PROMISSORY NOTE

      THIS  PROMISSORY NOTE (the "NOTE") is made and entered into as of June 16,
2004 by and between P-Com, Inc., a Delaware corporation  (hereinafter called the
"BORROWER" or the "CORPORATION"),  and ____________________  (individually,  the
"HOLDER," and collectively  with the holders of all other notes of same like and
tenor, the "HOLDERS").

      FOR  VALUE  RECEIVED,  Borrower,  hereby  promises  to pay to the order of
Holder or its registered assigns, the sum of ___________________________________
($___________)  on the  earlier of (a) ninety  (90) days from June 16, 2004 (the
"ISSUE  DATE")  or (b) the  date on  which  the  holders  of a  majority  of the
Corporation's outstanding common stock approve the removal of the 4.99% exercise
limitation  from all  outstanding  Series A Warrants and Series B Warrants  (the
"STOCKHOLDER  APPROVAL")  (the earlier date  referred to herein as the "MATURITY
DATE").  The  Corporation  shall pay  interest on the unpaid  principal  balance
hereof at the rate of six percent (6%) per annum.  Interest  shall accrue on the
unpaid  principal  balance  hereof  from the Issue  Date until the same is paid,
whether at maturity, or upon prepayment, repayment, or otherwise. Interest shall
be  calculated  based on a 360-day year of twelve 30-day  months.  The principal
amount hereof,  together with all accrued and unpaid interest thereon,  shall be
due and payable on the Maturity  Date.  All  payments of principal  and interest
shall be made in, and all  references  herein to  monetary  denominations  shall
refer to,  lawful money of the United States of America.  All payments  shall be
made at such address as the Holder shall have given or shall  hereafter  give to
the Borrower by written  notice made in accordance  with the  provisions of this
Note.

      The term  "NOTE"  and all  references  thereto,  as used  throughout  this
instrument,  shall mean this  instrument  as  originally  executed,  or if later
amended or supplemented, then as so amended or supplemented.

                                   ARTICLE I
                            APPLICATION OF PRINCIPLE

      Upon the receipt of Stockholder Approval, the principal amount of the Note
shall be applied upon the 61st day following the receipt of Stockholder Approval
as the  purchase  price due upon the  exercise  of all of  Holder's  outstanding
Series A Warrants and Series B Warrants.  The purchase price shall be calculated
under the terms of the  Corporation's  Special  Warrant  Offer,  offered  to the
Corporation's  warrantholders in June 2004, the terms of which Holder was unable
to take  advantage  because  of the 4.99%  exercise  limitation  on the Series A
Warrants and Series B Warrants (the  "BLOCKER").  Any accrued  interest shall be
paid in cash to Holder.

                                   ARTICLE II
                               HOLDER'S COVENANTS

      Holder agrees to vote its existing shares in the  Corporation  with voting
rights in favor of the removal of the Blocker. By execution of this Note, Holder
hereby delivers its request to remove the Blocker,  as required under the Series
A Warrants and Series B Warrants,  once the requisite  Stockholder  Approval has
been received by the  Corporation.  Holder's  failure to observe its obligations
described  herein  shall  constitute  a breach  of the Note.  Upon such  breach,
Borrower's  obligation to accrue and pay interest on the  principle  shall cease
and  Borrower's  obligation to repay the Note shall cease until Holder  complies
with its covenants.

<PAGE>

                                  ARTICLE III
                                   PREPAYMENT

      This Note may be prepaid in whole or in part, without premium,  penalty or
discount,  at any time,  or from time to time,  at the  option of the  Borrower,
together with accrued interest on the amount prepaid.

                                   ARTICLE IV
                               EVENTS OF DEFAULT

      A.  Events of  Default.  In the event  (each of the  events  described  in
clauses  (i)-(iii) below after expiration of the applicable cure period (if any)
being an "EVENT OF DEFAULT"):

            (i) the  Corporation  fails  to pay in full  the  principal  hereof,
and/or the accrued and unpaid interest  thereon,  when due, whether at maturity,
upon acceleration or otherwise;

            (ii) the Corporation or any subsidiary of the Corporation shall make
an  assignment  for the  benefit  of  creditors,  or apply for or consent to the
appointment  of a receiver  or trustee for it or for a  substantial  part of its
property  or  business;  or  such a  receiver  or  trustee  shall  otherwise  be
appointed; or

            (iii)   bankruptcy,   insolvency,   reorganization   or  liquidation
proceedings or other  proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the  Corporation  or
any subsidiary of the Corporation,  and if instituted against the Corporation or
any  subsidiary  of the  Corporation  by a third  party,  shall not be dismissed
within 60 days of their initiation;

then, upon the occurrence of an Event of Default,  the unpaid principal  balance
of this Note and accrued interest on this Note shall become  immediately due and
payable, without presentment,  demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the undersigned.

                                   ARTICLE V
                                      RANK

      The Notes  shall rank  senior to any  indebtedness  outstanding  as of the
Issue Date as to  repayment,  except  that the Notes  shall  rank  junior to any
secured  indebtedness of the Corporation for which a security  interest has been
perfected as of the Issue Date.

                                   ARTICLE VI
                                 MISCELLANEOUS

      A. Failure or  Indulgency  Not Waiver.  No failure or delay on the part of
any Holder in the  exercise of any power,  right or  privilege  hereunder  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
such power,  right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.

                                      -2-
<PAGE>

      B. Notices.  Any notices required or permitted to be given under the terms
of this Note shall be sent by  certified  or  registered  mail  (return  receipt
requested) or delivered  personally or by courier or by confirmed telecopy,  and
shall be effective five days after being placed in the mail, if mailed,  or upon
receipt  or  refusal  of  receipt,  if  delivered  personally  or by  courier or
confirmed  telecopy,  in each case addressed to a party.  The addresses for such
communications shall be:

                  If to the Corporation:

                  P-Com, Inc.
                  3175 South Winchester Blvd.
                  Campbell, CA 95008
                  Telephone: 408 866.3666
                  Facsimile:  408.874.4324
                  Attention:  Chief Executive Officer

                  If to the Holder:

                  North Sound Legacy Fund LLC
                  c/o North Sound Capital LLC
                  53 Old Forest Avenue, Suite 202
                  Old Greenwich, CT 06870
                  Telephone: 203.967.5700
                  Fascimile: 203.9367.5851

      Each  party  shall  provide  notice to the other  parties of any change in
address or the address of any transferee of the Note.

      A. Amendment Provision.  This Note and any provision hereof may be amended
only by an instrument in writing signed by the Corporation and the Holder.

      B. Assignability.  This Note shall be binding upon the Corporation and its
successors  and  assigns  and shall  inure to the  benefit of the Holder and its
successors  and  assigns.  This  Note  may not be  pledged  or  assigned  to any
affiliate or to any other person or entity without the prior written  consent of
the Corporation.

      C.  Cost of  Collection.  If an Event of  Default  occurs  hereunder,  the
Corporation  shall  pay  the  Holder  hereof  costs  of  collection,   including
reasonable attorneys' fees.

      D.  Governing  Law;  Jurisdiction.  This  Note  shall be  governed  by and
construed in accordance  with the laws of the State of California  applicable to
contracts  made and to be  performed  in the State of  California.  The  parties
irrevocably  consent to the jurisdiction of the United States federal courts and
the state courts  located in the State of  California  in any suit or proceeding
based on or arising  under this Note and  irrevocably  agrees that all claims in
respect of such suit or proceeding may be determined in such courts.  Each party

<PAGE>

irrevocably  waives the defense of an  inconvenient  forum to the maintenance of
such suit or proceeding.  The parties further agree that service of process upon
the other  party  mailed by first  class mail  shall be deemed in every  respect
effective  service  of  process  upon  the  other  party  in any  such  suit  or
proceeding.  Nothing  herein  shall  affect  the right of the  parties  to serve
process in any other manner  permitted  by law.  The parties  agree that a final
non-appealable  judgment in any such suit or proceeding  shall be conclusive and
may be enforced in other  jurisdictions by suit on such judgment or in any other
lawful manner.

      E. Lost or Stolen Notes.  Upon receipt by the  Corporation of (i) evidence
of the loss,  theft,  destruction  or mutilation of any Note and (ii) (y) in the
case of loss,  theft or  destruction,  of  indemnity  (without any bond or other
security)  reasonably  satisfactory  to the  Corporation,  or (z) in the case of
mutilation,  upon surrender and cancellation of any Note, the Corporation  shall
execute and deliver a new Note of like tenor and date.

      F.  Remedies  Cumulative.  The  remedies  provided  in this Note  shall be
cumulative and in addition to all other remedies  available  under this Note, at
law or in  equity  (including  a decree of  specific  performance  and/or  other
injunctive  relief),  and nothing  herein  shall limit either  party's  right to
pursue  actual  damages  for any  failure by the other  party to comply with the
terms  of  this  Note.  Each  party  acknowledges  that  a  breach  by it of its
obligations  hereunder will cause  irreparable  harm to the other party and that
the remedy at law for any such breach may be  inadequate.  Each party  therefore
agrees,  in the event of any such breach or  threatened  breach,  that the other
party shall be  entitled,  in addition to all other  available  remedies,  to an
injunction  restraining  any breach,  without the necessity of showing  economic
loss and without any bond or other security being required.

      G. Business Day. For purposes of this Note,  the term "BUSINESS DAY" means
any day, other than a Saturday or Sunday or a day on which banking  institutions
in the State of New York are  authorized  or  obligated  by law,  regulation  or
executive order to close. If any payment to be made hereunder shall be stated to
be or become due on a day which is not a business  day,  such  payment  shall be
made on the next  following  business  day and such  extension  of time shall be
included in computing interest in connection with such payment.

      H. JURY TRIAL  WAIVER.  BORROWER AND HOLDER  HEREBY WAIVE TRIAL BY JURY IN
ANY LEGAL  PROCEEDING  INVOLVING,  DIRECTLY OR INDIRECTLY,  ANY MATTER  (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO
THIS NOTE OR THE  RELATIONSHIP  EVIDENCED  HEREBY.  THIS PROVISION IS A MATERIAL
INDUCEMENT FOR HOLDER TO ACCEPT AND RELY UPON THIS NOTE.

      I.  Severability.  If any  provision of this Note shall be  prohibited  or
invalid,  under  applicable  law, it shall be  ineffective  only to such extent,
without invalidating the remainder of this Note.

<PAGE>

      J. Maximum  Interest  Rate.  If the  effective  interest rate on this Note
would otherwise  violate any applicable  usury law, then the interest rate shall
be reduced to the  maximum  permissible  rate and any  payment  received  by the
Holder  in  excess  of the  maximum  permissible  rate  shall  be  treated  as a
prepayment of the principal of this Note.

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                                      -5-
<PAGE>

      IN WITNESS  WHEREOF,  the parties hereto have executed this Note as of the
date first written above.


                                   P-COM, INC.



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


                                   HOLDER


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

                      [Signature page to Promissory Note.]