-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AMT2TNv+Yyg7Vq6xwzBfMlMUOMWYM6rlphrad/O3QyUCBgcug+1mJOyK8zopZ1KQ 8LBxSZAHgitCpm3+OFfmXA== 0001012870-00-000225.txt : 20000203 0001012870-00-000225.hdr.sgml : 20000203 ACCESSION NUMBER: 0001012870-00-000225 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20000113 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: P COM INC CENTRAL INDEX KEY: 0000935493 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 770289371 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-25356 FILM NUMBER: 512937 BUSINESS ADDRESS: STREET 1: 3175 S WINCHESTER BLVD CITY: CAMPBELL STATE: CA ZIP: 95008 BUSINESS PHONE: 4088663666 MAIL ADDRESS: STREET 1: 3175 S WINCHESTER BLVD STREET 2: P-COM INC CITY: CAMPBELL STATE: CA ZIP: 95008 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 13, 2000 ----------------------------- P-Com, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 0-25356 77-0289371 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 3175 S. Winchester Boulevard, Campbell, California 95008 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (408) 866-3666 ------------------------------ None - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Item 5. Other Events. ------------ On January 13, 2000, the Registrant issued a press release announcing the closing of the sale of approximately 7,531,000 shares of newly issued common stock for an aggregate purchase price of $43,000,000, and also announcing that the Registrant was entering into a secured loan agreement with Greyrock Capital, a division of Banc of America Commercial Finance Corporation. A portion of the new equity and debt financing has been used to repay the Registrant's entire indebtedness to Union Bank of California and Bank of America under a preexisting credit agreement. A copy of the press release is attached hereto and incorporated herein by reference. Statements in this report that are forward looking involve known and unknown risks and uncertainties, which may cause the Registrant's actual results in future periods to be materially different from any future performance that may be suggested in this release. Such factors may include, but are not limited to, fluctuations in customer demand and commitments, both in timing and volume, introduction of new products, commercial acceptance and viability of new products and expenses associated therewith, cancellations of orders without penalties, pricing and competition, the Registrant's ability to have available an appropriate amount of production capacity in a timely manner, the ability of the Registrant's customers to finance their purchases of the Registrant's products and/or services, the timing of new technology and product introductions, reliance upon subcontractors, and the pending stockholder class action lawsuits. Further, the Registrant operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond the Registrant's control, such as announcements by competitors and service providers. Reference is made to the discussion of risk factors detailed in the Company's filings with the Securities and Exchange Commission, including its reports on Form 10-K and 10-Q. Item 7. Financial Statement and Exhibits. -------------------------------- The following documents are filed as exhibits to this report: 1) Exhibit 10.60 - Common Stock PIPES Purchase Agreement, dated January 6, 2000, by and among P-Com and several investors. 2) Exhibit 10.61 - Loan and Security Agreement, dated January 14, 2000, by and between P-Com and Greyrock Capital. 3) Exhibit 10.62 - Warrant to Purchase Stock, dated January 14, 2000, to Greyrock Capital. 4) Exhibit 10.63 - Registration Rights Agreement, dated January 14, 2000, by and between P-Com and Greyrock Capital. 5) Exhibit 10.64 - Antidilution Agreement, dated January 14, 2000, by and between P-Com and Greyrock Capital. 6) Exhibit 10.65 - Warrant to Purchase Stock, dated January 14, 2000, to Silicon Valley Bank. 7) Exhibit 10.66 - Registration Rights Agreement, dated January 14, 2000, by and between P-Com and Silicon Valley Bank. 8) Exhibit 10.67 - Antidilution Agreement, dated January 14, 2000, by and between P-Com and Silicon Valley Bank. 9) Exhibit 99.1 - Press Release, dated January 13, 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. P-COM, INC. DATE: January 25, 2000 By: /s/ George P. Roberts --------------------------------- Name: George P. Roberts Title: Chief Executive Officer EXHIBIT INDEX Exhibit - ------- 10.60 Common Stock PIPES Purchase Agreement, dated January 6, 2000, by and among P-Com and several investors. 10.61 Loan and Security Agreement, dated January 14, 2000, by and between P- Com and Greyrock Capital. 10.62 Warrant to Purchase Stock, dated January 14, 2000, to Greyrock Capital. 10.63 Registration Rights Agreement, dated January 14, 2000, by and between P-Com and Greyrock Capital. 10.64 Antidilution Agreement, dated January 14, 2000, by and between P-Com and Greyrock Capital. 10.65 Warrant to Purchase Stock, dated January 14, 2000, to Silicon Valley Bank. 10.66 Registration Rights Agreement, dated January 14, 2000, by and between P-Com and Silicon Valley Bank. 10.67 Antidilution Agreement, dated January 14, 2000, by and between P-Com and Silicon Valley Bank. 99.1 Press Release, dated January 13, 2000. EX-10.60 2 COMMON STOCK PIPES PURCHASE AGREEMENT EXHIBIT 10.60 COMMON STOCK PIPES PURCHASE AGREEMENT THIS COMMON STOCK PIPES PURCHASE AGREEMENT (the "Agreement") is made as of January 6, 2000, by and among P-Com, Inc., a Delaware corporation (the "Company"), and the investors listed on Schedule A attached hereto (each an "Investor" and collectively the "Investors"). RECITALS: -------- A. The Company desires to sell shares of the Company's Common Stock, $.0001 par value ("Common Stock") to the Investors, and the Investors desire to purchase shares of Common Stock, on the terms and subject to the conditions set forth in this Agreement. THE PARTIES AGREE AS FOLLOWS: 1. Purchase and Sale of Common Stock. --------------------------------- 1.1 Sale and Issuance of Common Stock. The Company shall sell to each --------------------------------- Investor and each Investor shall purchase from the Company, on the date of the Closing (as defined in Section 1.2 below), at a price per share equal to the Formula Price (as defined in Section 1.3 below), that number of shares of Common Stock equal to the quotient of dollar value of such Investor's investment as indicated on Schedule A divided by the Formula Price, as defined below (the "Shares"). 1.2 Closing. The purchase and sale of the Shares shall take place at ------- 11:00 a.m. Pacific Standard Time promptly after the Trigger Time (as defined below), at the offices of Brobeck, Phleger & Harrison LLP, 550 West "C" Street, San Diego, California 92101, or on such date and at such time and place as the Company and the Investors shall mutually agree (the "Closing"). At the Closing the Company shall deliver to each Investor a stock certificate representing the Shares purchased by it against delivery to the Company (or to an escrow account designated by the Company) by each Investor of the quantity of funds indicated adjacent to such Investor's name on Schedule A by wire transfer to the Company (or to an escrow account designated by the Company). The "Trigger Time" means the first moment on which the aggregate borrowings of the Company from Foothill Capital Corporation or Greyrock Capital equal or exceed $12,000,000 provided however, if the Company does not borrow at least $12,000,000 from either Foothill Capital Corporation or Greyrock Capital but the gross proceeds deposited into the Investor Trust Account (defined below) from the sale of the Shares hereunder equal or exceed $42,999,975 then the "Trigger Time" shall be deemed to have occurred at the opening of business on January 13, 2000. The Investor Trust Account means that certain trust account identified in Schedule B hereto established by Shartsis, Friese & Ginsburg LLP for the purpose of collecting funds from the Investors for the purchase of Shares. The funds from the Investor Trust Account shall be released to the Company at the Closing. If the Closing has not occurred by January 20, 2000, each Investor depositing funds into the Investor Trust Account shall be entitled to have its funds returned by providing a written request to Shartsis, Friese & Ginsburg LLP requesting the return of such funds. 1.3 Formula Price. The "Formula Price" means the product, rounded to ------------- the nearest whole cent, of 85% times the mean average of the 60 closing sale prices of the Common Stock, as reported by the Nasdaq National Market, for the 60 consecutive trading days ending on and including January 5, 2000, i.e., the Formula Price is $5.71. 1.4 Restrictions on Future Sales. Until such time as the Shares are ---------------------------- registered for resale as required pursuant to Section 4 hereof or may otherwise be sold in a single transaction pursuant to Rule 144, the Company shall not issue, offer or sell any Common Stock (or any security convertible or exchangeable into Common Stock) on terms more favorable than 2 the terms that the Shares and the Warrants (as defined below) are being sold to the Investors pursuant to this Agreement. For this purpose, the price will not be deemed "more favorable" if it is equal to or more than the product, rounded to the nearest whole cent, of 85% times the mean average of the 60 closing sale prices of the Common Stock, as reported by the Nasdaq National Market, for the 60 consecutive trading days ending on and including the date of the sale of such other shares. In addition, until such time as the Shares are registered for resale as required pursuant to Section 4 hereof or may otherwise be sold in a single transaction pursuant to Rule 144, the Company shall not issue, offer or sell any Common Stock (or any security convertible or exchangeable into Common Stock) at an absolute price lower than this Agreement's Formula Price (even if such transaction is otherwise in compliance with this Section 1.4) unless the Company has first given each Investor written notice of intent to offer an amount specified in the notice of such securities at a price and on terms specified in the notice; each Investor then shall have (pro rata) a right of first offer to purchase some or all of the offered securities at the stated price and terms. Each Investor shall have 20 days after receipt of the written notice to accept such right of first offer in whole or in part, and at the end of such 20 days the right shall expire with respect to such notice to the extent it has not been exercised. The Company shall then have the right, without passing again through the right of first offer process, to sell up to all of the untaken securities at the notice price and terms (or other price and terms more favorable to the Company) within 60 days after the expiration of the right with respect to such notice. 2. Representations and Warranties of the Company. For purposes of this --------------------------------------------- Section 2, unless the context otherwise requires, the term "Company" shall include the Company and its subsidiaries as listed in its most recent Annual Report on Form 10-K/A for the year ended December 31, 1998 (the "Annual Report") filed with the Securities and Exchange Commission 3 (the "SEC"). Except as set forth in the Disclosure Schedule delivered to the Investors supplementally (the "Disclosure Schedule"), the Company hereby represents and warrants to the Investors as follows: 2.1 Corporate Organization and Authority of the Company. The Company --------------------------------------------------- and each of its subsidiaries: (a) is a corporation duly organized, validly existing, authorized to exercise all its corporate powers, rights and privileges and in good standing in the state or jurisdiction of its incorporation; (b) has the corporate power and authority to own and operate its properties and to carry on its business as presently conducted and as proposed to be conducted; and (c) is qualified to do business as a foreign corporation in each jurisdiction in which the ownership of its property or the nature of its business requires such qualification, except where failure to so qualify would not have a materially adverse effect on the business, properties or financial condition of the Company and its subsidiaries, taken as a whole. The Company has furnished to the Investors true and correct copies of its Certificate of Incorporation and Bylaws, each as amended to date. 2.2 Capitalization. The authorized capital stock of the Company -------------- consists of: (a) Preferred Stock. 2,000,000 shares of Preferred Stock, --------------- $.0001 par value, 750,000 shares of which have been designated Series A Junior Participating Preferred Stock, of which none were issued and outstanding as of January 6, 2000. 4 (b) Common Stock. 95,000,000 shares of Common Stock, $.0001 par ------------ value, of which 68,229,360 shares were issued and outstanding as of January 6, 2000 (including shares issued on January 5, 2000 in a stock-for-debt exchange). (c) All outstanding shares of the Company's Common Stock have been duly authorized and validly issued (including, without limitation, issued in compliance with applicable federal and state securities laws), and are fully paid and nonassessable. (d) Since December 31, 1999, the Company has not issued any shares of Common Stock or Preferred Stock except in connection with a January 5, 2000 stock-for-debt exchange or the exercise of outstanding options or warrants. Except as described in the Disclosure Schedule, there are no options, warrants, conversion privileges or other contractual rights presently outstanding to purchase or otherwise acquire from the Company any shares of the Company's capital stock or other securities (whether or not authorized). 2.3 Subsidiaries. The Company does not presently own, have any ------------ investment in, or control, directly or indirectly, any subsidiaries, associations or other business entities, except as disclosed in the Annual Report. The Company is not a participant in any joint venture or partnership, except as disclosed in the Annual Report. 2.4 Authorization. All corporate action on the part of the Company, ------------- its officers, directors and stockholders necessary for the authorization, execution, delivery and performance by the Company of all its obligations under this Agreement and for the authorization, issuance, sale and delivery of the Shares has been taken, and this Agreement, once executed by the Company and each Investor, will constitute a legally binding and valid obligation of the Company enforceable in accordance with its terms, such enforceability being subject only to laws of general application relating to bankruptcy, insolvency and the relief of 5 debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. Except for rights, if any, which have been duly waived, the issuance and sale of the Shares will not give rise to any preemptive rights or rights of first refusal on behalf of any person in existence on the date hereof. 2.5 Validity of Shares. The Shares and the Warrants (defined below), ------------------ when issued, sold and delivered in accordance with the terms and for the consideration expressed in this Agreement, shall be duly and validly issued (including, without limitation, compliance with applicable federal and state securities laws), fully paid and nonassessable, and free and clear of all pledges, liens, encumbrances and restrictions other than any liens or encumbrances created by or imposed on the holder thereof through no action of the Company. The common stock issuable on exercise of the Warrants (the "Warrant Shares"), when issued in accordance with the Warrants, shall be duly and validly issued (including, without limitation, compliance with applicable federal and state securities laws), fully paid and non-assessable and free and clear of all pledges, liens, encumbrances and restrictions other than any liens or encumbrances created by or imposed on the holder thereof through no action of the Company. The Company will reserve shares of Common Stock under the Warrants as such shares accrue in accordance with Sections 4.1(d) and 4.1(h) hereof, and on issuance of the Warrants, all Warrant Shares will be duly and validly reserved for issuance. Assuming the truth and accuracy of the representations made by the Investors, the offer, sale and issuance of the Common Stock, the Warrants and the Warrant Shares are exempt from the registration requirements of the Securities Act and applicable state securities Laws, and neither the Company nor any authorized agent acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption. 6 2.6 No Conflict. The execution and delivery of this Agreement do not, ----------- and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of, or default (with or without notice or lapse in time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, any provision of the Certificate of Incorporation or Bylaws of the Company. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of, or default (with or without notice or lapse in time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, any provision of any mortgage, indenture, lease or other agreement or instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company, its properties or assets, the effect of which could have a material adverse effect on the Company or materially impair or restrict its power to perform its obligations as contemplated hereby. 2.7 Accuracy of Reports. The Annual Report, the Company's quarterly ------------------- report on Form 10-Q for the quarter ended September 30, 1999 filed with the SEC (the "Quarterly Report"), and all reports required to be filed by the Company thereafter to the date of this Agreement under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), copies of which have been furnished to the Investors (together, the "SEC Reports"), have been duly filed, were (as amended to date) complete and correct in all material respects as of the dates at which the information was furnished, and (as amended to date) contained (as of such dates) no untrue statement of a material fact nor omitted to state a material fact necessary in order to make 7 the statements made therein, in light of the circumstances in which they were made, not misleading. 2.8 Changes. Except as otherwise disclosed herein, in the Disclosure ------- Schedule or in the SEC Reports, between September 30, 1999 and the date of this Agreement there has not been: (a) any change in the assets, liabilities, financial condition, prospects or operations of the Company from that reflected in the Quarterly Report, except changes in the ordinary course of business which have not been, either in any individual case or in the aggregate, materially adverse; (b) any material change in the contingent obligations of the Company, whether by way of guaranty, endorsement, indemnity, warranty or otherwise; (c) any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the properties or business of the Company; (d) any declaration or payment of any dividend or other distribution of the assets of the Company; (e) any labor organization activity; or (f) to the best of the Company's knowledge, any other event or condition of any character which has materially and adversely affected the Company's assets, liabilities, financial condition, prospects or operations. 2.9 Government Consent, etc. No consent, approval or authorization of ----------------------- or designation, declaration or filing with any governmental authority or any other person or entity (except Union Bank of California and Bank of America) on the part of the Company is required in connection with the valid execution and delivery of this Agreement, or the offer, sale or 8 issuance of the Shares, or the consummation of any other transaction contemplated hereby, except the filing of a Registration Statement and related activities pursuant to Section 4 hereof. 2.10 Full Disclosure. The representations and warranties of the --------------- Company contained in this Agreement, when read together with the Disclosure Schedule and the SEC Reports, do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained herein, in light of the circumstances under which they were made, not misleading. 2.11 Conflicts Prohibited. The Company represents, warrants and -------------------- covenants that to the best of its knowledge no officer or employee of any Investor has a direct or indirect economic interest in the Company or its property or contracts other than as disclosed in the SEC Reports, nor will any officer or employee of any Investor receive, directly or indirectly, anything of substantial economic value for his or her private benefit from the Company or anyone acting on its behalf in connection with the investment made pursuant to this Agreement. 2.12 Intellectual Property. The Company has not violated and is not --------------------- currently in violation of any copyright, trademark or other intellectual property rights of any third persons, except to the extent that such violation does not materially and adversely affect the Company or its operations. 2.13 Litigation/Bankruptcy/Malfeasance. The Company is not the subject --------------------------------- of and has not received notice of any legal proceedings of the following types to which the Company is a party (or, if applicable, any executive officer or director of the Company) or any of its property is the subject: any proceeding that involves a claim against the Company for damages in excess of $500,000; any material bankruptcy, receivership or similar proceedings with respect to the Company; or any criminal proceedings or civil proceedings for fraud or 9 malfeasance of which a director or executive officer of the Company is the subject (excluding minor offenses). 2.14 Year 2000. To the Company's knowledge, except for matters which --------- would not in the aggregate result in a material adverse effect on the Company, each hardware and software product and other computer and information technology used by the Company in its business (collectively, the "Software") will accurately receive, provide and process date and time data (including, but not limited to, calculating, comparing and sequencing) from, into and between the twentieth and twenty-first centuries, including, without limitation, leap year calculations, without a decrease in the functionality of the Software so that the Software will not malfunction, cease to function or provide invalid or incorrect results as a result of date or time data, to the extent that other information technology, used in combination with the Software, properly exchanges date and/or time data with it. To the Company's knowledge, except for matters which would not in the aggregate result in a material adverse effect on the Company, the Software is designed to be used prior to, during and after the calendar year 2000 A.D. and will operate during each such time period without error relating to date or time data, specifically including any error relating to, or the product of, date data which represents or references different centuries or more than one century. Without limiting the generality of the foregoing, to the Company's knowledge, except for matters which would not in the aggregate result in a material adverse effect on the Company, the Software (a) will not abnormally end or provide invalid or incorrect results as a result of date or time data, specifically including date data that represents or references different centuries or more than one century, (b) has been designed to ensure year 2000 compatibility, including, but not limited to, date data century recognition, calculations which accommodate same century and multi- century formulas and date values, and 10 date data interface values that reflect the century, and (c) includes "Year 2000 Capabilities," meaning that the Software (i) will manage and manipulate data involving dates or time, including single century formulas and multi-century formulas, and will not cause an abnormally ending scenario within the application or generate incorrect values or invalid results involving such dates, (ii) provides that all date-related user interface functionalities and data fields include the indication of century, and (iii) provides that all date- related data interface functionalities include the indication of century. 2.15 Investment Company. The Company represents and warrants that it ------------------ is not an "investment company" or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"). In addition, the Company agrees that it shall not become an "investment company" or a company "controlled" by an "investment company", within the meaning of the 1940 Act. In the event that the Company breaches the foregoing, the Company shall forthwith notify the Investors and shall take immediate corrective action to remedy such breach. 3. Representations and Warranties of the Investors. Each Investor ----------------------------------------------- severally, and not jointly, represents and warrants to the Company as follows: 3.1 Organization. It is validly existing under the laws of the state ------------ (or country) in which it is chartered, with all requisite power and authority to conduct its business as now being conducted. 3.2 Authority. It has all corporate or partnership, as the case may --------- be, right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Investor and the consummation by it of the transactions contemplated hereby have been duly authorized by all 11 necessary corporate or partnership, as the case may be, action on behalf of the Investor. This Agreement has been duly executed and delivered by and constitutes a legal, valid and binding obligation of the Investor, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby will not, conflict with or result in any violation of any obligation under any provision of the organizational or other charter documents of the Investor or any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Investor. 3.3 Information. The Investor represents that it has received all the ----------- information it has requested from the Company and considers necessary or appropriate for deciding whether to purchase the Shares. The delivery of any information by the Company to the Investor shall not abrogate the representations and warranties of the Company contained herein. 3.4 No Current Resale. The Investor is acquiring the Shares for its ----------------- own account and not with a view to sale or distribution. Any such sale or distribution shall be made only in compliance with the provisions of the Securities Act of 1933, as amended (the "Securities Act") and all applicable blue sky laws. The Investor acknowledges that the Shares are not now registered under the Securities Act or any blue sky law, and might never be so registered. The Investor further acknowledges that the stock certificate representing the Shares will bear a customary securities-law restrictive legend. 3.5 Status of Investor (Regulation D). The Investor is an "accredited --------------------------------- investor" as such term is defined in Rule 501 as promulgated by the SEC under the Securities Act. 12 3.6 No Net Change. There has been no change in excess of $1,000 in ------------- the Investor's net position in Common Stock of the Company since December 31, 1999. 4. Covenants. --------- 4.1 Registration of Shares. ---------------------- (a) The Company shall, before the later of (i) 20 days after the SEC declares effective the Company's Form S-3 registration statement for the resale of the Common Stock issued by the Company in exchange for its Series B Convertible Participating Preferred Stock, and (ii) 45 days following the Closing, prepare and file with the SEC a registration statement on Form S-1 under the Securities Act covering the resale of the Shares by any Investor (subject to Section 4.1(g), the "Registration Statement"), and corresponding applications for registration under the blue sky laws of any states for which any Investor reasonably requests in writing to the Company that the Company obtain such blue-sky registration (it being understood that in the vast majority of states no such registration is legally required, due to the Company's Nasdaq National Market listing or other reasons). The Company shall use its best efforts to obtain effectiveness of the Registration Statement and such blue sky registrations as soon thereafter as practicable, and in any event within 90 days after the Closing. If the Registration Statement has not been declared effective within 90 days after the Closing or at any such time as a Warrant (as defined in Section 4.1(h) below) is issued to an Investor, the Company shall also be required to register for resale any and all Warrant Shares (as defined in Section 4.1(h) below) to the same extent they were Shares. The Company shall use its best efforts to keep the Registration Statement and such blue sky registrations effective after that. Notwithstanding the foregoing, the Company will only be required to maintain the effectiveness of the Registration Statement and such blue sky registrations until the earlier of (i) such time as all of the Shares have been disposed of by the Investors, or (ii) such date on which the Investors may legally 13 dispose of all of the Shares in one transaction in the open market pursuant to Rule 144(k) under the Securities Act. The Company shall also cause the Shares and any Warrant Shares to be listed on the Nasdaq National Market and on any stock exchange on which the Common Stock may from time to time be listed. The Company shall pay all fees and expenses incurred by the Company in connection with preparing, filing, prosecuting and updating the Registration Statement, such blue sky applications and registrations, and such listing, including all registration and filing fees, listing fees, printing expenses, and fees and disbursements of the Company's counsel and accountants. (b) Each Investor shall cooperate fully with the Company in the preparation of such Registration Statement and blue sky applications and shall provide to the Company all information and materials (including updated information and materials) regarding itself and its proposed method of disposition of the Shares and any Warrant Shares and take all actions reasonably requested by the Company to permit the Company to comply with applicable requirements of the SEC, to comply with applicable requirements of the relevant blue sky laws, and to obtain the desired acceleration of the effective date of such Registration Statement. (c) Subject to Section 4.1(d) hereof, the Company shall promptly prepare and file with the SEC and any relevant blue sky authorities such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and to comply with (and enable the Investors to comply with) the provisions of the Securities Act and Rule 415 thereunder with respect to the disposition of all the Shares and any Warrant Shares. (d) During the effectiveness of the Registration Statement, the Company shall promptly notify the Investors of the happening of any event or other 14 circumstance as the result of which, in the Company's judgment, (i) the prospectus included in the Registration Statement, as then in effect, would include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, or (ii) the offer or resale of the Shares and any Warrant Shares would otherwise have a material and adverse effect on any proposed or pending acquisition, merger, business combination or other material transaction involving the Company; and, upon receipt of such notice and until the earlier of (i) the date the Company makes available to the Investors a supplemented or amended prospectus meeting the requirements of the Securities Act and relevant blue sky laws, or (ii) the date the Company notifies the Investors that the Investors may resume offers and sales using the prior prospectus, the Investors shall not offer or sell any Shares and any Warrant Shares pursuant to the Registration Statement (and shall return all copies of such prior prospectus to the Company if requested to do so by it). Notwithstanding Section 4.1(c), the Company may continue such "blackout" period or periods for such period of time as the Company considers reasonably necessary and in its best interest due to circumstances then existing, or simply due to the fact that amendments/supplements of a Registration Statement/ prospectus cannot be prepared instantly; but in no event may the Company impose --- "blackouts" on the Investors for any period of ten or more consecutive business days or totaling more than 20 days in any 12 month period (plus any "Permitted Blackouts" as defined in the Registration Rights Agreement dated as of December 21, 1998 between the Company, Castle Creek Technology Partners LLC and others). (e) The Company shall not be required to apply for or obtain blue sky registration in any state if in connection therewith or as a condition thereto it must (i) qualify to do business in such state where it would not otherwise be required to qualify, (ii) subject itself to 15 general taxation in such state, (iii) file a general consent to service of process in such state, or (iv) make any change in its Certificate of Incorporation or Bylaws, which the Company's Board of Directors determines to be contrary to the best interests of the Company and its stockholders. (f) Indemnification. --------------- (i) The Company will indemnify each Investor, and each of the officers and directors of, and each person controlling, each Investor, against all claims, losses, expenses, damages and liabilities (or actions in respect thereto) arising out of or based on (A) any untrue statements (or alleged untrue statement) of a material fact contained in any prospectus contained in any registration statement covering the Shares for resale, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (B) any misrepresentation or breach of any representation or warranty given or made by the Company in this Agreement, and will reimburse each Investor, each of its officers and directors and each person controlling each Investor, for any reasonable legal and any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability is caused by any untrue statement or omission based upon written information furnished to the Company by such Investor specifically for use therein. (ii) Each Investor will indemnify the Company, each of its directors and officers, and each person who controls the Company within the meaning of the Securities Act, against all claims, losses, expenses, damages and liabilities (or actions in respect thereof) arising out of or based on (A) any untrue statement (or alleged untrue statement) of a material fact contained in any such prospectus, or any omission (or alleged omission) to state 16 therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (B) any sale of Shares which violates (or allegedly violates) the Securities Act because of violation of the prospectus delivery requirement or because more or less than the information in such prospectus is given (or alleged to be given) in connection with the sale, or (C) any misrepresentation or breach of any representation or warranty given or made by such Investor in this Agreement, and will reimburse the Company, and such directors, officers, or controlling persons, for any reasonable legal or any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action, but in the case of subsection (f)(ii)(A) to the extent, and only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such prospectus in reliance upon and in conformity with written information furnished to the Company by such Investor specifically for use therein provided, however, that the indemnity agreement contained in this section 4.1(f)(ii) shall not apply to amounts paid in settlement of any such claims, losses, expenses, damages and liabilities if such settlement is effected without the consent of the Investor, which consent shall not be unreasonably withheld; provided, further, that in no event shall any indemnity under this section 4.1(f)(ii) exceed the net proceeds from the offering received by such Investor. (iii) Each party entitled to indemnification under this Section 4.1(f) (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such indemnified party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, 17 shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at the Indemnified Party's expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder, unless such failure resulted in actual detriment to the Indemnifying Party. The Indemnified Party shall provide all cooperation reasonably requested for the defense of the claim or litigation. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. An Indemnified Party shall not decline any settlement complying with the foregoing if it requires nothing of the Indemnified Party other than the payment of money (which is in fact paid by the Indemnifying Party) and does not include an admission of liability. (iv) In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which any person or entity entitled to indemnification under Section 4.1(f) makes a claim for indemnification pursuant to this Section 4.1(f) but it is judicially determined (by entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 4.1(f) provides for indemnification in such case; then, and in such case, the party that would otherwise be required to indemnify under Section 4.1(f) will contribute to the aggregate losses, claims, damages or liabilities to which the other parties may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of the 18 parties in connection with the losses suffered, as well as any other relevant equitable considerations. (g) The parties agree that if the Company becomes eligible to register securities for resale on Form S-3 it may choose to register the Shares for resale on Form S-3 and, after the SEC declares such Form S-3 registration statement effective, so notify the Investors, provide all relevant deliverables (such as a supply of new prospectuses), and then (if the original Form S-1 Registration Statement had already been declared effective) deregister the Shares from the original Form S-1 Registration Statement. Thereafter such Form S-3 Registration Statement shall, for all purposes of this Agreement, be deemed to be the "Registration Statement." (h) If the Shares have not been registered for resale by date that is three months following the Closing (the "Penalty Date"), the Company shall be obligated to issue each Investor a warrant (each a "Warrant" and collectively the "Warrants") on substantially the form attached hereto as Exhibit C. The number of shares for which each Warrant is exercisable for is to be determined as follows: for each month (pro rata for partial months) following the Penalty Date that the Shares have not been registered for resale the Warrant shall be issued for 3% of the number of Shares such Investor has purchased pursuant to Section 1.1 hereof. No Warrants shall be issuable if the Registration Statement is declared effective within the first three months after the date of Closing. For the purposes of this subsection (h) a "month" shall be deemed to begin on the same numbered day in each calendar month as the numbered day of the month on which the Closing occurs. As the obligation to issue the Warrants accrues, the Company shall reserve for issuance the corresponding number of Warrant Shares. In no event shall Warrant Shares accrue to an Investor to the extent that delay was caused by such Investor's violation of Section 4.1(b). 19 Although the obligation to issue Warrants will begin 3 months after the Penalty Date, the Company shall not actually issue such Warrants until the earlier of (i) the day after the Company first registers the Shares for resale or (ii) one year and one day after the Penalty Date (the "Warrant Issuance Date"). In the event clause (ii) in the preceding sentence applies then additional Warrants shall be issued, pursuant to this subsection, every three months after the first Warrant Issuance Date, as appropriate (each a "Warrant Issuance Date" and collectively the "Warrant Issuance Dates"). The maximum duration of the period of exerciseability for the Warrant shall be until the third anniversary of the respective Warrant Issuance Date. The initial Exercise Price per share of the Warrant shall be 80% of the price which was the lowest closing sale price of the Common Stock, as reported by the Nasdaq National Market, during the period between the Closing and the respective Warrant Issuance Date. (i) From the date hereof through a period of 20 days following the date that the Registration Statement is first declared effective, the Company shall not register any securities other than securities issued in connection with (1) any stock option plan, stock purchase plan, stock bonus plan or other plan for the benefit of employees, officers or directors of the Company or (2) the exercise of any rights, warrants or options heretofore granted or issued by the Company for the acquisition of any securities, provided however the Company may register securities (other than for resale) provided that the Company includes in such registration statement the registration for resale of the Shares and any Warrant Shares; provided further, that the registration rights granted to Investors pursuant to this Agreement shall be enforceable against the Company in connection with such registration statement as if it were a registration 20 statement filed pursuant to this Agreement. Neither such prohibition nor such piggyback provision shall apply to the Form S-3 registration statement described in Section 4.1(a)(i). (j) The Company shall cooperate with the Investors to facilitate the timely preparation and delivery of certificates representing the Shares and Warrant Shares to be offered for resale pursuant to the Registration Statement and enable such certificates to be in such denomination or amounts, as the case may be, as the Investors may reasonably request and registered in such names as the Investors may request after a Registration Statement which includes the Shares or Warrant Shares is ordered effective by the SEC, that the Company deliver, and on such request, the Company shall cause its legal counsel to deliver to the transfer agent for the Shares and Warrant Shares an opinion of such counsel in appropriate form to ensure the transfer of such shares without legend upon delivery by the Investors to the transfer agent of a certificate that the resale was made via proper delivery of the Prospectus under the Registration Statement. 4.2 Deliverables Upon Effectiveness. When and if the SEC declares ------------------------------- the Registration Statement effective, the Company shall promptly deliver to each Investor: (a) A certificate signed by the Chief Executive Officer or President of the Company that the Registration Statement is effective and, to his knowledge, no stop order with respect to the Registration Statement has been issued and no proceedings therefor have been instituted. (b) A legal opinion of Brobeck, Phleger & Harrison LLP, counsel to the Company, in substantially the form of Exhibit B. (c) Such number of copies of the Registration Statement and (from time to time) of each amendment and supplement thereto, such number of copies of the 21 prospectus (including (from time to time) any supplemental or amended prospectus) included in such Registration Statement, and such other related documents as the Investors may reasonably request in writing in order to facilitate the disposition of the Shares by the Investors. 4.3 Current Public Information. With a view to making available to -------------------------- Investors the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit Investors to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to: (a) make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times from and after the date of this Agreement so long as the Company remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act; (b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and (c) furnish to each Investor, so long as such Investor owns any Shares, Warrants or Warrant Shares, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144, the Securities Act and the Exchange Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company and (iii) such other information as may be reasonably requested in availing such Investor of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form. 22 4.4 Obligations of the Company. In connection with the registration -------------------------- obligations of the Company pursuant to this Agreement, the Company shall, as expeditiously as reasonably possible: (a) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Common Stock and Warrant Shares owned by them. (b) Provide a transfer agent and registrar for all Common Stock and Warrant Shares registered pursuant hereunder and a CUSIP number for all such Common Stock and Warrant Shares, in each case not later than the effective date of such registration. 4.5 Sales By Investors. Until the Shares are registered for resale ------------------ pursuant to Section 4 hereof or otherwise may be sold in a single transaction pursuant to Rule 144, each Investor shall not, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of the Company's Common Stock that such Investor owns immediately prior to the Closing or any securities convertible into or exchangeable for Common Stock that such Investor owns immediately prior to the Closing, or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of such Common Stock, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise. 23 5. Conditions of the Investors' Obligations at Closing. The obligations --------------------------------------------------- of each Investor under Section 1 of this Agreement are subject to the fulfillment at or before the Closing of each of the following conditions, any of which may be waived in writing by each Investor: 5.1 Bringdown. The Company's representations and warranties in --------- Section in Section 2 shall be true in all material respects as of the date of this Agreement and the Company shall not have intentionally done or omitted to do, between the date of this Agreement and the Closing, anything which has caused such representations and warranties not to be true in all material respects as if made on and as of the date of the Closing. The Company shall have performed or fulfilled in all material respects all agreements, obligations and conditions contained herein required to be performed or fulfilled by the Company before such Closing. 5.2 Blue Sky Compliance. The Company shall be exempt from or have ------------------- registration/qualification requirements of and be effective under all blue sky laws applicable to the offer and sale of the Shares to the Investors. 5.3 Compliance Certificate. The Company shall have delivered to each ---------------------- Investor a certificate dated as of the date of the Closing signed by the Chief Executive Officer or President of the Company certifying that, to his knowledge, the conditions set forth in Sections 5.1, 5.2, 5.5, 5.6, 5.7 and 5.8 have been satisfied. 5.4 Opinion of Counsel. There shall have been delivered to each ------------------ Investor an opinion of Brobeck, Phleger & Harrison LLP, counsel to the Company, in substantially the form of Exhibit A, dated the date of the Closing. 5.5 No Order Pending. There shall not then be in effect any order ---------------- enjoining or restraining the transactions contemplated by this Agreement. 24 5.6 No Material Litigation. During the period from the date of this ---------------------- Agreement to the Closing, no material litigation shall have been initiated challenging the Company's ownership or its right to use or distribute the core technology of the Company's products, and the Company shall have not received any written threat of such litigation or any written claim so challenging the Company's rights. 5.7 No Fraud or Malfeasance. During the period from the date of this ----------------------- Agreement to the Closing, (a) none of the Company's officers or directors shall have been removed for fraud or malfeasance in performance of his or her duties with respect to the affairs of the Company and (b) no new legal proceedings against any officers or directors of the Company for fraud or malfeasance in the performance of his or her duties with respect to the affairs of the Company shall have been instituted by the Company or its stockholders. 5.8 Trigger Time. The Trigger Time shall have occurred on or before ------------ the Closing. 6. Conditions of the Company's Obligations at Closing. The obligations of -------------------------------------------------- the Company under Section 1 of this Agreement are subject to the fulfillment at or before the Closing of each of the following conditions, any of which may be waived in writing by the Company: 6.1 Bringdown. The Investors' representations and warranties in --------- Section 3 shall be true in all material respects, as if made on and as of the date of the Closing. 6.2 Blue Sky Compliance. The Company shall be exempt from or have ------------------- complied with the registration/qualification requirements of and be effective under all blue sky laws applicable to the offer and sale of the Shares to the Investors. 25 6.3 No Order Pending. There shall not then be in effect any order ---------------- enjoining or restraining the transactions contemplated by this Agreement. 7. Miscellaneous. ------------- 7.1 Entire Agreement. This Agreement constitutes the entire contract ---------------- between the Company and the Investors relative to the subject matter hereof. Any previous or contemporaneous agreements, understandings, promises and representations (whether written or oral) with regard to such subject between the Company and the Investors are superseded by this Agreement. 7.2 Governing Law. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of California applicable to contracts entered into and wholly to be performed within the State of California by California residents. 7.3 Counterparts. This Agreement may be executed in counterparts, ------------ each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 7.4 Headings. The headings of the Sections and subsections of this -------- Agreement are for convenience and shall not determine the interpretation of this Agreement. 7.5 Notices. Any notice required or permitted hereunder shall be ------- given in writing and shall be conclusively deemed effectively given upon personal delivery, or, if made by registered or certified United States mail, postage prepaid, four business days after mailing, or if made by overnight carrier, one business day after sending, in all instances addressed (i) if to the Company, as set forth below the Company's name on the signature page of this Agreement, and (ii) if to the Investors, as set forth on Schedule A, or at such other address as the Company or Investor may designate by ten days' advance written notice to each Investor or the Company, respectively. 26 7.6 Survival of Warranties. The representations and warranties of the ---------------------- parties contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing for three years; provided, however, that such representations and warranties need only be accurate as of the date of such execution and delivery. 7.7 Amendment of Agreement. Any provision of this Agreement may be ---------------------- modified or amended, at any time, by a written instrument signed by the Company and by all of the Investors, and not in any other way. 7.8 Fees and Expenses. The Company and each Investor will each bear ----------------- their own fees and expenses in connection with the transactions contemplated by this Agreement; provided, that the Company shall pay at the Closing up to $25,000 of legal fees and expenses of Shartsis, Friese & Ginsburg, LLP. 7.9 Finders' Fees. The Company will hold the Investors harmless from ------------- from all finders' or brokers' fees in connection with the sale of the Shares to the Investors. 7.10 Use of Proceeds. --------------- (a) The Company covenants and agrees that it shall not use any portion of the purchase price hereunder to fund a settlement of any litigation pending against the Company as of the Closing, including but not limited to the currently-pending class action lawsuit against the Company identified in the Disclosure Schedule. (b) If the gross proceeds to the Company under this Agreement are less than $30,000,000, the Company covenants to the Investors and agrees that it shall not use any portion of the purchase price hereunder to repay its bank debt as described in the SEC Reports. If the gross proceeds to the Company under the Agreement are $30,000,000 or more, the Company covenants to the Investors and agrees that it shall use no more of the gross proceeds to the Company under the Agreement than the Excess Portion to repay its bank debt as 27 described in the SEC Reports. The "Excess Portion" is the excess of (i) the gross proceeds to the Company under the Agreement, over (ii) $29,999,998. 28 IN WITNESS WHEREOF, the parties hereto have executed this Common Stock PIPES Purchase Agreement as of the day and year first above written. P-COM, INC. By: /s/ George P. Roberts _____________________________________________________________ Title: Chairman / CEO __________________________________________________________ Address: 3175 S. Winchester Boulevard Campbell, CA 95008 Attention: Chief Financial Officer GRUBER MCBAINE INTERNATIONAL, a Cayman Islands Corporation By: /s/ Thomas O. Lloyd-Butler _____________________________________________________________ Title: GMCM LLC - Member; Attorney in Fact __________________________________________________________ LAGUNITAS PARTNERS, L.P. By: /s/ Thomas O. Lloyd-Butler _____________________________________________________________ Title: GMCM LLC - Member; Lagunitas Partners LP - Gen Partner LP __________________________________________________________ TRUSTEES OF HAMILTON COLLEGE By: /s/ Thomas O. Lloyd-Butler _____________________________________________________________ Title: GMCM LLC - Member; Attorney in Fact __________________________________________________________ LOCKHEED MARTIN CORP. MASTER RETIREMENT TRUST By: /s/ Thomas O. Lloyd-Butler _____________________________________________________________ Title: GMCM LLC - Member; Attorney in Fact __________________________________________________________ [SIGNATURE PAGE TO COMMON STOCK PIPES PURCHASE AGREEMENT] LION INVESTMENTS LTD. By: /s/ Robert Rayne ____________________________________ Title: Director _________________________________ WESTPOOL INVESTMENT TRUST By: /s/ Robert Rayne ____________________________________ Title: Director _________________________________ WEBER CAPITAL PARTNERS, L.P. By: Weber Capital Management, LLC, its General Partner ____________________________________ By: /s/ Eugene M. Weber ____________________________________ Title: Managing Member _________________________________ [SIGNATURE PAGE TO COMMON STOCK PIPES PURCHASE AGREEMENT] Quissett Partners, L.P. by Wellington Management Company, LLP, its Investment Advisor By: /s/ Cynthia M. Clarke _______________________________________________ Cynthia M. Clarke, Vice President Quissett Investors (Bermuda) L.P., by Wellington Management Company, LLP, its Investment Advisor By: /s/ Cynthia M. Clarke _______________________________________________ Cynthia M. Clarke, Vice President Vanguard Explorer Fund, by Wellington Management Company, LLP, its Investment Advisor By: /s/ Cynthia M. Clarke _______________________________________________ Cynthia M. Clarke, Vice President Hazelbrook Partners, L.P., by Wellington Management Company, LLP, its Investment Advisor By: /s/ Cynthia M. Clarke _______________________________________________ Cynthia M. Clarke, Vice President [SIGNATURE PAGE TO COMMON STOCK PIPES PURCHASE AGREEMENT] WHITMAN PARTNERS, L.P. By: /s/ Douglas F. Whitman ____________________________________ Title: General Partner _________________________________ SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC. By: J. & W. Seligman & Co. Incorporated, its Investment Advisor _____________________________________ By: /s/ Gregory Cote _____________________________________ Title: Managing Director _________________________________ [SIGNATURE PAGE TO COMMON STOCK PIPES PURCHASE AGREEMENT] SCHEDULE A
- --------------------------------------------------------------------------------------------------- Investor Address Amount to be Number of Invested Shares - --------------------------------------------------------------------------------------------------- Gruber McBaine International, a c/o Gruber McBaine $1,250,002 218,914 Cayman Islands Corporation Investment Advisors 50 Osgood Place, Penthouse San Francisco, CA 94133 Attn: Christine Arroyo - --------------------------------------------------------------------------------------------------- Lagunitas Partners, L.P. c/o Gruber McBaine $3,000,000 525,394 Investment Advisors 50 Osgood Place, Penthouse San Francisco, CA 94133 Attn: Christine Arroyo - --------------------------------------------------------------------------------------------------- Trustees of Hamilton College c/o Gruber McBaine $ 250,000 43,782 Investment Advisors [stock certificate should read: 50 Osgood Place, Hare & Co. / 651653] Penthouse San Francisco, CA 94133 Attn: Christine Arroyo - --------------------------------------------------------------------------------------------------- Lockheed Martin Corp. Master c/o Gruber McBaine $ 500,000 87,565 Retirement Trust Investment Advisors 50 Osgood Place, [stock certificate should read: Penthouse Pitt & Co. / 169629-99] San Francisco, CA 94133 Attn: Christine Arroyo - --------------------------------------------------------------------------------------------------- Vanguard Explorer Fund c/o Wellington $ 500,000 87,565 Management Company, LLP 75 State Street Boston, MA 02109 - --------------------------------------------------------------------------------------------------- Quissett Partners, L.P. c/o Wellington $2,610,000 457,092 Management Company, LLP 75 State Street Boston, MA 02109 Attn: Phillip Scibelli - --------------------------------------------------------------------------------------------------- Quissett Investors (Bermuda) L.P. c/o Wellington $1,740,000 304,728 Management - ---------------------------------------------------------------------------------------------------
Schedule A-1 - --------------------------------------------------------------------------------------------------- Company, LLP 75 State Street Boston, MA 02109 Attn: Phillip Scibelli - --------------------------------------------------------------------------------------------------- Hazelbrook Partners, L.P. c/o Wellington $ 150,000 26,269 Management Company, LLP 75 State Street Boston, MA 02109 Attn: Sean Higgins - --------------------------------------------------------------------------------------------------- Westpool Investment Trust c/o Weber Capital $ 750,000 131,348 Partners, L.P. 50 California Street Suite 3200 San Francisco, CA 94111 Attn: Eugene M. Weber - --------------------------------------------------------------------------------------------------- Lion Investments Ltd. c/o Weber Capital $ 750,000 131,348 Partners, L.P. 50 California Street Suite 3200 San Francisco, CA 94111 Attn: Eugene M. Weber - --------------------------------------------------------------------------------------------------- Weber Capital Partners, L.P. 50 California Street $ 1,500,000 262,697 Suite 3200 San Francisco, CA 94111 Attn: Eugene M. Weber - --------------------------------------------------------------------------------------------------- Whitman Partners, L.P. 525 University Avenue $14,999,999 2,626,970 Suite 701 * Palo Alto, CA 94301 Attn: Douglas F. Whitman - --------------------------------------------------------------------------------------------------- Seligman Communications and 125 University Avenue $14,999,999 2,626,970 Information Fund, Inc. Palo Alto, CA 94301 * - ---------------------------------------------------------------------------------------------------
* Whitman Partners, L.P. ("Whitman") and Seligman Communications and Information Fund, Inc. ("Seligman") shall be entitled, but not obligated, to purchase on a pro rata basis any Shares allocated to the Investors listed above if such Investors fail to purchase such Shares. If the Company does not borrow at least $12,000,000 from either Foothill Capital Corporation or Greyrock Capital, then Whitman and Seligman (or their designees, subject to the approval of the Company such approval not to be unreasonably withheld) shall be entitled, but not obligated, to purchase at the Closing on a pro rata basis up to an additional 175,132 Shares at the same per share price as the Shares. Schedule A-2 SCHEDULE B ABA Routing #: 321171184 Account #: 200018638 Account Name: Shartsis, Friese & Ginsburg LLP Trust Account Bank Name: Citibank, FSB Bank Address: One Sansome Street, 24th Floor, San Francisco, CA 94104 Reference: P-Com (4146.8) SCHEDULE B EXHIBIT A January __, 2000 To the Investors listed on Schedule A to the Common Stock PIPES Purchase Agreement dated January 6, 2000 Ladies and Gentlemen: We have acted as counsel for P-Com, Inc., a Delaware corporation (the "Company"), in connection with the issuance and sale to you of 7,530,642 shares of its common stock, par value $.0001 per share, pursuant to the Common Stock PIPES Purchase Agreement dated January 6, 2000 (the "Stock Purchase Agreement") among the Company and you. This opinion letter is being rendered to you pursuant to Section 5.4 of the Stock Purchase Agreement in connection with the Closing of the sale of the Shares. Capitalized terms not otherwise defined in this opinion letter have the meanings given them in the Stock Purchase Agreement. In connection with the opinions expressed herein, we have made such examination of matters of law and of fact as we considered appropriate or advisable for purposes hereof. As to matters of fact material to the opinions expressed herein, we have relied upon the representations and warranties as to factual matters contained in and made by the Company pursuant to the Stock Purchase Agreement and upon certificates and statements of government officials and of officers of the Company. We have also examined originals or copies of such corporate documents or records of the Company as we have considered appropriate for the opinions expressed herein. We have assumed for the purposes of this opinion letter the genuineness of all signatures, the legal capacity of natural persons, the authenticity of the documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as certified, facsimile or photostatic copies, and the authenticity of the originals of such copies. In rendering this opinion letter we have also assumed: (A) that the Stock Purchase Agreement has been duly and validly executed and delivered by you or on your behalf, that you have the power to enter into and perform all your obligations thereunder, and that the Stock Purchase Agreement constitutes a valid, legal, binding and enforceable obligation upon you; (B) that the representations and warranties made in the Stock Purchase Agreement by you are true and correct; (C) that any wire transfers, drafts or checks tendered by you will be honored; (D) that you have filed any required State Franchise income or similar tax returns and have paid any required State Franchise, income or similar taxes; and (E) that neither Whitman Partners, L.P. nor Seligman Communications and Information Fund, Inc., nor any person who "controls" either of them within the meaning of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, holds any voting securities of the Company as of immediately before the Closing. As used in this opinion letter, the expression "we are not aware" or the phrase "to our knowledge", or any similar expression or phrase with respect to our knowledge of matters of fact, means as to matters of fact that, based on the actual knowledge of individual attorneys Exhibit A-1 within the firm principally responsible for handling current matters for the Company (and not including any constructive or imputed notice of any information), and after an examination of documents referred to herein and after inquiries of certain officers of the Company, no facts have been disclosed to us that have caused us to conclude that the opinions expressed are factually incorrect; but beyond that we have made no factual investigation for the purposes of rendering this opinion letter. Specifically, but without limitation, we have not searched the dockets of any courts and we have made no inquiries of securities holders or employees of the Company, other than such officers. This opinion letter relates solely to the laws of the State of California, the General Corporation Law of the State of Delaware and the federal law of the United States and we express no opinion with respect to the effect or application of any other laws. Special rulings of authorities administering such laws or opinions of other counsel have not been sought or obtained. Based upon our examination of and reliance upon the foregoing and subject to the limitations, exceptions, qualifications and assumptions set forth below and except as set forth in the Stock Purchase Agreement or the Disclosure Schedule thereto, we are of the opinion that as of the date hereof: 1. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and the Company has the requisite corporate power and authority to own its properties and to conduct its business as, to our knowledge, it is presently conducted. The Company is qualified to do business as a foreign corporation in the state of California. 2. The Company has the requisite corporate power and authority to execute, deliver and perform the Stock Purchase Agreement, and to issue the Shares, the Warrant and the Warrant Shares. The Stock Purchase Agreement has been duly and validly authorized by the Company, duly executed and delivered by an authorized officer of the Company and constitutes a legal, valid and binding obligation of the Company, enforceable by you against the Company in accordance with its terms. 3. The Shares have been duly authorized and, upon purchase at the Closing pursuant to the terms of the Stock Purchase Agreement, will be validly issued, nonassessable and fully paid, and free of any liens created by the Company. If and when issued in accordance with the terms of the Stock Purchase Agreement the Warrants will be, and if and when issued upon exercise of the Warrants pursuant to the terms of the Warrants the Warrant Shares will be, validly issued, nonassessable and fully paid, and free of any liens created by the Company. 4. The Company's execution and delivery of, and its performance and compliance as of the date hereof with the terms of, the Stock Purchase Agreement do not violate any provision of any federal, Delaware corporate or California law, rule or regulation applicable to the Company or any provision of the Company's Restated Certificate of Incorporation or Bylaws and do not conflict with or constitute a default under the provisions of any judgment, writ, decree or order specifically identified in the SEC Reports or the material provisions of any of the material agreements specifically identified in the SEC Reports. Exhibit A-2 5. Other than in connection with any securities laws, all consents, approvals, permits, orders or authorizations of, and all qualifications by and registrations with, any federal or Delaware corporate or California state governmental authority on the part of the Company required in connection with the execution and delivery of the Stock Purchase Agreement and consummation at the Closing of the transactions contemplated by the Stock Purchase Agreement have been obtained, and are effective, and we are not aware of any proceedings, or written threat of any proceedings, that question the validity thereof. 6. Based in part upon the representations of you in the Stock Purchase Agreement, the offer and sale of the Shares to you pursuant to the terms of the Stock Purchase Agreement are exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended, and from the qualification requirements of the California Corporate Securities Law of 1968, as amended. Our opinions expressed above are specifically subject to the following limitations, exceptions, qualifications and assumptions: (A) The legality, validity, binding nature and enforceability of the Company's obligations under the Stock Purchase Agreement may be subject to or limited by (1) bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent transfer and other similar laws affecting the rights of creditors generally; (2) general principles of equity (whether relief is sought in a proceeding at law or in equity), including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of any court of competent jurisdiction in awarding specific performance or injunctive relief and other equitable remedies; and (3), without limiting the generality of the foregoing, the effect of California court decisions and statutes which indicate that provisions of the Stock Purchase Agreement which permit you to take action or make determinations may be subject to a requirement that such action be taken or such determinations be made on a reasonable basis in good faith or that it be shown that such action is reasonably necessary for your protection. (B) We express no opinion as to the Company's compliance or noncompliance with applicable federal or state antifraud or antitrust statutes, laws, rules and regulations. (C) We express no opinion concerning the past, present or future fair market value of any securities. (D) We express no opinion as to the enforceability under certain circumstances of any provisions indemnifying a party against, or requiring contributions toward, that party's liability for its own wrongful or negligent acts, or where indemnification or contribution is contrary to public policy or prohibited by law. In this regard, we advise you that in the opinion of the Securities and Exchange Commission, indemnification of directors, officers and controlling persons of an issuer against liabilities arising under the Securities Act of 1933, as amended, is against public policy and is therefore unenforceable. (E) We express no opinion as to the enforceability under certain circumstances of any provisions prohibiting waivers of any terms of the Stock Purchase Agreement other than in writing, or prohibiting oral modifications thereof or modification by course of dealing. In Exhibit A-3 addition, our opinions are subject to the effect of judicial decisions which may permit the introduction of extrinsic evidence to interpret the terms of written contracts. (F) We express no opinion as to the effect of Section 1670.5 of the California Civil Code or any other California law, federal law or equitable principle which provides that a court may refuse to enforce, or may limit the application of, a contract or any clause thereof which the court finds to have been unconscionable at the time it was made or contrary to public policy. (G) We express no opinion as to your compliance with any Federal or state law relating to your legal or regulatory status. (H) We express no opinion as to the compliance of the Company, you or the sale of the Common Stock to you with the provisions of the Small Business Investment Act of 1958, as amended, or any of the regulations promulgated thereunder. (I) We express no opinion as to the effect of subsequent issuances of securities of the Company, to the extent that further issuances which may be integrated with the Closing may include purchasers that do not meet the definition of "accredited investors" under Rule 501 of Regulation D and equivalent definitions under state securities or "blue sky" laws. (J) We express no opinion as to Section 7.2 of the Stock Purchase Agreement to the extent that it purports to exclude conflict of law principles under California law. This opinion letter is rendered as of the date first written above solely for your benefit in connection with the Stock Purchase Agreement and may not be delivered to, quoted or relied upon by any person other than you, or for any other purpose, without our prior written consent. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company or the Shares. We assume no obligation to advise you of facts, circumstances, events or developments which hereafter may be brought to our attention and which may alter, affect or modify the opinions expressed herein. Very truly yours, BROBECK, PHLEGER & HARRISON LLP Exhibit A-4 EXHIBIT B _____________, 2000 To the Investors listed on Schedule A to the Common Stock PIPES Purchase Agreement dated January 6, 2000 Ladies and Gentlemen: We have acted as counsel for P-Com, Inc., a Delaware corporation (the "Company"), in connection with the issuance and sale to you of certain Shares of its common stock, par value $.0001 per share, pursuant to the Common Stock PIPES Purchase Agreement dated January 6, 2000 (the "Stock Purchase Agreement") among the Company and you and in connection with the Company's registration with the SEC of such Shares for resale by you. This opinion letter is being rendered to you pursuant to Section 4.2(b) of the Stock Purchase Agreement in connection with the SEC declaring effective the Registration Statement for your resale of the Shares. Capitalized terms not otherwise defined in this opinion letter have the meanings given them in the Stock Purchase Agreement. In our capacity as counsel to the Company, we have examined, among other things, originals, or copies identified to our satisfaction as being true copies, of the Registration Statement on Form S-1 (File No. 333-____________) initially filed by the Company with the SEC on ____________, 2000, for the purpose of registering the resale of the Shares under the Securities Act; Amendment No. 1 to such Registration Statement filed with the SEC on _____________, 2000; Amendment No. 2 to such Registration Statement filed with the SEC on _____________, 2000; and oral advice on ______________, 2000, from an SEC staff examiner, that the SEC had declared such Registration Statement, as so amended, effective as of ______ p.m., Washington, D.C. time, on _____________, 2000. As used in this opinion letter, the phrase "to our knowledge" means as to matters of fact that, based on the actual knowledge of individual attorneys within the firm principally responsible for handling current matters for the Company (and not including any constructive or imputed notice of any information), no facts have been disclosed to us that have caused us to conclude that the opinions expressed are factually incorrect; but our affirmative factual investigation for the purpose of rendering this opinion letter has been limited to obtaining (a) oral advice received on ___________, from an SEC staff examiner, that the SEC had declared such Registration Statement, as amended, effective at _____ p.m. Washington, D.C. time, on _________, 2000 and (b) oral advice received on ___________, 2000 from an SEC staff examiner that there is no stop order suspending the effectiveness of the Registration Statement. Based upon our examination of and reliance upon the foregoing, we are of the opinion that as of the date hereof: Exhibit B-1 1. The Registration Statement has become effective under the Securities Act and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose are pending before or contemplated by the SEC. This opinion letter is rendered as of the date first written above solely for your benefit in connection with the Stock Purchase Agreement and the Registration Statement and may not be delivered to, quoted or relied upon by any person other than you, or for any other purpose, without our prior written consent. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company, the Stock Purchase Agreement, the Registration Statement or the Shares. We assume no obligation to advise you of facts, circumstances, events or developments which hereafter may be brought to our attention and which may alter, affect or modify the opinions expressed herein. Very truly yours, BROBECK, PHLEGER & HARRISON LLP Exhibit B-2 EXHIBIT C THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. WARRANT TO PURCHASE COMMON STOCK of P-COM, INC. Void after ____________, 200__ This Warrant is issued to __________________, or its registered assigns ("Holder"), by P-Com, Inc., a Delaware corporation (the "Company"), on ___________, 200__ (the "Warrant Issue Date"). This Warrant is issued in connection with the Company's issuance to the Holder of Common Stock on January __, 2000, and the Company's failure to timely register such Common Stock for resale under the Securities Act of 1933. 1. Purchase Shares. Subject to the terms and conditions hereinafter set --------------- forth, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company _____________ fully paid and nonassessable shares of Common Stock of the Company, as constituted on the Warrant Issue Date (the "Common Stock"). The number of shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall be subject to adjustment pursuant to Section 4 hereof. 2. Exercise Price. The purchase price for the Shares shall be $______ -------------- per share, as adjusted from time to time pursuant to Section 9 hereof (the "Exercise Price"). It is acknowledged that the Exercise Price is based on negotiated terms and is not intended to reflect the current fair market value of the Common Stock. 3. Exercise Period. Subject to Section 4 below, this Warrant shall be --------------- exercisable, in whole or in part, during the term commencing on the Warrant Issue Date and ending at 5:00 p.m. on the third anniversary of the Warrant Issuance Date. Exhibit C-1 4. Early Termination, Antidilution Adjustments and Registration Statement ---------------------------------------------------------------------- Adjustments. - ----------- (a) In case of any consolidation of the Company with, or merger of the Company into, any other corporation (other than a consolidation or merger in which the Company is the continuing corporation and in which no change occurs in its outstanding Common Stock), or in case of any sale or transfer of all or substantially all of the assets of the Company, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company, except where the Company is the surviving entity and no change occurs in its outstanding Common Stock), the corporation formed by such consolidation or the corporation resulting from or surviving such merger or the corporation which shall have acquired such assets or securities of the Company, as the case may be, shall execute and deliver to the Holder simultaneously therewith a new Warrant, satisfactory in form and substance to the Holder, together with such other documents as the Holder may reasonably request, entitling the Holder thereof to receive upon exercise of such Warrant the kind and amount of shares of stock and other securities and property receivable upon such consolidation, merger, sale, transfer, or exchange of securities, or upon the dissolution following such sale or other transfer, by a holder of the number of shares of Common Stock purchasable upon exercise of this Warrant immediately prior to such consolidation, merger, sale, transfer, or exchange. Such new Warrant shall contain the same basic other terms and conditions as this Warrant and shall provide for adjustments which, for events subsequent to the effective date of such written instrument, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 4. The above provisions of this Section 4(a) shall similarly apply to successive consolidations, mergers, exchanges, sales or other transfers covered hereby. Notwithstanding the foregoing, in the event the consideration to be paid to holders of Company capital stock in any transaction of the nature referred to above in this Section 4(a) (a "Transaction") consists of cash or cash equivalents, then, provided that the Company shall have given the holder hereof the notice required by Section 9, this Warrant shall, to the extent it has not been exercised by the effective date of such Transaction, terminate upon the completion of such Transaction. (b) If the Company at any time shall, by subdivision, combination or reclassification of securities or otherwise, change any of the securities to which purchase rights under this Warrant exist into the same or a different number of securities of any class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to such subdivision, combination, reclassification or other change. If shares of the Company's Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, the purchase price under this Warrant shall be proportionately reduced in the case of a subdivision of shares or proportionately increased in the case of a combination of shares, in both cases by the ratio which the total number of shares of Common Stock to be outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event. Exhibit C-2 (c) Except as set forth herein, no adjustment on account of cash dividends on the Company's Common Stock or other securities purchasable hereunder will be made to the purchase price under this Warrant. (d) The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of the Company's Common Stock upon the exercise of the purchase rights under this Warrant. The Company further covenants and agrees (i) that it will not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act, avoid or seek to avoid the observation or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by the Company, (ii) promptly to take such action as may be required of the Company to permit the Holder to exercise this Warrant and the Company duly and effectively to issue shares of its Common Stock or other securities as provided herein upon the exercise hereof and (iii) promptly to take all action required or provided herein to protect the rights of the Holder granted hereunder against dilution. (e) If the Company declares a dividend on Common Stock, or makes a distribution to holders of Common Stock, and such dividend or distribution is payable or made in Common Stock or securities convertible into or exchangeable for Common Stock, or rights to purchase Common Stock or securities convertible into or exchangeable for Common Stock, the number of shares of Common Stock for which this Warrant may be exercised shall be increased, as of the record date for determining which holders of Common Stock shall be entitled to receive such dividend or distribution, in proportion to the increase in the number of outstanding shares (and shares of Common Stock issuable upon conversion of all such securities convertible into Common Stock) of Common Stock as a result of such dividend or distribution, and the Exercise Price shall be adjusted so that the aggregate amount payable for the purchase of all the Warrant Shares issuable hereunder immediately after the record date for such dividend or distribution shall equal the aggregate amount so payable immediately before such record date. (f) If the Company declares a dividend on Common Stock (other than a dividend covered by subsection (e) above) or distributes to holders of its Common Stock, other than as part of its dissolution or liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any cash or other of its assets (other than Common Stock or securities convertible into or exchangeable for Common Stock), the Holder shall receive notice of such event as set forth in Section 9 below. (g) If the Company shall, at any time before the expiration of this Warrant, sell all or substantially all of its assets and distribute the proceeds thereof to the Company's stockholders, the Holder shall, upon exercise of this Warrant have the right to receive, in lieu of the shares of Common Stock of the Company that the Holder otherwise would have been entitled to receive, the same kind and amount of assets as would have been issued, distributed or paid to the Holder upon any such distribution with respect to such shares of Common Stock of the Company had Exhibit C-3 the Holder been the holder of record of such shares of Common Stock receivable upon exercise of this Warrant on the date for determining those entitled to receive any such distribution. If any such distribution results in any cash distribution in excess of the Exercise Price provided by this Warrant for the shares of Common Stock receivable upon exercise of this Warrant, the Holder may, at the Holder's option, exercise this Warrant without making payment of the Exercise Price and, in such case, the Company shall, upon distribution to the Holder, consider the Exercise Price to have been paid in full and, in making settlement to the Holder, shall obtain receipt of the Exercise Price by deducting an amount equal to the Exercise Price for the shares of Common Stock receivable upon exercise of this Warrant from the amount payable to the Holder. Notwithstanding the foregoing, in the event the consideration to be paid to holders of Company capital stock in any transaction of the nature referred to above in this Section 4(g) (an "Asset Sale Transaction") consists of cash or cash equivalents and the consideration payable per share of Common Stock of the Company is less than the Exercise Price hereunder, then, provided that the Company shall have given the holder hereof the notice required by Section 9, this Warrant shall, to the extent it has not been exercised by the effective date of such Transaction, terminate upon the completion of such Transaction. (h) The term "Common Stock" shall mean the Common Stock of the Company as the same exists at January 6, 2000 or as such stock may be constituted from time to time, except that for the purpose of this Section 4, the term "Common Stock" shall include any stock of any class of the Company which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and which is not subject to redemption by the Company. (i) Whenever the number of Warrant Shares or the Exercise Price shall be adjusted as required by the provisions of this Section 4, the Company forthwith shall file in the custody of its secretary or an assistant secretary, at its principal office, and furnish to each Holder hereof, a certificate prepared by its Chief Financial Officer, showing the adjusted number of Warrant Shares and the adjusted Exercise Price and setting forth in reasonable detail the circumstances requiring the adjustments. (j) No adjustment in the Exercise Price in accordance with the provisions of this Section 4 need be made if such adjustment would amount to a change in such Exercise Price of less than $.01; provided however, that the amount by which any adjustment is not made by reason of the provisions of this Section 4(j) shall be carried forward and taken into account at the time of any subsequent adjustment in the Exercise Price. (k) If an adjustment is made under this Section 4 and the event to which the adjustment relates does not occur, then any adjustments in accordance with this Section 4 shall be readjusted to the Exercise Price and the number of Warrant Shares which would be in effect had the earlier adjustment not been made. 5. Method of Exercise. While this Warrant remains outstanding and ------------------ exercisable in accordance with Section 3 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by: Exhibit C-4 (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of Exercise attached hereto, to the Secretary of the Company at its principal offices; and (b) the payment to the Company of cash equal to the aggregate Exercise Price for the number of Shares being purchased. 6. Net Exercise. In lieu of exercising this Warrant pursuant to Section ------------ 5, the Holder may elect to receive, without the payment by the Holder of any additional consideration, shares of Common Stock equal to the value of the "spread" on the Shares (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the Notice of Exercise, in which event the Company shall issue to the holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) --------- X = A Where: X = The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = The number of Shares in respect of which the net issue election is made; A = The fair market value of one share of the Common Stock at the time the net issue election is made; B = The Exercise Price (as adjusted to the date of the net issuance). For purposes of this Section 6, the fair market value of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the sixty (60) day period ending three (3) days prior to the net exercise election; and (ii) if traded over-the-counter but not on the Nasdaq National Market, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the sixty (60) day period ending three (3) days prior to the net exercise. 7. Certificates for Shares. Upon the exercise of the purchase rights ----------------------- evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter (with appropriate restrictive legends, if applicable). 8. Issuance of Shares. The Company covenants that the Shares, when ------------------ issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. 9. Notice of Adjustment. So long as this Warrant shall be outstanding, -------------------- (a) if the Company shall propose to pay any dividends or make any distribution upon the Common Stock, or (b) if the Company shall offer generally to the holders of Common Stock the right to subscribe to or purchase any shares of any class of Common Stock or securities convertible into Common Stock or any other similar rights, or (c) if there shall be any proposed capital reorganization of Exhibit C-5 the Company in which the Company is not the surviving entity, recapitalization of the capital stock of the Company, consolidation or merger of the Company with or into another corporation, sale, lease or other transfer of all or substantially all of the property and assets of the Company, or voluntary or involuntary dissolution, liquidation or winding up of the Company, or (d) if the Company shall give to its stockholders any notice, report or other communication respecting any significant or special action or event, then in such event, the Company shall give to the Holder, at least ten (10) days prior to the relevant date described below, a notice containing a description of the proposed action or event and stating the date or expected date on which a record of the Company's stockholders is to be taken for any of the foregoing purposes, and the date or expected date on which any such dividend, distribution, subscription, reclassification, reorganization, consolidation, combination, merger, conveyance, sale, lease or transfer, dissolution, liquidation or winding up is to take place and the date or expected date, if any is to be fixed, as of which the holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such event. 10. No Fractional Shares or Scrip. No fractional shares or scrip ----------------------------- representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect. 11. No Stockholder Rights. Prior to exercise of this Warrant, the Holder --------------------- shall not be entitled to any rights of a stockholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. However, nothing in this Section 11 shall limit the right of the Holder to be provided the Notices required under this Warrant. 12. Transfers of Warrant. Subject to compliance with applicable federal -------------------- and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company in substantially the form as Exhibit A hereto. The transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices. In the event of a partial transfer, the Company shall issue to the holders one or more appropriate new warrants. 13. Successors and Assigns. The terms and provisions of this Warrant ---------------------- shall inure to the benefit of, and be binding upon, the Company and the Holder and their respective successors and assigns. 14. Amendments and Waivers. Any term of this Warrant may be amended and ---------------------- the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. 15. Notices. All notices required under this Warrant and shall be deemed ------- to have been given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt Exhibit C-6 that the communication was successfully sent to the applicable number if sent by facsimile; (iii) one day after being sent, when sent by professional overnight courier service, or (iv) five days after posting when sent by registered or certified mail. Notices to the Company shall be sent to the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the books of the Company (or at such other place as the Holder shall notify the Company hereof in writing). 16. Attorneys' Fees. If any action of law or equity is necessary to --------------- enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to its reasonable attorneys' fees, costs and disbursements in addition to any other relief to which it may be entitled. 17. Captions. The section and subsection headings of this Warrant are -------- inserted for convenience only and shall not constitute a part of this Warrant in construing or interpreting any provision hereof. 18. Governing Law. This Warrant shall be governed by the laws of the ------------- State of California as applied to agreements among California residents made and to be performed entirely within the State of California. 19. Registration Rights. The Holder of this Warrant and the Warrant ------------------- Shares are entitled to the rights and benefits of all of the terms, provisions and conditions of that certain Common Stock PIPES Purchase Agreement dated January 6, 2000 between the Company and Holders and others, including but not limited to the registration rights contained in Section 4 thereof. IN WITNESS WHEREOF, P-Com, Inc. caused this Warrant to be executed by an officer thereunto duly authorized. P-COM, INC. By:_________________________________________ Chief Financial Officer Exhibit C-7 NOTICE OF EXERCISE To: P-COM, INC. The undersigned hereby elects to [check applicable subsection]: ________ (a) Purchase _________________ shares of Common Stock of P-Com, Inc., pursuant to the terms of the attached Warrant and payment of the Exercise Price per share required under such Warrant accompanies this notice; OR ________ (b) Exercise the attached Warrant for [all of the shares] [________ of the shares] [cross out inapplicable phrase] purchasable under the Warrant pursuant to the net exercise provisions of Section 6 of such Warrant. The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof. WARRANTHOLDER: ____________________________________ By:_________________________________ Address: ____________________________________ ____________________________________ Date: ______________________ Name in which shares should be registered: __________________________________________ Exhibit C-8 Exhibit A to Warrant: ASSIGNMENT FORM --------------- (To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.) FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to ________________________________________________________________________________ (Please Print) whose address is _______________________________________________________________ (Please Print) ________________________________________________________________________________ Dated:______________________, 200_. Holder's Signature:_______________________________ Holder's Address:_________________________________ __________________________________________________ Signature Guaranteed:___________________________________________________________ NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant. Exhibit A to Warrant EX-10.61 3 LOAN AND SECURITY AGREEMENT EXHIBIT 10.61 [LOGO OF GREYROCK CAPITAL] Loan and Security Agreement Borrower: P-Com, Inc. Address: 3175 S. Winchester Blvd. Campbell, California 95008 Date: January 14, 2000 This Loan and Security Agreement is entered into on the above date between GREYROCK CAPITAL, a Division of Banc of America Commercial Finance Corporation (Greyrock), whose address is 10880 Wilshire Blvd. Suite 1850, Los Angeles, CA 90024 and the borrower named above (Borrower), whose chief executive office is located at the above address (Borrower's Address). The Schedule to this Agreement (the Schedule) being signed concurrently is an integral part of this Agreement. (Definitions of certain terms used in this Agreement are set forth in Section 8 below.) 1. LOANS. 1.1 Loans. Greyrock will make loans to Borrower (the Loans), in amounts determined by Greyrock in its sole discretion, up to the amounts (the Credit Limit) shown on the Schedule, provided no Default or Event of Default has occurred and is continuing. If at any time or for any reason the total of all outstanding Loans and all other Obligations exceeds the Credit Limit, Borrower shall immediately pay the amount of the excess to Greyrock, without notice or demand. 1.2 Interest. All Loans and all other monetary Obligations shall bear interest at the rate shown on the Schedule, except where expressly set forth to the contrary in this Agreement or in another written agreement signed by Greyrock and Borrower. Interest shall be payable monthly, on the last day of the month. Interest may, in Greyrock's discretion, be charged to Borrower's loan account, and the same shall thereafter bear interest at the same rate as the other Loans. 1.3 Fees. Borrower shall pay Greyrock the fee(s) shown on the Schedule, which are in addition to all interest and other sums payable to Greyrock and are not refundable. 2. SECURITY INTEREST. 2.1 Security Interest. To secure the payment and performance of all of the Obligations when due, Borrower hereby grants to Greyrock a security interest in all of Borrower's interest in the following, whether now owned or hereafter acquired, and wherever located (collectively, the Collateral): All Receivables, Inventory, Equipment, Investment Property and General Intangibles, including, without limitation, all of Borrower's Deposit Accounts, all money, all collateral in which Greyrock is granted a security interest pursuant to any other present or future agreement, all property now or at any time in the future in Greyrock's possession, and all proceeds (including proceeds of any insurance policies, proceeds of proceeds and claims against third parties), all products of the foregoing, and all books and records related to any of the foregoing*. *provided that the Collateral shall not include any right, title or interest of Borrower arising under any license or other agreement to the extent that the grant of a security interest in the same is validly prohibited by such license or other agreement 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER. In order to induce Greyrock to enter into this Agreement and to make Loans, Borrower represents and warrants to Greyrock as follows, and Borrower covenants that the following representations will continue to be true, and that Borrower will at all times comply with all of the following covenants: 3.1 Corporate Existence and Authority. Borrower, if a corporation, is and will continue to be, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. Borrower is and will continue to be qualified and licensed to do business in all jurisdictions in which any failure to do so would have a material adverse effect on Borrower. The execution, delivery and performance by Borrower of this Agreement, and all other documents contemplated hereby (i) have been duly and validly authorized, (ii) are enforceable against Borrower in accordance with their terms (except as enforcement may be limited by equitable principles and by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors' rights generally), (iii) do not violate Borrower's articles or certificate of incorporation, or Borrower's by-laws, or any law or any material agreement or instrument which is binding upon Borrower or its property*, and (iv) do not constitute grounds for acceleration of any material indebtedness or obligation under any material agreement or instrument which is binding upon Borrower or its property. -1- Greyrock Capital Loan and Security Agreement - -------------------------------------------------------------------------------- *if such violation would have a material adverse effect on Borrower 3.2 Name; Trade Names and Styles. The name of Borrower set forth in the heading to this Agreement is its correct name. Listed on the Schedule are all prior names of Borrower and all of Borrower's present and prior trade names. Borrower shall give Greyrock 30 days' prior written notice before changing its name or doing business under any other name. Borrower has complied, and will in the future comply, with all laws relating to the conduct of business under a fictitious business name. 3.3 Place of Business; Location of Collateral. The address set forth in the heading to this Agreement is Borrower's chief executive office. In addition, Borrower has places of business and Collateral is located only at the locations set forth on the Schedule. Borrower will give Greyrock at least 30 days prior written notice before opening any additional place of business, changing its chief executive office, or moving any of the Collateral to a location other than Borrower's Address or one of the locations set forth on the Schedule. 3.4 Title to Collateral; Permitted Liens. Borrower is now, and will at all times in the future be, the sole owner of all the Collateral, except for items of Equipment which are leased by Borrower*. The Collateral now is and will remain free and clear of any and all liens, charges, security interests, encumbrances and adverse claims, except for Permitted Liens. Greyrock now has, and will continue to have, a first-priority perfected and enforceable security interest in all of the Collateral, subject only to the Permitted Liens, and Borrower will at all times defend Greyrock and the Collateral against all claims of others. So long as any Loan is outstanding which is a term loan, none of the Collateral now is or will be affixed to any real property in such a manner, or with such intent, as to become a fixture. Borrower is not and will not become a lessee under any real property lease pursuant to which the lessor may obtain any rights in any of the Collateral *** and no such lease now prohibits, restrains, impairs or will prohibit, restrain or impair Borrower's right to remove any Collateral from the leased premises. Whenever any Collateral is located upon premises in which any third party has an interest (whether as owner, mortgagee, beneficiary under a deed of trust, lien or otherwise), Borrower shall, whenever requested by Greyrock, use its best efforts to cause such third party to execute and deliver to Greyrock, in form acceptable to Greyrock, such waivers and subordinations as Greyrock shall specify, so as to ensure that Greyrock's rights in the Collateral are, and will continue to be, superior to the rights of any such third party. Borrower will keep in full force and effect, and will comply with all the terms of, any lease of real property where any of the Collateral now or in the future may be located**. *and interests in Collateral licensed by Borrower in the ordinary course of business **in each case in all material respects ***except for Permitted Liens 3.5 Maintenance of Collateral. Borrower will maintain the * Collateral in good working condition, ordinary wear and tear excepted, and Borrower will not use the Collateral for any unlawful purpose. Borrower will immediately advise Greyrock in writing of any material loss or damage to the Collateral. *all material tangible personal property 3.6 Books and Records. Borrower has maintained and will maintain at Borrower's Address complete and accurate books and records, comprising an accounting system in accordance with generally accepted accounting principles. 3.7 Financial Condition, Statements and Reports. All financial statements now or in the future delivered to Greyrock have been, and will be, prepared in conformity with generally accepted accounting principles and now and in the future will completely and fairly reflect the financial condition of Borrower, at the times and for the periods therein stated. Between the last date covered by any such statement provided to Greyrock and the date hereof, there has been no material adverse change in the financial condition or business of Borrower. Borrower is now and will continue to be solvent. 3.8 Tax Returns and Payments; Pension Contributions. Borrower has timely filed, and will timely file, all tax returns and reports required by applicable law, and Borrower has timely paid, and will timely pay, all applicable taxes, assessments, deposits and contributions now or in the future owed by Borrower. Borrower may, however, defer payment of any contested taxes, provided that Borrower (i) in good faith contests Borrower's obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (ii) notifies Greyrock in writing of the commencement of, and any material development in, the proceedings, and (iii) posts bonds or takes any other steps required to keep the contested taxes from becoming a lien upon any of the Collateral. Borrower is unaware of any claims or adjustments proposed for any of Borrower's prior tax years which could result in additional taxes becoming due and payable by Borrower. Borrower has paid, and shall continue to pay all amounts necessary to fund all present and future pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not and will not withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any such plan which could result in any liability of Borrower, including any liability to the Pension Benefit Guarantee Corporation or any other governmental agency. Borrower shall, at all times, maintain a separate payroll account which shall be used exclusively for payment of payroll and payroll taxes and other items related directly to payroll. 3.9 Compliance with Law. Borrower has complied, and will comply, in all material respects, with all provisions of all applicable laws and regulations, including, but not limited to, those relating to Borrower's ownership of real or personal property, the conduct and licensing of Borrower's business, and all environmental matters. 3.10 Litigation. Except as disclosed in the Schedule, there is no claim, suit, litigation, proceeding or investigation pending or (to best of Borrower's knowledge) threatened * by or against or affecting Borrower in any court or before any governmental agency (or any basis therefor known to Borrower) which may result, either separately or in the aggregate, in any material adverse change in the -2- Greyrock Capital Loan and Security Agreement - -------------------------------------------------------------------------------- financial condition or business of Borrower, or in any material impairment in the ability of Borrower to carry on its business in substantially the same manner as it is now being conducted. Borrower will promptly inform Greyrock in writing of any claim, proceeding, litigation or investigation in the future threatened or instituted by or against Borrower involving any single claim of ** or more, or involving *** or more in the aggregate. *in writing **$250,000 ***$500,000 3.11 Use of Proceeds. All proceeds of all Loans shall be used solely for lawful business purposes. 3.12 Year 2000 Compliance. The Borrower has (i) initiated a review and assessment of all areas within its and each of its subsidiaries' business and operations (including those affected by suppliers and vendors) that could be adversely affected by the "Year 2000 Problem" (that is, the risk that computer applications used by the Borrower or any of its subsidiaries (or its suppliers and vendors) may be unable to recognize and perform properly date-sensitive functions involving certain dates prior to and any date after December 31, 1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan in accordance with that timetable. The Borrower reasonably believes that all computer applications (including those of its suppliers and vendors) that are material to its or any of its subsidiaries' business and operations will on a timely basis be able to perform properly date-sensitive functions for all dates before and after January 1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a failure to do so could not reasonably be expected to have material adverse effect. The Borrower will promptly notify Greyrock in the event the Borrower discovers or determines that any computer application (including those of its suppliers and vendors) that is material to its or any of its subsidiaries' business and operations will not be Year 2000 compliant on a timely basis, except to the extent that such failure could not reasonably be expected to have a material adverse effect. 4. [OMITTED] 5. ADDITIONAL DUTIES OF THE BORROWER. 5.1 Insurance. Borrower shall, at all times, insure all of the tangible personal property Collateral and carry such other business insurance, with insurers reasonably acceptable to Greyrock, in such form and amounts as Greyrock may reasonably require, and Borrower shall provide evidence of such insurance to Greyrock, so that Greyrock is * satisfied that such insurance is, at all times, in full force and effect. All such insurance policies shall name Greyrock as an additional loss payee, and shall contain a lenders loss payee endorsement in form reasonably acceptable to Greyrock. Upon receipt of the proceeds of any such insurance, Greyrock shall ** Greyrock may require reasonable assurance that the insurance proceeds so released will be so used. If Borrower fails to provide or pay for any insurance, Greyrock may, but is not obligated to, obtain the same at Borrower's expense. Borrower shall promptly deliver to Greyrock copies of all reports made to insurance companies. *reasonably **release such proceeds to Borrower which shall be utilized by Borrower for the replacement of the Collateral with respect to which the insurance proceeds were paid 5.2 Reports. Borrower, at its expense, shall provide Greyrock with the written reports set forth in the Schedule, and such other written reports with respect to Borrower (including budgets, sales projections, operating plans and other financial documentation), as Greyrock shall from time to time reasonably specify . 5.3 Access to Collateral, Books and Records. At reasonable times, and on one business day's notice, Greyrock, or its agents, shall have the right to inspect the Collateral, and the right to audit and copy Borrower's books and records. Greyrock shall take reasonable steps to keep confidential all * information obtained in any such inspection or audit, but Greyrock shall have the right to disclose any such information to its auditors**, regulatory agencies***, and attorneys, and pursuant to any subpoena or other legal process. The foregoing inspections and audits shall be at Borrower's expense and the charge therefor shall be $600 per person per day (or such higher amount as shall represent Greyrock's then current standard charge for the same), plus reasonable out-of- pockets expenses. Borrower shall not be charged more than $3,000 per audit (plus reasonable out-of-pockets expenses), nor shall audits be done more frequently than four times per calendar year, provided that the foregoing limits shall not apply after the occurrence of a Default or Event of Default, nor shall they restrict Greyrock's right to conduct audits at its own expense (whether or not a Default or Event of Default has occurred). Borrower will not enter into any agreement with any accounting firm, service bureau or third party to store Borrower's books or records at any location other than Borrower's Address, without first obtaining Greyrock's written consent, which may be conditioned upon such accounting firm, service bureau or other third party agreeing to give Greyrock the same rights with respect to access to books and records and related rights as Greyrock has under this Agreement. *confidential **(who have agreed to keep such information confidential) ***which require disclosure of such information 5.4 Remittance of Proceeds. All proceeds arising from the sale or other disposition of any Collateral shall be delivered, in kind, by Borrower to Greyrock in the original form in which received by Borrower not later than the following business day after receipt by Borrower, to be applied to the Obligations in such order as Greyrock shall determine, except for the proceeds of the sale of obsolete or unneeded Equipment which is sold by Borrower in the ordinary course of business and the proceeds of which are utilized to acquire replacements for -3- Greyrock Capital Loan and Security Agreement - -------------------------------------------------------------------------------- such Equipment*. Except as permitted by the immediately preceding sentence, Borrower shall not commingle proceeds of Collateral with any of Borrower's other funds or property, and shall hold such proceeds separate and apart from such other funds and property and in an express trust for Greyrock. Nothing in this Section limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement. *; provided that, prior to the effective date of the conversion of the Loans to a Receivable Facility (as provided in Section 7(c) of the Schedule), Borrower may retain the proceeds of its Receivables arising from the sale of Inventory or the providing of services. 5.5 Negative Covenants. Except as may be permitted in the Schedule, Borrower shall not, without Greyrock's prior written consent, do any of the following: (i) merge or consolidate with another corporation or entity; (ii) acquire any assets, except in the ordinary course of business; (iii) enter into any other transaction outside the ordinary course of business; (iv) sell or transfer any Collateral, except that, Borrower may sell finished Inventory in the ordinary course of Borrower's business, and Borrower may sell or trade in Equipment in the ordinary course of business which is unneeded****; (v) store any Inventory or other Collateral with any warehouseman or other third party; (vi) sell any Inventory on a sale-or-return, guaranteed sale, consignment, or other contingent basis; (vii) make any loans of any money or other assets*; (viii) incur any debts, outside the ordinary course of business, which would have a material, adverse effect on Borrower or on the prospect of repayment of the Obligations; (ix) guarantee or otherwise become liable with respect to the obligations of another party or entity**; (x) pay or declare any dividends on Borrower's stock (except for dividends payable solely in stock of Borrower); (xi) redeem, retire, purchase or otherwise acquire, directly or indirectly, any of Borrower's stock***; (xii) make any change in Borrower's capital structure which would have a material adverse effect on Borrower or on the prospect of repayment of the Obligations; or (xiii) dissolve or elect to dissolve; or (xiv) agree to do any of the foregoing. *, except in the case of (a) loans to employees or consultants of the Borrower, in an amount in the aggregate not to exceed $250,000 at any time outstanding, and (b) loans by the Borrower to any of its Subsidiaries; provided that such loans are in the ordinary course of business **other than a subsidiary of Borrower *** except for redemption or purchase of stock owned by employees or consultants pursuant to any stock compensation plans approved by the Borrower's board of directors, provided the consideration paid therefor does not exceed $250,000 in the aggregate in any fiscal year of Borrower ****and Borrower may sell its Techno Systems unit and CRC Business Systems unit without Greyrock's prior written consent in good-faith arms' length transactions (provided no Event of Default or event which with notice or lapse of time would constitute an Event of Default has occurred and is continuing) 5.6 Litigation Cooperation. Should any third-party suit or proceeding be instituted by or against Greyrock with respect to any Collateral or in any manner relating to Borrower, Borrower shall, without expense to Greyrock, make available Borrower and its officers, employees and agents, and Borrower's books and records, without charge, to the extent that Greyrock may * deem them necessary in order to prosecute or defend any such suit or proceeding. *reasonably 5.7 Notification of Changes. Borrower will promptly notify Greyrock in writing of any change in its officers or directors, the opening of any new bank account or other deposit account, and any material adverse change in the business or financial affairs of Borrower. 5.8 Investment Property. Upon the request of Greyrock, Borrower shall deliver to Greyrock all certificated securities included in Investment Property, with all necessary endorsements, and obtain such account control agreements with securities intermediaries and take such other action with respect to any Investment Property, as Greyrock shall * request, in form and substance * satisfactory to Greyrock. Borrower shall have the right to retain all Investment Property payments and distributions, unless and until a Default or an Event of Default has occurred. If a Default or an Event of Default exists, Borrower shall hold all payments on, and proceeds of, and distributions with respect to, Investment Property in trust for Greyrock, and Borrower shall deliver all such payments, proceeds and distributions to Greyrock, immediately upon receipt, in their original form, duly endorsed, to be applied to the Obligations in such order as Greyrock shall determine. Upon the request of Greyrock, any such distributions and payments with respect to any Investment Property held in any securities account shall be held and retained in such securities account as part of the Collateral. *reasonably 5.9 Further Assurances. Borrower agrees, at its expense, on request by Greyrock, to execute all documents and take all actions, as Greyrock may deem reasonably necessary or useful in order to perfect and maintain Greyrock's perfected security interest in the Collateral, and in order to fully consummate the transactions contemplated by this Agreement. 5.10 Indemnity. Borrower hereby agrees to indemnify Greyrock and hold Greyrock harmless from and against any and all claims, debts, liabilities, demands, obligations, actions, causes of action, penalties, costs and expenses (including attorneys' fees), of every nature, character and description, which Greyrock may sustain or incur based upon or arising out of any of the Obligations, any actual or alleged failure to collect and pay over any withholding or other tax relating to Borrower or its employees, any relationship or agreement between Greyrock and Borrower, any actual or alleged failure of Greyrock to comply with any writ of attachment or other legal process relating to Borrower or any of its property, or any other matter, cause or thing whatsoever occurred, done, omitted or suffered to be done by Greyrock relating to Borrower or the Obligations (except any such amounts sustained or incurred as the result of the gross negligence or willful misconduct of Greyrock or any of its directors, officers, employees, agents, attorneys, or any other person -4- Greyrock Capital Loan and Security Agreement - -------------------------------------------------------------------------------- affiliated with or representing Greyrock). Notwithstanding any provision in this Agreement to the contrary, the indemnity agreement set forth in this Section shall survive any termination of this Agreement and shall for all purposes continue in full force and effect. 6. TERM. 6.1 Maturity Date. This Agreement shall continue in effect until the maturity date set forth on the Schedule (the Maturity Date); provided that the Maturity Date shall automatically be extended, and this Agreement shall automatically and continuously renew, for successive additional terms of one year each, unless one party gives written notice to the other, not less than sixty days prior to the next Maturity Date, that such party elects to terminate this Agreement effective on the next Maturity Date. 6.2 Early Termination. This Agreement may be terminated prior to the Maturity Date as follows: (i) by Borrower, effective three business days after written notice of termination is given to Greyrock; or (ii) by Greyrock at any time after the occurrence of an Event of Default, without notice, effective immediately. If this Agreement is terminated by Borrower or by Greyrock under this Section 6.2, Borrower shall pay to Greyrock a termination fee (the Termination Fee) in the amount shown on the Schedule. The Termination Fee shall be due and payable on the effective date of termination and thereafter shall bear interest at a rate equal to the highest rate applicable to any of the Obligations. 6.3 Payment of Obligations. On the Maturity Date or on any earlier effective date of termination, Borrower shall pay and perform in full all Obligations, whether evidenced by installment notes or otherwise, and whether or not all or any part of such Obligations are otherwise then due and payable. Without limiting the generality of the foregoing, if on the Maturity Date, or on any earlier effective date of termination, there are any outstanding letters of credit issued based upon an application, guarantee, indemnity or similar agreement on the part of Greyrock, then on such date Borrower shall provide to Greyrock cash collateral in an amount equal to 110% of the face amount of all such letters of credit plus all interest, fees and costs due or (in Greyrock's estimation) likely to become due in connection therewith, to secure all of the Obligations relating to said letters of credit, pursuant to Greyrock's then standard form cash pledge agreement. Notwithstanding any termination of this Agreement, all of Greyrock's security interests in all of the Collateral and all of the terms and provisions of this Agreement shall continue in full force and effect until all Obligations have been paid and performed in full; provided that, without limiting the fact that Loans are subject to the discretion of Greyrock, Greyrock may, in its sole discretion, refuse to make any further Loans after termination. No termination shall in any way affect or impair any right or remedy of Greyrock, nor shall any such termination relieve Borrower of any Obligation to Greyrock, until all of the Obligations have been paid and performed in full*. Upon payment and performance in full of all the Obligations ** and termination of this Agreement, Greyrock shall promptly deliver to Borrower termination statements, requests for reconveyances and such other documents as may be reasonably required to terminate Greyrock's security interests. *or cash collateral, in the case of letter of credit obligations, is provided pursuant to the preceding sentence **(except for contingent obligations to indemnify Greyrock or pay other unknown amounts in the future) 7. EVENTS OF DEFAULT AND REMEDIES. 7.1 Events of Default. The occurrence of any of the following events shall constitute an Event of Default under this Agreement, and Borrower shall give Greyrock immediate written notice thereof: (a) Any warranty, representation, statement, report or certificate made or delivered to Greyrock by Borrower or any of Borrower's officers, employees or agents, now or in the future, shall be untrue or misleading in a material respect; or (b) Borrower shall fail to pay when due any Loan or any interest thereon or any other monetary Obligation*; or (c) the total Loans and other Obligations outstanding at any time shall exceed the Credit Limit; or (d) Borrower shall fail to perform any non-monetary Obligation which by its nature cannot be cured; or (e) Borrower shall fail to perform any other non-monetary Obligation, which failure is not cured within ** days after the date performance is due; or (f) any levy, assessment, attachment, seizure, lien or encumbrance (other than a Permitted Lien) is made on all or any part of the Collateral which is not cured within 10 days after the occurrence of the same; or (g) any default or event of default occurs under any obligation secured by a Permitted Lien, which is not cured within any applicable cure period or waived in writing by the holder of the Permitted Lien; or (h) Borrower breaches any material contract or obligation, which has or may reasonably be expected to have a material adverse effect on Borrower's business or financial condition; or (i) dissolution, termination of existence, insolvency or business failure of Borrower or any Guarantor; or appointment of a receiver, trustee or custodian, for all or any part of the property of, assignment for the benefit of creditors by, or the commencement of any proceeding by Borrower or any Guarantor under any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, now or in the future in effect; or (j) the commencement of any proceeding against Borrower or any Guarantor under any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, now or in the future in effect, which is not cured by the dismissal thereof within 45 days after the date commenced; or (k) revocation or termination of, or limitation or denial of liability upon, any guaranty of the Obligations or any attempt to do any of the foregoing; or (l) revocation or termination of, or limitation or denial of liability upon, any pledge of any certificate of deposit, securities or other property or asset pledged by any third party to secure any or all of the Obligations, or any attempt to do any of the foregoing, or commencement of proceedings by or against any such third party under any bankruptcy or insolvency law; or (m) Borrower makes any payment on account of any indebtedness or obligation which has been subordinated to the Obligations other than as permitted in the applicable subordination agreement, or if any Person who has subordinated such indebtedness or obligations terminates or in any way limits or terminates its subordination agreement; -5- Greyrock Capital Loan and Security Agreement - -------------------------------------------------------------------------------- or (o) Borrower shall generally not pay its debts as they become due, or Borrower shall conceal, remove or transfer any part of its property, with intent to hinder, delay or defraud its creditors, or make or suffer any transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or (p) there shall be a material adverse change in Borrower's business or financial condition. Greyrock may cease making any Loans hereunder during any of the above cure periods, and thereafter if an Event of Default has occurred. *within five days of its respective due date **10 7.2 Remedies. Upon the occurrence and during the continuance of any Event of Default, and at any time thereafter, Greyrock, at its option, and without notice or demand of any kind (all of which are hereby expressly waived by Borrower), may do any one or more of the following: (a) Cease making Loans or otherwise extending credit to Borrower under this Agreement or any other document or agreement; (b) Accelerate and declare all or any part of the Obligations to be immediately due, payable, and performable, notwithstanding any deferred or installment payments allowed by any instrument evidencing or relating to any Obligation; (c) Take possession of any or all of the Collateral wherever it may be found, and for that purpose Borrower hereby authorizes Greyrock without judicial process to enter onto any of Borrower's premises without interference to search for, take possession of, keep, store, or remove any of the Collateral, and remain on the premises or cause a custodian to remain on the premises in exclusive control thereof, without charge for so long as Greyrock deems it reasonably necessary in order to complete the enforcement of its rights under this Agreement or any other agreement; provided, however, that should Greyrock seek to take possession of any of the Collateral by Court process, Borrower hereby irrevocably waives: (i) any bond and any surety or security relating thereto required by any statute, court rule or otherwise as an incident to such possession; (ii) any demand for possession prior to the commencement of any suit or action to recover possession thereof; and (iii) any requirement that Greyrock retain possession of, and not dispose of, any such Collateral until after trial or final judgment; (d) Require Borrower to assemble any or all of the Collateral and make it available to Greyrock at places designated by Greyrock which are reasonably convenient to Greyrock and Borrower, and to remove the Collateral to such locations as Greyrock may deem advisable; (e) Complete the processing, manufacturing or repair of any Collateral prior to a disposition thereof and, for such purpose and for the purpose of removal, Greyrock shall have the right to use Borrower's premises, vehicles, hoists, lifts, cranes, equipment and all other property without charge; (f) Collect, receive, dispose of and realize upon any Investment Property, including withdrawal of any and all funds from any securities accounts; (g) Sell, lease or otherwise dispose of any of the Collateral, in its condition at the time Greyrock obtains possession of it or after further manufacturing, processing or repair, at one or more public and/or private sales, in lots or in bulk, for cash, exchange or other property, or on credit, and to adjourn any such sale from time to time without notice other than oral announcement at the time scheduled for sale. Greyrock shall have the right to conduct such disposition on Borrower's premises without charge, for such time or times as Greyrock deems reasonable, or on Greyrock's premises, or elsewhere and the Collateral need not be located at the place of disposition. Greyrock may directly or through any affiliated company purchase or lease any Collateral at any such public disposition, and if permissible under applicable law, at any private disposition. Any sale or other disposition of Collateral shall not relieve Borrower of any liability Borrower may have if any Collateral is defective as to title or physical condition or otherwise at the time of sale; (h) Demand payment of, and collect any Receivables and General Intangibles comprising Collateral and, in connection therewith, Borrower irrevocably authorizes Greyrock to endorse or sign Borrower's name on all collections, receipts, instruments and other documents, to take possession of and open mail addressed to Borrower and remove therefrom payments made with respect to any item of the Collateral or proceeds thereof, and, in Greyrock's sole discretion, to grant extensions of time to pay, compromise claims and settle Receivables, General Intangibles and the like for less than face value; and (i) Demand and receive possession of any of Borrower's federal and state income tax returns and the books and records utilized in the preparation thereof or referring thereto. Borrower recognizes that Greyrock may be unable to make a public sale of any or all of the Investment Property, by reasons of prohibitions contained in applicable securities laws or otherwise, and expressly agrees that a private sale to a restricted group of purchasers for investment and not with a view to any distribution thereof shall be considered a commercially reasonable sale. All reasonable attorneys' fees, expenses, costs, liabilities and obligations incurred by Greyrock with respect to the foregoing shall be added to and become part of the Obligations, shall be due on demand, and shall bear interest at a rate equal to the highest interest rate applicable to any of the Obligations. 7.3 Standards for Determining Commercial Reasonableness. Borrower and Greyrock agree that a sale or other disposition (collectively, sale) of any Collateral which complies with the following standards will conclusively be deemed to be commercially reasonable: (i) Notice of the sale is given to Borrower at least seven days prior to the sale, and, in the case of a public sale, notice of the sale is published at least seven days before the sale in a newspaper of general circulation in the county where the sale is to be conducted; (ii) Notice of the sale describes the collateral in general, non- specific terms; (iii) The sale is conducted at a place designated by Greyrock*, with or without the Collateral being present; (iv) The sale commences at any time between 8:00 a.m. and 6:00 p.m; (v) Payment of the purchase price in cash or by cashier's check or wire transfer is required; (vi) With respect to any sale of any of the Collateral, Greyrock may (but is not obligated to) direct any prospective purchaser to ascertain directly from Borrower any and all information concerning the same. Greyrock shall be free to employ other methods of noticing and selling the Collateral, in its discretion, if they are commercially reasonable. *in the State of California -6- Greyrock Capital Loan and Security Agreement - -------------------------------------------------------------------------------- 7.4 Power of Attorney. Upon the occurrence and during the continuance of any Event of Default, without limiting Greyrock's other rights and remedies, Borrower grants to Greyrock an irrevocable power of attorney coupled with an interest, authorizing and permitting Greyrock (acting through any of its employees, attorneys or agents) at any time, at its option, but without obligation, with or without notice to Borrower, and at Borrower's expense, to do any or all of the following, in Borrower's name or otherwise, but Greyrock agrees to exercise the following powers in a commercially reasonable manner: (a) Execute on behalf of Borrower any documents that Greyrock may, in its sole discretion, deem advisable in order to perfect and maintain Greyrock's security interest in the Collateral, or in order to exercise a right of Borrower or Greyrock, or in order to fully consummate all the transactions contemplated under this Agreement, and all other present and future agreements; (b) Execute on behalf of Borrower any document exercising, transferring or assigning any option to purchase, sell or otherwise dispose of or to lease (as lessor or lessee) any real or personal property which is part of Greyrock's Collateral or in which Greyrock has an interest; (c) Execute on behalf of Borrower, any invoices relating to any Receivable, any draft against any Account Debtor and any notice to any Account Debtor, any proof of claim in bankruptcy, any Notice of Lien, claim of mechanic's, materialman's or other lien, or assignment or satisfaction of mechanic's, materialman's or other lien; (d) Take control in any manner of any cash or non-cash items of payment or proceeds of Collateral; endorse the name of Borrower upon any instruments, or documents, evidence of payment or Collateral that may come into Greyrock's possession; (e) Endorse all checks and other forms of remittances received by Greyrock; (f) Pay, contest or settle any lien, charge, encumbrance, security interest and adverse claim in or to any of the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; (g) Grant extensions of time to pay, compromise claims and settle Receivables and General Intangibles for less than face value and execute all releases and other documents in connection therewith; (h) Pay any sums required on account of Borrower's taxes or to secure the release of any liens therefor, or both; (i) Settle and adjust, and give releases of, any insurance claim that relates to any of the Collateral and obtain payment therefor; (j) Instruct any third party having custody or control of any books or records belonging to, or relating to, Borrower to give Greyrock the same rights of access and other rights with respect thereto as Greyrock has under this Agreement; (k) Execute and deliver to any securities intermediary or other Person any entitlement order, account control agreement or other notice, document or instrument with respect to any Investment Property, and (l) Take any action or pay any sum required of Borrower pursuant to this Agreement and any other present or future agreements. Any and all reasonable sums paid and any and all reasonable costs, expenses, liabilities, obligations and reasonable attorneys' fees incurred by Greyrock with respect to the foregoing shall be added to and become part of the Obligations, shall be payable on demand, and shall bear interest at a rate equal to the highest interest rate applicable to any of the Obligations. In no event shall Greyrock's rights under the foregoing power of attorney or any of Greyrock's other rights under this Agreement be deemed to indicate that Greyrock is in control of the business, management or properties of Borrower. 7.5 Application of Proceeds. All proceeds realized as the result of any sale or other disposition of the Collateral shall be applied by Greyrock first to the reasonable costs, expenses, liabilities, obligations and attorneys' fees incurred by Greyrock in the exercise of its rights under this Agreement, second to the interest due upon any of the Obligations, and third to the principal of the Obligations, in such order as Greyrock shall determine in its sole discretion. Any surplus shall be paid to Borrower or other persons legally entitled thereto; Borrower shall remain liable to Greyrock for any deficiency. If Greyrock, in its sole discretion, directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Greyrock shall have the option, exercisable at any time, in its sole discretion, of either reducing the Obligations by the principal amount of purchase price or deferring the reduction of the Obligations until the actual receipt by Greyrock of the cash therefor. 7.6 Remedies Cumulative. In addition to the rights and remedies set forth in this Agreement, Greyrock shall have all the other rights and remedies accorded a secured party under the California Uniform Commercial Code and under all other applicable laws, and under any other instrument or agreement now or in the future entered into between Greyrock and Borrower, and all of such rights and remedies are cumulative and none is exclusive. Exercise or partial exercise by Greyrock of one or more of its rights or remedies shall not be deemed an election, nor bar Greyrock from subsequent exercise or partial exercise of any other rights or remedies. The failure or delay of Greyrock to exercise any rights or remedies shall not operate as a waiver thereof, but all rights and remedies shall continue in full force and effect until all of the Obligations have been fully paid and performed. 8. DEFINITIONS. As used in this Agreement, the following terms have the following meanings: Account Debtor means the obligor on a Receivable. -------------- Affiliate means, with respect to any Person, a relative, partner, shareholder, --------- director, officer, or employee of such Person, or any parent or subsidiary of such Person, or any Person controlling, controlled by or under common control with such Person. Agreement and this Agreement means this Loan and Security Agreement and all --------- -------------- modifications and amendments thereto, extensions thereof, and replacements therefor. Business Day means a day on which Greyrock is open for business. ------------ Code means the Uniform Commercial Code as adopted and in effect in the State ---- of California from time to time. Collateral has the meaning set forth in Section 2.1 above. ---------- Default means any event which with notice or passage of time or both, would ------- constitute an Event of Default. Deposit Account has the meaning set forth in Section 9105 of the Code. --------------- -7- Greyrock Capital Loan and Security Agreement - -------------------------------------------------------------------------------- Equipment means all of Borrower's present and hereafter acquired machinery, --------- molds, machine tools, motors, furniture, equipment, furnishings, fixtures, trade fixtures, motor vehicles, tools, parts, dyes, jigs, goods and other tangible personal property (other than Inventory) of every kind and description used in Borrower's operations or owned by Borrower and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions or improvements to any of the foregoing, wherever located. Event of Default means any of the events set forth in Section 7.1 of this ---------------- Agreement. General Intangibles means all general intangibles of Borrower, whether now ------------------- owned or hereafter created or acquired by Borrower, including, without limitation, all choses in action, causes of action, corporate or other business records, Deposit Accounts, inventions, designs, drawings, blueprints, patents, patent applications, trademarks and the goodwill of the business symbolized thereby, names, trade names, trade secrets, goodwill, copyrights, registrations, licenses, franchises, customer lists, security and other deposits, rights in all litigation presently or hereafter pending for any cause or claim (whether in contract, tort or otherwise), and all judgments now or hereafter arising therefrom, all claims of Borrower against Greyrock, rights to purchase or sell real or personal property, rights as a licensor or licensee of any kind, royalties, telephone numbers, proprietary information, purchase orders, and all insurance policies and claims (including life insurance, key man insurance, credit insurance, liability insurance, property insurance and other insurance), tax refunds and claims, computer programs, discs, tapes and tape files, claims under guaranties, security interests or other security held by or granted to Borrower, all rights to indemnification and all other intangible property of every kind and nature (other than Receivables). Guarantor means any Person who has guaranteed any of the Obligations. --------- Inventory means all of Borrower's now owned and hereafter acquired goods, --------- merchandise or other personal property, wherever located, to be furnished under any contract of service or held for sale or lease (including all raw materials, work in process, finished goods and goods in transit), and all materials and supplies of every kind, nature and description which are or might be used or consumed in Borrower's business or used in connection with the manufacture, packing, shipping, advertising, selling or finishing of such goods, merchandise or other personal property, and all warehouse receipts, documents of title and other documents representing any of the foregoing. Investment Property means any and all investment property of Borrower, ------------------- including all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, and whether now existing or hereafter acquired or arising. Obligations means all present and future Loans, advances, debts, liabilities, ----------- obligations, guaranties, covenants, duties and indebtedness at any time owing by Borrower to Greyrock, whether * this Agreement or any note or other instrument or document, whether arising from an extension of credit, opening of a letter of credit, banker's acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect (including, without limitation, those acquired by assignment and any participation by Greyrock in Borrower's debts owing to others), absolute or contingent, due or to become due, including, without limitation, all interest, charges, expenses, fees, attorney's fees, expert witness fees, audit fees, letter of credit fees, loan fees, termination fees, minimum interest charges and any other sums chargeable to Borrower under this Agreement or under any other present or future instrument or agreement between Borrower and Greyrock. *arising under Permitted Liens means the following: (i) purchase money security interests in --------------- specific items of Equipment; (ii) leases of specific items of Equipment; (iii) liens for taxes not yet payable; (iv) additional security interests and liens which are subordinate to the security interest in favor of Greyrock and are consented to in writing by Greyrock (which consent shall be a matter of Greyrock's sole discretion); (v) security interests being terminated substantially concurrently with this Agreement; (vi) liens of materialmen, mechanics, warehousemen, carriers, or other similar liens arising in the ordinary course of business and securing obligations which are not delinquent; (vii) liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by liens of the type described above in clauses (i) or (ii) above, provided that any extension, renewal or replacement lien is limited to the property encumbered by the existing lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase; (viii) Liens in favor of customs and revenue authorities which secure payment of customs duties in connection with the importation of goods*. Greyrock will have the right to require, as a condition to its consent under subparagraph (iv) above, that the holder of the additional security interest or lien sign an intercreditor agreement on Greyrock's then standard form, acknowledge that the security interest is subordinate to the security interest in favor of Greyrock, and agree not to take any action to enforce its subordinate security interest so long as any Obligations remain outstanding, and that Borrower agree that any uncured default in any obligation secured by the subordinate security interest shall also constitute an Event of Default under this Agreement. *(ix) interests of third parties under non-exclusive licenses granted by Borrower in the ordinary course of business, (x) Liens created by the Borrower depositing with one or more issuing banks cash collateral in an amount not to exceed $4,000,000 at any one time to secure one or more letters of credit, (xi) statutory landlord liens, provided that there is no default under the lease giving rise to the lien (taking into account any cure period provided therein) Person means any individual, sole proprietorship, partnership, joint venture, ------ trust, unincorporated organization, association, corporation, government, or any agency or political division thereof, or any other entity. Receivables means all of Borrower's now owned and hereafter acquired accounts ----------- (whether or not earned by performance), letters of credit, contract rights, chattel paper, instruments, documents and all other forms of -8- Greyrock Capital Loan and Security Agreement - -------------------------------------------------------------------------------- obligations at any time owing to Borrower, all guaranties and other security therefor, all merchandise returned to or repossessed by Borrower, and all rights of stoppage in transit and all other rights or remedies of an unpaid vendor, lienor or secured party. Other Terms. All accounting terms used in this Agreement, unless otherwise ----------- indicated, shall have the meanings given to such terms in accordance with generally accepted accounting principles, consistently applied. All other terms contained in this Agreement, unless otherwise indicated, shall have the meanings provided by the Code, to the extent such terms are defined therein. 9.GENERAL PROVISIONS. 9.1 Interest Computation. In computing interest on the Obligations, all checks, wire transfers and other items of payment received by Greyrock (including proceeds of Receivables and payment of the Obligations in full) shall be deemed applied by Greyrock on account of the Obligations three Business Days after receipt by Greyrock of immediately available funds*. Greyrock shall not, however, be required to credit Borrower's account for the amount of any item of payment which is unsatisfactory to Greyrock in its discretion, and Greyrock may charge Borrower's Loan account for the amount of any item of payment which is returned to Greyrock unpaid. *provided that principal payments on the Term Loan shall be applied thereto on the date of receipt by Greyrock of immediately available funds, if such funds are received before 10:00 AM Pacific time, or on the next Business Day, if such funds are received after 10:00 AM Pacific time 9.2 Application of Payments. All payments with respect to the Obligations may be applied, and in Greyrock's sole discretion reversed and re-applied, to the Obligations, in such order and manner as Greyrock shall determine in its sole discretion. 9.3 Charges to Account. Greyrock may, in its discretion, require that Borrower pay monetary Obligations in cash to Greyrock, or charge them to Borrower's Loan account, in which event they will bear interest at the same rate applicable to the Loans. 9.4 Monthly Accountings. Greyrock shall provide Borrower monthly with an account of advances, charges, expenses and payments made pursuant to this Agreement. Such account shall be deemed correct, accurate and binding on Borrower and an account stated (except for reverses and reapplications of payments made and corrections of errors discovered by Greyrock), unless Borrower notifies Greyrock in writing to the contrary within sixty days after each account is rendered, describing the nature of any alleged errors or admissions. 9.5 Notices. All notices to be given under this Agreement shall be in writing and shall be given either personally or by reputable private delivery service or by regular first-class mail, or certified mail return receipt requested, or by fax, addressed to Greyrock or Borrower at the addresses shown in the heading to this Agreement, or at any other address designated in writing by one party to the other party. All notices shall be deemed to have been given upon delivery in the case of notices personally delivered, or at the expiration of one Business Day following delivery to the private delivery service, or two business days following the deposit thereof in the United States mail, with postage prepaid, or on transmission and receipt thereof in the case of notices given by fax. 9.6 Severability. Should any provision of this Agreement be held by any court of competent jurisdiction to be void or unenforceable, such defect shall not affect the remainder of this Agreement, which shall continue in full force and effect. 9.7 Integration. This Agreement and such other written agreements, documents and instruments as may be executed in connection herewith are the final, entire and compl ete agreement between Borrower and Greyrock and supersede all prior and contemporaneous negotiations and oral representations and agreements, all of which are merged and integrated in this Agreement. There ----- are no oral understandings, representations or agreements between the parties - ----------------------------------------------------------------------------- which are not set forth in this Agreement or in other written agreements signed - ------------------------------------------------------------------------------- by the parties in connection herewith. - ------------------------------------- 9.8 Waivers. The failure of Greyrock at any time or times to require Borrower to strictly comply with any of the provisions of this Agreement or any other present or future agreement between Borrower and Greyrock shall not waive or diminish any right of Greyrock later to demand and receive strict compliance therewith. Any waiver of any default shall not waive or affect any other default, whether prior or subsequent, and whether or not similar. None of the provisions of this Agreement or any other agreement now or in the future executed by Borrower and delivered to Greyrock shall be deemed to have been waived by any act or knowledge of Greyrock or its agents or employees, but only by a specific written waiver signed by an authorized officer of Greyrock and delivered to Borrower. Borrower waives demand, protest, notice of protest and notice of default or dishonor, notice of payment and nonpayment, release, compromise, settlement, extension or renewal of any commercial paper, instrument, account, General Intangible, document or guaranty at any time held by Greyrock on which Borrower is or may in any way be liable, and notice of any action taken by Greyrock, unless expressly required by this Agreement. 9.9 Amendment. The terms and provisions of this Agreement may not be waived or amended, except in a writing executed by Borrower and a duly authorized officer of Greyrock. 9.10 Time of Essence. Time is of the essence in the performance by Borrower of each and every obligation under this Agreement. 9.11 Attorneys Fees and Costs. Borrower shall reimburse Greyrock for all reasonable attorneys' fees and all filing, recording, search, title insurance, appraisal, audit, and other reasonable costs incurred by Greyrock, pursuant to, or in connection with, or relating to this Agreement (whether or not a lawsuit is filed), including, but not limited to, any reasonable attorneys' fees and costs Greyrock incurs in order to do the following: prepare and negotiate this Agreement and the documents relating to this Agreement; obtain legal advice in connection with this Agreement or Borrower; enforce, or seek to enforce, any of its rights; prosecute actions against, or defend actions by, Account Debtors; commence, intervene in, or defend any action or proceeding; initiate any complaint to be relieved of the automatic stay in bankruptcy; file or -9- Greyrock Capital Loan and Security Agreement - -------------------------------------------------------------------------------- prosecute any probate claim, bankruptcy claim, third-party claim, or other claim; examine, audit, copy, and inspect any of the Collateral or any of Borrower's books and records; protect, obtain possession of, lease, dispose of, or otherwise enforce Greyrock's security interest in, the Collateral; and otherwise represent Greyrock in any litigation relating to Borrower. If either Greyrock or Borrower files any lawsuit against the other predicated on a breach of this Agreement, the prevailing party in such action shall be entitled to recover its reasonable costs and attorneys' fees, including (but not limited to) reasonable attorneys' fees and costs incurred in the enforcement of, execution upon or defense of any order, decree, award or judgment. All attorneys' fees and costs to which Greyrock may be entitled pursuant to this Paragraph shall immediately become part of Borrower's Obligations, shall be due on demand, and shall bear interest at a rate equal to the highest interest rate applicable to any of the Obligations. 9.12 Benefit of Agreement. The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors, assigns, heirs, beneficiaries and representatives of Borrower and Greyrock; provided, however, that Borrower may not assign or transfer any of its rights under this Agreement without the prior written consent of Greyrock, and any prohibited assignment shall be void. No consent by Greyrock to any assignment shall release Borrower from its liability for the Obligations. 9.13 Joint and Several Liability. If Borrower consists of more than one Person, their liability shall be joint and several, and the compromise of any claim with, or the release of, any Borrower shall not constitute a compromise with, or a release of, any other Borrower. 9.14 Limitation of Actions. Any claim or cause of action by Borrower against Greyrock, its directors, officers, employees, agents, accountants or attorneys, based upon, arising from, or relating to this Loan Agreement, or any other present or future document or agreement, or any other transaction contemplated hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever, occurred, done, omitted or suffered to be done by Greyrock, its directors, officers, employees, agents, accountants or attorneys*, shall be barred unless asserted by Borrower by the commencement of an action or proceeding in a court of competent jurisdiction by the filing of a complaint within one year after the first act, occurrence or omission upon which such claim or cause of action, or any part thereof, is based, and the service of a summons and complaint on an officer of Greyrock, or on any other person authorized to accept service on behalf of Greyrock, within thirty (30) days thereafter. Borrower agrees that such one-year period is a reasonable and sufficient time for Borrower to investigate and act upon any such claim or cause of action. The one-year period provided herein shall not be waived, tolled, or extended except by the written consent of Greyrock in its sole discretion. This provision shall survive any termination of this Loan Agreement or any other present or future agreement. *in connection herewith or therewith 9.15 Paragraph Headings; Construction. Paragraph headings are only used in this Agreement for convenience. Borrower and Greyrock acknowledge that the headings may not describe completely the subject matter of the applicable paragraph, and the headings shall not be used in any manner to construe, limit, define or interpret any term or provision of this Agreement. The term "including", whenever used in this Agreement, shall mean "including (but not limited to)". This Agreement has been fully reviewed and negotiated between the parties and no uncertainty or ambiguity in any term or provision of this Agreement shall be construed strictly against Greyrock or Borrower under any rule of construction or otherwise. 9.16 Governing Law; Jurisdiction; Venue. This Agreement and all acts and transactions hereunder and all rights and obligations of Greyrock and Borrower shall be governed by the laws of the State of California. As a material part of the consideration to Greyrock to enter into this Agreement, Borrower (i) agrees that all actions and proceedings relating directly or indirectly to this Agreement shall, at Greyrock's option, be litigated in courts located within California, and that the exclusive venue therefor shall be Los Angeles County; (ii) consents to the jurisdiction and venue of any such court and consents to service of process in any such action or proceeding by personal delivery or any other method permitted by law; and (iii) waives any and all rights Borrower may have to object to the jurisdiction of any such court, or to transfer or change the venue of any such action or proceeding. 9.17 Mutual Waiver of Jury Trial. BORROWER AND GREYROCK EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN GREYROCK AND BORROWER, OR ANY CONDUCT, ACTS OR OMISSIONS OF GREYROCK OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH GREYROCK OR BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. Borrower: P-COM, INC. By /s/ Robert E. Collins ------------------------------- Vice President Greyrock: GREYROCK CAPITAL, a Division of Banc of America Commercial Finance Corporation By /s/ Lisa Nagano -------------------------------- Title Senior Vice President ----------------------------- Version -2 -10- [LOGO OF GREYROCK CAPITAL] Schedule to Loan and Security Agreement Borrower: P-Com, Inc. Address: 3175 S. Winchester Blvd. Campbell, California 95008 Date: January 14, 2000 This Schedule is an integral part of the Loan and Security Agreement between Greyrock Capital, a Division of Banc of America Commercial Finance Corporation (Greyrock) and the above-borrower (Borrower) of even date. ================================================================================ 1. CREDIT LIMIT (Section 1.1): An amount not to exceed $12,000,000 at any one time outstanding. The Loans will initially be made as a term loan (the "Term Loan"), in one disbursement. The principal amount of the Term Loan will be payable on termination of this Agreement, except as otherwise provided herein. The Term Loan may be pre-paid, in whole or in part, without premium or penalty; provided that if the Term Loan is pre-paid in whole or in part prior to the exercise of the Greyrock Option provided for in Section 7(c) below, then Greyrock may retain the Warrants, regardless of which Greyrock Option is selected. Amounts of the Term Loan that are prepaid may not be reborrowed. The Term Loan may be converted to a revolving Receivable Facility as provided in Section 7(c) below. ================================================================================ 2. INTEREST. Interest Rate (Section 1.2): A rate equal to the "Prime Rate" plus 2% per annum, calculated on the basis of a 360-day year for the actual number of days elapsed, provided that the interest rate in effect in each month shall not be less than 8% per annum, regardless of the amount of the Obligations outstanding. The interest rate applicable to all Loans shall be adjusted monthly as of the first day of each month, and the interest to be charged for each month shall be based on the highest "Prime Rate" in effect during said month. "Prime Rate" means the announced "Prime Greyrock Capital Schedule to Loan and Security Agreement - -------------------------------------------------------------------------------- Rate" or the substitute therefor of the Bank of America N.A. (or its successor) whether or not that rate is the lowest interest rate charged by said bank. If the Prime Rate, as defined, is unavailable, "Prime Rate" shall mean the highest of the prime rates published in the Wall Street Journal on the first business day of the month, as the base rate on corporate loans at large U.S. money center commercial banks. ================================================================================ 3. FEES (Section 1.3/Section 6.2): Loan Fee: $120,000, payable concurrently herewith. Termination Fee: None. NSF Check Charge: $15.00 per item. Wire Transfers: $15.00 per transfer. ================================================================================ 4. MATURITY DATE (Section 6.1): January 31, 2001, subject to automatic renewal as provided in Section 6.1 above, and early termination as provided in Section 6.2 above. ================================================================================ 5. REPORTING. (Section 5.2): Borrower shall provide Greyrock with the following: 1. Annual financial statements, as soon as available, and in any event within 90 days following the end of Borrower's fiscal year, certified by independent certified public accountants acceptable to Greyrock. 2. Quarterly unaudited financial statements, as soon as available, and in any event within 45 days after the end of each fiscal quarter of Borrower. 3. Monthly unaudited financial statements, as soon as available, and in any event within 30 days after the end of each month. ================================================================================ 6. BORROWER INFORMATION: Prior Names of Borrower (Section 3.2): None Prior Trade Names of Borrower (Section 3.2): None Existing Trade Names of Borrower (Section 3.2): None -2- Greyrock Capital Schedule to Loan and Security Agreement - -------------------------------------------------------------------------------- Other Locations and Addresses (Section 3.3): See Exhibit A hereto Material Adverse Litigation (Section 3.10): None ================================================================================ 7. ADDITIONAL PROVISIONS: (a) Conditions. The making of the initial Loan and subsequent Loans hereunder is subject to the following additional conditions precedent: (1) Additional Equity Investment Borrower shall have received $43,000,000 in cash proceeds from the issuance by Borrower of its equity securities, within two Business Days after the date hereof and concurrently with or prior to the initial Loan hereunder, and Borrower shall provide evidence of the same to Greyrock, reasonably satisfactory to Greyrock. (2) Cash Collateral. Borrower shall provide to Greyrock cash collateral in the amount of $6,000,000 (the "Cash Collateral") which shall constitute "Collateral" for all purposes of this Agreement. The Cash Collateral may, in the discretion of Greyrock, be provided by Greyrock withholding said sum from the proceeds of the Loans made pursuant hereto. The Cash Collateral need not be maintained in a separate account. The Cash Collateral shall bear interest at a rate equal to the Prime Rate minus 3% per annum, computed on the basis of a 360-day year. Provided no Event of Default or event which with notice or lapse of time would constitute an Event of Default has occurred and is continuing, accrued interest on the Cash Collateral shall be paid to Borrower monthly, or, in the discretion of Greyrock, applied to the outstanding Loans and other Obligations. (b) Warrants. The Borrower shall provide Greyrock with three-year warrants to purchase 200,000 shares of common stock of the Borrower, on the terms set forth in the Warrant to Purchase Stock and related documents being executed concurrently with this Agreement, at $5.71 per share (the "Warrants"). The Warrants shall contain such terms and provisions as Borrower and Greyrock shall agree, and the Warrant shall be issued in the form of two separate Warrants, one issued to Greyrock with respect to 120,000 shares, and one issued to Greyrock's participant, Silicon Valley Bank ("Silicon"), with respect to the remaining 80,000 shares.. In addition, concurrently, Borrower and Greyrock and Silicon Valley Bank shall enter into an Anti-Dilution Agreement and Registration Rights Agreement in such form as Borrower and Greyrock shall agree. The Warrants shall be deemed fully earned on the date hereof, shall be in addition to all interest and other fees, and shall be non-refundable, except as provided in Section 7(c) below, provided that, in the event this Agreement is terminated for any reason prior to the exercise of the Greyrock Option, Greyrock and Silicon shall have the right to retain the Warrants. Greyrock represents that it is acquiring the Warrant for its own account and not with a view to the distribution thereof. Greyrock further represents that it is an accredited investor within the meaning of Rule 501(a) promulgated under the Securities Act of 1933 (the "Securities Act"). Greyrock understands that the Warrant has not been registered under the Securities Act or any state securities laws. Greyrock understands further that the Warrant will be acquired for investment and may not be sold, pledged or otherwise transferred without an effective registration statement thereof under the Securities Act and any applicable state securities laws or pursuant to Rule 144 or an opinion of counsel reasonably satisfactory to the Company and its counsel that such registration is not required. -3- Greyrock Capital Schedule to Loan and Security Agreement - -------------------------------------------------------------------------------- (c) Option to Convert to Receivable Facility. (1) Initial Review. During the 60-day period commencing on the date hereof, Greyrock shall have the right to complete its audits and investigations with respect to the Borrower and its business, in order to enable Greyrock to decide whether to convert the Loan facility to a Receivable Facility as provided below. The Borrower shall cooperate in said audits and investigations and shall provide such information and documentation in connection therewith as Greyrock shall reasonably request. (2) Option to Convert to Receivable Facility. Within 60 days after the date hereof, Greyrock shall have the option (the "Greyrock Option") of doing either of the following: (i) releasing the Cash Collateral to Borrower and converting the Loans to an account receivable loan facility (the "Receivable Facility") as provided below (the "Receivable Facility Option"); or (ii) retaining the Cash Collateral as Collateral and releasing its and Silicon's interest in the Warrants (the "Warrant Release Option"). Greyrock shall exercise said option by giving written notice to the Borrower within said 60-day period as to whether Greyrock elects the Receivable Facility Option or the Warrant Release Option. If Greyrock fails to give such written notice, Greyrock shall be deemed to have exercised the Warrant Release Option. The date on which Greyrock gives written notice to Borrower as to which option it selects is referred to herein as the Option Effective Date. (3) Warrant Release Option. If Greyrock elects the Warrant Release Option, Greyrock shall, upon written request of Borrower, execute and deliver, and cause Silicon to execute and deliver, such documents as Borrower shall reasonably specify in order to release their interest in the Warrants. (4) Receivable Facility Option. If Greyrock elects the Receivable Facility Option, then the following shall occur: (A) Release of Cash Collateral. Greyrock shall, within said 60-day period, release the Cash Collateral by wiring the same to such account as the Borrower shall specify in written instructions to Greyrock. (B) Credit Limit. Effective on the Option Effective Date, the Credit Limit shall be modified to be the following: The lesser of (i) $12,000,000 or (ii) 85% of the amount of Borrower's Eligible Receivables (as defined in Exhibit A hereto). In the event, on the Option Effective Date, the total Obligations exceed the Credit Limit, Borrower shall pay the excess to Greyrock immediately, without notice or demand, and without limiting the foregoing, Greyrock may, in its discretion apply the Cash Collateral to any such excess and release the remaining Cash Collateral to Borrower as provided in Section 7(c)(4)(A) above. (C) Receivable Provisions. Effective on the Option Effective Date and thereafter, the provisions of Exhibit A hereto shall be effective. (5) Legal Opinion Post-Closing. Within 20 days after the date hereof, Borrower shall provide to Greyrock an opinion of Borrower's counsel with respect to the due execution and delivery of this Agreement and the -4- Greyrock Capital Schedule to Loan and Security Agreement - -------------------------------------------------------------------------------- related documents and agreements, the due incorporation, valid existence and good-standing of Borrower, its corporate power and authority to enter into and perform its obligations under this Agreement and the related documents and agreements, and such other matters as Greyrock shall reasonably request. (6) Subsidiary Guarantees Post-Closing. Within 60 days after the date hereof (and in any event if Greyrock exercises the Receivable Facility Option, within 10 days after the Option Effective Date), Borrower shall cause each of its U.S. subsidiaries to execute and deliver to Greyrock (i) Continuing Guarantees with respect to the Obligations, on Greyrock's standard form, (ii) Security Agreements granting Greyrock a first-priority security interest in all of their assets (subject to "Permitted Liens" defined in the same manner as under this Agreement), on substantially the same terms as the provisions of this Agreement, (iii) all such documents relating thereto as Greyrock shall reasonably request, including without limitation UCC-1 financing statements, intellectual property filings, and certified resolutions. (7) Other Provisions Not Limited. Nothing in this Section 7 or in the other provisions of this Schedule is intended to limit in any way any of the other provisions of this Agreement. Borrower: Greyrock: P-COM, INC. GREYROCK CAPITAL, a Division of Banc of America Commercial Corporation By Robert E. Collins -------------------------------- Vice President By Lisa Nagano --------------------------------- Title Senior Vice President ------------------------------ Version-2 -5- Exhibit A to Loan and Security Agreement Receivable Facility Provisions 1. RECEIVABLES. 1.1 Representations Relating to Receivables. Borrower represents and warrants to Greyrock as follows: Each Eligible Receivable shall, on the date each Loan is requested and made, represent an undisputed, bona fide, existing, unconditional obligation of the Account Debtor on such Receivable created by the sale, delivery, and acceptance of goods or the rendition of services, in the ordinary course of Borrower's business. 1.2 Representations Relating to Documents and Legal Compliance. Borrower represents and warrants to Greyrock as follows: All statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing the Eligible Receivables are and shall be true and correct and all such invoices, instruments and other documents and all of Borrower's books and records are and shall be genuine and in all respects what they purport to be, and all signatories and endorsers have the capacity to contract. All sales and other transactions underlying or giving rise to each Eligible Receivable shall comply with all applicable laws and governmental rules and regulations in all material respects. All signatures and indorsements on all documents, instruments, and agreements relating to all Eligible Receivables are and shall be genuine, and all such documents, instruments and agreements are and shall be legally enforceable in accordance with their terms. 1.3 Schedules and Documents relating to Receivables. Borrower shall deliver to Greyrock transaction reports and loan requests, schedules and assignments of all Receivables, and schedules of collections, all on Greyrock's standard forms; provided, however, that Borrower's failure to execute and deliver the same shall not affect or limit Greyrock's security interest and other rights in all of Borrower's Receivables, nor shall Greyrock's failure to advance or lend against a specific Receivable affect or limit Greyrock's security interest and other rights therein. Together with each such schedule and assignment, or later if requested by Greyrock, Borrower shall furnish Greyrock with copies (or, at Greyrock's request, originals) of all contracts, orders, invoices, and other similar documents, and all original shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any goods the sale or disposition of which gave rise to such Receivables, and Borrower warrants the genuineness of all of the foregoing. Borrower shall also furnish to Greyrock an aged accounts receivable trial balance in such form and at such intervals as Greyrock shall reasonably request. In addition, Borrower shall deliver to Greyrock the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property evidencing or securing any Receivables, immediately upon receipt thereof and in the same form as received, with all necessary indorsements. 1.4 Collection of Receivables. Borrower shall have the right to collect all Receivables, unless and until a Default or an Event of Default has occurred. Borrower shall hold all payments on, and proceeds of, Receivables in trust for Greyrock, and Borrower shall deliver all such payments and proceeds to Greyrock, within one Business Day after receipt of the same, in their original form, duly endorsed, to be applied to the Obligations in such order as Greyrock shall determine. 1.5 Disputes. Borrower shall notify Greyrock promptly of all disputes or claims relating to Eligible Receivables on the regular reports to Greyrock. Borrower shall not forgive, or settle any Receivable for less than payment in full, or agree to do any of the foregoing, except that Borrower may do so, provided that: (i) Borrower does so in good faith, in a commercially reasonable manner, in the ordinary course of business, and in arm's length transactions, which are reported to Greyrock on the regular reports provided to Greyrock; (ii) no Default or Event of Default has occurred and is continuing; and (iii) taking into account all such settlements and forgiveness, the total outstanding Loans and other Obligations will not exceed the Credit Limit. 1.6 Verification. Greyrock may, from time to time, at reasonable times and in a reasonable manner, verify directly with the respective Account Debtors the validity, amount and other matters relating to the Receivables, by means of mail, telephone or otherwise, either in the name of Borrower or Greyrock or such other name as Greyrock may choose, and Greyrock or its designee may, at any time, notify Account Debtors that it has a security interest in the Receivables. Exhibit A- Page 1 1.7 No Liability. Greyrock shall not under any circumstances be responsible or liable for any shortage or discrepancy in, damage to, or loss or destruction of, any goods, the sale or other disposition of which gives rise to a Receivable, or for any error, act, omission, or delay of any kind occurring in the settlement, failure to settle, collection or failure to collect any Receivable, or for settling any Receivable in good faith for less than the full amount thereof, nor shall Greyrock be deemed to be responsible for any of Borrower's obligations under any contract or agreement giving rise to a Receivable. Nothing herein shall, however, relieve Greyrock from liability for its own gross negligence or willful misconduct. 1.8 Definition. As used in this Agreement, "Eligible Receivables" means unconditional Receivables arising in the ordinary course of Borrower's business from the completed sale of goods or rendition of services, which Greyrock, in its good-faith business judgment, shall deem eligible for borrowing, based on such considerations as Greyrock may from time to time deem appropriate, notice of which Greyrock shall give to Borrower. 1.9 Reporting. In addition to the reports provided elsewhere in this Agreement, Borrower shall provide to Greyrock the following: (i) Monthly Receivable agings, aged by invoice date, within 10 Business Days after the end of each month, and (ii) Monthly accounts payable agings, aged by invoice date, and outstanding or held check registers within 10 Business Days after the end of each month. Exhibit A - Page 2 EX-10.62 4 WARRANT TO PURCHASE STOCK TO GREYROCK CAPITAL EXHIBIT 10.62 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED. _________________________ WARRANT TO PURCHASE STOCK Warrant to Purchase 120,000 Issue Date: January 14, 2000 ------- Shares of the Common Expiration Date: January 31, 2005 Stock of P-Com, Inc. Initial Exercise Price: $5.71 per share THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other good and valuable consideration, GREYROCK CAPITAL, a Division of Banc of America Commercial Finance Corporation ("Holder") is entitled to purchase the number of fully paid and non-assessable shares of the class of securities (the "Shares") of the corporation (the "Company") at the initial exercise price per Share (the "Warrant Price") all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. ARTICLE 1. EXERCISE. 1.1 Method of Exercise. Holder may exercise this Warrant by delivering a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 1.2, Holder shall also deliver to the Company a check for the aggregate Warrant Price for the Shares being purchased. 1.2 Conversion Right. In lieu of exercising this Warrant as specified in Section 1.1, Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares shall be determined pursuant Section 1.4. 1.3 [Reserved] 1.4 Fair Market Value. If the Shares are traded in a public market, the fair market value of the Shares shall be mean average closing price of the Shares (or the closing price of the Company's stock into which the Shares are convertible) reported with respect to the ten business days immediately before Holder delivers its Notice of Exercise to the Company. If the Shares are not traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment. The foregoing notwithstanding, if Holder advises the Board of Directors in writing that Holder disagrees with such determination, then the Company and Holder shall promptly agree upon a reputable investment banking firm to undertake such valuation. If the valuation of such investment banking firm is greater than that determined by the Board of Directors, then all fees and expenses of such investment banking firm shall be paid by the Company. In all other circumstances, such fees and expenses shall be paid by Holder. 1.5 Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, a new Warrant representing the Shares not so acquired. 1.6 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor. 1.7 Repurchase on Sale, Merger or Consolidation of the Company. 1.7.1. "Acquisition". For the purpose of this Warrant, "Acquisition" means any sale, license, or other disposition of all or substantially all of the assets of the Company, or any reorganization, consolidation, or merger of the Company where the holders of the Company's securities before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction. 1.7.2. Assumption of Warrant. If upon the closing of any Acquisition the successor entity assumes the obligations of this Warrant, then this Warrant shall be exercisable for the same securities, cash, and property as would be payable for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price shall be adjusted accordingly. 1.7.3. Nonassumption. If upon the closing of any Acquisition the successor entity does not assume the obligations of this Warrant and Holder has not otherwise exercised this Warrant in full, then the unexercised portion of this Warrant shall be deemed to have been automatically converted pursuant to Section 1.2 and thereafter Holder shall participate in the acquisition on the same terms as other holders of the same class of securities of the Company. 1.7.4. [Reserved] -1- Warrant to Purchase Stock ----------------------------------------------------------------------------- ARTICLE 2. ADJUSTMENTS TO THE SHARES. 2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on its common stock (or the Shares if the Shares are securities other than common stock) payable in common stock, or other securities, subdivides the outstanding common stock into a greater amount of common stock, or, if the Shares are securities other than common stock, subdivides the Shares in a transaction that increases the amount of common stock into which the Shares are convertible, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend or subdivision occurred. 2.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution, or other event. Such an event shall include any automatic conversion of the outstanding or issuable securities of the Company of the same class or series as the Shares to common stock pursuant to the terms of the Company's Articles of Incorporation upon the closing of a registered public offering of the Company's common stock. The Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events. 2.3 Adjustments for Combinations, Etc. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased. 2.4 Adjustments for Diluting Issuances. The Warrant Price and the number of Shares issuable upon exercise of this Warrant or, if the Shares are Preferred Stock, the number of shares of common stock issuable upon conversion of the Shares, shall be subject to adjustment, from time to time in the manner set forth on Exhibit A in the event of diluting issuances. 2.5 No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out of all the provisions of this Article 2 and in taking all such action as may be reasonably necessary or appropriate to protect Holder's rights under this Article against impairment. If the Company takes any action affecting the Shares or its common stock other than as described above that adversely affects Holder's rights under this Warrant, the Warrant Price shall be adjusted downward and the number of Shares issuable upon exercise of this Warrant shall be adjusted upward in such a manner that the aggregate Warrant Price of this Warrant is unchanged. 2.6 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying Holder amount computed by multiplying the fractional interest by the fair market value of a full Share. 2.7 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date thereof and the series of adjustments leading to such Warrant Price. ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY. 3.1 Representations and Warranties. The Company hereby represents and warrants to the Holder as follows: (a) The initial Warrant Price referenced on the first page of this Warrant is not greater than the fair market value of the Shares as of the date of this Warrant. (b) All Shares which may be issued upon the exercise of the purchase right represented by this Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. 3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare any dividend or distribution upon its common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to offer for subscription pro rata to the holders of its common stock any additional shares of stock of any class or series or other rights; (c) to effect any reclassification or recapitalization of common stock; (d) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up; or (e) offer holders of registration rights the opportunity to participate in an underwritten public offering of the company's common stock for cash, then, in connection with each such event, the Company shall give Holder (1) at least 20 days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of common stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (c) and (d) above; (2) in the case of the matters referred to in (c) and (d) above at least 20 days prior written notice of the date when the same will take place (and specifying the date on which the holders of common stock will be entitled to exchange their common stock for securities or other -2- Warrant to Purchase Stock ----------------------------------------------------------------------------- property deliverable upon the occurrence of such event); and (3) in the case of the matter referred to in (e) above, the same notice as is given to the holders of such registration rights. 3.3 Information Rights. So long as the Holder holds this Warrant and/or any of the Shares, the Company shall deliver to the Holder (a) promptly after mailing, copies of all notices or other written communications to the shareholders of the Company, (b) within ninety (90) days after the end of each fiscal year of the Company, the annual audited financial statements of the Company certified by independent public accountants of recognized standing and (c) within forty-five (45) days after the end of each of the first three quarters of each fiscal year, the Company's quarterly, unaudited financial statements. 3.4 Registration Under Securities Act of 1933, as amended. The Company agrees that the Shares or, if the Shares are convertible into common stock of the Company, such common stock, shall be subject to the registration rights set forth on Exhibit B, if attached. ARTICLE 4. MISCELLANEOUS. ------------- 4.1 Term: Notice of Expiration. This Warrant is exercisable, in whole or in part, at any time and from time to time on or before the Expiration Date set forth above. 4.2 Legends. This Warrant and the Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form: THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. 4.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder or if there is no material question as to the availability of current information as referenced in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of Holders notice of proposed sale. 4.4 Transfer Procedure. Subject to the provisions of Section 4.2 and 4.3, Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable, directly or indirectly, upon conversion of the Shares, if any) by giving the Company notice of the portion of the Warrant being transferred setting forth the name, address and taxpayer identification number of the transferee and surrendering this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable). Subject to the following proviso, the Holder shall have no right to transfer to any Person or exercise all or any part of this Warrant at any time prior to the exercise (if any) of the Receivables Facility Option (as defined in the Loan and Security Agreement dated January 14, 2000 between the Company and Greyrock Capital, a Division of Banc of America Commercial Finance Corporation (as amended from time to time referred to herein as the "Loan Agreement"), provided -------- that the above restrictions regarding the transfer and exercise of this Warrant shall no longer be effective if the Loan Agreement is terminated prior to the exercise of the Greyrock Option (as defined in the Loan Agreement). Further, unless the Company is filing financial information with the SEC pursuant to the Securities Exchange Act of 1934, the Company shall have the right to refuse to transfer any portion of this Warrant to any person who directly competes with the Company. 4.4A Holder Agreements. The Holder, by its acceptance hereof, represents and agrees as follows: (1) Holder represents that it is acquiring this Warrant for its own account and not with a view to the distribution thereof. Holder further represents that it is an accredited investor within the meaning of Rule 501(a) promulgated under the Securities Act of 1933, as amended (the "Securities Act"). (2) Holder understands that the Warrant has not been registered under the Securities Act or any state securities laws. Holder understands further that the Warrant will be acquired for investment and may not be sold, pledged or otherwise transferred without an effective registration statement thereof under the Securities Act and any applicable state securities laws or pursuant to Rule 144 or an opinion of counsel reasonably satisfactory to the Company and its counsel that such registration is not required. (3) Holder agrees that Holder's rights in this Warrant are subject to being released as provided in Section 7(c) of the Schedule to the Loan Agreement. 4.5 Notices. All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or the Holder, as the case may be, in writing by the Company or such holder from time to time. 4.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. 4.7 Attorneys Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys' fees. -3- Warrant to Purchase Stock ----------------------------------------------------------------------------- 4.8 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law. P-COM, INC. By /s/ Karl F. Meyer --------------------------------------- Vice President, Corporate Controller -4- Warrant to Purchase Stock ------------------------------------------------------------------------------ APPENDIX 1 NOTICE OF EXERCISE - ------------------ 1. The undersigned hereby elects to purchase ____________ shares of the Common/Series ____ Preferred [strike one] Stock of __________ pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full. 1. The undersigned hereby elects to convert the attached Warrant into Shares/cash [strike one] in the manner specified in the Warrant. This conversion is exercised with respect to _______ of the Shares covered by the Warrant. [Strike paragraph that does not apply.] 2. Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below: __________________________ (NAME) __________________________ __________________________ (ADDRESS) 3. The undersigned represents it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws. _____________________________________ (Signature) _____________________________________ (Date) -5- Warrant to Purchase Stock ----------------------------------------------------------------------------- EXHIBIT A ANTI-DILUTION PROVISIONS Per Anti-Dilution Agreement of even date. -6- Warrant to Purchase Stock ------------------------------------------------------------------------------- EXHIBIT B REGISTRATION RIGHTS Per Registration Rights Agreement of even date. -7- EX-10.63 5 REGISTRATION RIGHTS AGRMT BY & BTWN P-COM & GREYROCK CAPITAL EXHIBIT 10.63 [LOGO OF GREYROCK CAPITAL] Registration Rights Agreement Issuer: P-COM, INC. Address: 3175 S. Winchester Blvd. Campbell, California 95008 Date: January 14, 2000 THIS REGISTRATION RIGHTS AGREEMENT is entered into as of the above date by and between GREYROCK CAPITAL, a Division of Banc of America Commercial Finance Corporation ("Purchaser"), whose address is 10880 Wilshire Blvd. Suite 1850, Los Angeles, CA 90024 and the above Company, whose address is set forth above. RECITALS A. Concurrently with the execution of this Agreement, the Purchaser is purchasing from the Company a Warrant to Purchase Stock (the "Warrant") pursuant to which Purchaser has the right to acquire from the Company the Shares (as defined in the Warrant). B. By this Agreement, the Purchaser and the Company desire to set forth the registration rights of the Shares all as provided herein. NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, the parties hereto mutually agree as follows: 1. Registration Rights. The Company covenants and agrees as follows: 1.1 Definitions. For purposes of this Section 1: (a) The term "register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act of 1933, as amended (the "Securities Act"), and the declaration or ordering of effectiveness of such registration statement or document; (b) The term "Registrable Securities" means (i) the Shares (if Common Stock) or all shares of Common Stock of the Company issuable or issued upon conversion of the Shares and (ii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, any stock referred to in (i). (c) The terms "Holder" or "Holders" means the Purchaser or qualifying transferees under subsection 1.8 hereof who hold Registrable Securities. (d) The term "SEC" means the Securities and Exchange Commission. 1.2 Company Registration. (a) Registration. If at any time or from time to time, the Company shall determine to register any of its securities, for its own account or the account of any of its shareholders, other than with regard to resale registration statements for the former holders of Series B Preferred Stock of the Company and other than a registration on Form S-1 or S-8 relating solely to employee stock option or purchase plans, or a registration on Form S-4 relating solely to an SEC Rule 145 transaction, or a registration on any other form (other than Form S-1, S-2, S-3 or S-18, or their successor forms) or any successor to such forms, which does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities, the Company will: (i) promptly give to each Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable blue sky or other state securities laws); and (ii) include in such registration (and compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made within 30 days after receipt of such written notice from the Greyrock Capital Registration Rights Agreement - -------------------------------------------------------------------------------- Company, by any Holder or Holders, except as set forth in subsection 1.2(b) below. (b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to subsection 1.2(a)(i). In such event the right of any Holder to registration pursuant to this subsection 1.2 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other shareholders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision of this Section 1.2(b), if the underwriter determines that marketing factors require a limitation on the number of shares to be underwritten, the underwriter may (subject to the allocation priority set forth below) exclude from such registration and underwriting some or all of the Registrable Securities which would otherwise be underwritten pursuant hereto. The Company shall so advise all Holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated in the following manner. The number of shares that may be included in the registration and underwriting on behalf of the Purchaser, directors and officers and other Holders shall be allocated among the Purchaser, directors and officers and other Holders in proportion, as nearly as practicable, to the respective amounts of Registrable Securities and other securities which they had requested to be included in such registration at the time of filing the registration statement. 1.3 Expenses of Registration. All expenses incurred in connection with any registration, qualification or compliance pursuant to this Section 1 including without limitation, all registration, filing and qualification fees, printing expenses, fees and disbursements of counsel for the Company and expenses of any special audits incidental to or required by such registration, shall be borne by the Company except the Company shall not be required to pay underwriters' fees, discounts or commissions relating to Registrable Securities or any fees and disbursements of counsel for any Holder. All other expenses of any registered offering not otherwise borne by the Company shall be borne pro rata among the Holders participating in the offering and the Company. 1.4 Registration Procedures. In the case of each registration, qualification or compliance effected by the Company pursuant to this Registration Rights Agreement, the Company will keep each Holder participating therein advised in writing as to the initiation of each registration, qualification and compliance and as to the completion thereof. Except as otherwise provided in subsection 1.3, at its expense the Company will: (a) Should a registration statement with respect to such Registrable Securities become effective, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to 120 days. (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement. (c) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them. (d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such states as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states. (e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement. (f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act or the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. Upon such notification, the Holders agree to cease immediately selling Registrable Securities until the Company has provided a supplemental prospectus to the Holders. 1.5 Indemnification. (a) The Company will indemnify each Holder of Registrable Securities and each of its officers, directors and partners, and each person controlling such Holder, with respect to which such registration, qualification or compliance has been effected pursuant to this Rights Agreement, and each underwriter, if any, and each person who controls any underwriter of the Registrable Securities held by or issuable to such Holder, against all claims, losses, expenses, damages and liabilities (or actions in respect thereto) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading, or any violation or alleged violation by the Company of the Securities Act, the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any state securities law applicable to the Company or any rule or regulation promulgated under the Greyrock Capital Registration Rights Agreement - -------------------------------------------------------------------------------- Securities Act, the Exchange Act or any such state law and relating to action or inaction required of the Company in connection with any such registration, qualification of compliance, and will reimburse each such Holder, each of its officers, directors and partners, and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, within a reasonable amount of time after incurred for any reasonable legal and any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection 1.5(a) shall not apply to amounts paid in settlement of any such claim, loss, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld); and provided further, that the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Holder specifically for use therein. (b) Each Holder will, if Registrable Securities held by or issuable to such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers, each underwriter, if any, of the Company's securities covered by such a registration statement, each person who controls the Company within the meaning of the Securities Act, and each other such Holder, each of its officers, directors and partners and each person controlling such Holder, against all claims, losses, expenses, damages and liabilities (or actions in respect thereof) arising out of or based on any (i) sales not using the official prospectus or using representations not in the official prospectus or (ii) untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, such Holders, such directors, officers, partners, persons or underwriters for any reasonable legal or any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder specifically for use therein; provided, however, that the indemnity agreement contained in this subsection 1.5(b) shall not apply to amounts paid in settlement of any such claim, loss, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld); and provided further, that the total amount for which any Holder shall be liable under this subsection 1.5(b) shall not in any event exceed the aggregate proceeds received by such Holder from the sale of Registrable Securities held by such Holder in such registration. (c) Each party entitled to indemnification under this subsection 1.5 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party's expense; and provided further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder, unless such failure resulted in prejudice to the Indemnifying Party; and provided further, that an Indemnified Party (together with all other Indemnified Parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. 1.6 Information by Holder. Any Holder or Holders of Registrable Securities included in any registration shall promptly furnish to the Company such information regarding such Holder or Holders and the distribution proposed by such Holder or Holders as the Company may request in writing and as shall be required in connection with any registration, qualification or compliance referred to herein. 1.7 Rule 144 Reporting. With a view to making available to Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company agrees at all times to: (a) make and keep public information available, as those terms are understood and defined in SEC Rule 144, after 90 days after the effective date of the first registration filed by the Company for an offering of its securities to the general public; (b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and (c) so long as a Holder owns any Registrable Securities, to furnish to such Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 (at any time after 90 days after the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as the Holder may reasonably request in complying with Greyrock Capital Registration Rights Agreement - -------------------------------------------------------------------------------- any rule or regulation of the SEC allowing the Holder to sell any such securities without registration. 1.8 Transfer of Registration Rights. Holders' rights to cause the Company to register their securities and keep information available, granted to them by the Company under subsections 1.2 and 1.7 may be assigned to a transferee or assignee of a Holder's Registrable Securities not sold to the public, provided, that the Company is given written notice by such Holder at the time of or within a reasonable time after said transfer, stating the name and address of said transferee or assignee and identifying the securities with respect to which such registration rights are being assigned. The Company may prohibit the transfer of any Holders' rights under this subsection 1.8 to any proposed transferee or assignee who the Company reasonably believes is a competitor of the Company. 2. General. 2.1 Waivers and Amendments. With the written consent of the record or beneficial holders of at least a majority of the Registrable Securities, the obligations of the Company and the rights of the Holders of the Registrable Securities under this agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely), and with the same consent the Company, when authorized by resolution of its Board of Directors, may enter into a supplementary agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement; provided, however, that no such modification, amendment or waiver shall reduce the aforesaid percentage of Registrable Securities. Upon the effectuation of each such waiver, consent, agreement of amendment or modification, the Company shall promptly give written notice thereof to the record holders of the Registrable Securities who have not previously consented thereto in writing. This Agreement or any provision hereof may be changed, waived, discharged or terminated only by a statement in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, except to the extent provided in this subsection 2.1. 2.2 Governing Law. This Agreement shall be governed in all respects by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within California. 2.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 2.4 Entire Agreement. Except as set forth below, this Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. 2.5 Notices. etc. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by first class mail, postage prepaid, certified or registered mail, return receipt requested, addressed (a) if to Holder, at such Holder's address as set forth in the heading to this Agreement, or at such other address as such Holder shall have furnished to the Company in writing, or (b) if to the Company, at the Company's address set forth in the heading to this Agreement, or at such other address as the Company shall have furnished to the Holder in writing. 2.6 Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement or any provision of the other Agreements shall not in any way be affected or impaired thereby. 2.7 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. Greyrock Capital Registration Rights Agreement - -------------------------------------------------------------------------------- 2.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Company: P-COM, INC. By /s/ Karl F. Meyer ---------------------------------------- Vice President, Corporate Controller Purchaser: GREYROCK CAPITAL By /s/ Lisa Nagano ---------------------------------------- Title Senior Vice President ------------------------------------- EX-10.64 6 ANTIDULTION AGRMT BY & BTWN P-COM & GREYROCK CAPITAL EXHIBIT 10.64 [LOGO OF GREYROCK CAPITAL APPEARS HERE] Antidilution Agreement Issuer: P-COM, INC. Address: 3175 S. Winchester Blvd. Campbell, California 95008 Date: January 14, 2000 THIS AGREEMENT is entered into as of the above date by and between GREYROCK CAPITAL, a Division of Banc of America Commercial Finance Corporation ("Purchaser"), whose address is 10880 Wilshire Blvd. Suite 1850, Los Angeles, CA 90024, and the above Company, whose address is set forth above. RECITALS A. Concurrently with the execution of this Antidilution Agreement, the Purchaser is purchasing from the Company a Warrant to Purchase Stock (the "Warrant") pursuant to which Purchaser has the right to acquire from the Company the Shares (as defined in the Warrant). B. By this Antidilution Agreement, the Purchaser and the Company desire to set forth the adjustment in the number of Shares issuable upon exercise of the Warrant as a result of a diluting issuance. C. Capitalized terms used herein shall have the same meaning as set forth in the Warrant. NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, the parties hereto mutually agree as follows: 1. Definitions. As used in this Antidilution Agreement, the following terms have the following respective meanings: (a) "Option" means any right, option, or warrant to subscribe for, purchase, or otherwise acquire common stock or Convertible Securities. (b) "Convertible Securities" means any evidences of indebtedness, shares of stock, or other securities directly or indirectly convertible into or exchangeable for common stock. (c) "Issue" means to grant, issue, sell, assume, or fix a record date for determining persons entitled to receive, any security (including Options), whichever of the foregoing is the first to occur. (d) "Additional Common Shares" means all common stock (including reissued shares) issued (or deemed to be issued pursuant to Section 2) after the date of the Warrant. Additional Common Shares does not include, however, (i) any common stock issued in a transaction described in Sections 2.1 and 2.2 of the Warrant; any common stock Issued upon exercise or conversion of any Option or Convertible Securities outstanding on the date of the Warrant; (ii) the Shares; or (iii) common stock issued as incentive or in a nonfinancing transaction to employees, officers, directors, or consultants to the Company or under any Option or Convertible Security so issued (including all transactions under the employee's stock purchase plan); or (iv) any common stock issued in connection with (or under Options or Convertible Securities issued in connection with) vendor or customer relationships or strategic partnering, provided that the foregoing -------- shall not include issuances in connection with merger or acquisition transactions. 2. Deemed Issuance of Additional Common Shares. The shares of common stock ultimately Issuable upon exercise of an Option (including the shares of common stock ultimately Issuable upon conversion or exercise of a Convertible Security Issuable pursuant to an Option) are deemed to be Issued when the Option is Issued. The shares of common stock ultimately Issuable upon conversion or exercise of a Convertible Security (other than a Convertible Security Issued pursuant to an Option) shall be deemed Issued upon Issuance of the Convertible Security. The maximum amount of common stock Issuable is determined without regard to any future adjustments permitted under the instrument creating the Options or Convertible Securities. Greyrock Capital Antidilution Agreement - -------------------------------------------------------------------------------- 3. Adjustment of Warrant Price for Diluting Issuances. 3.1 Weighted Average Adjustment. If the Company Issues Additional Common Shares after the date of the Warrant and the consideration per Additional Common Share (determined pursuant to Section 9) is less than the Warrant Price in effect immediately before such Issue, the Warrant Price in effect immediately before such Issue shall be reduced, concurrently with such Issue, to a price (calculated to the nearest hundredth of a cent) determined by multiplying the Warrant Price by a fraction: (a) the numerator of which is the amount of common stock outstanding immediately before such Issue plus the amount of common stock that the aggregate consideration received by the Company for the Additional Common Shares would purchase at the Warrant Price in effect immediately before such Issue, and (b) the denominator of which is the amount of common stock outstanding immediately before such Issue plus the number of such Additional Common Shares. 3.2 Adjustment of Number of Shares. Upon each adjustment of the Warrant Price, the number of Shares issuable upon exercise of the Warrant shall be increased to equal the quotient obtained by dividing (a) the product resulting from multiplying (i) the number of Shares issuable upon exercise of the Warrant and (ii) the Warrant Price, in each case as in effect immediately before such adjustment, by (b) the adjusted Warrant Price. 3.3 Securities Deemed Outstanding. For the purpose of this Section 3, all securities issuable upon exercise of any outstanding Convertible Securities or Options, warrants, or other rights to acquire securities of the Company shall be deemed to be outstanding. 4. No Adjustment for Issuances Following Deemed Issuances. No adjustment to the Warrant Price shall be made upon the exercise of Options or conversion of Convertible Securities. 5. Adjustment Following Changes in Terms of Options or Convertible Securities. If the consideration payable to, or the amount of common stock Issuable by, the Company increases or decreases, respectively, pursuant to the terms of any outstanding Options or Convertible Securities, the Warrant Price shall be recomputed to reflect such increase or decrease. The recomputation shall be made as of the time of the Issuance of the Options or Convertible Securities. Any changes in the Warrant Price that occurred after such Issuance because other Additional Common Shares were Issued or deemed Issued shall also be recomputed. 6. Recomputation Upon Expiration of Options or Convertible Securities. The Warrant Price computed upon the original Issue of any Options or Convertible Securities, and any subsequent adjustments based thereon, shall be recomputed when any Options or rights of conversion under Convertible Securities expire without having been exercised. In the case of Convertible Securities or Options for common stock, the Warrant Price shall be recomputed as if the only Additional Common Shares Issued were the shares of common stock actually Issued upon the exercise of such securities, if any, and as if the only consideration received therefor was the consideration actually received upon the Issue, exercise or conversion of the Options or Convertible Securities. In the case of Options for Convertible Securities, the Warrant Price shall be recomputed as if the only Convertible Securities Issued were the Convertible Securities actually Issued upon the exercise thereof, if any, and as if the only consideration received therefor was the consideration actually received by the Company (determined pursuant to Section 9), if any, upon the Issue of the Options for the Convertible Securities. 7. Limit on Readjustments. No readjustment of the Warrant Price pursuant to Sections 5 or 6 shall increase the Warrant Price more than the amount of any decrease made in respect of the Issue of any Options or Convertible Securities. 8. 30 Day Options. In the case of any Options that expire by their terms not more than 30 days after the date of Issue thereof, no adjustment of the Warrant Price shall be made until the expiration or exercise of all such Options. 9. Computation of Consideration. The consideration received by the Company for the Issue of any Additional Common Shares shall be computed as follows: (a) Cash shall be valued at the amount of cash received by the Corporation, ---- excluding amounts paid or payable for accrued interest or accrued dividends. (b) Property. Property other than cash shall be computed at the fair market -------- value thereof at the time of the Issue as determined in good faith by the Board of Directors of the Company. (c) Mixed Consideration. The consideration for Additional common Shares ------------------- Issued together with other property of the Company for consideration that covers both shall be determined in good faith by the Board of Directors. (d) Options and Convertible Securities. The consideration per Additional ---------------------------------- Common Share for Options and Convertible Securities shall be determined by dividing: (i) the total amount, if any, received or receivable by the Company for the Issue of the Options or Convertible Securities, plus the minimum amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon exercise of the Options or conversion of the Convertible Securities, by (ii) the maximum amount of common stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) ultimately Issuable upon the exercise of such Options or the conversion of such Convertible Securities. 10. General. 10.1 Governing Law. This Antidilution Agreement shall be governed in all respects by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within California. Greyrock Capital Antidilution Agreement - -------------------------------------------------------------------------------- 10.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 10.3 Entire Agreement. This Antidilution Agreement and the other documents delivered pursuant and otherwise relating hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. The terms and provisions of this Agreement may not be waived or amended, except in a writing executed by Company and a duly authorized officer of Holder. 10.4 Notices. etc. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by first class mail, postage prepaid, certified or registered mail, return receipt requested, addressed (a) if to Purchaser at Purchaser's address as set forth in the heading to this Agreement, or at such other address as Purchaser shall have furnished to the Company in writing, or (b) if to the Company, at the Company's address set forth in the heading to this Agreement, or at such other address as the Company shall have furnished to the Purchaser in writing. 10.5 Severability. In case any provision of this Antidilution Agreement shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions of this Antidilution Agreement shall not in any way be affected or impaired thereby. 10.6 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Antidilution Agreement. 10.7 Counterparts. This Antidilution Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Company: P-COM, INC. By /s/ Karl F. Meyer ------------------------------------- Vice President, Corporate Controller Purchaser: GREYROCK CAPITAL By /s/ Lisa Nagano ------------------------------- Title Senior Vice President ---------------------------- EX-10.65 7 WARRANT TO PURCHASE STOCK TO SILICON VALLEY BANK EXHIBIT 10.65 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED. ______________________________________________ WARRANT TO PURCHASE STOCK Warrant to Purchase 80,000 Issue Date: January 14, 2000 ------ Shares of the Common Expiration Date: January 31, 2005 Stock of P-Com, Inc. Initial Exercise Price: $5.71 per share THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other good and valuable consideration, Silicon Valley Bank ("Holder") is entitled to purchase the number of fully paid and non-assessable shares of the class of securities (the "Shares") of the corporation (the "Company") at the initial exercise price per Share (the "Warrant Price") all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. ARTICLE 1. EXERCISE. 1.1 Method of Exercise. Holder may exercise this Warrant by delivering a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 1.2, Holder shall also deliver to the Company a check for the aggregate Warrant Price for the Shares being purchased. 1.2 Conversion Right. In lieu of exercising this Warrant as specified in Section 1.1, Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares shall be determined pursuant Section 1.4. 1.3 [Reserved] 1.4 Fair Market Value. If the Shares are traded in a public market, the fair market value of the Shares shall be mean average closing price of the Shares (or the closing price of the Company's stock into which the Shares are convertible) reported with respect to the ten business days immediately before Holder delivers its Notice of Exercise to the Company. If the Shares are not traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment. The foregoing notwithstanding, if Holder advises the Board of Directors in writing that Holder disagrees with such determination, then the Company and Holder shall promptly agree upon a reputable investment banking firm to undertake such valuation. If the valuation of such investment banking firm is greater than that determined by the Board of Directors, then all fees and expenses of such investment banking firm shall be paid by the Company. In all other circumstances, such fees and expenses shall be paid by Holder. 1.5 Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, a new Warrant representing the Shares not so acquired. 1.6 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor. 1.7 Repurchase on Sale, Merger or Consolidation of the Company. 1.7.1. "Acquisition". For the purpose of this Warrant, "Acquisition" means any sale, license, or other disposition of all or substantially all of the assets of the Company, or any reorganization, consolidation, or merger of the Company where the holders of the Company's securities before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction. 1.7.2. Assumption of Warrant. If upon the closing of any Acquisition the successor entity assumes the obligations of this Warrant, then this Warrant shall be exercisable for the same securities, cash, and property as would be payable for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price shall be adjusted accordingly. 1.7.3. Nonassumption. If upon the closing of any Acquisition the successor entity does not assume the obligations of this Warrant and Holder has not otherwise exercised this Warrant in full, then the unexercised portion of this Warrant shall be deemed to have been automatically converted pursuant to Section 1.2 and thereafter Holder shall participate in the acquisition on the same terms as other holders of the same class of securities of the Company. 1.7.4. [Reserved] -1- Warrant to Purchase Stock - -------------------------------------------------------------------------------- ARTICLE 2. ADJUSTMENTS TO THE SHARES. 2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on its common stock (or the Shares if the Shares are securities other than common stock) payable in common stock, or other securities, subdivides the outstanding common stock into a greater amount of common stock, or, if the Shares are securities other than common stock, subdivides the Shares in a transaction that increases the amount of common stock into which the Shares are convertible, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend or subdivision occurred. 2.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution, or other event. Such an event shall include any automatic conversion of the outstanding or issuable securities of the Company of the same class or series as the Shares to common stock pursuant to the terms of the Company's Articles of Incorporation upon the closing of a registered public offering of the Company's common stock. The Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events. 2.3 Adjustments for Combinations, Etc. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased. 2.4 Adjustments for Diluting Issuances. The Warrant Price and the number of Shares issuable upon exercise of this Warrant or, if the Shares are Preferred Stock, the number of shares of common stock issuable upon conversion of the Shares, shall be subject to adjustment, from time to time in the manner set forth on Exhibit A in the event of diluting issuances. 2.5 No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out of all the provisions of this Article 2 and in taking all such action as may be reasonably necessary or appropriate to protect Holder's rights under this Article against impairment. If the Company takes any action affecting the Shares or its common stock other than as described above that adversely affects Holder's rights under this Warrant, the Warrant Price shall be adjusted downward and the number of Shares issuable upon exercise of this Warrant shall be adjusted upward in such a manner that the aggregate Warrant Price of this Warrant is unchanged. 2.6 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying Holder amount computed by multiplying the fractional interest by the fair market value of a full Share. 2.7 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date thereof and the series of adjustments leading to such Warrant Price. ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY. 3.1 Representations and Warranties. The Company hereby represents and warrants to the Holder as follows: (a) The initial Warrant Price referenced on the first page of this Warrant is not greater than the fair market value of the Shares as of the date of this Warrant. (b) All Shares which may be issued upon the exercise of the purchase right represented by this Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. 3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare any dividend or distribution upon its common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to offer for subscription pro rata to the holders of its common stock any additional shares of stock of any class or series or other rights; (c) to effect any reclassification or recapitalization of common stock; (d) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up; or (e) offer holders of registration rights the opportunity to participate in an underwritten public offering of the company's common stock for cash, then, in connection with each such event, the Company shall give Holder (1) at least 20 days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of common stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (c) and (d) above; (2) in the case of the matters referred to in (c) and (d) above at least 20 days prior written notice of the date when the same will take place (and specifying the date on which the holders of common stock will be entitled to exchange their common stock for securities or other -2- Warrant to Purchase Stock - -------------------------------------------------------------------------------- property deliverable upon the occurrence of such event); and (3) in the case of the matter referred to in (e) above, the same notice as is given to the holders of such registration rights. 3.3 Information Rights. So long as the Holder holds this Warrant and/or any of the Shares, the Company shall deliver to the Holder (a) promptly after mailing, copies of all notices or other written communications to the shareholders of the Company, (b) within ninety (90) days after the end of each fiscal year of the Company, the annual audited financial statements of the Company certified by independent public accountants of recognized standing and (c) within forty-five (45) days after the end of each of the first three quarters of each fiscal year, the Company's quarterly, unaudited financial statements. 3.4 Registration Under Securities Act of 1933, as amended. The Company agrees that the Shares or, if the Shares are convertible into common stock of the Company, such common stock, shall be subject to the registration rights set forth on Exhibit B, if attached. ARTICLE 4. MISCELLANEOUS. ------------- 4.1 Term: Notice of Expiration. This Warrant is exercisable, in whole or in part, at any time and from time to time on or before the Expiration Date set forth above. 4.2 Legends. This Warrant and the Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form: THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. 4.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder or if there is no material question as to the availability of current information as referenced in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of Holders notice of proposed sale. 4.4 Transfer Procedure. Subject to the provisions of Section 4.2 and 4.3, Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable, directly or indirectly, upon conversion of the Shares, if any) by giving the Company notice of the portion of the Warrant being transferred setting forth the name, address and taxpayer identification number of the transferee and surrendering this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable). Subject to the following proviso, the Holder shall have no right to transfer to any Person or exercise all or any part of this Warrant at any time prior to the exercise (if any) of the Receivables Facility Option (as defined in the Loan and Security Agreement dated January 14, 2000 between the Company and Greyrock Capital, a Division of Banc of America Commercial Finance Corporation (as amended from time to time referred to herein as the "Loan Agreement"), provided -------- that the above restrictions regarding the transfer and exercise of this Warrant shall no longer be effective if the Loan Agreement is terminated prior to the exercise of the Greyrock Option (as defined in the Loan Agreement). Further, unless the Company is filing financial information with the SEC pursuant to the Securities Exchange Act of 1934, the Company shall have the right to refuse to transfer any portion of this Warrant to any person who directly competes with the Company. Notwithstanding anything to the contrary herein, Holder may transfer all or portion of this Warrant to Silicon Valley Bancshares at any time provided that such entity is an "affiliate" (as defined in Rule 405 under the - -------- Act) of the Holder, provided, further, Company shall not require an opinion of -------- ------- counsel in connection therewith, provided, further, that any such transfer shall -------- ------- nonetheless be subject to the release provisions set forth in section 7(c) of the Loan Agreement. 4.4A Holder Agreements. The Holder, by its acceptance hereof, represents and agrees as follows: (1) Holder represents that it is acquiring this Warrant for its own account and not with a view to the distribution thereof. Holder further represents that it is an accredited investor within the meaning of Rule 501(a) promulgated under the Securities Act of 1933, as amended (the "Securities Act"). (2) Holder understands that the Warrant has not been registered under the Securities Act or any state securities laws. Holder understands further that the Warrant will be acquired for investment and may not be sold, pledged or otherwise transferred without an effective registration statement thereof under the Securities Act and any applicable state securities laws or pursuant to Rule 144 or an opinion of counsel reasonably satisfactory to the Company and its counsel that such registration is not required. (3) Holder agrees that Holder's rights in this Warrant are subject to being released as provided in Section 7(c) of the Schedule to the Loan Agreement. 4.5 Notices. All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or the Holder, as the case may be, in writing by the Company or such holder from time to time. 4.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which -3- Warrant to Purchase Stock - -------------------------------------------------------------------------------- enforcement of such change, waiver, discharge or termination is sought. 4.7 Attorneys Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys' fees. 4.8 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law. P-COM, INC. By /s/ Karl F. Meyer -------------------------------------- Vice President, Corporate Controller -4- Warrant to Purchase Stock - -------------------------------------------------------------------------------- APPENDIX 1 NOTICE OF EXERCISE ------------------ 1. The undersigned hereby elects to purchase ____________ shares of the Common/Series ____ Preferred [strike one] Stock of __________ pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full. 1. The undersigned hereby elects to convert the attached Warrant into Shares/cash [strike one] in the manner specified in the Warrant. This conversion is exercised with respect to _______ of the Shares covered by the Warrant. [Strike paragraph that does not apply.] 2. Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below: __________________________ (NAME) __________________________ __________________________ (ADDRESS) 3. The undersigned represents it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws. _____________________________________ (Signature) _____________________________________ (Date) -5- Warrant to Purchase Stock - -------------------------------------------------------------------------------- EXHIBIT A ANTI-DILUTION PROVISIONS Per Anti-Dilution Agreement of even date. -6- Warrant to Purchase Stock - -------------------------------------------------------------------------------- EXHIBIT B REGISTRATION RIGHTS Per Registration Rights Agreement of even date. -7- EX-10.66 8 REGISTRATION RIGHTS AGREEMENT - -------------------------------------------------------------------------------- EXHIBIT 10.66 Registration Rights Agreement Issuer: P-COM, INC. Address: 3175 S. Winchester Blvd. Campbell, California 95008 Date: January 14, 2000 THIS REGISTRATION RIGHTS AGREEMENT is entered into as of the above date by and between SILICON VALLEY BANK ("Purchaser"), whose address is 3003 Tasman Drive, Santa Clara, California 95054 and the above Company, whose address is set forth above. RECITALS A. Concurrently with the execution of this Agreement, the Purchaser is purchasing from the Company a Warrant to Purchase Stock (the "Warrant") pursuant to which Purchaser has the right to acquire from the Company the Shares (as defined in the Warrant). B. By this Agreement, the Purchaser and the Company desire to set forth the registration rights of the Shares all as provided herein. NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, the parties hereto mutually agree as follows: 1. Registration Rights. The Company covenants and agrees as follows: 1.1 Definitions. For purposes of this Section 1: (a) The term "register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act of 1933, as amended (the "Securities Act"), and the declaration or ordering of effectiveness of such registration statement or document; (b) The term "Registrable Securities" means (i) the Shares (if Common Stock) or all shares of Common Stock of the Company issuable or issued upon conversion of the Shares and (ii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, any stock referred to in (i). (c) The terms "Holder" or "Holders" means the Purchaser or qualifying transferees under subsection 1.8 hereof who hold Registrable Securities. (d) The term "SEC" means the Securities and Exchange Commission. 1.2 Company Registration. (a) Registration. If at any time or from time to time, the Company shall determine to register any of its securities, for its own account or the account of any of its shareholders, other than with regard to resale registration statements for the former holders of Series B Preferred Stock of the Company and other than a registration on Form S-1 or S-8 relating solely to employee stock option or purchase plans, or a registration on Form S-4 relating solely to an SEC Rule 145 transaction, or a registration on any other form (other than Form S-1, S-2, S-3 or S-18, or their successor forms) or any successor to such forms, which does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities, the Company will: (i) promptly give to each Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable blue sky or other state securities laws); and (ii) include in such registration (and compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made within 30 days after receipt of such written notice from the Company, by any Holder or Holders, except as set forth in subsection 1.2(b) below. (b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to subsection 1.2(a)(i). In such event the right of any Holder to registration pursuant to this subsection 1.2 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other shareholders distributing their Silicon Valley Bank Registration Rights Agreement - -------------------------------------------------------------------------------- securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision of this Section 1.2(b), if the underwriter determines that marketing factors require a limitation on the number of shares to be underwritten, the underwriter may (subject to the allocation priority set forth below) exclude from such registration and underwriting some or all of the Registrable Securities which would otherwise be underwritten pursuant hereto. The Company shall so advise all Holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated in the following manner. The number of shares that may be included in the registration and underwriting on behalf of the Purchaser, directors and officers and other Holders shall be allocated among the Purchaser, directors and officers and other Holders in proportion, as nearly as practicable, to the respective amounts of Registrable Securities and other securities which they had requested to be included in such registration at the time of filing the registration statement. 1.3 Expenses of Registration. All expenses incurred in connection with any registration, qualification or compliance pursuant to this Section 1 including without limitation, all registration, filing and qualification fees, printing expenses, fees and disbursements of counsel for the Company and expenses of any special audits incidental to or required by such registration, shall be borne by the Company except the Company shall not be required to pay underwriters' fees, discounts or commissions relating to Registrable Securities or any fees and disbursements of counsel for any Holder. All other expenses of any registered offering not otherwise borne by the Company shall be borne pro rata among the Holders participating in the offering and the Company. 1.4 Registration Procedures. In the case of each registration, qualification or compliance effected by the Company pursuant to this Registration Rights Agreement, the Company will keep each Holder participating therein advised in writing as to the initiation of each registration, qualification and compliance and as to the completion thereof. Except as otherwise provided in subsection 1.3, at its expense the Company will: (a) Should a registration statement with respect to such Registrable Securities become effective, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to 120 days. (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement. (c) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them. (d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such states as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states. (e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement. (f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act or the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. Upon such notification, the Holders agree to cease immediately selling Registrable Securities until the Company has provided a supplemental prospectus to the Holders. 1.5 Indemnification. (a) The Company will indemnify each Holder of Registrable Securities and each of its officers, directors and partners, and each person controlling such Holder, with respect to which such registration, qualification or compliance has been effected pursuant to this Rights Agreement, and each underwriter, if any, and each person who controls any underwriter of the Registrable Securities held by or issuable to such Holder, against all claims, losses, expenses, damages and liabilities (or actions in respect thereto) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading, or any violation or alleged violation by the Company of the Securities Act, the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any state securities law applicable to the Company or any rule or regulation promulgated under the Securities Act, the Exchange Act or any such state law and relating to action or inaction required of the Company in connection with any such registration, qualification of compliance, and will reimburse each such Holder, each of its officers, directors and partners, and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, within a reasonable amount of time after incurred for any reasonable legal and any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection 1.5(a) shall not apply to amounts paid in settlement of any such claim, loss, damage, liability, or action if such settlement is effected without the consent of -9- Silicon Valley Bank Registration Rights Agreement - -------------------------------------------------------------------------------- the Company (which consent shall not be unreasonably withheld); and provided further, that the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Holder specifically for use therein. (b) Each Holder will, if Registrable Securities held by or issuable to such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers, each underwriter, if any, of the Company's securities covered by such a registration statement, each person who controls the Company within the meaning of the Securities Act, and each other such Holder, each of its officers, directors and partners and each person controlling such Holder, against all claims, losses, expenses, damages and liabilities (or actions in respect thereof) arising out of or based on any (i) sales not using the official prospectus or using representations not in the official prospectus or (ii) untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, such Holders, such directors, officers, partners, persons or underwriters for any reasonable legal or any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder specifically for use therein; provided, however, that the indemnity agreement contained in this subsection 1.5(b) shall not apply to amounts paid in settlement of any such claim, loss, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld); and provided further, that the total amount for which any Holder shall be liable under this subsection 1.5(b) shall not in any event exceed the aggregate proceeds received by such Holder from the sale of Registrable Securities held by such Holder in such registration. (c) Each party entitled to indemnification under this subsection 1.5 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party's expense; and provided further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder, unless such failure resulted in prejudice to the Indemnifying Party; and provided further, that an Indemnified Party (together with all other Indemnified Parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. 1.6 Information by Holder. Any Holder or Holders of Registrable Securities included in any registration shall promptly furnish to the Company such information regarding such Holder or Holders and the distribution proposed by such Holder or Holders as the Company may request in writing and as shall be required in connection with any registration, qualification or compliance referred to herein. 1.7 Rule 144 Reporting. With a view to making available to Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company agrees at all times to: (a) make and keep public information available, as those terms are understood and defined in SEC Rule 144, after 90 days after the effective date of the first registration filed by the Company for an offering of its securities to the general public; (b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and (c) so long as a Holder owns any Registrable Securities, to furnish to such Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 (at any time after 90 days after the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as the Holder may reasonably request in complying with any rule or regulation of the SEC allowing the Holder to sell any such securities without registration. 1.8 Transfer of Registration Rights. Holders' rights to cause the Company to register their securities and keep information available, granted to them by the Company under subsections 1.2 and 1.7 may be assigned to a transferee or assignee of a Holder's Registrable Securities not sold to the public, provided, that the Company is given written notice by such Holder at the time of or within a reasonable time after said transfer, stating the name and address of said transferee or assignee and identifying the securities with respect to which such registration rights are being assigned. The Company may prohibit the transfer of any Holders' rights under this subsection 1.8 to any -10- Silicon Valley Bank Registration Rights Agreement - -------------------------------------------------------------------------------- proposed transferee or assignee who the Company reasonably believes is a competitor of the Company. 2. General. 2.1 Waivers and Amendments. With the written consent of the record or beneficial holders of at least a majority of the Registrable Securities, the obligations of the Company and the rights of the Holders of the Registrable Securities under this agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely), and with the same consent the Company, when authorized by resolution of its Board of Directors, may enter into a supplementary agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement; provided, however, that no such modification, amendment or waiver shall reduce the aforesaid percentage of Registrable Securities. Upon the effectuation of each such waiver, consent, agreement of amendment or modification, the Company shall promptly give written notice thereof to the record holders of the Registrable Securities who have not previously consented thereto in writing. This Agreement or any provision hereof may be changed, waived, discharged or terminated only by a statement in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, except to the extent provided in this subsection 2.1. 2.2 Governing Law. This Agreement shall be governed in all respects by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within California. 2.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 2.4 Entire Agreement. Except as set forth below, this Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. 2.5 Notices. etc. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by first class mail, postage prepaid, certified or registered mail, return receipt requested, addressed (a) if to Holder, at such Holder's address as set forth in the heading to this Agreement, or at such other address as such Holder shall have furnished to the Company in writing, or (b) if to the Company, at the Company's address set forth in the heading to this Agreement, or at such other address as the Company shall have furnished to the Holder in writing. 2.6 Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement or any provision of the other Agreements shall not in any way be affected or impaired thereby. 2.7 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. -11- Silicon Valley Bank Registration Rights Agreement - -------------------------------------------------------------------------------- 2.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Company: P-COM, INC. By /s/ Karl F. Meyer ------------------------------------- Vice President, Corporate Controller Purchaser: SILICON VALLEY BANK By /s/ Patrick J. Clemens ------------------------------ Title Vice President --------------------------- -12- EX-10.67 9 ANTIDULTION AGRMT BY & BTWN P-COM & SILICON VALLEY BANK - -------------------------------------------------------------------------------- EXHIBIT 10.67 Antidilution Agreement Issuer: P-COM, INC. Address: 3175 S. Winchester Blvd. Campbell, California 95008 Date: January 14, 2000 THIS AGREEMENT is entered into as of the above date by and between SILICON VALLEY BANK ("Purchaser"), whose address is 3003 Tasman Drive, Santa Clara, California 95054, and the above Company, whose address is set forth above. RECITALS A. Concurrently with the execution of this Antidilution Agreement, the Purchaser is purchasing from the Company a Warrant to Purchase Stock (the "Warrant") pursuant to which Purchaser has the right to acquire from the Company the Shares (as defined in the Warrant). B. By this Antidilution Agreement, the Purchaser and the Company desire to set forth the adjustment in the number of Shares issuable upon exercise of the Warrant as a result of a diluting issuance. C. Capitalized terms used herein shall have the same meaning as set forth in the Warrant. NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, the parties hereto mutually agree as follows: 1. Definitions. As used in this Antidilution Agreement, the following terms have the following respective meanings: (a) "Option" means any right, option, or warrant to subscribe for, purchase, or otherwise acquire common stock or Convertible Securities. (b) "Convertible Securities" means any evidences of indebtedness, shares of stock, or other securities directly or indirectly convertible into or exchangeable for common stock. (c) "Issue" means to grant, issue, sell, assume, or fix a record date for determining persons entitled to receive, any security (including Options), whichever of the foregoing is the first to occur. (d) "Additional Common Shares" means all common stock (including reissued shares) issued (or deemed to be issued pursuant to Section 2) after the date of the Warrant. Additional Common Shares does not include, however, (i) any common stock issued in a transaction described in Sections 2.1 and 2.2 of the Warrant; any common stock Issued upon exercise or conversion of any Option or Convertible Securities outstanding on the date of the Warrant; (ii) the Shares; or (iii) common stock issued as incentive or in a nonfinancing transaction to employees, officers, directors, or consultants to the Company or under any Option or Convertible Security so issued (including all transactions under the employee's stock purchase plan); or (iv) any common stock issued in connection with (or under Options or Convertible Securities issued in connection with) vendor or customer relationships or strategic partnering, provided that the foregoing -------- shall not include issuances in connection with merger or acquisition transactions. 2. Deemed Issuance of Additional Common Shares. The shares of common stock ultimately Issuable upon exercise of an Option (including the shares of common stock ultimately Issuable upon conversion or exercise of a Convertible Security Issuable pursuant to an Option) are deemed to be Issued when the Option is Issued. The shares of common stock ultimately Issuable upon conversion or exercise of a Convertible Security (other than a Convertible Security Issued pursuant to an Option) shall be deemed Issued upon Issuance of the Convertible Security. The maximum amount of common stock Issuable is determined without regard to any future adjustments permitted under the instrument creating the Options or Convertible Securities. 3. Adjustment of Warrant Price for Diluting Issuances. 3.1 Weighted Average Adjustment. If the Company Issues Additional Common Shares after the date of the Warrant and the consideration per Additional Common Share (determined pursuant to Section 9) is less than the Warrant Price in effect immediately before such Issue, the Warrant Price in effect immediately before such Issue shall be reduced, concurrently with such Issue, to a price -13- Silicon Valley Bank Antidilution Agreement - -------------------------------------------------------------------------------- (calculated to the nearest hundredth of a cent) determined by multiplying the Warrant Price by a fraction: (a) the numerator of which is the amount of common stock outstanding immediately before such Issue plus the amount of common stock that the aggregate consideration received by the Company for the Additional Common Shares would purchase at the Warrant Price in effect immediately before such Issue, and (b) the denominator of which is the amount of common stock outstanding immediately before such Issue plus the number of such Additional Common Shares. 3.2 Adjustment of Number of Shares. Upon each adjustment of the Warrant Price, the number of Shares issuable upon exercise of the Warrant shall be increased to equal the quotient obtained by dividing (a) the product resulting from multiplying (i) the number of Shares issuable upon exercise of the Warrant and (ii) the Warrant Price, in each case as in effect immediately before such adjustment, by (b) the adjusted Warrant Price. 3.3 Securities Deemed Outstanding. For the purpose of this Section 3, all securities issuable upon exercise of any outstanding Convertible Securities or Options, warrants, or other rights to acquire securities of the Company shall be deemed to be outstanding. 4. No Adjustment for Issuances Following Deemed Issuances. No adjustment to the Warrant Price shall be made upon the exercise of Options or conversion of Convertible Securities. 5. Adjustment Following Changes in Terms of Options or Convertible Securities. If the consideration payable to, or the amount of common stock Issuable by, the Company increases or decreases, respectively, pursuant to the terms of any outstanding Options or Convertible Securities, the Warrant Price shall be recomputed to reflect such increase or decrease. The recomputation shall be made as of the time of the Issuance of the Options or Convertible Securities. Any changes in the Warrant Price that occurred after such Issuance because other Additional Common Shares were Issued or deemed Issued shall also be recomputed. 6. Recomputation Upon Expiration of Options or Convertible Securities. The Warrant Price computed upon the original Issue of any Options or Convertible Securities, and any subsequent adjustments based thereon, shall be recomputed when any Options or rights of conversion under Convertible Securities expire without having been exercised. In the case of Convertible Securities or Options for common stock, the Warrant Price shall be recomputed as if the only Additional Common Shares Issued were the shares of common stock actually Issued upon the exercise of such securities, if any, and as if the only consideration received therefor was the consideration actually received upon the Issue, exercise or conversion of the Options or Convertible Securities. In the case of Options for Convertible Securities, the Warrant Price shall be recomputed as if the only Convertible Securities Issued were the Convertible Securities actually Issued upon the exercise thereof, if any, and as if the only consideration received therefor was the consideration actually received by the Company (determined pursuant to Section 9), if any, upon the Issue of the Options for the Convertible Securities. 7. Limit on Readjustments. No readjustment of the Warrant Price pursuant to Sections 5 or 6 shall increase the Warrant Price more than the amount of any decrease made in respect of the Issue of any Options or Convertible Securities. 8. 30 Day Options. In the case of any Options that expire by their terms not more than 30 days after the date of Issue thereof, no adjustment of the Warrant Price shall be made until the expiration or exercise of all such Options. 9. Computation of Consideration. The consideration received by the Company for the Issue of any Additional Common Shares shall be computed as follows: (a) Cash shall be valued at the amount of cash received by the ---- Corporation, excluding amounts paid or payable for accrued interest or accrued dividends. (b) Property. Property other than cash shall be computed at the fair -------- market value thereof at the time of the Issue as determined in good faith by the Board of Directors of the Company. (c) Mixed Consideration. The consideration for Additional common Shares ------------------- Issued together with other property of the Company for consideration that covers both shall be determined in good faith by the Board of Directors. (d) Options and Convertible Securities. The consideration per Additional ---------------------------------- Common Share for Options and Convertible Securities shall be determined by dividing: (i) the total amount, if any, received or receivable by the Company for the Issue of the Options or Convertible Securities, plus the minimum amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon exercise of the Options or conversion of the Convertible Securities, by (ii) the maximum amount of common stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) ultimately Issuable upon the exercise of such Options or the conversion of such Convertible Securities. 10. General. 10.1 Governing Law. This Antidilution Agreement shall be governed in all respects by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within California. 10.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 10.3 Entire Agreement. This Antidilution Agreement and the other documents delivered pursuant and otherwise relating hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. The terms and provisions of -14- Silicon Valley Bank Antidilution Agreement - -------------------------------------------------------------------------------- this Agreement may not be waived or amended, except in a writing executed by Company and a duly authorized officer of Holder. 10.4 Notices. etc. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by first class mail, postage prepaid, certified or registered mail, return receipt requested, addressed (a) if to Purchaser at Purchaser's address as set forth in the heading to this Agreement, or at such other address as Purchaser shall have furnished to the Company in writing, or (b) if to the Company, at the Company's address set forth in the heading to this Agreement, or at such other address as the Company shall have furnished to the Purchaser in writing. 10.5 Severability. In case any provision of this Antidilution Agreement shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions of this Antidilution Agreement shall not in any way be affected or impaired thereby. 10.6 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Antidilution Agreement. 10.7 Counterparts. This Antidilution Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Company: P-COM, INC. By /s/ Karl F. Meyer -------------------------------------- Vice President, Corporate Controller Purchaser: SILICON VALLEY BANK By /s/ Patrick J. Clemens ------------------------------ Title Vice President --------------------------- -15- EX-99.1 10 PRESS RELEASE EXHIBIT 99.1 FOR IMMEDIATE RELEASE Page 1 of 2 COMPANY CONTACTS: Bob Collins, Vice President & Chief Financial Officer (408) 866-3666 P-COM CLOSES AGREEMENT FOR $43 MILLION OF NEW EQUITY AND REFINANCES ITS BANK LINE OF CREDIT - -------------------------------------------------------------------------------- CAMPBELL, CA - January 13, 2000- P-Com, Inc. (Nasdaq National Market: PCMS) announced today that it sold 7,530,642 shares of newly issued common stock to institutional investors for an aggregate of $43.0 million. The Company priced the unregistered shares at a 15% discount to the 60-day average of its closing sale prices for the period ended January 5, 2000, the day before the purchase agreement was signed and the Board of Directors approved the transaction. The sale closed today. Whitman Capital, L.P. and J. & W. Seligman & Co. Incorporated were the lead investors, acquiring 5,253,940 shares of Common Stock for $30.0 million. Investors advised by Wellington Management Company, LLP, Gruber McBaine Investment Advisors and Weber Capital Partners, L.P. invested $5.0 million, $5.0 million, and $3.0 million, respectively. The Company also announced that the repayment in full of its line of credit with Union Bank of California, N.A. and Bank of America NT & SA, amounting to approximately $27 million, by utilizing part of the equity proceeds and entering into a new loan agreement with Greyrock Capital for $12 million. "These transactions are key steps in our program to strengthen the balance sheet and provide needed working capital. The initial successful deployment of our new point-to-multipoint product to several customers is very encouraging and these actions will allow the Company to aggressively follow-up these successes," said George Roberts, Chairman and CEO, P-Com, Inc. "We are particularly pleased with the investor group and their in-depth knowledge of the telecommunications industry." P-Com, Inc. develops, manufactures, and markets network access systems for the worldwide wireless telecommunications market. The point-to-point, spread spectrum, and --more-- P-COM, INC. CLOSES AGREEMENT FOR $43 MILLION - -------------------------------------------------------------------------------- Page 2 of 2 point-to-multipoint radio links provided by P-Com are designed to satisfy the network requirements of cellular and personal communications services, corporate communications, public utilities and local governments. In addition, P-Com provides comprehensive network services including system planning, program planning and management, path design, and installation. Statements in this release that are forward looking involve known and unknown risks and uncertainties, which may cause P-Com's actual results in future periods to be materially different from any future performance that may be suggested in this release. Such factors may include, but are not limited to, fluctuations in customer demand and commitments, both in timing and volume, introduction of new products, commercial acceptance and viability of new products and expenses associated therewith, cancellations of orders without penalties, pricing and competition, reliance upon subcontractors, P-Com's ability to have available an appropriate amount of production capacity in a timely manner, the ability of P-Com's customers to finance their purchases of P- Com's products and/or services, the timing of new technology and product introductions, the risk of early obsolescence, and the pending stockholder class action lawsuit. Further, P-Com operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond P-Com's control, such as announcements by competitors and service providers. Reference is made to the discussion of risk factors detailed in P- Com's filings with the Securities and Exchange Commission, including its reports on Form 10-K and 10-Q. P-Com, Inc. has its world headquarters in Campbell, California, USA and offices in Florida, New Jersey, Virginia, the UK, Italy, France, Germany, China, and Singapore. P-Com is an ISO 9001 certified company. For additional information, contact P-Com at: P-Com, Inc. . 3175 S. Winchester Boulevard . Campbell, CA 95008 . USA TEL: (408) 866-3666 . FAX: (408) 866-3655 www.p-com.com ------------- ### -----END PRIVACY-ENHANCED MESSAGE-----