Eimac operating division from our San Carlos, California to our Palo
Alto and Mountain View, California facilities, which could result in
disruptions to our operations and unexpected costs</font></b>.</p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In connection with the
relocation of our San Carlos, California facility to our Palo Alto, California
and Mountain View, California facilities, we will have to: decommission
specialized production equipment; build out our Palo</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Alto and Mountain View,
California locations; and configure, install and test our specialized equipment
in its new locations. During this process we expect that our Eimac operating
division will suffer production inefficiencies, delayed product deliveries to
our customers and reduced sales. In addition, the San Carlos move will
negatively impact our fiscal year 2006 results of operations because we will
not be able to reduce our fixed overhead costs to offset the expected
reductions in sales during the periods impacted by the move.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, our results of
operations could be adversely affected if we incur unexpected move or buildout
costs associated with the San Carlos move. Finally, any delays in product
deliveries caused by the San Carlos move could affect our customer relations,
which could result in lower sales after the San Carlos move is completed.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We may not be able to continue to
achieve profitability in the future, and if we are not profitable, our stock
price may decline.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We were profitable from
fiscal years 1996 to 1998, as well as in fiscal years 2003 and 2005. However,
from fiscal years 1999 to 2002, and in fiscal year 2004, we incurred net
losses. We cannot ensure that we will continue to achieve profitability in the
future. Future revenues and profits will depend upon various factors, including
continued acceptance of our products and services in the various markets that
we serve, the competitive position of our products in those markets, our
ability to enhance or improve on our existing products and develop new products
and our ability to continue to control the costs and expenses associated with
the operation of our business, such as sales and marketing, personnel, and
product development and enhancement. Our profitability could also be adversely
affected by purchase accounting charges related to future acquisitions, and
potential impairment charges related to goodwill and other intangible assets.
If we are unable to sustain our profitability, our stock price may decline.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We may not be able to timely
comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Beginning in fiscal year
2007, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we must
perform and report our evaluation of internal controls over financial
reporting, and our independent registered public accounting firm must attest to
and report on the adequacy of management&#146;s evaluation and the effectiveness of
such controls, on an annual basis. Our efforts to comply with Section 404 have
resulted in, and are likely to continue to result in, significant costs, the
commitment of time and operational resources and the diversion of management&#146;s
attention. Because compliance with these requirements is complex and time
consuming, there can be no assurance that we will be able to implement the
requirements of Section 404 in a timely fashion. In addition, because of the
time and expense required to evaluate our internal controls, our independent
registered public accounting firm may have limited time before its attestation
is required, which may prevent our accountants from being able to adequately
test and subsequently to report on our internal controls. If we fail to timely
complete our assessment of internal controls, or if our independent registered
public accounting firm cannot report on our assessment, we could suffer a loss
of public confidence in our internal controls. In addition, any failure to
implement required new or improved controls, or difficulties encountered in
implementation, could harm our operating results or cause us to fail to timely
meet our regulatory reporting obligations.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RISKS RELATED TO OUR INDEBTEDNESS</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">We have a substantial amount of
debt and we may incur substantial additional debt in the future, which could
adversely affect our financial health and our ability to obtain financing in
the future and to react to changes in our business.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We have a substantial amount
of debt and may incur additional debt in the future. As of March 31, 2006, our
total consolidated indebtedness was $295 million and we had $35.8 million of
additional borrowings available under the revolver under our senior credit
facilities. Pro forma, after giving effect to the repayment of $47.5 million in
aggregate principal amount of the outstanding term loan amounts under our
senior credit facilities in May 2006, our total consolidated indebtedness as of
March 31, 2006 was $247.5<b><font style="font-weight:bold;"> </font></b>million and we
had $35.8 million of<b><font style="font-weight:bold;"> </font></b>additional
borrowings available under the revolver under our senior credit facilities. Our
substantial amount of debt could have important consequences to us and you,
including, without limitation, the following:</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>it will require us to dedicate a substantial
portion of our cash flow from operations to payments on indebtedness, which
will reduce the funds available for working capital, capital expenditures and
other general corporate expenses;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>it could have the effect of limiting our
flexibility in planning for, or reacting to, changes in our business, the
markets in which we compete and the economy at large;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>it could place us at a disadvantage compared
to our competitors that have proportionately less debt;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>it could adversely affect our relationship
with customers and suppliers;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>it could limit our ability to borrow
additional funds in the future, if needed, because of applicable financial and
restrictive covenants of our indebtedness;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>it could make it more difficult for us to
satisfy our obligations to our noteholders under our outstanding notes and our
senior credit facilities; and</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>it could make us more vulnerable to interest
rate increases because a portion of our borrowings is, and will continue to be,
at variable rates of interest.</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A default under our debt
obligations could result in the acceleration of those obligations. We may not
have the ability to fund our debt obligations in the event of such a default.
This may adversely affect our ability to operate our business and therefore
could adversely affect our results of operations and financial condition, and
consequently, the price of our common stock. In addition, we may incur
substantial additional debt in the future. If current debt levels increase, the
related risks that we and you now face will intensify.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">The agreements and instruments
governing our debt contain restrictions and limitations that could limit our
flexibility in operating our business.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our senior credit facilities
and the indentures governing our outstanding notes have a number of significant
covenants that, among other things, restrict our ability to:</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>incur additional indebtedness;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>sell assets or consolidate or merge with or
into other companies;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>pay dividends or repurchase or redeem capital
stock;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>make certain investments;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>issue capital stock of our subsidiaries;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>incur liens; and</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>enter into certain types of transactions with
our affiliates.</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">These covenants could have
the effect of limiting our flexibility in planning for, or reacting to, changes
in our business and the markets in which we compete.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Under our senior credit
facilities, we are required to satisfy and maintain specified financial ratios
and tests. Events beyond our control may affect our ability to comply with
those provisions, and we may not be able to meet those ratios and tests, which
would result in a default under our senior credit facilities. In addition, our
senior credit facilities and the indenture governing Communications &amp; Power
Industries&#146; 8% senior subordinated notes restrict Communications &amp; Power
Industries&#146; ability to make distributions to us. Because we are a holding
company with no</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">operations of our own, we
rely on distributions from Communications &amp; Power Industries, our wholly
owned subsidiary, to satisfy our obligations under our floating rate senior
notes. If Communications &amp; Power Industries is unable make distributions to
us, and we cannot obtain other funds to satisfy our obligations under our
floating rate senior notes, a default under our floating rate senior notes
could result.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The breach of any covenants
or obligations in our senior credit facilities and the indentures governing our
outstanding notes could result in a default under the applicable debt agreement
or instrument and could trigger acceleration of (or the right to accelerate)
the related debt. Because of cross-default provisions in the agreements and
instruments governing our indebtedness, a default under one agreement or
instrument could result in a default under, and the acceleration of, our other
indebtedness. In addition, the lenders under our senior credit facilities could
proceed against the collateral securing that indebtedness. If any of our
indebtedness were to be accelerated, it could adversely affect our ability to
operate our business or we may be unable to repay such debt, and therefore such
acceleration could adversely affect our results of operations and financial
condition, and consequently, the price of our common stock.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our ability to generate the
significant amount of cash needed to service our debt and to fund capital
expenditures or other liquidity needs depends on many factors beyond our
control.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our ability to service our
debt and to fund our planned capital expenditures and ongoing operations will
depend on our ability to generate cash and to obtain financing in the future.
This, to a certain extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors affecting our industry
that are beyond our control. If we do not generate sufficient cash flow from
operations, and sufficient future borrowings are not available under our senior
credit facilities or from other sources of financing, we may not be able to
repay our debt or fund capital expenditures or our other liquidity needs. As of
March 31, 2006, on a consolidated basis, we had principal repayment obligations
of $0 in each of fiscal years 2006, 2007 and 2008, $19 million in fiscal year
2009, $71 million in fiscal year 2010 and $205 million thereafter. Pro forma,
after giving effect to the repayment of $47.5 million in aggregate principal
amount of the outstanding term loan amounts under our senior credit facilities in
May 2006, as of March 31, 2006, on a consolidated basis, we had principal
repayment obligations of $0 in each of fiscal years 2006, 2007, 2008 and 2009,
$42.5 million in fiscal year 2010 and $205 million thereafter. Based on our
debt obligations and interest rates at March 31, 2006, our current annual debt
service costs are approximately $24 million per year,<b><font style="font-weight:bold;"> </font></b>and
pro forma, after giving effect to the repayment of $47.5 million in aggregate
principal amount of our outstanding term loan, our current annual debt service
costs are approximately <b><font style="font-weight:bold;">$</font></b>21 million.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our outstanding notes and our
senior credit facilities are subject to change of control provisions. We may
not have the ability to raise funds necessary to fulfill our obligations under
our debt following a change of control, which could place us in default
thereunder.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We may not have the ability
to raise funds necessary to fulfill our obligations under our debt following a
change of control, which would place us in default thereunder. We may not have
the ability to raise the funds necessary to fulfill our obligations under our
outstanding notes and our senior credit facilities following a change of
control. Under the indentures governing our notes, upon the occurrence of specified
change of control events, we are required to offer to repurchase the notes.
However, we may not have sufficient funds at the time of the change of control
event to make the required repurchase of our notes. In addition, a change of
control under our senior credit facilities would result in an event of default
thereunder and permit the acceleration of the outstanding obligations under the
senior credit facilities.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RISKS RELATED TO OUR COMMON STOCK</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">The price of our common stock may
fluctuate, which could negatively affect the value of your investment.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The market price of our
common stock may fluctuate widely as a result of various factors, such as
period-to-period fluctuations in our actual or anticipated operating results,
sales of our common stock by our existing equity investors, developments in our
industry, the failure of securities analysts to cover our common stock or
changes in financial estimates by analysts, failure to meet financial estimates
by analysts, competitive factors, general economic and securities market
conditions and other external factors. Also, securities markets worldwide
experience significant price and volume fluctuations. This market volatility,
as well as general economic or market conditions,</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">and market conditions
affecting the stock of companies in our industry in particular, could reduce
the market price of our common stock in spite of our operating performance. You
may be unable to resell your shares of our common stock at or above the purchase
price for your shares or at all.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">If our share price is volatile,
we may be the target of securities litigation, which is costly and
time-consuming to defend.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In the past, following
periods of market volatility in the price of a company&#146;s securities,
securityholders have often instituted class action litigation. If the market
value of our common stock experiences adverse fluctuations and we become
involved in this type of litigation, regardless of the outcome, we could incur
substantial legal costs and our management&#146;s attention could be diverted from
the operation of our business, causing our business to suffer.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Future sales of shares of our
common stock in the public market could depress our stock price and make it
difficult for you to recover the full value of your investment.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We cannot predict the
effect, if any, that market sales of shares of common stock or the availability
of shares of common stock for sale will have on the market price of our common
stock prevailing from time to time. Future sales, or the perception or
availability for sale in the public market, of substantial amounts of our
common stock could adversely affect the market price of our common stock.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, we may issue a
substantial number of shares of our common stock under our stock incentive and
stock purchase plans. As of May 15, 2006, we had options outstanding to
purchase 3,191,698 shares of our common stock under our 2000 Stock Option Plan,
our 2004 Stock Incentive Plan and our 2006 Equity and Performance Incentive
Plan, of which 2,359,225 were exercisable as of such date. In addition our 2006
Equity and Performance Incentive Plan and 2006 Employee Stock Purchase Plan
provide for the issuance of up to an additional 1,853,645 shares of our common
stock to officers, directors and consultants. The issuance of significant
additional shares of our common stock upon the exercise of outstanding options
or otherwise pursuant to these stock plans could have a material adverse effect
on the market price of our common stock and could significantly dilute the
interests of other stockholders.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">The controlling position of
Cypress will limit your ability to influence corporate matters.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As of May 15, 2006, entities
affiliated with The Cypress Group collectively own over 55.5% of our
outstanding shares of common stock. Accordingly, the entities affiliated with
Cypress have significant influence over our management and affairs and over
most matters requiring stockholder approval, including the election of directors
and the approval of significant corporate transactions. The entities affiliated
with Cypress will also be able to deter any attempted change of control. This
concentrated control will limit your ability to influence corporate matters
and, as a result, we may take actions that some of our stockholders do not view
as beneficial. Accordingly, the market price of our common stock could be
adversely affected.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our anti-takeover provisions
could prevent or delay a change in control of our company, even if such change
of control would be beneficial to our stockholders.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Provisions of our amended
and restated certificate of incorporation and amended and restated bylaws as
well as provisions of Delaware law could discourage, delay or prevent a merger,
acquisition or other change in control of our company. These provisions
include:</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a board of directors that is classified such
that only one-third of directors are elected each year;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>authorizing the issuance of &#147;blank check&#148;
preferred stock that could be issued by our board of directors to increase the
number of outstanding shares and thwart a takeover attempt;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>limitations on the ability of stockholders to
call special meetings of stockholders;</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>prohibiting stockholder action by written
consent and requiring all stockholder actions to be taken at a meeting of our
stockholders;</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>establishing advance notice requirements for
nominations for election to the board of directors or for proposing matters
that can be acted upon by stockholders at stockholder meetings; and</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>requiring that the affirmative vote of the
holders of at least two thirds (66 2/3%) of the voting power of our issued and
outstanding capital stock entitled to vote in the election of directors be obtained
to amend certain provisions of our amended and restated certificate of
incorporation.</p>

<p style="margin:0in 0in .0001pt .25in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, Section 203 of
the Delaware General Corporation Law, which will apply to us after affiliates
of Cypress collectively cease to own at least 15% of the total voting power of
our common stock, limits business combination transactions with 15%
stockholders that have not been approved by the board of directors. These
provisions and other similar provisions make it more difficult for a third
party to acquire us without negotiation. These provisions may apply even if the
transaction may be considered beneficial by some stockholders.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">The failure to maintain a minimum
share price of $1.00 per share of common stock could result in delisting of our
shares on the Nasdaq National Market, which would harm the market price of our
common stock.</font></b></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In order to retain our
listing on the Nasdaq National Market we are required to maintain a minimum bid
price of $1.00 per share. If the bid price falls below the $1.00 minimum for
more than 30 consecutive trading days, we will have 180 days to satisfy the
$1.00 minimum bid price for a period of at least 10 trading days. If we are
unable to take action to increase the bid price per share (either by reverse
stock split or otherwise), we could be subject to delisting from the Nasdaq
National Market.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The failure to maintain our
listing on the Nasdaq National Market would harm the liquidity of our common
stock and would have an adverse effect on the market price of our common stock.
As a result, the liquidity of our common stock would be impaired, not only in
the number of shares that could be bought or sold, but also through delays in
the timing of transactions, reduction in security analysts&#146; and news media&#146;s
coverage and lower prices for our common stock than might otherwise be
attained. In addition, our common stock would become subject to the &#147;penny
stock&#148; rules that impose additional sales practice&#160; requirements on broker-dealers who sell such
securities.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">USE OF PROCEEDS</font></b><a name="UseOfProceeds_092821"></a></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
will not receive any of the proceeds from the sale of our common stock by the
selling stockholders pursuant to this resale prospectus. All proceeds from the
sale of our common stock by the selling stockholders will be for the account of
such selling stockholders.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SELLING STOCKHOLDERS</font></b><a name="SellingStockholders_092824"></a></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
following table lists the names of each selling stockholder and the number of
shares of our common stock that could be sold by that individual pursuant to
this resale prospectus.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.02%;">
 <tr>
  <td width="23%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:23.32%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Name &amp; Title</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.38%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="16%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:16.78%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Number
  of<br>
  Shares of<br>
  Common Stock<br>
  Beneficially<br>
  Owned Prior<br>
  to the Offering</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.46%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="16%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:16.72%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Number
  of<br>
  Shares of<br>
  Common Stock<br>
  That May be<br>
  Offered(1)</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.6%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="17%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:17.8%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Number
  of<br>
  Shares of<br>
  Common Stock<br>
  Beneficially<br>
  Owned After<br>
  the Offering</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="13%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:13.0%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Percent
  of<br>
  Outstanding<br>
  Common Stock<br>
  Beneficially<br>
  Owned After<br>
  the Offering(2)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.94%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="23%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:23.32%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael F. Finley <br>
  Director(3)(4)</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:16.78%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8,872,071</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.46%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:16.72%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,333</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:17.8%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8,868,738</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:13.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">55.3</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
 <tr>
  <td width="23%" valign="bottom" style="padding:0in 0in 0in 0in;width:23.32%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" style="padding:0in 0in 0in 0in;width:16.78%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.46%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" style="padding:0in 0in 0in 0in;width:16.72%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" style="padding:0in 0in 0in 0in;width:17.8%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="bottom" style="padding:0in 0in 0in 0in;width:13.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="23%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:23.32%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jeffrey P. Hughes, <br>
  Director(3)(5)</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:16.78%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8,869,849</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.46%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:16.72%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,111</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:17.8%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8,868,738</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:13.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">55.3</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
 <tr>
  <td width="23%" valign="bottom" style="padding:0in 0in 0in 0in;width:23.32%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" style="padding:0in 0in 0in 0in;width:16.78%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.46%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" style="padding:0in 0in 0in 0in;width:16.72%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" style="padding:0in 0in 0in 0in;width:17.8%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="bottom" style="padding:0in 0in 0in 0in;width:13.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="23%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:23.32%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael Targoff<br>
  Chairman(6)</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:16.78%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">77,049</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.46%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:16.72%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,222</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:17.8%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">74,827</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:13.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font></p>
  </td>
 </tr>
 <tr>
  <td width="23%" valign="bottom" style="padding:0in 0in 0in 0in;width:23.32%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" style="padding:0in 0in 0in 0in;width:16.78%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.46%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" style="padding:0in 0in 0in 0in;width:16.72%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" style="padding:0in 0in 0in 0in;width:17.8%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="bottom" style="padding:0in 0in 0in 0in;width:13.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="23%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:23.32%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chris Toffales<br>
  Vice Chairman and <br>
  Director(7)</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:16.78%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">20,671</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.46%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:16.72%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,111</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:17.8%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19,560</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:13.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font></p>
  </td>
 </tr>
 <tr>
  <td width="23%" valign="bottom" style="padding:0in 0in 0in 0in;width:23.32%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" style="padding:0in 0in 0in 0in;width:16.78%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.46%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" style="padding:0in 0in 0in 0in;width:16.72%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" style="padding:0in 0in 0in 0in;width:17.8%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="bottom" style="padding:0in 0in 0in 0in;width:13.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="23%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:23.32%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">William P. Rutledge<br>
  Director(8)</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:16.78%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,222</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.46%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:16.72%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,222</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.6%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:17.8%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:13.0%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="2" width="100%" noshade color="gray" align="left"></div>

</div>
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<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="1" width="25%" noshade color="black" align="left"></div>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*
Represents less than 1% of total.</font></p>

<p style="margin:0in 0in .0001pt .25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Does not constitute a commitment to sell any
or all of the stated number of shares of our common stock. The number of shares
of our common stock offered shall be determined from time to time by each
selling stockholder in his sole discretion.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Percentage of beneficial ownership is based
on 16,030,153 shares of our common stock issued and outstanding as of May 15,
2006.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Amount of shares beneficially owned includes
8,868,738 shares beneficially owned by Cypress Associates II LLC (&#147;<b><font style="font-weight:bold;">Cypress Associates</font></b>&#148;), which consists of 8,429,065 shares
owned by Cypress Merchant Banking Partners II L.P., 358,332 shares owned by
Cypress Merchant B II C.V. and 81,341 shares owned by 55th Street Partners II
L.P. (collectively, the &#147;<b><font style="font-weight:bold;">Cypress Funds</font></b>&#148;).
Cypress Associates is the managing general partner of Cypress Merchant B II
C.V. and the general partner of Cypress Merchant Banking Partners II L.P. and
55th Street Partners II L.P., and has voting and investment power over the
shares held or controlled by each of these funds. Jeffrey P. Hughes and James
A. Stern, each of whom is a managing member of Cypress Associates, may be
deemed to share beneficial ownership of the shares shown as beneficially owned
by Cypress Associates and by the Cypress Funds. In addition, Messrs. Finley and
Hughes are members of the investment committee that exercises voting control
over the shares owned by the Cypress Funds. Each of the foregoing individuals disclaims
beneficial ownership of the shares shown as beneficially owned by Cypress
Associates and the shares shown as beneficially owned by the Cypress Funds.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Amount of shares beneficially owned includes 3,333
unvested shares. The unvested shares will vest as follows:&#160; 1/3 of the shares will vest on the day before
the 2007 annual stockholders&#146; meeting, 1/3 of the shares will vest on the day
before the 2008 annual stockholders&#146; meeting and 1/3 of the shares will vest on
the day before the 2009 annual stockholders&#146; meeting. Unvested shares are generally
subject to forefeiture restrictions in the event of the termination of Mr.
Finley&#146;s status as a director.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(5)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Amount of shares beneficially owned includes 1,111
unvested<b><font style="font-weight:bold;"> </font></b>shares. The unvested shares will vest
on the day before the 2007 annual stockholders&#146; meeting. Unvested shares are generally
subject to forefeiture restrictions in the event of the termination of Mr.
Hughes&#146; status as a director.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(6)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Amount of shares beneficially owned includes
(i) 2,222 unvested<b><font style="font-weight:bold;"> </font></b>shares and
(ii) 9,807 shares of our common stock issuable upon the exercise of options
that are presently exercisable or exercisable within sixty (60) days after May
15, 2006. The unvested shares will vest as follows: 1/2 of the shares will vest
on the day before the 2007 annual stockholders&#146; meeting and 1/2 of the shares
will vest on the day before the 2008 annual stockholders&#146; meeting. Unvested
shares are generally subject to forefeiture restrictions in the event of the
termination of Mr. Targoff&#146;s status as a director.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(7)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Amount of shares beneficially owned includes
(i) 1,111 unvested<b><font style="font-weight:bold;"> </font></b>shares and
(ii) 9,807 shares of our common stock issuable upon the exercise of options
that are presently exercisable or exercisable within (60) days after May 15,
2006. The unvested shares will vest on the day before the 2007 annual</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">17</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="2" width="100%" noshade color="gray" align="left"></div>

</div>
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<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">stockholders&#146; meeting. Unvested shares are generally subject to
forefeiture restrictions in the event of the termination of Mr. Toffales&#146; status
as a director.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(8)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Amount of shares beneficially owned consists
of 2,222 unvested<b><font style="font-weight:bold;"> </font></b>shares. The unvested shares will
vest as follows: 1/2 of the shares will vest on the day before the 2007 annual
stockholders&#146; meeting and 1/2 of the shares will vest on the day before the
2008 annual stockholders&#146; meeting. Unvested shares are generally subject to
forefeiture restrictions in the event of the termination of Mr. Rutledge&#146;s
status as a director.</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PLAN OF DISTRIBUTION</font></b><a name="PlanOfDistribution_092830"></a></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The selling stockholders and their successors,
including their transferees and donees, may sell the common stock offered under
this resale prospectus directly to purchasers or through underwriters,
broker-dealers or agents, who may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders or the
purchasers. These discounts, concessions or commissions as to any particular
underwriter, broker-dealer or agent may be in excess of those customary in the
types of transactions involved. Neither we nor the selling stockholders can
estimate the amount of this compensation.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The common stock offered under this resale
prospectus may be sold from time to time in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market prices, at varying prices determined at the time of sale,
or at negotiated prices. These sales may be effected in transactions, that may
involve crosses or block transactions:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>on any national securities exchange or U.S.
inter-dealer system of a registered national securities association on which
the common stock may be listed or quoted at the time of sale;</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>in the over-the-counter market;</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>in transactions otherwise than on these
exchanges or systems or in the over-the-counter market;</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>through the writing of options, whether the
options are listed on an options exchange or otherwise; or</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>through the settlement of short sales.</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In connection with the sale of the common stock, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. Except as
provided in Section 16(c) of the Securities Act of 1933, the selling
stockholders may also sell the common stock short and deliver these securities
to close out their short positions, or loan or pledge the common stock to
broker-dealers that in turn may sell these securities.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The aggregate proceeds to the selling stockholders
from the sale of the common stock offered by them will be the purchase price of
the common stock less discounts and commissions, if any. Each of the selling
stockholders reserves the right to accept or to reject, in whole or in part,
any proposed purchase of common stock to be made directly or through agents.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The selling stockholders and any underwriters,
broker-dealers or agents that participate in the sale of the common stock may
be &#147;underwriters&#148; within the meaning of Section 2(11) of the Securities Act of
1933. Any discounts, commissions, concessions or profit they earn on any resale
of the shares may be underwriting discounts and commissions under the
Securities Act of 1933. If the selling stockholders are &#147;underwriters&#148; within
the meaning of Section 2(11) of the Securities Act of 1933, they will be
subject to the prospectus delivery requirements of the Securities Act of 1933.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, any securities covered by this resale
prospectus that qualify for sale pursuant to Rule 144 of the Securities Act of
1933 may be sold under Rule 144 rather than pursuant to this resale prospectus.
A selling</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">stockholder may not sell any
common stock described in this resale prospectus and may not transfer, devise
or gift these securities by other means not described in this resale prospectus.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">To the extent required, the specific common stock to
be sold, the names of the selling stockholders, the respective purchase prices
and public offering prices, the names of any agent, dealer or underwriter, and
any applicable commissions or discounts with respect to a particular offer will
be set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement of which this resale
prospectus is a part. This resale prospectus also may be used, with our
consent, by donees of the selling stockholders, or by other persons acquiring
shares and who wish to offer and sell shares under circumstances requiring or
making desirable its use.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In order to comply with the securities laws of some
states, if applicable, the common stock may be sold in these jurisdictions only
through registered or licensed brokers or dealers.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The selling stockholders may indemnify brokers,
dealers, agents or underwriters that participate in transactions involving
sales of the shares against specific liabilities, including liabilities arising
under the Securities Act of 1933 and/or the Securities Exchange Act of 1934. We
will pay substantially all of the expenses incident to this offering of the
shares by the selling stockholders to the public other than commissions and discounts
of underwriters, brokers, dealers or agents.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We may suspend the use of this resale prospectus if
we learn of any event that causes this resale prospectus to include an untrue
statement of a material fact or to omit to state a material fact required to be
stated in the resale prospectus or necessary to make the statements in the resale
prospectus not misleading in the light of the circumstances then existing. If
this type of event occurs, a prospectus supplement or post-effective amendment,
if required, will be distributed to each selling stockholder.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">LEGAL MATTERS</font></b><a name="LegalMatters_092836"></a></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .95pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
validity of the issuance of the shares offered hereby has been passed upon by
Irell &amp; Manella LLP, Los Angeles, California.</font></p>

<p style="margin:0in 0in .0001pt .95pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXPERTS</font></b><a name="Experts_092839"></a></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The consolidated balance sheets of CPI International,
Inc. and subsidiaries as of September 30, 2005 and October 1, 2004, and the
related consolidated statements of operations, stockholders&#146; equity (deficit)
and comprehensive income, and cash flows for the year ended September 30, 2005
and for the 36-week period ended October 1, 2004, and for the 16-week period
ended January 22, 2004 and the year ended October 3, 2003 of Communications
&amp; Power Industries Holding Corporation and subsidiaries, have each been
incorporated by reference herein in reliance upon the report of KPMG LLP, an
independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PART II<br>
INFORMATION NOT REQUIRED IN PROSPECTUS</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 3.&#160;&#160;&#160; Incorporation of
Documents by Reference.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following documents and information previously
filed with the Securities and Exchange Commission by us are hereby incorporated
by reference in this Registration Statement:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 54.15pt;text-indent:-36.1pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our annual report on Form 10-K for the fiscal
year ended September 30, 2005, and our Form 10-K/A for such fiscal year;</p>

<p style="margin:0in 0in .0001pt 54.15pt;text-indent:-36.1pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our quarterly report on Form 10-Q for the
quarter ended December 30, 2005;</p>

<p style="margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our quarterly report on Form 10-Q for the quarter ended March 31, 2006;</p>

<p style="margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iv)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our current report on Form 8-K filed on February 16, 2006;</p>

<p style="margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(v)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our current report on Form 8-K filed on May
3, 2006;</p>

<p style="margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(vi)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our prospectus dated April 27, 2006, as filed by us under Rule 424(b)(4)
on May 1, 2006; and</p>

<p style="margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(vii)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The description of our common stock set forth, or incorporated by
reference, in our Registration Statement on Form 8-A filed pursuant to Section
12 of the Securities Exchange Act of 1934, as amended (the &#147;<b><font style="font-weight:bold;">Exchange Act</font></b>&#148;), on April 24, 2006, and any amendment or
report filed for the purpose of updating any such description.</p>

<p style="margin:0in 0in .0001pt 55.1pt;text-indent:-37.05pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All reports and other documents subsequently filed
by us (other than information furnished pursuant to Item 2.02, Item 7.01 or
Item 9.01 of Form 8-K or as otherwise permitted by the rules of the Securities
and Exchange Commission) pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act after the date of this prospectus and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which de-registers all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
part hereof from the date of filing of such documents.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Any statement contained herein or in a document incorporated
or deemed to be incorporated herein by reference shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any subsequently filed document which also is
incorporated or deemed to be incorporated herein by reference modifies or
supersedes such prior statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 4.&#160;&#160;&#160; Description of
Securities.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Not applicable.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 5.&#160;&#160;&#160; Interests of Named
Experts and Counsel.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Not applicable.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 6.&#160;&#160;&#160; Indemnification of
Directors and Officers.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Section 145 of the Delaware General Corporation Law
(&#147;<b><font style="font-weight:bold;">DGCL</font></b>&#148;) authorizes a corporation to
indemnify any person who was or is a party or threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that the person
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys&#146; fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by the person in connection
with such action, suit or proceeding, if the person acted in good faith and in
a manner the person reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the person&#146;s conduct was unlawful.
The DGCL does not permit indemnification in any threatened, pending or completed
action or suit by or in the right of the corporation in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable
to the corporation unless and only to the extent that the Court of Chancery of
the State of Delaware in which</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-1</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="2" width="100%" noshade color="gray" align="left"></div>

</div>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery of the State of
Delaware or such other court shall deem proper. To the extent that a present or
former director or officer of a corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to above, or
in defense of any claim, issue or matter, such person shall be indemnified
against expenses, including attorneys&#146; fees, actually and reasonably incurred
by such person in connection therewith. Section 102 of the DGCL also allows a
corporation to eliminate or limit the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director provided that such provisions shall not eliminate or limit
the liability of a director:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>for
any breach of the director&#146;s duty of loyalty to the corporation or its
stockholders;</p>

<p style="margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law;</p>

<p style="margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>for
unlawful payments of dividends or unlawful stock purchases or redemptions; or</p>

<p style="margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iv)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>for any
transaction from which the director derived an improper personal benefit.</p>

<p style="margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">These provisions will not limit the liability of
directors or officers under the federal securities laws of the United States.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The registrant&#146;s amended and restated certificate of
incorporation provides that, to the fullest extent that the DGCL or any other
applicable law as it exists or as it may be amended permits the limitation or elimination
of the liability of directors, no directors of the registrant will be liable to
the registrant or its stockholders for monetary damages for breach of fiduciary
duty as a director.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The registrant&#146;s amended and restated certificate of
incorporation and amended and restated bylaws provide that, to the fullest
extent permitted by law, the registrant shall indemnify any director or officer
of the registrant against all expenses (including attorneys&#146; fees), judgments,
fines and amounts paid in the defense or settlement actually and reasonably
incurred by him in connection with any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, investigative or otherwise,
and whether brought by or in the right of the registrant, to which he or she
was or is a party or threatened to be made a party by reason of his or her
current or former position with the registrant or by reason of the fact that he
or she is or was serving, at the request of the registrant, as a director,
officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The registrant maintains officers&#146; and directors&#146;
insurance covering certain liabilities that may be incurred by officers and
directors in the performance of their duties. In addition, the registrant has entered
into indemnification agreements with each of its directors and executive
officers that provide for indemnification and expense advancement to the
fullest extent permitted under the DGCL.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 7.&#160;&#160;&#160; Exemption From
Registration Claimed.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The securities that may be reoffered or resold
pursuant to this Registration Statement were issued to the selling stockholders
named herein in connection with their service as directors of the Registrant in
a transaction that did not involve any public offering and was exempt from the
registration requirements of the Securities Act of 1933, as amended, pursuant
to Section 4(2) of the Securities Act of 1933.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 8.&#160;&#160;&#160; Exhibits.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">See Exhibit Index beginning on page II-5 of this Registration
Statement, which is incorporated herein by reference.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 9.&#160;&#160;&#160; Undertakings.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a) The undersigned Registrant hereby undertakes:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:</p>

<p style="margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 55.0pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;</p>

<p style="margin:0in 0in .0001pt 55.0pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 55.0pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-2</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="2" width="100%" noshade color="gray" align="left"></div>

</div>
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<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 54.7pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering price set forth
in the &#147;Calculation of Registration Fee&#148; table in the effective Registration
Statement.</font></p>

<p style="margin:0in 0in .0001pt 55.0pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 55.0pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement.</p>

<p style="margin:0in 0in .0001pt 55.0pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">provided, however</font></i>, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply
if the Registration Statement is on Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial <i><font style="font-style:italic;">bona fide</font></i>
offering thereof.</p>

<p style="margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.</p>

<p style="margin:0in 0in .0001pt 37.05pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 19.0pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant&#146;s
annual report pursuant to Section 13(a) or Section&nbsp;15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan&#146;s annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial <i><font style="font-style:italic;">bona fide</font></i> offering thereof.</p>

<p style="margin:0in 0in .0001pt 19.0pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 19.0pt;text-indent:-19.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-3</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="2" width="100%" noshade color="gray" align="left"></div>

</div>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SIGNATURES</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to the requirements of the Securities Act
of 1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form&nbsp;S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Palo Alto, state of California, on May&nbsp;26,
2006.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="50%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:50.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CPI International, Inc.</font></p>
  </td>
 </tr>
 <tr>
  <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="17%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:17.18%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Joel A. Littman</font></p>
  </td>
  <td width="29%" valign="top" style="padding:0in 0in 0in 0in;width:29.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:46.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel A. Littman</font></p>
  </td>
 </tr>
 <tr>
  <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:46.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Financial Officer</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to the requirements of the Securities Act
of 1933, this Registration Statement has been signed by the following persons
in the capacities indicated on May&nbsp;26, 2006.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="44%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:44.46%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Signature</font></b></p>
  </td>
  <td width="2%" valign="top" style="padding:0in .7pt 0in .7pt;width:2.78%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="52%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Title</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="47%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:47.24%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="52%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/*</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Executive Officer
  and Director</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">O. Joe Caldarelli</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Principal Executive
  Officer)</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Joel A. Littman</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Financial Officer,
  Treasurer</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel A. Littman</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">and Secretary (Principal
  Financial<br>
  and Accounting Officer)</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/*</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chairman
  of the Board of Directors</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael
  Targoff</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/*</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael F. Finley</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/*</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jeffrey P. Hughes</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/*</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">William P. Rutledge</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/*</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chris Toffales</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*By:</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/
  Joel A. Littman</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="7%" valign="top" style="padding:0in .7pt 0in .7pt;width:7.52%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;padding:0in .7pt 0in .7pt;width:31.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel
  A. Littman, Attorney-in-fact</font></p>
  </td>
  <td width="8%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:8.32%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0in .7pt 0in .7pt;width:52.76%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="56" style="border:none;"></td>
  <td width="235" style="border:none;"></td>
  <td width="41" style="border:none;"></td>
  <td width="21" style="border:none;"></td>
  <td width="395" style="border:none;"></td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-4</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="2" width="100%" noshade color="gray" align="left"></div>

</div>
<!-- SEQ.=1,FOLIO='II-4',FILE='C:\JMS\sruthira\06-12722-2\task1138068\12722-2-ba.htm',USER='sruthirapathi',CD='May 26 17:26 2006' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:auto;text-align:center;text-decoration:underline;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">INDEX TO EXHIBITS</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="10%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Exhibit
  No.</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Specimen common stock
  certificate (incorporated by reference to Exhibit 4.5 to the registrant&#146;s
  Registration Statement on Form S-1/A filed on April 11, 2006 (Commission File
  No. 333-130662))</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.2</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amended and Restated
  Certificate of Incorporation of the registrant, filed with the Delaware
  Secretary of State on April 7, 2006 (incorporated by reference to Exhibit 3.3
  to the registrant&#146;s Registration Statement on Form S-1/A filed on April 11,
  2006 (Commission File No. 333-130662))</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.3</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amended and Restated
  Bylaws of the registrant (incorporated by reference to Exhibit 3.4 to the
  registrant&#146;s Registration Statement on Form S-1/A filed on April 11, 2006
  (Commission File No. 333-130662))</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.4</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2006 Equity and
  Performance Incentive Plan (incorporated by reference to Exhibit 10.24 to the
  registrant&#146;s Registration Statement on Form S-1/A filed on April 11, 2006
  (Commission File No. 333-130662))</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.5</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of Stock Option
  Agreement (IPO Grant) under 2006 Equity and Performance Incentive Plan
  (incorporated by reference to Exhibit 10.25 to the registrant&#146;s Registration
  Statement on Form S-1/A filed on April 11, 2006 (Commission File No.
  333-130662))</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.6</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of Stock Option
  Agreement (Senior Executives) (IPO Grant) under 2006 Equity and Performance
  Incentive Plan (incorporated by reference to Exhibit 10.26 to the
  registrant&#146;s Registration Statement on Form S-1/A filed on April 11, 2006
  (Commission File No. 333-130662)</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.7</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of Stock Option
  Agreement (Directors) under 2006 Equity and Performance Incentive Plan
  (incorporated by reference to Exhibit 10.27 to the registrant&#146;s Registration
  Statement on Form S-1/A filed on April 11, 2006 (Commission File No.
  333-130662))</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.8</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of Restricted Stock
  Agreement (Directors) under 2006 Equity and Performance Incentive Plan
  (incorporated by reference to Exhibit 10.28 to the registrant&#146;s Registration
  Statement on Form S-1/A filed on April 11, 2006 (Commission File No.
  333-130662))</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.1</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Opinion of Irell &amp;
  Manella LLP</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.1</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of Irell &amp;
  Manella LLP (included as part of Exhibit 5.1)</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.2</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of KPMG LLP</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">24.1</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.72%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Power of Attorney</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-5</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="2" width="100%" noshade color="gray" align="left"></div>

</div>
<!-- SEQ.=1,FOLIO='II-5',FILE='C:\JMS\sruthira\06-12722-2\task1138068\12722-2-ba.htm',USER='sruthirapathi',CD='May 26 17:26 2006' -->


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</html>
[{"type": "S-8", "sequence": "1", "filename": "a06-12722_2s8.htm", "description": "SECURITIES TO BE OFFERED TO EMPLOYEES PURSUANT TO EMPLOYEE BENEFIT PLANS", "secsgml_size_bytes": 277787}]
{"company-data": {"conformed-name": "CPI INTERNATIONAL, INC.", "cik": "0001279176", "assigned-sic": "3670", "irs-number": "753142681", "state-of-incorporation": "DE", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-134521", "film-number": "06870760"}, "business-address": {"street1": "811 HANSEN WAY", "street2": "PO BOX 51110", "city": "PALO ALTO", "state": "CA", "zip": "94303-1110", "phone": "650-846-3491"}, "mail-address": {"street1": "811 HANSEN WAY", "street2": "PO BOX 51110", "city": "PALO ALTO", "state": "CA", "zip": "94303-1110"}, "former-company": [{"former-conformed-name": "CPI HOLDCO INC", "date-changed": "20040322"}, {"former-conformed-name": "CPI ACQUISITION CORP", "date-changed": "20040209"}]}
As filed with
the Securities and Exchange Commission on May 26, 2006
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CPI INTERNATIONAL, INC.
(Exact Name of
Registrant as Specified in Its Charter)
Delaware
75-3142681
(State or
  Other Jurisdiction of Incorporation or
Organization)
(I.R.S.
  Employer
Identification No.)
811 Hansen
Way
Palo Alto, California 94303-1110
(Address of Principal Executive Offices, Including Zip
Code)
CPI
International, Inc. 2006 Equity and Performance Incentive Plan
(Full Title of
the Plan)
Joel A.
Littman
811 Hansen Way
Palo Alto, California 94303-1110
(Name and Address of Agent For Service)
(650)
846-2900
Telephone
Number, Including Area Code, of Agent For Service
Copy to:
Richard C.
Wirthlin, Esq.
Irell & Manella LLP
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067
(310) 277-1010
CALCULATION
OF REGISTRATION FEE
Title of
  Each Class of
Securities to be Registered
Amount
  to be
registered(1)
Proposed
  Maximum
Offering Price Per
Share(2)(3)
Proposed
  Maximum
Aggregate Offering
Price(2)(3)
Amount
  of
Registration Fee
Common Stock,
  par
value $0.01 per share
1,401,144
$  17.02
$  23,847,470.88
$  2,551.73
(1)
This Registration Statement will also cover
any additional shares of Common Stock that become issuable under the
above-mentioned plans by reason of any stock dividend, stock split,
recapitalization, reorganization or other similar transaction effected without
the Registrant's receipt of consideration that results in an increase in the
number of outstanding shares of the Registrant's Common Stock.
(2)
Estimated solely for purposes of calculating
the registration fee.
(3)
Computed in accordance
with Rule 457(h) under the Securities Act of 1933, on the basis of $17.02 per
share, which was the average of the high and low prices of the Common Stock as
quoted on the Nasdaq National Market on May 25, 2006.
PART I
INFORMATION REQUIRED IN
THE SECTION 10(a) PROSPECTUS
The document(s) containing the information required
in Part I of Form S-8 will be sent or given to participants as specified by
Rule 428(b)(1) of the Securities Act of 1933, as amended (the "
Securities Act
"). These documents and the documents
incorporated by reference to this Registration Statement pursuant to Item 3 of
Part II, taken together, constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act.
This Registration Statement includes two forms of
prospectus. The documents constituting the prospectus under Part I of this Registration
Statement (the "
Plan Prospectus
") will be sent or
given to participants in the CPI International, Inc. 2006 Equity and Performance
Incentive Plan (the "
Plan
") as
specified by Rule 428(b)(1) under the Securities Act. The second prospectus
(the "
Resale Prospectus
") may be used in
connection with reoffers and resales, made on a delayed or continuous basis in
the future, as provided by Rule 415 under the Securities Act, of shares of our
common stock acquired by certain Plan participants prior to the date of this
Registration Statement. The Plan Prospectus has been omitted from this
Registration Statement as permitted by Part I of Form S-8. The Resale Prospectus
is filed as part of this Registration Statement as required by Form S-8.
1
RESALE
PROSPECTUS
CPI
International, Inc.
811
Hansen Way
Palo
Alto, California  94303
(650)
846-2900
9,999
SHARES OF COMMON STOCK
This resale prospectus relates to the offer and sale
of up to 9,999 shares of our common stock from time to time by the selling
stockholders identified beginning on page 16 of this resale prospectus.
Our common stock is traded on the Nasdaq Stock
Market's Nasdaq National Market under the symbol "CPII."
We will not receive any of the proceeds from the
sales by the selling stockholders. The selling stockholders may sell the shares
of our common stock offered under this prospectus in the open market at
prevailing market prices, or in private transactions at negotiated prices. They
may sell the shares directly, or may sell them through underwriters, brokers or
dealers. Underwriters, brokers, or dealers may receive discounts, concessions
or commissions from the selling stockholders or from the purchasers, and this
compensation might be in excess of the compensation customary in the type of
transaction involved. See "Plan of Distribution."  However, the selling stockholders are not
obligated to sell their shares of common stock at all.
Upon any sale of our common stock by a selling
stockholder, any participating agents, brokers, dealers or market makers may be
deemed to be underwriters as that term is defined in the Securities Act of
1933, as amended, and commissions or discounts or any profit realized on the
resale of such securities purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act of 1933.
No underwriter is being utilized in connection with
this offering. We will pay all expenses incurred in connection with this
offering and the preparation of this resale prospectus. Brokerage commissions
and similar selling expenses, if any, attributable to the offer or sale of the shares
will be borne by the selling stockholders.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. PLEASE SEE "RISK
FACTORS" BEGINNING ON PAGE 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS RESALE PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The
date of this resale prospectus is May 26, 2006
2
TABLE
OF CONTENTS
Page
Where You Can Find More
  Information
3
Information
  Incorporated by Reference
4
Special
  Note Regarding Forward-Looking Statements
5
Note
  Regarding Stock Split
5
Risk Factors
6
Use of Proceeds
16
Selling
  Stockholders
16
Plan of
  Distribution
18
Legal Matters
19
Experts
19
You should only rely on the information incorporated
by reference or provided in this resale prospectus or any supplement. Neither
we nor the selling stockholders have authorized anyone else to provide you with
different information. The common stock offered hereby is not being offered in
any state where the offer is not permitted. You should not assume that the
information in this resale prospectus or any supplement is accurate as of any
date other than the date on the front of this resale prospectus or such supplement.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the requirements of the Securities
Exchange Act of 1934. Accordingly, we file proxy statements and annual,
quarterly and special reports with the Securities and Exchange Commission (the "
Commission
"). You may read and copy this information, for a
copying fee, at the Commission's Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549. You may obtain information on the operation of the Public Reference
Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an
Internet web site at http://www.sec.gov that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the Commission. We also make available, free of charge
through our Internet web site our annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K, and all amendments to
those reports, as soon as reasonably practicable after that material is filed
with or furnished to the Commission. Our Internet web site address is
http://www.cpii.com. Please note that we have not incorporated by reference
into this resale prospectus the information on our website, and you should not
consider it to be a part of this resale prospectus.
We have filed with the Commission a Registration Statement
on Form S-8 under the Securities Act of 1933, as amended, to register
with the Commission the resale of the shares of the common stock described in
this resale prospectus. This resale prospectus is part of that Registration Statement,
and provides you with a general description of the shares of the common stock being
registered, but does not include all of the information you can find in the Registration
Statement or the exhibits. You should refer to the Registration Statement and
its exhibits for more information about us and the shares of common stock being
registered.
3
INFORMATION INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by
reference" information into this resale prospectus, which means that we can
disclose important information to you by referring to another document filed
separately by us with the Commission. The information incorporated by reference
is deemed to be part of this resale prospectus, except for information
superseded by this resale prospectus. This resale prospectus incorporates by
reference the documents set forth below that we have previously filed with the Commission
as of their respective filing dates. These documents contain important
information about us and our finances.
1.
Our annual report on Form 10-K for the fiscal
year ended September 30, 2005, and our Form 10-K/A for such fiscal year;
2.
Our quarterly report on Form 10-Q for the
quarter ended December 30, 2005;
3.
Our quarterly report on Form 10-Q for the
quarter ended March 31, 2006;
4.
Our current report on Form 8-K filed on
February 16, 2006;
5.
Our current report on Form 8-K filed on May
3, 2006;
6.
Our prospectus dated April 27, 2006, as filed
by us under Rule 424(b)(4) on May 1, 2006; and
7.
The description of our common stock set
forth, or incorporated by reference, in our Registration Statement on Form 8-A
filed pursuant to Section 12 of the Securities Exchange Act of 1934 on April
24, 2006, and any amendment or report filed for the purpose of updating any
such description.
We are also incorporating by reference additional
documents that we may file with the Commission in the future under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the
termination of this offering. Nothing in this resale prospectus shall or shall
be deemed to incorporate information furnished by us, but not filed with the
Commission, pursuant to Item 2.02, Item 7.01 or Item 9.01 of Form 8-K.
Any statement contained herein or in a document
incorporated or deemed to be incorporated herein by reference shall be deemed
to be modified or superseded for purposes hereof to the extent that a statement
contained herein or in any subsequently filed document which also is
incorporated or deemed to be incorporated herein by reference modifies or
supersedes such prior statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part
hereof.
We will provide, without charge, to each person, including
any beneficial owner, to whom this resale prospectus is delivered, upon written
or oral request of such person, a copy of any document incorporated by
reference into this resale prospectus (not including exhibits to such documents
unless such exhibits are specifically incorporated by reference into the information
incorporated into this resale prospectus). Request for such information should
be directed to:
Joel
A. Littman
Chief Financial Officer
CPI
International, Inc.
811
Hansen Way
Palo
Alto, California
Telephone:
(650) 846-2900
4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This resale prospectus and the documents
incorporated by reference herein contain forward-looking statements. Forward-looking
statements provide our current expectations or forecasts of future events.
Forward-looking statements include statements about our expectations, beliefs,
plans, objectives, intentions, assumptions and other statements that are not
historical facts. Words or phrases such as "anticipate," "believe," "continue,"
"ongoing," "estimate," "expect," "intend," "may," "plan," "potential," "predict,"
"project" or similar words or phrases, or the negatives of those words or
phrases, may identify forward-looking statements, but the absence of these
words does not necessarily mean that a statement is not forward-looking.
Forward-looking statements are subject to known and
unknown risks and uncertainties and are based on potentially inaccurate
assumptions that could cause actual results to differ materially from those
expected or implied by the forward-looking statements. Our actual results could
differ materially from those anticipated in forward-looking statements for many
reasons, including the factors described in the section entitled "Risk factors"
in this prospectus. Accordingly, you should not unduly rely on these
forward-looking statements, which speak only as of the date of this resale prospectus.
We undertake no obligation to publicly revise any forward-looking statement to
reflect circumstances or events after the date of this resale prospectus or to
reflect the occurrence of unanticipated events.
NOTE REGARDING STOCK SPLIT
On April 7, 2006 we effected a 3.059 for one stock
split. All references in this resale prospectus to numbers of shares of our common
stock and to related per-share prices (including references to periods prior to
the effective date of the stock split) reflect the stock split.
5
RISK FACTORS
Before you invest in our common
stock, you should carefully consider the following risks as well as other information
set forth in this resale prospectus. If any of the following risks actually
occurs, our business, financial condition or results of operations may suffer.
As a result, the trading price of our common stock could decline, and you could
lose all or part of your investment.
RISKS RELATING TO OUR BUSINESS
We face competition in the
markets in which we sell our products
.
The U.S. and foreign markets
in which we sell our products are competitive. Our ability to compete in these
markets depends on our ability to provide high quality products with short lead
times at competitive prices, as well our ability to create innovative new products.
In addition, our competitors could introduce new products with greater
capabilities, which could have a material adverse effect on our business.
Certain of our competitors are owned by companies that have substantially
greater financial resources than we do. Also, our foreign competitors are not
subject to U.S. Government export restrictions, which may make it easier in
certain circumstances for them to sell to foreign customers. If we are unable
to compete successfully against our current or future competitors, our business
and sales will be harmed.
The end markets in which we
operate are subject to technological change, and changes in technology could
adversely affect our sales
.
Both our defense and
commercial end markets are subject to technological change. Advances in
existing technology, or the development of new technology, could adversely
affect our business and results of operations. Historically, we have relied on
a combination of internal research and development and customer-funded research
activities. To succeed in the future, we must continually engage in effective
and timely research and development efforts in order to introduce innovative
new products for technologically sophisticated customers and end markets and
benefit from activities of our customers. We may not be able to continue to
allocate sufficient financial and other resources to our research and
development activities or receive customer funding for research and
development. If we fail to adapt successfully to technological changes or fail
to obtain access to important technologies, our sales could suffer.
If we are unable to retain key
management and other personnel, our business and results of operations could be
adversely affected.
Our business and future
performance depends on the continued contributions of key management personnel.
Our current management team has an average of 25 years experience with us in
various capacities. Since assuming their current leadership roles in 2002, this
team has increased our sales, reduced our costs and grown our business. The
unanticipated departure of any key member of our management team could have an
adverse effect on our business and our results of operations. In addition, some
of our technical personnel, such as our key engineers, could be difficult to
replace.
A significant portion of our
sales is, and is expected to continue to be, from contracts with the U.S.
Government, and any significant reduction in the U.S. defense budget or any
disruption or decline in U.S. Government expenditures could negatively affect
our results of operations and cash flows.
Over 31%, 37% and 34% of our
sales in our 2005, 2004 and 2003 fiscal years, respectively, were made to the
U.S. Government either directly or indirectly through prime contractors or subcontractors.
Because U.S. Government contracts are dependent on the U.S. defense budget, any
significant disruption or decline in U.S. Government expenditures in the
future, changes in U.S. Government spending priorities, other legislative
changes, or a change in our relationship with the U.S. Government could result
in the loss of some or all of our government contracts, which, in turn would
result in a decrease in our earnings and cash flow.
6
In addition, U.S. Government
contracts are also conditioned upon continuing congressional approval and the
appropriation of necessary funds. Congress usually appropriates funds for a
given program each fiscal year even though contract periods of performance may
exceed one year. Consequently, at the outset of a major program, multi-year
contracts are usually funded for only the first year, and additional monies are
normally committed to the contract by the procuring agency only as Congress
makes appropriations for future fiscal years. We cannot ensure that any of our
government contracts will continue to be funded from year to year. If such
contracts are not funded, our sales may decline, which could negatively affect
our results of operations and result in decreased cash flows.
We are subject to risks
particular to companies supplying defense-related equipment and services to the
U.S. Government. The occurrence of any of these risks could cause a loss of or
decline in our sales to the U.S. Government.
U.S. Government contracts contain termination provisions and are subject
to audit and modification
The U.S. Government has the
ability unilaterally to:
•
terminate existing contracts, including for
the convenience of the government or because of a default in our performance of
the contract;
•
reduce the value of existing contracts;
•
cancel multi-year contracts or programs;
•
audit our contract related costs and fees,
including allocated indirect costs;
•
suspend or debar us from receiving new
contracts pending resolution of alleged violations of procurement laws or
regulations; and
•
control and potentially prohibit the export
of our products, technology or other data.
All of our U.S. Government
contracts can be terminated by the U.S. Government either for its convenience
or if we default by failing to perform under the contract. Termination for
convenience provisions provide only for our recovery of costs incurred or
committed, settlement expenses and profit on the work completed prior to
termination. Termination for default provisions provide for the contractor to
be liable for excess costs incurred by the U.S. Government in procuring
undelivered items from another source. Our contracts with foreign governments
generally contain similar provisions relating to termination at the convenience
of the customer.
The U.S. Government may
review or audit our direct and indirect costs and performance on certain
contracts, as well as our accounting and general business practices for
compliance with complex statutes and regulations, including the Truth in
Negotiations Act, Federal Acquisition Regulations, Cost Accounting Standards,
and other administrative regulations. Like most government contractors, the
U.S. Government audits our costs and performance on a continual basis, and we
have outstanding audits. Based on the results of these audits, the U.S.
Government may reduce our contract related costs and fees, including allocated
indirect costs. In addition, under U.S. Government regulations, some of our
costs, including certain financing costs, research and development costs, and
marketing expenses, may not be reimbursable under U.S. Government contracts.
We are subject to laws and regulations related to our U.S. Government
contracts business, which may impose additional costs on our business.
As a U.S. Government
contractor, we must comply with and are affected by laws and regulations
related to our performance of our government contracts and our business. These
laws and regulations may impose additional costs on our business. In addition,
we are subject to audits, reviews and investigations of our compliance with
these laws and regulations. If we are found to have failed to comply with these
laws and regulations, then we may be fined, we may not be reimbursed for costs
incurred in performing the contracts, our contracts may be terminated, and we
may be unable to obtain new contracts. Any of these actions would cause our
revenue to decrease. If a government
7
review, audit, or investigation
uncovers improper or illegal activities, then we may be subject to civil or
criminal penalties and administrative sanctions, including forfeiture of claims
and profits, suspension of payments, statutory penalties, fines, and suspension
or debarment.
In addition, many of our
U.S. Government contracts require our employees to maintain various levels of
security clearances, and we are required to maintain certain facility
clearances. Complex regulations and requirements apply to obtaining and maintaining
security clearances and facility clearances, and obtaining such clearances can
be a lengthy process. To the extent we are not able to obtain or maintain
security clearances or facility clearances, we also may not be able to seek or
perform future classified contracts. If we are unable to do any of the foregoing,
we will not be able to maintain or grow our business, and our revenue may
decline.
As a result of our U.S. Government business, we may be subject to false
claim suits, and a judgment against us in any of these suits could cause us to
be liable for substantial damages.
Our business with the U.S.
Government, subjects us to "qui tam," or whistle blower, suits brought by
private plaintiffs in the name of the U.S. Government upon the allegation that
we submitted a false claim to the U.S. Government, as well as to false claim
suits brought by the U.S. Government. A judgment against us in a qui tam or
false claim suit could cause us to be liable for substantial damages (including
treble damages and monetary penalties) and could carry penalties of suspension
or debarment, which would make us ineligible to receive any U.S. Government
contracts for a period of up to three years. Any material judgment, or any
suspension or debarment, could result in increased costs, which could
negatively affect our results of operations. In addition, any of the foregoing
could cause a loss of customer confidence and could negatively harm our
business and our future prospects.
Some of our sole-provider business from the U.S. Government in the
future may be subject to competitive bidding.
Some of the business that we
will seek from the U.S. Government in the future may be awarded through a
competitive bidding process. Competitive bidding on government contracts
presents risks that are not common to certain commercial contracts, such as:
•
the need to bid on programs in advance of
contract performance, which may result in unforeseen performance issues and
costs; and
•
the expense and delay that may arise if our
competitors protest or challenge the award made to us, which could result in a
reprocurement, modified contract, or reduced work.
If we fail to win
competitively bid contracts, or fail to perform these contracts in a profitable
manner, our sales and results of operations will suffer.
We generate sales from contracts
with foreign governments, and significant changes in policies or to
appropriations of those governments could have an adverse effect on our
business, results of operations and financial condition.
Approximately 19% of our
fiscal year 2005 sales were made directly or indirectly to foreign governments.
Significant changes to appropriations or national defense policies, disruptions
of our relationships with foreign governments or terminations of our foreign
government contracts could have an adverse effect on our business, results of
operations and financial condition.
Our international operations
subject us to the social, political and economic risks of doing business in
foreign countries.
We conduct a substantial
portion of our business, employ a substantial number of employees, and use
external sales organizations, in Canada and in other countries outside of the
United States. Direct sales to customers located outside the United States were
33%, 30% and 34% in fiscal years 2005, 2004 and 2003, respectively. As a
result, we
8
are subject to risks of
doing business internationally. Circumstances and developments related to international
operations that could negatively affect our business, results of operations and
financial condition include the following:
•
difficulties and costs of staffing and
managing international operations;
•
currency restrictions, which may prevent the
transfer of capital and profits to the United States;
•
changes in currency rates with respect to the
U.S. dollar;
•
changes in regulatory requirements;
•
U.S. and foreign government policies;
•
potentially adverse tax consequences;
•
restrictions imposed by the U.S. Government
on the export of certain products and technology;
•
the responsibility of complying with multiple
and potentially conflicting laws;
•
the impact of regional or country specific
business cycles and economic instability; and
•
geopolitical developments and conditions,
including international hostilities, acts of terrorism and governmental
reactions, trade relationships and military and political alliances.
Limitations on imports,
currency exchange control regulations, transfer pricing regulations and tax
laws and regulations could adversely affect our international operations,
including the ability of our non-U.S. subsidiaries to declare dividends or
otherwise transfer cash among our subsidiaries to pay interest and principal on
our debt.
Laws and regulations restricting
the sale of our products to foreign customers could impair our ability to make
sales to foreign customers.
Licenses for the export of
many of our products are required from government agencies in accordance with
various regulations, including the United States Export Administration
Regulations and the International Traffic In Arms Regulations. Under these
regulations, we must obtain a license or permit from the U.S. Government before
making foreign sales of certain of our products that have been designated as
important for national security. These laws and regulations could adversely
impact our sales and business for the following reasons:
•
In order to obtain the license for the sale
of such a product, we are required to obtain information from the potential
customer and provide it to the U.S. Government. If the U.S. Government
determines that the sale presents national security risks, it may not approve
the sale.
•
Delays caused by the requirement to obtain
the required license may cause us to lose potential foreign sales to overseas
competitors who may not be subject to comparable restrictions and delays.
•
If we make a sale in violation of these laws
and regulations, we could be subject to fines or penalties.
Our business, results of
operations and financial condition may be adversely affected by increased or
unexpected costs incurred by us on our contracts and sales orders.
The terms of virtually all
of our contracts and sales orders require us to perform the work under the
contract or sales order for a predetermined fixed price. As a result, we bear
the risk of increased or unexpected costs associated with a contract or sales
order, which may reduce our profit or cause us to sustain losses. Future
increased or unexpected
9
costs on a significant
number of our contracts and sales orders could adversely affect our results of
operations and financial condition.
Environmental laws and
regulations and other obligations relating to environmental matters could
subject us to liability for fines, clean-ups and other damages, require us to
incur significant costs to modify our operations and increase our manufacturing
costs.
Environmental laws and regulations could limit our ability to operate
as we are currently operating and could result in additional costs.
We are subject to a variety
of U.S. federal, state and local, as well as foreign, environmental laws and
regulations relating, among other things, to wastewater discharge, air
emissions, handling of hazardous materials, disposal of solid and hazardous
wastes, and remediation of soil and groundwater contamination. We use a number
of chemicals or similar substances, and generate wastes, that are classified as
hazardous. We require environmental permits to conduct many of our operations.
Violations of environmental laws and regulations could result in substantial
fines, penalties, and other sanctions. Changes in environmental laws or
regulations (or in their enforcement) affecting or limiting, for example, our
chemical uses, certain of our manufacturing processes, or our disposal
practices, could restrict our ability to operate as we are currently operating
or impose additional costs. In addition, we may experience releases of certain
chemicals or discover existing contamination, which could cause us to incur
material cleanup costs or other damages.
We could be subject to significant liabilities if Varian Medical
Systems does not satisfy the obligations associated with existing environmental
contamination.
When we purchased our
electron devices business in 1995, Varian Medical Systems agreed to indemnify
us for various environmental liabilities relating to the business prior to the
sale, with certain exceptions and limitations. Varian Medical Systems is
undertaking the environmental investigation and remedial work at the remaining
two of our manufacturing facilities that are known to require environmental
remediation, Palo Alto, California and Beverly, Massachusetts. In addition,
Varian Medical Systems has been sued or threatened with suit with respect to
environmental obligations related to these manufacturing facilities. If Varian
Medical Systems does not comply fully with its indemnification obligations to
us or does not continue to have the financial resources to comply fully with
those obligations, we could be subject to significant liabilities.
We could be subject to significant liabilities if existing
environmental insurance and indemnification payments from Varian Medical
Systems are not sufficient to satisfy the obligations associated with existing
environmental contamination at our former San Carlos, California facility.
Our San Carlos, California
facility is under contract for sale and redevelopment. This facility has
preexisting soil and groundwater contamination that has been the subject of
some remediation and is expected to undergo additional remediation by the
purchaser after the sale closes. In connection with the pending sale of that
facility, we released Varian Medical Systems from certain of its pre-existing
environmental indemnity obligations related to that property, although the
purchaser of the property has acquired pollution liability insurance that is
intended to cover the expected remediation costs of that property. If the
combination of the proceeds of this insurance and the amounts to be paid by
Varian Medical Systems under its remaining indemnification obligations are not
sufficient to cover the remediation costs and pollution liability associated
with the San Carlos property, we could be subject to significant costs and
liabilities.
We have only a limited ability to
protect our intellectual property rights, which are important to our success.
Our success depends, in
part, upon our ability to protect our proprietary technology and other
intellectual property. We rely on a combination of trade secrets,
confidentiality policies, nondisclosure and other contractual arrangements, and
patent, copyright and trademark laws to protect our intellectual property
rights. The steps we take to protect our intellectual property may not be
adequate to prevent or deter infringement or other violation of our
intellectual property, and we may not be able to detect unauthorized use or
take appropriate and timely steps to enforce our intellectual property rights.
In addition, we cannot be certain that our processes and products do not or
10
will not infringe or
otherwise violate the intellectual property rights of others. Infringement or
other violations of intellectual property rights could cause us to incur
significant costs and prevent us from selling our products and could have a
material adverse effect on our business, results of operations and financial
condition.
Our inability to obtain certain
necessary raw materials and key components could disrupt the manufacture of our
products and cause our sales and results of operations to suffer.
We obtain certain raw
materials and key components necessary for the manufacture of our products, such
as molybdenum, cupronickel, OFHC copper, and some cathodes from a limited group
of, or occasionally sole, suppliers. If any of our suppliers fails to meet our
needs, we may not have readily available alternatives. Delays in component
deliveries could cause delays in product shipments and require the redesign of
certain products. If we are unable to obtain necessary raw materials and key
components from our suppliers under favorable purchase terms and on a timely
basis, or to develop alternative sources, our ability to manufacture products
could be disrupted or delayed, and our sales and results of operations could
suffer.
We may not be successful in
implementing part of our growth strategy if we are unable to identify and
acquire suitable acquisition targets or integrate acquired companies
successfully.
Finding and consummating
acquisitions is one of the components of our growth strategy. Our ability to
grow by acquisition depends on the availability of acquisition candidates at
reasonable prices and our ability to obtain additional acquisition financing on
acceptable terms. We may experience competition in making acquisitions from
larger companies with significantly greater resources. We are likely to use
significant amounts of cash, issue additional equity securities or incur
additional debt in connection with future acquisitions, each of which could
have a material adverse effect on our business. There can be no assurance that
we will be able to obtain the necessary funds to carry out acquisitions on commercially
reasonable terms, or at all.
In addition, future
acquisitions could place demands on our management and our operational and
financial resources and could cause or result in the following:
•
difficulties in assimilating and integrating
the operations, technologies and products acquired;
•
the diversion of our management's attention
from other business concerns;
•
our operating and financial systems and
controls being inadequate to deal with our growth;
•
our entering markets in which we have limited
or no prior experience; and
•
the potential loss of key employees.
Our backlog is subject to
modifications and terminations of orders, which could negatively impact our
sales.
Backlog represents firm
orders for which goods and services are yet to be provided, including with
respect to government contracts that are cancelable at will. As of March 31,
2006, we had an order backlog of $197.7 million. Although historically the
amount of modifications and terminations of our orders has not been material
compared to our total contract volume, customers can, and sometimes do,
terminate or modify these orders. Cancellations of purchase orders or
reductions of product quantities in existing contracts could substantially and
materially reduce our backlog and consequently, our future revenues. Our
failure to replace canceled or reduced backlog could negatively impact our sales
and results of operations.
We are in the process of
relocating our Eimac operating division from our San Carlos, California to our Palo
Alto and Mountain View, California facilities, which could result in
disruptions to our operations and unexpected costs
.
In connection with the
relocation of our San Carlos, California facility to our Palo Alto, California
and Mountain View, California facilities, we will have to: decommission
specialized production equipment; build out our Palo
11
Alto and Mountain View,
California locations; and configure, install and test our specialized equipment
in its new locations. During this process we expect that our Eimac operating
division will suffer production inefficiencies, delayed product deliveries to
our customers and reduced sales. In addition, the San Carlos move will
negatively impact our fiscal year 2006 results of operations because we will
not be able to reduce our fixed overhead costs to offset the expected
reductions in sales during the periods impacted by the move.
In addition, our results of
operations could be adversely affected if we incur unexpected move or buildout
costs associated with the San Carlos move. Finally, any delays in product
deliveries caused by the San Carlos move could affect our customer relations,
which could result in lower sales after the San Carlos move is completed.
We may not be able to continue to
achieve profitability in the future, and if we are not profitable, our stock
price may decline.
We were profitable from
fiscal years 1996 to 1998, as well as in fiscal years 2003 and 2005. However,
from fiscal years 1999 to 2002, and in fiscal year 2004, we incurred net
losses. We cannot ensure that we will continue to achieve profitability in the
future. Future revenues and profits will depend upon various factors, including
continued acceptance of our products and services in the various markets that
we serve, the competitive position of our products in those markets, our
ability to enhance or improve on our existing products and develop new products
and our ability to continue to control the costs and expenses associated with
the operation of our business, such as sales and marketing, personnel, and
product development and enhancement. Our profitability could also be adversely
affected by purchase accounting charges related to future acquisitions, and
potential impairment charges related to goodwill and other intangible assets.
If we are unable to sustain our profitability, our stock price may decline.
We may not be able to timely
comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.
Beginning in fiscal year
2007, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we must
perform and report our evaluation of internal controls over financial
reporting, and our independent registered public accounting firm must attest to
and report on the adequacy of management's evaluation and the effectiveness of
such controls, on an annual basis. Our efforts to comply with Section 404 have
resulted in, and are likely to continue to result in, significant costs, the
commitment of time and operational resources and the diversion of management's
attention. Because compliance with these requirements is complex and time
consuming, there can be no assurance that we will be able to implement the
requirements of Section 404 in a timely fashion. In addition, because of the
time and expense required to evaluate our internal controls, our independent
registered public accounting firm may have limited time before its attestation
is required, which may prevent our accountants from being able to adequately
test and subsequently to report on our internal controls. If we fail to timely
complete our assessment of internal controls, or if our independent registered
public accounting firm cannot report on our assessment, we could suffer a loss
of public confidence in our internal controls. In addition, any failure to
implement required new or improved controls, or difficulties encountered in
implementation, could harm our operating results or cause us to fail to timely
meet our regulatory reporting obligations.
RISKS RELATED TO OUR INDEBTEDNESS
We have a substantial amount of
debt and we may incur substantial additional debt in the future, which could
adversely affect our financial health and our ability to obtain financing in
the future and to react to changes in our business.
We have a substantial amount
of debt and may incur additional debt in the future. As of March 31, 2006, our
total consolidated indebtedness was $295 million and we had $35.8 million of
additional borrowings available under the revolver under our senior credit
facilities. Pro forma, after giving effect to the repayment of $47.5 million in
aggregate principal amount of the outstanding term loan amounts under our
senior credit facilities in May 2006, our total consolidated indebtedness as of
March 31, 2006 was $247.5
million and we
had $35.8 million of
additional
borrowings available under the revolver under our senior credit facilities. Our
substantial amount of debt could have important consequences to us and you,
including, without limitation, the following:
12
•
it will require us to dedicate a substantial
portion of our cash flow from operations to payments on indebtedness, which
will reduce the funds available for working capital, capital expenditures and
other general corporate expenses;
•
it could have the effect of limiting our
flexibility in planning for, or reacting to, changes in our business, the
markets in which we compete and the economy at large;
•
it could place us at a disadvantage compared
to our competitors that have proportionately less debt;
•
it could adversely affect our relationship
with customers and suppliers;
•
it could limit our ability to borrow
additional funds in the future, if needed, because of applicable financial and
restrictive covenants of our indebtedness;
•
it could make it more difficult for us to
satisfy our obligations to our noteholders under our outstanding notes and our
senior credit facilities; and
•
it could make us more vulnerable to interest
rate increases because a portion of our borrowings is, and will continue to be,
at variable rates of interest.
A default under our debt
obligations could result in the acceleration of those obligations. We may not
have the ability to fund our debt obligations in the event of such a default.
This may adversely affect our ability to operate our business and therefore
could adversely affect our results of operations and financial condition, and
consequently, the price of our common stock. In addition, we may incur
substantial additional debt in the future. If current debt levels increase, the
related risks that we and you now face will intensify.
The agreements and instruments
governing our debt contain restrictions and limitations that could limit our
flexibility in operating our business.
Our senior credit facilities
and the indentures governing our outstanding notes have a number of significant
covenants that, among other things, restrict our ability to:
•
incur additional indebtedness;
•
sell assets or consolidate or merge with or
into other companies;
•
pay dividends or repurchase or redeem capital
stock;
•
make certain investments;
•
issue capital stock of our subsidiaries;
•
incur liens; and
•
enter into certain types of transactions with
our affiliates.
These covenants could have
the effect of limiting our flexibility in planning for, or reacting to, changes
in our business and the markets in which we compete.
Under our senior credit
facilities, we are required to satisfy and maintain specified financial ratios
and tests. Events beyond our control may affect our ability to comply with
those provisions, and we may not be able to meet those ratios and tests, which
would result in a default under our senior credit facilities. In addition, our
senior credit facilities and the indenture governing Communications & Power
Industries' 8% senior subordinated notes restrict Communications & Power
Industries' ability to make distributions to us. Because we are a holding
company with no
13
operations of our own, we
rely on distributions from Communications & Power Industries, our wholly
owned subsidiary, to satisfy our obligations under our floating rate senior
notes. If Communications & Power Industries is unable make distributions to
us, and we cannot obtain other funds to satisfy our obligations under our
floating rate senior notes, a default under our floating rate senior notes
could result.
The breach of any covenants
or obligations in our senior credit facilities and the indentures governing our
outstanding notes could result in a default under the applicable debt agreement
or instrument and could trigger acceleration of (or the right to accelerate)
the related debt. Because of cross-default provisions in the agreements and
instruments governing our indebtedness, a default under one agreement or
instrument could result in a default under, and the acceleration of, our other
indebtedness. In addition, the lenders under our senior credit facilities could
proceed against the collateral securing that indebtedness. If any of our
indebtedness were to be accelerated, it could adversely affect our ability to
operate our business or we may be unable to repay such debt, and therefore such
acceleration could adversely affect our results of operations and financial
condition, and consequently, the price of our common stock.
Our ability to generate the
significant amount of cash needed to service our debt and to fund capital
expenditures or other liquidity needs depends on many factors beyond our
control.
Our ability to service our
debt and to fund our planned capital expenditures and ongoing operations will
depend on our ability to generate cash and to obtain financing in the future.
This, to a certain extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors affecting our industry
that are beyond our control. If we do not generate sufficient cash flow from
operations, and sufficient future borrowings are not available under our senior
credit facilities or from other sources of financing, we may not be able to
repay our debt or fund capital expenditures or our other liquidity needs. As of
March 31, 2006, on a consolidated basis, we had principal repayment obligations
of $0 in each of fiscal years 2006, 2007 and 2008, $19 million in fiscal year
2009, $71 million in fiscal year 2010 and $205 million thereafter. Pro forma,
after giving effect to the repayment of $47.5 million in aggregate principal
amount of the outstanding term loan amounts under our senior credit facilities in
May 2006, as of March 31, 2006, on a consolidated basis, we had principal
repayment obligations of $0 in each of fiscal years 2006, 2007, 2008 and 2009,
$42.5 million in fiscal year 2010 and $205 million thereafter. Based on our
debt obligations and interest rates at March 31, 2006, our current annual debt
service costs are approximately $24 million per year,
and
pro forma, after giving effect to the repayment of $47.5 million in aggregate
principal amount of our outstanding term loan, our current annual debt service
costs are approximately
$
21 million.
Our outstanding notes and our
senior credit facilities are subject to change of control provisions. We may
not have the ability to raise funds necessary to fulfill our obligations under
our debt following a change of control, which could place us in default
thereunder.
We may not have the ability
to raise funds necessary to fulfill our obligations under our debt following a
change of control, which would place us in default thereunder. We may not have
the ability to raise the funds necessary to fulfill our obligations under our
outstanding notes and our senior credit facilities following a change of
control. Under the indentures governing our notes, upon the occurrence of specified
change of control events, we are required to offer to repurchase the notes.
However, we may not have sufficient funds at the time of the change of control
event to make the required repurchase of our notes. In addition, a change of
control under our senior credit facilities would result in an event of default
thereunder and permit the acceleration of the outstanding obligations under the
senior credit facilities.
RISKS RELATED TO OUR COMMON STOCK
The price of our common stock may
fluctuate, which could negatively affect the value of your investment.
The market price of our
common stock may fluctuate widely as a result of various factors, such as
period-to-period fluctuations in our actual or anticipated operating results,
sales of our common stock by our existing equity investors, developments in our
industry, the failure of securities analysts to cover our common stock or
changes in financial estimates by analysts, failure to meet financial estimates
by analysts, competitive factors, general economic and securities market
conditions and other external factors. Also, securities markets worldwide
experience significant price and volume fluctuations. This market volatility,
as well as general economic or market conditions,
14
and market conditions
affecting the stock of companies in our industry in particular, could reduce
the market price of our common stock in spite of our operating performance. You
may be unable to resell your shares of our common stock at or above the purchase
price for your shares or at all.
If our share price is volatile,
we may be the target of securities litigation, which is costly and
time-consuming to defend.
In the past, following
periods of market volatility in the price of a company's securities,
securityholders have often instituted class action litigation. If the market
value of our common stock experiences adverse fluctuations and we become
involved in this type of litigation, regardless of the outcome, we could incur
substantial legal costs and our management's attention could be diverted from
the operation of our business, causing our business to suffer.
Future sales of shares of our
common stock in the public market could depress our stock price and make it
difficult for you to recover the full value of your investment.
We cannot predict the
effect, if any, that market sales of shares of common stock or the availability
of shares of common stock for sale will have on the market price of our common
stock prevailing from time to time. Future sales, or the perception or
availability for sale in the public market, of substantial amounts of our
common stock could adversely affect the market price of our common stock.
In addition, we may issue a
substantial number of shares of our common stock under our stock incentive and
stock purchase plans. As of May 15, 2006, we had options outstanding to
purchase 3,191,698 shares of our common stock under our 2000 Stock Option Plan,
our 2004 Stock Incentive Plan and our 2006 Equity and Performance Incentive
Plan, of which 2,359,225 were exercisable as of such date. In addition our 2006
Equity and Performance Incentive Plan and 2006 Employee Stock Purchase Plan
provide for the issuance of up to an additional 1,853,645 shares of our common
stock to officers, directors and consultants. The issuance of significant
additional shares of our common stock upon the exercise of outstanding options
or otherwise pursuant to these stock plans could have a material adverse effect
on the market price of our common stock and could significantly dilute the
interests of other stockholders.
The controlling position of
Cypress will limit your ability to influence corporate matters.
As of May 15, 2006, entities
affiliated with The Cypress Group collectively own over 55.5% of our
outstanding shares of common stock. Accordingly, the entities affiliated with
Cypress have significant influence over our management and affairs and over
most matters requiring stockholder approval, including the election of directors
and the approval of significant corporate transactions. The entities affiliated
with Cypress will also be able to deter any attempted change of control. This
concentrated control will limit your ability to influence corporate matters
and, as a result, we may take actions that some of our stockholders do not view
as beneficial. Accordingly, the market price of our common stock could be
adversely affected.
Our anti-takeover provisions
could prevent or delay a change in control of our company, even if such change
of control would be beneficial to our stockholders.
Provisions of our amended
and restated certificate of incorporation and amended and restated bylaws as
well as provisions of Delaware law could discourage, delay or prevent a merger,
acquisition or other change in control of our company. These provisions
include:
•
a board of directors that is classified such
that only one-third of directors are elected each year;
•
authorizing the issuance of "blank check"
preferred stock that could be issued by our board of directors to increase the
number of outstanding shares and thwart a takeover attempt;
•
limitations on the ability of stockholders to
call special meetings of stockholders;
15
•
prohibiting stockholder action by written
consent and requiring all stockholder actions to be taken at a meeting of our
stockholders;
•
establishing advance notice requirements for
nominations for election to the board of directors or for proposing matters
that can be acted upon by stockholders at stockholder meetings; and
•
requiring that the affirmative vote of the
holders of at least two thirds (66 2/3%) of the voting power of our issued and
outstanding capital stock entitled to vote in the election of directors be obtained
to amend certain provisions of our amended and restated certificate of
incorporation.
In addition, Section 203 of
the Delaware General Corporation Law, which will apply to us after affiliates
of Cypress collectively cease to own at least 15% of the total voting power of
our common stock, limits business combination transactions with 15%
stockholders that have not been approved by the board of directors. These
provisions and other similar provisions make it more difficult for a third
party to acquire us without negotiation. These provisions may apply even if the
transaction may be considered beneficial by some stockholders.
The failure to maintain a minimum
share price of $1.00 per share of common stock could result in delisting of our
shares on the Nasdaq National Market, which would harm the market price of our
common stock.
In order to retain our
listing on the Nasdaq National Market we are required to maintain a minimum bid
price of $1.00 per share. If the bid price falls below the $1.00 minimum for
more than 30 consecutive trading days, we will have 180 days to satisfy the
$1.00 minimum bid price for a period of at least 10 trading days. If we are
unable to take action to increase the bid price per share (either by reverse
stock split or otherwise), we could be subject to delisting from the Nasdaq
National Market.
The failure to maintain our
listing on the Nasdaq National Market would harm the liquidity of our common
stock and would have an adverse effect on the market price of our common stock.
As a result, the liquidity of our common stock would be impaired, not only in
the number of shares that could be bought or sold, but also through delays in
the timing of transactions, reduction in security analysts' and news media's
coverage and lower prices for our common stock than might otherwise be
attained. In addition, our common stock would become subject to the "penny
stock" rules that impose additional sales practice  requirements on broker-dealers who sell such
securities.
USE OF PROCEEDS
We
will not receive any of the proceeds from the sale of our common stock by the
selling stockholders pursuant to this resale prospectus. All proceeds from the
sale of our common stock by the selling stockholders will be for the account of
such selling stockholders.
SELLING STOCKHOLDERS
The
following table lists the names of each selling stockholder and the number of
shares of our common stock that could be sold by that individual pursuant to
this resale prospectus.
Name & Title
Number
  of
Shares of
Common Stock
Beneficially
Owned Prior
to the Offering
Number
  of
Shares of
Common Stock
That May be
Offered(1)
Number
  of
Shares of
Common Stock
Beneficially
Owned After
the Offering
Percent
  of
Outstanding
Common Stock
Beneficially
Owned After
the Offering(2)
Michael F. Finley
Director(3)(4)
8,872,071
3,333
8,868,738
55.3
%
Jeffrey P. Hughes,
Director(3)(5)
8,869,849
1,111
8,868,738
55.3
%
Michael Targoff
Chairman(6)
77,049
2,222
74,827
*
Chris Toffales
Vice Chairman and
Director(7)
20,671
1,111
19,560
*
William P. Rutledge
Director(8)
2,222
2,222
—
*
16
*
Represents less than 1% of total.
(1)
Does not constitute a commitment to sell any
or all of the stated number of shares of our common stock. The number of shares
of our common stock offered shall be determined from time to time by each
selling stockholder in his sole discretion.
(2)
Percentage of beneficial ownership is based
on 16,030,153 shares of our common stock issued and outstanding as of May 15,
2006.
(3)
Amount of shares beneficially owned includes
8,868,738 shares beneficially owned by Cypress Associates II LLC ("
Cypress Associates
"), which consists of 8,429,065 shares
owned by Cypress Merchant Banking Partners II L.P., 358,332 shares owned by
Cypress Merchant B II C.V. and 81,341 shares owned by 55th Street Partners II
L.P. (collectively, the "
Cypress Funds
").
Cypress Associates is the managing general partner of Cypress Merchant B II
C.V. and the general partner of Cypress Merchant Banking Partners II L.P. and
55th Street Partners II L.P., and has voting and investment power over the
shares held or controlled by each of these funds. Jeffrey P. Hughes and James
A. Stern, each of whom is a managing member of Cypress Associates, may be
deemed to share beneficial ownership of the shares shown as beneficially owned
by Cypress Associates and by the Cypress Funds. In addition, Messrs. Finley and
Hughes are members of the investment committee that exercises voting control
over the shares owned by the Cypress Funds. Each of the foregoing individuals disclaims
beneficial ownership of the shares shown as beneficially owned by Cypress
Associates and the shares shown as beneficially owned by the Cypress Funds.
(4)
Amount of shares beneficially owned includes 3,333
unvested shares. The unvested shares will vest as follows:  1/3 of the shares will vest on the day before
the 2007 annual stockholders' meeting, 1/3 of the shares will vest on the day
before the 2008 annual stockholders' meeting and 1/3 of the shares will vest on
the day before the 2009 annual stockholders' meeting. Unvested shares are generally
subject to forefeiture restrictions in the event of the termination of Mr.
Finley's status as a director.
(5)
Amount of shares beneficially owned includes 1,111
unvested
shares. The unvested shares will vest
on the day before the 2007 annual stockholders' meeting. Unvested shares are generally
subject to forefeiture restrictions in the event of the termination of Mr.
Hughes' status as a director.
(6)
Amount of shares beneficially owned includes
(i) 2,222 unvested
shares and
(ii) 9,807 shares of our common stock issuable upon the exercise of options
that are presently exercisable or exercisable within sixty (60) days after May
15, 2006. The unvested shares will vest as follows: 1/2 of the shares will vest
on the day before the 2007 annual stockholders' meeting and 1/2 of the shares
will vest on the day before the 2008 annual stockholders' meeting. Unvested
shares are generally subject to forefeiture restrictions in the event of the
termination of Mr. Targoff's status as a director.
(7)
Amount of shares beneficially owned includes
(i) 1,111 unvested
shares and
(ii) 9,807 shares of our common stock issuable upon the exercise of options
that are presently exercisable or exercisable within (60) days after May 15,
2006. The unvested shares will vest on the day before the 2007 annual
17
stockholders' meeting. Unvested shares are generally subject to
forefeiture restrictions in the event of the termination of Mr. Toffales' status
as a director.
(8)
Amount of shares beneficially owned consists
of 2,222 unvested
shares. The unvested shares will
vest as follows: 1/2 of the shares will vest on the day before the 2007 annual
stockholders' meeting and 1/2 of the shares will vest on the day before the
2008 annual stockholders' meeting. Unvested shares are generally subject to
forefeiture restrictions in the event of the termination of Mr. Rutledge's
status as a director.
PLAN OF DISTRIBUTION
The selling stockholders and their successors,
including their transferees and donees, may sell the common stock offered under
this resale prospectus directly to purchasers or through underwriters,
broker-dealers or agents, who may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders or the
purchasers. These discounts, concessions or commissions as to any particular
underwriter, broker-dealer or agent may be in excess of those customary in the
types of transactions involved. Neither we nor the selling stockholders can
estimate the amount of this compensation.
The common stock offered under this resale
prospectus may be sold from time to time in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market prices, at varying prices determined at the time of sale,
or at negotiated prices. These sales may be effected in transactions, that may
involve crosses or block transactions:
•
on any national securities exchange or U.S.
inter-dealer system of a registered national securities association on which
the common stock may be listed or quoted at the time of sale;
•
in the over-the-counter market;
•
in transactions otherwise than on these
exchanges or systems or in the over-the-counter market;
•
through the writing of options, whether the
options are listed on an options exchange or otherwise; or
•
through the settlement of short sales.
In connection with the sale of the common stock, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. Except as
provided in Section 16(c) of the Securities Act of 1933, the selling
stockholders may also sell the common stock short and deliver these securities
to close out their short positions, or loan or pledge the common stock to
broker-dealers that in turn may sell these securities.
The aggregate proceeds to the selling stockholders
from the sale of the common stock offered by them will be the purchase price of
the common stock less discounts and commissions, if any. Each of the selling
stockholders reserves the right to accept or to reject, in whole or in part,
any proposed purchase of common stock to be made directly or through agents.
The selling stockholders and any underwriters,
broker-dealers or agents that participate in the sale of the common stock may
be "underwriters" within the meaning of Section 2(11) of the Securities Act of
1933. Any discounts, commissions, concessions or profit they earn on any resale
of the shares may be underwriting discounts and commissions under the
Securities Act of 1933. If the selling stockholders are "underwriters" within
the meaning of Section 2(11) of the Securities Act of 1933, they will be
subject to the prospectus delivery requirements of the Securities Act of 1933.
In addition, any securities covered by this resale
prospectus that qualify for sale pursuant to Rule 144 of the Securities Act of
1933 may be sold under Rule 144 rather than pursuant to this resale prospectus.
A selling
18
stockholder may not sell any
common stock described in this resale prospectus and may not transfer, devise
or gift these securities by other means not described in this resale prospectus.
To the extent required, the specific common stock to
be sold, the names of the selling stockholders, the respective purchase prices
and public offering prices, the names of any agent, dealer or underwriter, and
any applicable commissions or discounts with respect to a particular offer will
be set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement of which this resale
prospectus is a part. This resale prospectus also may be used, with our
consent, by donees of the selling stockholders, or by other persons acquiring
shares and who wish to offer and sell shares under circumstances requiring or
making desirable its use.
In order to comply with the securities laws of some
states, if applicable, the common stock may be sold in these jurisdictions only
through registered or licensed brokers or dealers.
The selling stockholders may indemnify brokers,
dealers, agents or underwriters that participate in transactions involving
sales of the shares against specific liabilities, including liabilities arising
under the Securities Act of 1933 and/or the Securities Exchange Act of 1934. We
will pay substantially all of the expenses incident to this offering of the
shares by the selling stockholders to the public other than commissions and discounts
of underwriters, brokers, dealers or agents.
We may suspend the use of this resale prospectus if
we learn of any event that causes this resale prospectus to include an untrue
statement of a material fact or to omit to state a material fact required to be
stated in the resale prospectus or necessary to make the statements in the resale
prospectus not misleading in the light of the circumstances then existing. If
this type of event occurs, a prospectus supplement or post-effective amendment,
if required, will be distributed to each selling stockholder.
LEGAL MATTERS
The
validity of the issuance of the shares offered hereby has been passed upon by
Irell & Manella LLP, Los Angeles, California.
EXPERTS
The consolidated balance sheets of CPI International,
Inc. and subsidiaries as of September 30, 2005 and October 1, 2004, and the
related consolidated statements of operations, stockholders' equity (deficit)
and comprehensive income, and cash flows for the year ended September 30, 2005
and for the 36-week period ended October 1, 2004, and for the 16-week period
ended January 22, 2004 and the year ended October 3, 2003 of Communications
& Power Industries Holding Corporation and subsidiaries, have each been
incorporated by reference herein in reliance upon the report of KPMG LLP, an
independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3.    Incorporation of
Documents by Reference.
The following documents and information previously
filed with the Securities and Exchange Commission by us are hereby incorporated
by reference in this Registration Statement:
(i)
Our annual report on Form 10-K for the fiscal
year ended September 30, 2005, and our Form 10-K/A for such fiscal year;
(ii)
Our quarterly report on Form 10-Q for the
quarter ended December 30, 2005;
(iii)
Our quarterly report on Form 10-Q for the quarter ended March 31, 2006;
(iv)
Our current report on Form 8-K filed on February 16, 2006;
(v)
Our current report on Form 8-K filed on May
3, 2006;
(vi)
Our prospectus dated April 27, 2006, as filed by us under Rule 424(b)(4)
on May 1, 2006; and
(vii)
The description of our common stock set forth, or incorporated by
reference, in our Registration Statement on Form 8-A filed pursuant to Section
12 of the Securities Exchange Act of 1934, as amended (the "
Exchange Act
"), on April 24, 2006, and any amendment or
report filed for the purpose of updating any such description.
All reports and other documents subsequently filed
by us (other than information furnished pursuant to Item 2.02, Item 7.01 or
Item 9.01 of Form 8-K or as otherwise permitted by the rules of the Securities
and Exchange Commission) pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act after the date of this prospectus and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which de-registers all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated
or deemed to be incorporated herein by reference shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any subsequently filed document which also is
incorporated or deemed to be incorporated herein by reference modifies or
supersedes such prior statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
Item 4.    Description of
Securities.
Not applicable.
Item 5.    Interests of Named
Experts and Counsel.
Not applicable.
Item 6.    Indemnification of
Directors and Officers.
Section 145 of the Delaware General Corporation Law
("
DGCL
") authorizes a corporation to
indemnify any person who was or is a party or threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that the person
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by the person in connection
with such action, suit or proceeding, if the person acted in good faith and in
a manner the person reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the person's conduct was unlawful.
The DGCL does not permit indemnification in any threatened, pending or completed
action or suit by or in the right of the corporation in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable
to the corporation unless and only to the extent that the Court of Chancery of
the State of Delaware in which
II-1
such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery of the State of
Delaware or such other court shall deem proper. To the extent that a present or
former director or officer of a corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to above, or
in defense of any claim, issue or matter, such person shall be indemnified
against expenses, including attorneys' fees, actually and reasonably incurred
by such person in connection therewith. Section 102 of the DGCL also allows a
corporation to eliminate or limit the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director provided that such provisions shall not eliminate or limit
the liability of a director:
(i)
for
any breach of the director's duty of loyalty to the corporation or its
stockholders;
(ii)
for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law;
(iii)
for
unlawful payments of dividends or unlawful stock purchases or redemptions; or
(iv)
for any
transaction from which the director derived an improper personal benefit.
These provisions will not limit the liability of
directors or officers under the federal securities laws of the United States.
The registrant's amended and restated certificate of
incorporation provides that, to the fullest extent that the DGCL or any other
applicable law as it exists or as it may be amended permits the limitation or elimination
of the liability of directors, no directors of the registrant will be liable to
the registrant or its stockholders for monetary damages for breach of fiduciary
duty as a director.
The registrant's amended and restated certificate of
incorporation and amended and restated bylaws provide that, to the fullest
extent permitted by law, the registrant shall indemnify any director or officer
of the registrant against all expenses (including attorneys' fees), judgments,
fines and amounts paid in the defense or settlement actually and reasonably
incurred by him in connection with any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, investigative or otherwise,
and whether brought by or in the right of the registrant, to which he or she
was or is a party or threatened to be made a party by reason of his or her
current or former position with the registrant or by reason of the fact that he
or she is or was serving, at the request of the registrant, as a director,
officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
The registrant maintains officers' and directors'
insurance covering certain liabilities that may be incurred by officers and
directors in the performance of their duties. In addition, the registrant has entered
into indemnification agreements with each of its directors and executive
officers that provide for indemnification and expense advancement to the
fullest extent permitted under the DGCL.
Item 7.    Exemption From
Registration Claimed.
The securities that may be reoffered or resold
pursuant to this Registration Statement were issued to the selling stockholders
named herein in connection with their service as directors of the Registrant in
a transaction that did not involve any public offering and was exempt from the
registration requirements of the Securities Act of 1933, as amended, pursuant
to Section 4(2) of the Securities Act of 1933.
Item 8.    Exhibits.
See Exhibit Index beginning on page II-5 of this Registration
Statement, which is incorporated herein by reference.
Item 9.    Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1)
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i)
To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii)
To
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the
II-2
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective Registration
Statement.
(iii)
To
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement.
provided, however
, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply
if the Registration Statement is on Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2)
That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(3)
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(b)
The
undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
(c)
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Palo Alto, state of California, on May 26,
2006.
CPI International, Inc.
By:
/s/ Joel A. Littman
Joel A. Littman
Chief Financial Officer
Pursuant to the requirements of the Securities Act
of 1933, this Registration Statement has been signed by the following persons
in the capacities indicated on May 26, 2006.
Signature
Title
/s/*
Chief Executive Officer
  and Director
O. Joe Caldarelli
(Principal Executive
  Officer)
/s/ Joel A. Littman
Chief Financial Officer,
  Treasurer
Joel A. Littman
and Secretary (Principal
  Financial
and Accounting Officer)
/s/*
Chairman
  of the Board of Directors
Michael
  Targoff
/s/*
Director
Michael F. Finley
/s/*
Director
Jeffrey P. Hughes
/s/*
Director
William P. Rutledge
/s/*
Director
Chris Toffales
*By:
/s/
  Joel A. Littman
Joel
  A. Littman, Attorney-in-fact
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INDEX TO EXHIBITS
Exhibit
  No.
4.1
Specimen common stock
  certificate (incorporated by reference to Exhibit 4.5 to the registrant's
  Registration Statement on Form S-1/A filed on April 11, 2006 (Commission File
  No. 333-130662))
4.2
Amended and Restated
  Certificate of Incorporation of the registrant, filed with the Delaware
  Secretary of State on April 7, 2006 (incorporated by reference to Exhibit 3.3
  to the registrant's Registration Statement on Form S-1/A filed on April 11,
  2006 (Commission File No. 333-130662))
4.3
Amended and Restated
  Bylaws of the registrant (incorporated by reference to Exhibit 3.4 to the
  registrant's Registration Statement on Form S-1/A filed on April 11, 2006
  (Commission File No. 333-130662))
4.4
2006 Equity and
  Performance Incentive Plan (incorporated by reference to Exhibit 10.24 to the
  registrant's Registration Statement on Form S-1/A filed on April 11, 2006
  (Commission File No. 333-130662))
4.5
Form of Stock Option
  Agreement (IPO Grant) under 2006 Equity and Performance Incentive Plan
  (incorporated by reference to Exhibit 10.25 to the registrant's Registration
  Statement on Form S-1/A filed on April 11, 2006 (Commission File No.
  333-130662))
4.6
Form of Stock Option
  Agreement (Senior Executives) (IPO Grant) under 2006 Equity and Performance
  Incentive Plan (incorporated by reference to Exhibit 10.26 to the
  registrant's Registration Statement on Form S-1/A filed on April 11, 2006
  (Commission File No. 333-130662)
4.7
Form of Stock Option
  Agreement (Directors) under 2006 Equity and Performance Incentive Plan
  (incorporated by reference to Exhibit 10.27 to the registrant's Registration
  Statement on Form S-1/A filed on April 11, 2006 (Commission File No.
  333-130662))
4.8
Form of Restricted Stock
  Agreement (Directors) under 2006 Equity and Performance Incentive Plan
  (incorporated by reference to Exhibit 10.28 to the registrant's Registration
  Statement on Form S-1/A filed on April 11, 2006 (Commission File No.
  333-130662))
5.1
Opinion of Irell &
  Manella LLP
23.1
Consent of Irell &
  Manella LLP (included as part of Exhibit 5.1)
23.2
Consent of KPMG LLP
24.1
Power of Attorney
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