Document:

EX-10.1

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL IN THE FORM,
SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE MAKER THAT THIS NOTE MAY BE SOLD, TRANSFERRED,
OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND SUCH STATE
SECURITIES LAWS.

P-COM, INC.

Promissory Note

due December 31, 2006

No. PN-05-1 $250,000.00

Dated: March 22, 2005

For value received, P-COM, INC., a Delaware corporation (the “Maker”), hereby promises
to pay to the order of SDS CAPITAL GROUP SPC, LTD. (together with its successors, representatives,
and permitted assigns, the “Holder”), in accordance with the terms hereinafter provided,
the principal amount of Two Hundred Fifty Thousand Dollars ($250,000.00), together with interest
thereon. Concurrently with the issuance of this Note, the Maker is issuing separate promissory
notes (the “Other Notes”) to separate purchasers (the “Other Holders”) pursuant to
the Note and Warrant Purchase Agreement dated as of November 3, 2004 (the “Purchase
Agreement”) by and among the Maker and the purchasers listed therein.

All payments under or pursuant to this Note shall be made in United States Dollars in
immediately available funds to the Holder at the address of the Holder first set forth above or at
such other place as the Holder may designate from time to time in writing to the Maker or by wire
transfer of funds to the Holder’s account, instructions for which are attached hereto as
Exhibit A. The outstanding principal balance of this Note shall be due and payable on
December 31, 2006 (the “Maturity Date”) or at such earlier time as provided herein.

ARTICLE I

Section 1.1 Purchase Agreement. This Note has been executed and delivered pursuant to
the Purchase Agreement. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for such terms in the Purchase Agreement.

Section 1.2 Interest; Payment of Interest. Beginning on the issuance date of this
Note (the “Issuance Date”), the outstanding principal balance of this Note shall bear
interest, in arrears, at a rate per annum equal to seven percent (7%), increasing to eight percent
(8%) on July 1, 2005 and ten percent (10%) on April 1, 2006 through the Maturity Date. Interest
shall be payable on a quarterly basis on each Principal Payment Date (as defined below) commencing
on March 31, 2005. Interest shall be computed on the basis of a 360-day year of twelve (12) 30-day
months and shall accrue commencing on the Issuance Date. Furthermore, upon the occurrence of an
Event of Default (as defined in Section 2.1 hereof), then to the extent permitted by law, the Maker
will pay interest to the Holder, payable on demand, on the outstanding principal balance of the
Note from the date of the Event of Default until such Event of Default is cured at the rate equal
to the lesser of the interest rate then in effect plus two percent (2%) and the maximum applicable
legal rate per annum (the “Default Rate”).

Section 1.3 Payment of Principal. Commencing on March 31, 2005 and continuing
thereafter on a quarterly basis (each, a “Quarterly Determination Period”) on each of June
30, 2005, September 30, 2005, December 31, 2005, March 31, 2006, June 30, 2006, September 30, 2006
and December 31, 2006 (each, a “Principal Payment Date”), the Maker shall pay the
outstanding principal balance of this Note in eight (8) consecutive and equal installments equal to
$31,250 (the “Principal Installment Amount”), plus accrued interest thereon (the
"Interest Installment Amount”). The Maker may pay such Principal Installment Amount in
cash or registered shares of the Maker’s common stock, par value $0.0001 per share (the “Common
Stock”). The Maker shall notify the Holder in writing five (5) Trading Days prior to the
Principal Payment Date (the “Notification Date”) of its election to pay the Principal
Installment Amount and Interest Installment Amount in cash or registered shares of Common Stock, or
any combination thereof, at the Maker’s discretion. If the Maker elects to pay the Principal
Installment Amount and the Interest Installment Amount in cash such amount shall be wired in
immediately available funds on the Principal Payment Date. If the Maker elects to pay the
Principal Installment Amount and the Interest Installment Amount in registered shares of Common
Stock, the Registration Statement must be effective and the number of registered shares of Common
Stock to be issued to the Holder shall be an amount equal to the Principal Installment Amount and
the Interest Installment Amount divided by ninety percent (90%) of the average of the twenty (20)
lowest Volume Weighted Average Prices of the Maker’s Common Stock, as reported on the OTC Bulletin
Board, for the applicable Quarterly Determination Period, excluding the Trading Days occurring on
and after the Notification Date for such Quarterly Determination Period. The Maker shall not issue
more than six million (6,000,000) shares of its Common Stock (“Share Cap Amount”) in the
aggregate in payment of Principal Installment Amounts and Interest Installment Amounts under this
Note and the Other Notes. Any payment of Principal Installment Amounts and Interest Installment
Amounts in excess of the Share Cap Amount shall be paid in cash.

Section 1.4 Payment on Non-Business Days. Whenever any payment to be made shall be
due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment
may be due on the next succeeding business day and such next succeeding day shall be included in
the calculation of the amount of accrued interest payable on such date.

Section 1.5 Seniority. Except for the amounts outstanding under the Credit Facility
dated September 17, 2004 from Silicon Valley Bank, which amounts shall not exceed $5,000,000
without the consent of the Holders and the Other Holders, this Note and the Other Notes shall rank
senior to the Maker’s currently issued and outstanding indebtedness and equity securities. The
parties agree and acknowledge that all amounts due under the terms of this Note are subordinate to
all amounts due under the terms of the Credit Facility from Silicon Valley Bank.

Section 1.6 Transfer. This Note may be transferred or sold, subject to the provisions
of Section 4.8 of this Note, or pledged, hypothecated or otherwise granted as security by the
Holder.

Section 1.7 Replacement. Upon receipt of a duly executed, notarized and unsecured
written statement from the Holder with respect to the loss, theft or destruction of this Note (or
any replacement hereof), and without requiring an indemnity bond or other security, or, in the case
of a mutilation of this Note, upon surrender and cancellation of such Note, the Maker shall issue a
new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.

ARTICLE II

EVENTS OF DEFAULT; REMEDIES

Section 2.1 Events of Default. The occurrence of any of the following events shall be
an “Event of Default” under this Note:

(a) the Maker shall fail to make the payment of any Principal Installment Amount on the date
such payment is due hereunder; or

(b) the Maker shall fail to make any payment of Interest Installment Amount on the date such
payment is due hereunder; or

(c) the failure of the Registration Statement to be declared effective by the Securities and
Exchange Commission on or prior to the date which is one hundred twenty (120) days after the
Closing Date; or

(d) the suspension from listing, without subsequent listing on any one of, or the failure of
the Common Stock to be listed on at least one of the OTC Bulletin Board, Nasdaq National Market,
Nasdaq SmallCap Market, The New York Stock Exchange, Inc. or The American Stock Exchange, Inc. for
a period of five (5) consecutive Trading Days; or

(e) the Maker shall fail to (i) timely deliver the shares of Common Stock in accordance with
Section 1.3 hereof, (ii) timely file the Registration Statement or (iii) make the payment of any
fees and/or liquidated damages under this Note, the Purchase Agreement or the Registration Rights
Agreement, which failure in each case is not remedied within three (3) business days after the
occurrence thereof; or

(f) default shall be made in the performance or observance of (i) any material covenant,
condition or agreement contained in this Note (other than as set forth in clause (e) of this
Section 2.1) and such default is not fully cured within five (5) business days after the receipt by
the Maker of a notice of default or (ii) any material covenant, condition or agreement contained in
the Purchase Agreement, the Other Notes or the Registration Rights Agreement which is not covered
by any other provisions of this Section 2.1 and such default is not fully cured within five (5)
business days after the receipt by the Maker of a notice of default; or

(g) any material representation or warranty made by the Maker herein or in the Purchase
Agreement, the Registration Rights Agreement or the Other Notes shall prove to have been false or
incorrect or breached in a material respect on the date as of which made; or

(h) the Maker shall (i) default in any payment of any amount or amounts of principal of or
interest on any Indebtedness (other than the Indebtedness hereunder) the aggregate principal amount
of which Indebtedness is in excess of $250,000 or (ii) default in the observance or performance of
any other agreement or condition relating to any Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or to permit the holder
or holders or beneficiary or beneficiaries of such Indebtedness to cause with the giving of notice
if required, such Indebtedness to become due prior to its stated maturity; or

(i) the Maker shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its property or assets, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the United States Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic), (iv) file a
petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or
other similar law affecting the enforcement of creditors’ rights generally, (v) acquiesce in
writing to any petition filed against it in an involuntary case under United States Bankruptcy Code
(as now or hereafter in effect) or under the comparable laws of any jurisdiction (foreign or
domestic), (vi) issue a notice of bankruptcy or winding down of its operations or issue a press
release regarding same, or (vii) take any action under the laws of any jurisdiction (foreign or
domestic) analogous to any of the foregoing; or

(j) a proceeding or case shall be commenced in respect of the Maker, without its application
or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization,
moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any
substantial part of its assets in connection with the liquidation or dissolution of the Maker or
(iii) similar relief in respect of it under any law providing for the relief of debtors, and such
proceeding or case described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed
and in effect, for a period of sixty (60) days or any order for relief shall be entered in an
involuntary case under United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic) against the Maker or action under the
laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken
with respect to the Maker and shall continue undismissed, or unstayed and in effect for a period of
sixty (60) days; or

(k) the failure of the Maker to instruct its transfer agent to remove any legends from shares
of Common Stock eligible to be sold under Rule 144 of the Securities Act and issue such unlegended
certificates to the Holder within three (3) business days of the Holder’s request so long as the
Holder has provided reasonable assurances to the Maker that such shares of Common Stock can be
resold pursuant to Rule 144; or

(l) the occurrence of an Event of Default under the Other Notes.

Section 2.2 Remedies Upon An Event of Default. If an Event of Default shall have
occurred and shall be continuing, the Holder of this Note may at any time at its option, (a)
declare the entire unpaid principal balance of this Note, together with all interest accrued
hereon, due and payable, and thereupon, the same shall be accelerated and so due and payable,
without presentment, demand, protest, or notice, all of which are hereby expressly unconditionally
and irrevocably waived by the Maker; provided, however, that upon the occurrence of
an Event of Default described in (i) Sections 2.1(i) or (j), the outstanding principal balance and
accrued interest hereunder shall be automatically due and payable and (ii) Sections 2.1 (c)-(h),
demand the prepayment of this Note pursuant to Section 3.3 hereof, (b) demand that the principal
amount of this Note then outstanding and all accrued and unpaid interest thereon shall be converted
into shares of Common Stock at a conversion price per share calculated pursuant to Section 1.3
hereof assuming that the Trading Day that precedes the date that the Event of Default occurs is the
last day of a ninety day period to determine the average of the twenty (20) lowest Volume Weight
Average Prices, or (c) exercise or otherwise enforce any one or more of the Holder’s rights,
powers, privileges, remedies and interests under this Note, the Purchase Agreement, the
Registration Rights Agreement or applicable law. No course of delay on the part of the Holder
shall operate as a waiver thereof or otherwise prejudice the right of the Holder. No remedy
conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter
available at law, in equity, by statute or otherwise.

ARTICLE III

DELIVERY OF COMMON STOCK; PREPAYMENT

Section 3.1 Delivery of Common Stock.

(a) On the Principal Payment Date, the Maker or its designated transfer agent, as applicable,
shall issue and deliver to the Depository Trust Company (“DTC”) account on the Holder’s
behalf via the Deposit Withdrawal Agent Commission System (“DWAC”) as specified by the
Holder, registered in the name of the Holder or its designee, for the number of shares of Common
Stock to which the Holder shall be entitled. In the alternative, the Maker shall deliver to the
Holder by express courier a certificate or certificates which shall be free of restrictive legends
and trading restrictions (other than those required by Section 5.1 of the Purchase Agreement)
representing the number of shares of Common Stock being issued in payment of the Principal
Installment Amount and the Interest Installment Amount on the Principal Payment Date.
Notwithstanding the foregoing to the contrary, the Maker or its transfer agent shall only be
obligated to issue and deliver the shares to the DTC on the Holder’s behalf via DWAC (or
certificates free of restrictive legends) if such conversion is in connection with a sale and the
Holder has complied with the applicable prospectus delivery requirements.

(b) The Maker understands that a delay in the delivery of the shares of Common Stock beyond
the Principal Payment Date could result in economic loss to the Holder. If the Maker fails to
deliver to the Holder such shares via DWAC or a certificate or certificates pursuant to this
Section hereunder by the Principal Payment Date, the Maker shall pay to such Holder, in cash, an
amount per Trading Day for each Trading Day until such shares are delivered via DWAC or
certificates are delivered, together with interest on such amount at the Default Rate, accruing
until such amount and any accrued interest thereon is paid in full, equal to the greater of (A) (i)
1% of the aggregate Principal Installment Amount of the Notes being repaid for the first five (5)
Trading Days after the Principal Payment Date and (ii) 2% of the aggregate Principal Installment
Amount of the Notes being repaid for each Trading Day thereafter and (B) $2,000 per day (which
amount shall be paid as liquidated damages and not as a penalty). Nothing herein shall limit a
Holder’s right to pursue actual damages for the Maker’s failure to deliver certificates
representing shares of Common Stock within the period specified herein and such Holder shall have
the right to pursue all remedies available to it at law or in equity (including, without
limitation, a decree of specific performance and/or injunctive relief).

(c) Issue Taxes. The Maker shall pay any and all issue and other taxes, excluding
federal, state or local income taxes, that may be payable in respect of any issue or delivery of
shares of Common Stock in payment of this Note pursuant thereto.

(d) Fractional Shares. No fractional shares of Common Stock shall be issued in
payment of this Note. In lieu of any fractional shares to which the Holder would otherwise be
entitled, the Maker shall pay cash equal to the product of such fraction multiplied by the average
of the Volume Weighted Average Prices of the Common Stock for the five (5) consecutive Trading Days
immediately preceding the Principal Payment Date.

(e) Reservation of Common Stock. The Maker shall at all times when this Note shall be
outstanding, reserve and keep available out of its authorized but unissued Common Stock, six
million (6,000,000) shares of Common Stock as shall from time to time be sufficient to effect the
payment of this Note and all interest accrued thereon. The Maker shall, from time to time in
accordance with the Delaware General Corporation Law, increase the authorized number of shares of
Common Stock if at any time the unissued number of authorized shares shall not be sufficient to
satisfy the Maker’s obligations under this Section 3.1(e).

(f) Regulatory Compliance. If any shares of Common Stock to be reserved for the
purpose of repayment of this Note or any interest accrued thereon require registration or listing
with or approval of any governmental authority, stock exchange or other regulatory body under any
federal or state law or regulation or otherwise before such shares may be validly issued or
delivered upon conversion, the Maker shall, at its sole cost and expense, in good faith and as
expeditiously as possible, endeavor to secure such registration, listing or approval, as the case
may be.

Section 3.2 Ownership Cap and Certain Conversion Restriction. Notwithstanding anything
to the contrary set forth in Section 3 of this Note, at no time may the Maker issue shares of
Common Stock in payment of a quarterly Principal Installment Amount if the number of shares of
Common Stock to be issued would exceed, when aggregated with all other shares of Common Stock owned
by the Holder at such time, the number of shares of Common Stock which would result in the Holder
beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the
rules thereunder) more than 9.9% of all of the Common Stock outstanding at such time.

Section 3.3 Prepayment.

(a) Prepayment Upon an Event of Default. Notwithstanding anything to the contrary
contained herein, upon the occurrence of an Event of Default described in Sections 2.1(c)-(j)
hereof, the Holder shall have the right, at such Holder’s option, to require the Maker to prepay in
cash all or a portion of this Note at a price equal to the Triggering Event Prepayment Price (as
defined in Section 3.3(c) below) applicable at the time of such request (the “Event of Default
Prepayment Price”). Nothing in this Section 3.3(a) shall limit the Holder’s rights under
Section 2.2 hereof.

(b) Prepayment Option Upon Major Transaction. In addition to all other rights of the
Holder contained herein, simultaneous with the occurrence of a Major Transaction (as defined
below), the Holder shall have the right, at the Holder’s option, to require the Maker to prepay all
or a portion of the Holder’s Notes in cash at a price equal to one hundred percent (100%) of the
aggregate principal amount of this Note plus all accrued and unpaid interest (the “Major
Transaction Prepayment Price”).

(c) Prepayment Option Upon Triggering Event. In addition to all other rights of the
Holder contained herein, after a Triggering Event (as defined below), the Holder shall have the
right, at the Holder’s option, to require the Maker to prepay all or a portion of the Holder’s
Notes in cash at a price equal to one hundred percent (100%) of the aggregate principal amount of
this Note plus all accrued and unpaid interest (the “Triggering Event Prepayment Price,”
and, collectively with the “Major Transaction Prepayment Price,” the “Prepayment
Price”).

(d) Intentionally Omitted.

(e) "Major Transaction.” A “Major Transaction” shall be deemed to have
occurred at such time as any of the following events:

(i) the consolidation, merger or other business combination of the Maker with or into another
Person (as defined in Section 4.13 hereof) (other than (A) pursuant to a migratory merger effected
solely for the purpose of changing the jurisdiction of incorporation of the Maker or (B) a
consolidation, merger or other business combination in which holders of the Maker’s voting power
immediately prior to the transaction continue after the transaction to hold, directly or
indirectly, the voting power of the surviving entity or entities necessary to elect a majority of
the members of the board of directors (or their equivalent if other than a corporation) of such
entity or entities);

(ii) the sale or transfer of more than fifty percent (50%) of the Maker’s assets (based on the
fair market value as determined in good faith by the Maker’s Board of Directors) other than
inventory in the ordinary course of business in one or a related series of transactions; or

(iii) closing of a purchase, tender or exchange offer made to the holders of more than fifty
percent (50%) of the outstanding shares of Common Stock in which more than fifty percent (50%) of
the outstanding shares of Common Stock were tendered and accepted; or

(iv) the issuance by the Maker of shares of its Common Stock in one or a series of related
transactions in excess of forty percent (40%) of its shares of Common Stock outstanding on the
[Closing Date].

(f) "Triggering Event.” A “Triggering Event” shall be deemed to have occurred
at such time as any of the following events:

(i) so long as any Notes are outstanding, the effectiveness of the Registration Statement,
after it becomes effective, (i) lapses for any reason (including, without limitation, the issuance
of a stop order) or (ii) is unavailable to the Holder for sale of the shares of Common Stock, and
such lapse or unavailability continues for a period of twenty (20) consecutive Trading Days, and
the shares of Common Stock which may be issued in payment of the Holder’s Notes cannot be sold in
the public securities market pursuant to Rule 144(k), provided that the cause of such lapse or
unavailability is not due to factors primarily within the control of the Holder of the Notes; and
provided further that a Triggering Event shall not have occurred if and to the extent the Maker
exercised its rights set forth in Sections 3(m) or 3(n) of the Registration Rights Agreement; or

(ii) the suspension from listing, without subsequent listing on any one of, or the failure of
the Common Stock to be listed on at least one of the OTC Bulletin Board, Nasdaq National Market,
Nasdaq SmallCap Market, The New York Stock Exchange, Inc. or The American Stock Exchange, Inc., for
a period of five (5) consecutive Trading Days.

(f) Intentionally Omitted.

(g) Mechanics of Prepayment at Option of Holder Upon Major Transaction. No sooner
than fifteen (15) days nor later than ten (10) days prior to the consummation of a Major
Transaction, but not prior to the public announcement of such Major Transaction, the Maker shall
deliver written notice thereof via facsimile and overnight courier (“Notice of Major
Transaction”) to the Holder of this Note. At any time after receipt of a Notice of Major
Transaction (or, in the event a Notice of Major Transaction is not delivered at least ten (10) days
prior to a Major Transaction, at any time within ten (10) days prior to a Major Transaction), any
holder of the Notes then outstanding may require the Maker to prepay, effective immediately prior
to the consummation of such Major Transaction, all of the holder’s Notes then outstanding by
delivering written notice thereof via facsimile and overnight courier (“Notice of Prepayment at
Option of Holder Upon Major Transaction”) to the Maker, which Notice of Prepayment at Option of
Holder Upon Major Transaction shall indicate (i) the number of Notes that such holder is electing
to prepay and (ii) the applicable Major Transaction Prepayment Price, as calculated pursuant to
Section 3.3(b) above.

(h) Mechanics of Prepayment at Option of Holder Upon Triggering Event. Within one (1)
business day after the occurrence of a Triggering Event, the Maker shall deliver written notice
thereof via facsimile and overnight courier (“Notice of Triggering Event”) to each holder
of the Notes. At any time after the earlier of a holder’s receipt of a Notice of Triggering Event
and such holder becoming aware of a Triggering Event, any holder of this Note and the Other Notes
then outstanding may require the Maker to prepay all of the Notes on a pro rata basis by delivering
written notice thereof via facsimile and overnight courier (“Notice of Prepayment at Option of
Holder Upon Triggering Event”) to the Maker, which Notice of Prepayment at Option of Holder
Upon Triggering Event shall indicate (i) the amount of the Note that such holder is electing to
have prepaid and (ii) the applicable Triggering Event Prepayment Price, as calculated pursuant to
Section 3.3(c) above. A holder shall only be permitted to require the Maker to prepay the Note
pursuant to Section 3.3 hereof for the greater of a period of ten (10) days after receipt by such
holder of a Notice of Triggering Event or for so long as such Triggering Event is continuing.

(i) Intentionally Omitted.

(j) Payment of Prepayment Price. Upon the Maker’s receipt of a Notice(s) of
Prepayment at Option of Holder Upon Triggering Event or a Notice(s) of Prepayment at Option of
Holder Upon Major Transaction from any holder of the Notes, the Maker shall immediately notify each
holder of the Notes by facsimile of the Maker’s receipt of such Notice(s) of Prepayment at Option
of Holder Upon Triggering Event or Notice(s) of Prepayment at Option of Holder Upon Major
Transaction and each holder which has sent such a notice shall promptly submit to the Maker such
holder’s certificates representing the Notes which such holder has elected to have prepaid. The
Maker shall deliver the applicable Triggering Event Prepayment Price, in the case of a prepayment
pursuant to Section 3.3(h), to such holder within five (5) business days after the Maker’s receipt
of a Notice of Prepayment at Option of Holder Upon Triggering Event and, in the case of a
prepayment pursuant to Section 3.3(g), the Maker shall deliver the applicable Major Transaction
Prepayment Price immediately prior to the consummation of the Major Transaction; provided that a
holder’s original Note shall have been so delivered to the Maker; provided further that if the
Maker is unable to prepay all of the Notes to be prepaid, the Maker shall prepay an amount from
each holder of the Notes being prepaid equal to such holder’s pro-rata amount (based on the number
of Notes held by such holder relative to the number of Notes outstanding) of all Notes being
prepaid. If the Maker shall fail to prepay all of the Notes submitted for prepayment (other than
pursuant to a dispute as to the arithmetic calculation of the Prepayment Price), in addition to any
remedy such holder of the Notes may have under this Note and the Purchase Agreement, the applicable
Prepayment Price payable in respect of such Notes not prepaid shall bear interest at the rate of
two percent (2%) per month (prorated for partial months) until paid in full. Until the Maker pays
such unpaid applicable Prepayment Price in full to a holder of the Notes submitted for prepayment,
such holder shall have the option (the “Void Optional Prepayment Option”) to, in lieu of
prepayment, require the Maker to promptly return to such holder(s) all of the Notes that were
submitted for prepayment by such holder(s) under this Section 3.3 and for which the applicable
Prepayment Price has not been paid, by sending written notice thereof to the Maker via facsimile
(the “Void Optional Prepayment Notice”). Upon the Maker’s receipt of such Void Optional
Prepayment Notice(s) and prior to payment of the full applicable Prepayment Price to such holder,
(i) the Notice(s) of Prepayment at Option of Holder Upon Triggering Event or the Notice(s) of
Prepayment at Option of Holder Upon Major Transaction, as the case may be, shall be null and void
with respect to those Notes submitted for prepayment and for which the applicable Prepayment Price
has not been paid, and (ii) the Maker shall immediately return any Notes submitted to the Maker by
each holder for prepayment under this Section 3.3(j) and for which the applicable Prepayment Price
has not been paid. A holder’s delivery of a Void Optional Prepayment Notice and exercise of its
rights following such notice shall not effect the Maker’s obligations to make any payments which
have accrued prior to the date of such notice. Payments provided for in this Section 3.3 shall
have priority to payments to other stockholders in connection with a Major Transaction.

(k) Maker’s Prepayment Option. At any time and from time to time after the Issuance
Date, the Maker may prepay in cash all or any portion of the outstanding principal amount of this
Note, plus any accrued and unpaid interest thereon, upon ten (10) business days prior written
notice to the Holder (the “Maker Prepayment Notice”) at a cash price equal to one hundred
percent (100%) of the outstanding principal amount of this Note plus any interest accrued and
outstanding thereon (the “Maker Prepayment Price”). The Maker may not deliver a Maker
Prepayment Notice to the Holder unless the Maker has clear and good funds for a minimum of the
amount it intends to prepay in a bank account controlled by the Maker. The Maker Prepayment Notice
shall state the date of prepayment (the “Maker Prepayment Date”), the Maker Prepayment
Price, the amount of the Note of such Holder to be prepaid, the amount of accrued and unpaid
interest through the Maker Prepayment Date and shall call upon the Holder to surrender to the Maker
on the Maker Prepayment Date at the place designated in the Maker Prepayment Notice such Holder’s
Note. The Maker Prepayment Date shall be no more than ten (10) Trading Days after the date on
which the Holder is notified of the Maker’s intent to prepay the Note (the “Maker Prepayment
Notice Date”). If the Maker fails to pay the Maker Prepayment Price by the eleventh
(11th) trading day following the Maker Prepayment Notice Date, the prepayment will be
declared null and void and the Maker shall lose its right to deliver a Maker Prepayment Notice to
the Holder in the future. On or after the Maker Prepayment Date, the Holder shall surrender the
Notes called for prepayment to the Maker at the place designated in the Maker Prepayment Notice and
shall thereupon be entitled to receive payment of the Maker Prepayment Price.

Section 3.4 No Rights as Shareholder. Nothing contained in this Note shall be
construed as conferring upon the Holder, prior to the payment of this Note in shares of Common
Stock, the right to vote or to receive dividends or to consent or to receive notice as a
shareholder in respect of any meeting of shareholders for the election of directors of the Maker or
of any other matter, or any other rights as a shareholder of the Maker.

ARTICLE IV

MISCELLANEOUS

Section 4.1 Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be effective (a) upon
hand delivery by telex (with correct answer back received), telecopy or facsimile at the address or
number designated in the Purchase Agreement (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such notice is to be
received) or (b) on the second business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The Maker will give written notice to the Holder at least ten (10)
days prior to the date on which the Maker takes a record (x) with respect to any dividend or
distribution upon the Common Stock, (y) with respect to any pro rata subscription offer to holders
of Common Stock or (z) for determining rights to vote with respect to any Organic Change,
dissolution, liquidation or winding-up and in no event shall such notice be provided to such holder
prior to such information being made known to the public. The Maker will also give written notice
to the Holder at least ten (10) days prior to the date on which any Organic Change, dissolution,
liquidation or winding-up will take place and in no event shall such notice be provided to the
Holder prior to such information being made known to the public. The Maker shall promptly notify
the Holder of this Note of any notices sent or received, or any actions taken with respect to the
Other Notes.

Section 4.2 Governing Law. This Note shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to any of the conflicts of
law principles which would result in the application of the substantive law of another
jurisdiction. This Note shall not be interpreted or construed with any presumption against the
party causing this Note to be drafted.

Section 4.3 Headings. Article and section headings in this Note are included herein
for purposes of convenience of reference only and shall not constitute a part of this Note for any
other purpose.

Section 4.4 Remedies, Characterizations, Other Obligations, Breaches and Injunctive
Relief. 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, without limitation, a decree of
specific performance and/or other injunctive relief), no remedy contained herein shall be deemed a
waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit
a holder’s right to pursue actual damages for any failure by the Maker to comply with the terms of
this Note. Amounts set forth or provided for herein with respect to payments, conversion and the
like (and the computation thereof) shall be the amounts to be received by the holder thereof and
shall not, except as expressly provided herein, be subject to any other obligation of the Maker (or
the performance thereof). The Maker acknowledges that a breach by it of its obligations hereunder
will cause irreparable and material harm to the Holder and that the remedy at law for any such
breach may be inadequate. Therefore the Maker agrees that, in the event of any such breach or
threatened breach, the Holder shall be entitled, in addition to all other available rights and
remedies, at law or in equity, to seek and obtain such equitable relief, including but not limited
to an injunction restraining any such breach or threatened breach, without the necessity of showing
economic loss and without any bond or other security being required.

Section 4.5 Enforcement Expenses. The Maker agrees to pay all costs and expenses of
enforcement of this Note, including, without limitation, reasonable attorneys’ fees and expenses.

Section 4.6 Binding Effect. The obligations of the Maker and the Holder set forth
herein shall be binding upon the successors and assigns of each such party, whether or not such
successors or assigns are permitted by the terms hereof.

Section 4.7 Amendments. This Note may not be modified or amended in any manner except
in writing executed by the Maker and the Holder.

Section 4.8 Compliance with Securities Laws. The Holder of this Note acknowledges
that this Note is being acquired solely for the Holder’s own account and not as a nominee for any
other party, and for investment, and that the Holder shall not offer, sell or otherwise dispose of
this Note. This Note and any Note issued in substitution or replacement therefor shall be stamped
or imprinted with a legend in substantially the following form:

"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL IN THE
FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE MAKER THAT
THIS NOTE MAY BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
SUCH STATE SECURITIES LAWS.”

Section 4.9 Consent to Jurisdiction. Each of the Maker and the Holder (i) hereby
irrevocably submits to the exclusive jurisdiction of the United States District Court sitting in
the Southern District of New York and the courts of the State of New York located in New York
county for the purposes of any suit, action or proceeding arising out of or relating to this Note
and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding
is improper. Each of the Maker and the Holder consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in effect for notices
to it under the Purchase Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing in this Section 4.9 shall affect or
limit any right to serve process in any other manner permitted by law. Each of the Maker and the
Holder hereby agree that the prevailing party in any suit, action or proceeding arising out of or
relating to this Note shall be entitled to reimbursement for reasonable legal fees from the
non-prevailing party.

Section 4.10 Parties in Interest. This Note shall be binding upon, inure to the
benefit of and be enforceable by the Maker, the Holder and their respective successors and
permitted assigns.

Section 4.11 Failure or Indulgence Not Waiver. No failure or delay on the part of the
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.

Section 4.12 Maker Waivers. Except as otherwise specifically provided herein, the
Maker and all others that may become liable for all or any part of the obligations evidenced by
this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands’
and notices in connection with the delivery, acceptance, performance and enforcement of this Note,
and do hereby consent to any number of renewals of extensions of the time or payment hereof and
agree that any such renewals or extensions may be made without notice to any such persons and
without affecting their liability herein and do further consent to the release of any person liable
hereon, all without affecting the liability of the other persons, firms or Maker liable for the
payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY.

(a) No delay or omission on the part of the Holder in exercising its rights under this Note,
or course of conduct relating hereto, shall operate as a waiver of such rights or any other right
of the Holder, nor shall any waiver by the Holder of any such right or rights on any one occasion
be deemed a waiver of the same right or rights on any future occasion.

(b) THE MAKER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL
TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND
HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY
DESIRE TO USE.

Section 4.13 Definitions. For the purposes hereof, the following terms shall have the
following meanings:

"Person” means an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or political subdivision thereof) or other entity of any kind.

"Trading Day” means (a) a day or which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (b) if the Common Stock is not
quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided, however, that in
the event that the Common Stock is not listed or quoted as set forth in (a) and (b) hereof, then
Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday
or a day on which banking institutions in the State of New York are authorized or required by law
or other government action to close.

1

P-COM, INC.

	 	 	 	By:
/s/ Daniel W. Rumsey

	 	 	 	Name: Daniel W. Rumsey

Title: Chief Restructuring Officer

2

EXHIBIT A

WIRE INSTRUCTIONS.

Payee:

Bank:

Address:

Bank No.:

Account No.:

Account Name:

DWAC INSTRUCTIONS.

Payee:

Bank:

Address:

Bank No.:

Account No.:

Account Name:

3EX-10.2

SECURITY AGREEMENT

SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time
in accordance herewith and including all attachments, exhibits and schedules hereto, the
“Agreement”), dated as of March 22, 2005, made by P-COM, INC., a Delaware corporation (the
“Grantor”), in favor of the secured parties listed on Exhibit A to this Agreement
(collectively, the “Secured Parties”).

WHEREAS, the Grantor has issued or will issue separate promissory notes to the Secured Parties
(the “Notes”) pursuant to a Note and Warrant Purchase Agreement, dated as of November 3, 2004 (the
“Purchase Agreement”), by and among the Grantor and the Secured Parties; and

WHEREAS, the Secured Parties and the Grantor agree that the Grantor execute and deliver to the
Secured Parties a security agreement providing for the grant to the Secured Parties of a continuing
security interest in all personal property and assets of the Grantor, all in substantially the form
hereof to secure all Obligations (hereinafter defined).

	 	 	 
	NOW, THEREFORE, the parties agree as follows:

	 
	 	 
	ARTICLE I.

	 	Definitions

Section 1.1. Definition of Terms Used Herein. All capitalized terms used herein and
not defined herein have the respective meanings provided therefor in the Purchase Agreement or the
Notes, as applicable. All terms defined in the Uniform Commercial Code (hereinafter defined) as in
effect from time to time and used herein and not otherwise defined herein (whether or not such
terms are capitalized) have the same definitions herein as specified therein.

Section 1.2. Definition of Certain Terms Used Herein. As used herein, the following
terms have the following meanings:

"Collateral” means all accounts receivable of the Grantor and all personal and fixture
property of every kind and nature, including, without limitation, all furniture, fixtures,
equipment, raw materials, inventory, or other goods, accounts, contract rights, rights to the
payment of money, insurance refund claims and all other insurance claims and proceeds, tort claims,
chattel paper, documents, instruments, securities and other investment property, deposit accounts,
rights to proceeds of letters of credit and all general intangibles including, without limitation,
all tax refund claims, license fees, patents, patent licenses, patent applications, trademarks,
trademark licenses, trademark applications, trade names, copyrights, copyright licenses, copyright
applications, rights to sue and recover for past infringement of patents, trademarks and
copyrights, computer programs, computer software, engineering drawings, service marks, customer
lists, goodwill, and all licenses, permits, agreements of any kind or nature pursuant to which the
Grantor possesses, uses or has authority to possess or use property (whether tangible or
intangible) of others or others possess, use or have authority to possess or use property (whether
tangible or intangible) of the Grantor, and all recorded data of any kind or nature, regardless of
the medium of recording including, without limitation, all books and records, software, writings,
plans, specifications and schematics; and all proceeds and products of each of the foregoing.

“Default” means any event or circumstance which, with the giving of notice, the lapse
of time, or both, would (if not cured, waived, or otherwise remedied during such time) constitute
an Event of Default.

“Event of Default” has the meaning specified in the Notes.

“Indemnitees” has the meaning specified in Section 7.5(b).

“Lien” means: (i) any interest in property securing an obligation owed to, or a claim
by, a Person other than the owner of the property, whether such interest is based on the common
law, statute, or contract, and including a security interest, charge, claim, or lien arising from a
mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes; (ii) to the extent not included under clause (i), any
reservation, exception, encroachment, easement, right-of-way, covenant, condition, restriction,
lease or other title exception or encumbrance affecting property; and (iii) any contingent or other
agreement to provide any of the foregoing.

"Notes” has the meaning assigned to such term in the first recital of this Agreement.

"Obligations” means all indebtedness, liabilities, obligations, covenants and duties
of the Grantor to the Secured Parties of every kind, nature and description, direct or indirect,
absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated,
arising by operation of law or otherwise, now existing of hereafter arising under or in connection
with the Notes, this Agreement or the other Transaction Documents.

“Registered Organization” means an entity formed by filing a registration document
with a United States Governmental Authority, such as a corporation, limited partnership or limited
liability company.

"Security Interest” has the meaning specified in Section 2.1 of this Agreement.

“Uniform Commercial Code” means the Uniform Commercial Code from time to time in
effect in the State of New York.

ARTICLE II. Security Interest

Section 2.1. Security Interest. As security for the payment and performance, in full
of the Obligations, and any extensions, renewals, modifications or refinancings of the Obligations,
the Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Secured Parties, and hereby grants to the Secured Parties, their successors
and assigns, a security interest in, all of such Grantor’s right, title and interest in, to and
under the Collateral (the "Security Interest"). The parties agree and acknowledge that
the Security Interest granted hereunder to the Secured Party in and to the Collateral shall at all
times be subordinate in all respects to the secured interest of Silicon Valley Bank in and to the
Collateral.

Section 2.2. No Assumption of Liability. The Security Interest is granted as security
only and shall not subject the Secured Parties to, or in any way alter or modify, any obligation or
liability of the Grantor with respect to or arising out of the Collateral.

ARTICLE III. Representations and Warranties

The Grantor represents and warrants to the Secured Parties that:

Section 3.1. Title and Authority. The Grantor has good and valid rights in and title
to the Collateral with respect to which it has purported to grant a security interest hereunder and
has full power and authority to grant to the Secured Parties the Security Interest and to execute,
deliver and perform its obligations in accordance with the terms of this Agreement, without the
consent or approval of any other Person other than any consent or approval which has been obtained.

Section 3.2. Filings; Actions to Achieve Perfection. Fully executed Uniform
Commercial Code financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations containing a description of the Collateral have
been delivered to the Secured Parties for filing in each United States governmental, municipal or
other office specified in Schedule A, which are all the filings, recordings and
registrations that are necessary to publish notice of and protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Secured Parties in respect of all
Collateral in which the Security Interest may be perfected by filing, recording or registration in
the United States (or any political subdivision thereof) and its territories and possessions, and
no further or subsequent filing, refiling, recording, rerecording, registration or reregistration
is necessary in any such jurisdiction, except as provided under applicable law with respect to the
filing of continuation statements or with respect to the filing of amendments or new filings to
reflect the change of the Grantor’s name, location, identity or corporate structure. The Grantor’s
name is listed in the preamble of this Agreement identically to how it appears on its articles of
incorporation or other organizational documents.

Section 3.3. Validity and Priority of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral securing the payment and
performance of the Obligations, (b) subject only to the filings described in Section 3.2 above and
other previously perfected security interests in the Collateral listed on Schedule 3.3 to
this Agreement (“Existing Liens”), a perfected security interest in all Collateral in which
a security interest may be perfected by filing, recording or registration in the United States
pursuant to the Uniform Commercial Code or other applicable law in the United States (or any
political subdivision thereof) and its territories and possessions or any other country, state or
nation (or any political subdivision thereof). The Security Interest is and shall be subordinate
to any other Existing Lien on any of the Collateral. Without limiting the generality of the
foregoing, the parties agree and acknowledge that the Security Interest granted hereunder to the
Secured Party in and to the Collateral shall at all times be subordinate in all respects to the
secured interest of Silicon Valley Bank in and to the Collateral.

Section 3.4. Absence of Other Liens. The Grantor’s Collateral is owned by the Grantor
free and clear of any Lien other than Existing Liens. Without limiting the foregoing and except as
set forth on Schedule 3.4 to this Agreement, the Grantor has not filed or consented to any
filing described in Schedule A in favor of any Person other than the Secured Parties, nor
permitted the granting or assignment of a security interest or permitted perfection of any security
interest in the Collateral in favor of any Person other than the Secured Parties. The Grantor’s
having possession of all instruments and cash constituting Collateral from time to time and the
filing of financing statements in the offices referred to in Schedule A hereto results in
the perfection of such security interest. Such security interest is, or in the case of Collateral
in which the Grantor obtain rights after the date hereof, will be, a perfected, first priority
security interest. Such notices, filings and all other action necessary or desirable to perfect
and protect such security interest have been duly taken.

Section 3.5. Valid and Binding Obligation. This Agreement constitutes the legal,
valid and binding obligation of the Grantor, enforceable against the Grantor in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive relief, or other
equitable remedies, and (iii) to the extent the indemnification provisions contained in this
Agreement may be limited by applicable federal or state securities laws.

ARTICLE IV. Covenants

Section 4.1. Change of Name; Location of Collateral; Place of Business, State of Formation
or Organization.

(a) The Grantor shall notify the Secured Parties in writing promptly of any change (i)
in its corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (ii) in the location of its chief executive
office, its principal place of business, any office in which it maintains books or records
relating to Collateral owned by it (including the establishment of any such new office or
facility), (iii) in its identity or corporate structure such that a filed filing made under
the Uniform Commercial Code becomes misleading or (iv) in its Federal Taxpayer
Identification Number. In extension of the foregoing, the Grantor shall not effect or
permit any change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for the Secured
Parties to continue at all times following such change to have a valid, legal and perfected
first priority security interest in all the Collateral.

(b) Without limiting Section 4.1(a), without the prior written consent of the Secured
Parties in each instance, the Grantor shall not change its (i) principal residence, if it is
an individual, (ii) place of business, if it has only one place of business and is not a
Registered Organization, (iii) principal place of business, if it has more than one place of
business and is not a Registered Organization, or (iv) state of incorporation, formation or
organization, if it is a Registered Organization.

Section 4.2. Records. The Grantor shall maintain, at its own cost and expense, such
complete and accurate records with respect to the Collateral owned by it as is consistent with its
current practices and in accordance with such prudent and standard practices used in industries
that are the same as or similar to those in which the Grantor is engaged, but in any event to
include complete accounting records indicating all payments and proceeds received with respect to
any part of the Collateral, and, at such time or times as the Secured Parties may reasonably
request, promptly to prepare and deliver to the Secured Parties a duly certified schedule or
schedules in form and detail satisfactory to the Secured Parties showing the identity, amount and
location of any and all Collateral.

Section 4.3. Periodic Certification; Notice of Changes. In the event there should at
any time be any change in the information represented and warranted herein or in the documents and
instruments executed and delivered in connection herewith, the Grantor shall immediately notify the
Secured Parties in writing of such change (this notice requirement shall be in extension of and
shall not limit or relieve the Grantor of any other covenants hereunder).

Section 4.4. Protection of Security. The Grantor shall, at its own cost and expense,
take any and all actions necessary to defend title to the Collateral against all persons and to
defend the Security Interest of the Secured Parties in the Collateral and the priority thereof
against any Lien.

Section 4.5. Inspection and Verification. The Secured Parties and such persons as the
Secured Parties may reasonably designate shall have the right to inspect the Collateral, all
records related thereto (and to make extracts and copies from such records) and the premises upon
which any of the Collateral is located, to discuss the Grantor’s affairs with the officers of the
Grantor and its independent accountants and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other matter relating to, the
Collateral, including, in the case of collateral in the possession of any third Person, by
contacting any account debtor or third Person possessing such Collateral for the purpose of making
such a verification. Out-of-pocket expenses in connection with any inspections by representatives
of the Secured Parties shall be (a) the obligations of the Grantor with respect to any inspection
after the Secured Parties’ demand payment of the Notes or (b) the obligation of the Secured Parties
in any other case.

Section 4.6. Taxes; Encumbrances. At their option, the Secured Parties may discharge,
Liens other than Existing Liens at any time levied or placed on the Collateral and may pay for the
maintenance and preservation of the Collateral to the extent the Grantor fails to do so and the
Grantor shall reimburse the Secured Parties on demand for any payment made or any expense incurred
by the Secured Parties pursuant to the foregoing authorization; provided, however, that nothing in
this Section shall be interpreted as excusing the Grantor from the performance of, or imposing any
obligation on the Secured Parties to cure or perform, any covenants or other obligation of the
Grantor with respect to any Lien or maintenance or preservation of Collateral as set forth herein.

Section 4.7. Use and Disposition of Collateral. The Grantor shall not make or permit
to be made an assignment, pledge or hypothecation of any Collateral or shall grant any other Lien
in respect of the Collateral without the prior written consent of the Secured Parties. The Grantor
shall not make or permit to be made any transfer of any Collateral and the Grantor shall remain at
all times in possession of the Collateral owned by it, other than with respect to Existing Liens
and other liens approved by the Secured Parties.

Section 4.8. Insurance/Notice of Loss. Within a reasonable period of time following
the date of this Agreement, Grantor, at its own expense, shall maintain or cause to be maintained
insurance covering physical loss or damage to the Collateral. In extension of the foregoing and
without limitation, such insurance shall be payable to the Secured Parties as loss payee under a
“standard” loss payee clause, and the Secured Parties shall be listed as an “additional insured” on
Grantor’s general liability insurance. Such insurance shall not be terminated, cancelled or not
renewed for any reason, including non-payment of insurance premiums, unless the insurer shall have
provided the Secured Parties at least 30 days prior written notice. Grantor irrevocably makes,
constitutes and appoints the Secured Parties (and all officers, employees or agents designated by
the Secured Parties) as its true and lawful agent and attorney-in-fact for the purpose, at any time
following the Secured Parties’ demand for payment of the Notes, of making, settling and adjusting
claims in respect of Collateral under policies of insurance, endorsing the name of Grantor on any
check, draft, instrument or other item of payment for the proceeds of such policies of insurance
and for making all determinations and decisions with respect thereto. In the event that Grantor at
any time or times shall fail to obtain or maintain any of the policies of insurance required hereby
or to pay any premium in whole or part relating thereto, the Secured Parties may, without waiving
or releasing any obligation or liability of Grantor hereunder, in their sole discretion, obtain and
maintain such policies of insurance and pay such premium and take any other actions with respect
thereto as the Secured Parties deem advisable. All sums disbursed by the Secured Parties in
connection and in accordance with this Section, including reasonable attorneys’ fees, court costs,
expenses and other charges relating thereto, shall be payable upon demand, by Grantor to the
Secured Parties and shall be additional Obligations secured hereby. Grantor shall promptly notify
the Secured Parties if any material portion of the Collateral owned or held by Grantor is damaged
or destroyed. The proceeds of any casualty insurance in respect of any casualty loss of any of the
Collateral shall (i) so long as the Secured Parties have not demanded payment of the Notes, be
disbursed to Grantor for direct application by Grantor solely to the repair or replacement of
Grantor’s property so damaged or destroyed, and (ii) in all other circumstances, be held by the
Secured Parties as cash collateral for the Obligations. The Secured Parties may, at their sole
option, disburse from time to time all or any part of such proceeds so held as cash collateral,
upon such terms and conditions as the Secured Parties may reasonably prescribe, for direct
application by the Secured Parties solely to the repair or replacement of Grantor’s property so
damaged or destroyed, or Grantor may apply all or any part of such proceeds to the Obligations.

Section 4.9. Legend. Grantor shall legend, in form and manner satisfactory to the
Secured Parties, its accounts and its books, records and documents evidencing or pertaining thereto
with an appropriate reference to the fact that such accounts have been assigned to the Secured
Parties and that the Secured Parties have a security interest therein.

ARTICLE V. Further Assurances; Power of Attorney

Section 5.1. Further Assurances. Grantor shall, at its own expense, execute,
acknowledge, deliver and cause to be duly filed all such further instruments and documents and take
all such actions as the Secured Parties may from time to time reasonably request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the execution and delivery
of this Agreement, the granting of the Security Interest and the filing of any financing statements
(including fixture filings) or other documents in connection herewith or therewith. If any amount
payable under or in connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be immediately pledged and
delivered to the Secured Parties, duly endorsed in a manner satisfactory to the Secured Parties.

Section 5.2. Power of Attorney. 

(a) Grantor hereby irrevocably (as a power coupled with an interest) constitutes and appoints
the Secured Parties (and all officers, employees or agents designated by the Secured Parties), its
attorney-in-fact with full power of substitution, for the benefit of the Secured Parties,

(i) to take all appropriate action and to execute all documents and instruments that
may be necessary or desirable to accomplish the purposes of this Agreement, and without
limiting the generality of the foregoing, Grantor hereby grants the power to file one or
more financing statements (including fixture filings), continuation statements, filings with
the United States Patent and Trademark Office or United States Copyright Office (or any
successor office or any similar office in any other country) or other documents for the
purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest
granted by Grantor, without the signature of Grantor, and naming Grantor as debtor and the
Secured Parties as secured party; and

(ii) at any time following the Secured Parties’ demand for payment of the Notes (i) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any part thereof;
(ii) to demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (iii) to sign the name of Grantor on any invoice
or bill of lading relating to any of the Collateral; (iv) to send verifications of accounts
to any account debtor or any other Person liable for an account; (v) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to
enforce any rights in respect of any Collateral; (vi) to settle, compromise, compound,
adjust or defend any actions, suits or proceeding relating to all or any of the Collateral;
and (vii) to use, sell, assign, transfer, pledge, make any agreement with respect to or
otherwise deal with all or any of the Collateral, and to do all other acts and things
necessary to carry out the purposes of this Agreement, as fully and completely as though the
Secured Parties were the absolute owner of the Collateral for all purposes; provided,
however, that nothing herein contained shall be construed as requiring or obligating the
Secured Parties to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Secured Parties, or to present or file any claim
or notice, or to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby, and no
action taken or omitted to be taken by the Secured Parties with respect to the Collateral or
any part thereof shall give rise to any defense, counterclaim or offset in favor of Grantor
or to any claim or action against the Secured Parties.

(b) The provisions of this Article shall in no event relieve Grantor of any of its obligations
hereunder with respect to the Collateral or any part thereof or impose any obligation on the
Secured Parties to proceed in any particular manner with respect to the Collateral or any part
thereof, or in any way limit the exercise by the Secured Parties of any other or further right
which it may have on the date of this Agreement or hereafter, whether hereunder, by law or
otherwise.

	 	 	 
	ARTICLE VI.

Section 6.1.

	 	Remedies

Remedies upon Default.
	
 
	 	 

(a) Upon the occurrence and during the continuance of an Event of Default, Grantor
agrees to deliver each item of its Collateral to the Secured Parties on demand, and it is
agreed that the Secured Parties shall have the right to take any of or all the following
actions at the same or different times (but at all times subject to any Existing Liens):
with or without legal process and with or without prior notice or demand for performance, to
take possession of the Collateral and without liability for trespass to enter any premises
where the Collateral may be located for the purpose of taking possession of or removing the
Collateral, exercise Grantor’s right to bill and receive payment for completed work and,
generally, to exercise any and all rights afforded to a secured party under the Uniform
Commercial Code or other applicable law. Without limiting the generality of the foregoing,
Grantor agrees that the Secured Parties shall have the right, subject to the mandatory
requirements of applicable law, to sell or otherwise dispose of all or any part of the
Collateral, at public or private sale or at any broker’s board or on any securities
exchange, for cash, upon credit or for future delivery as the Secured Parties shall deem
appropriate. The Secured Parties shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon consummation of
any such sale the Secured Parties shall have the right to assign, transfer and deliver to
the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such
sale shall hold the property sold absolutely, free from any claim or right on the part of
Grantor, and Grantor hereby waives (to the extent permitted by law) all rights of
redemption, stay and appraisal which Grantor now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted.

(b) The Secured Parties shall give Grantor ten (10) days’ written notice (which Grantor
agrees is reasonable notice within the meaning of Section 9-504(3) of the Uniform Commercial
Code) of the Secured Parties’ intention to make any sale of Collateral. Such notice, in the
case of a public sale, shall state the time and place for such sale and, in the case of a
sale at a broker’s board or on a securities exchange, shall state the board or exchange at
which such sale is to be made and the day on which the Collateral, or portion thereof, will
first be offered for sale at such board or exchange. Any such public sale shall be held at
such time or times within ordinary business hours and at such place or places as the Secured
Parties may fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Secured Parties may (in their sole and absolute discretion)
determine. The Secured Parties shall not be obligated to make any sale of any Collateral if
it shall determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. The Secured Parties may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without further
notice, be made at the time and place to which the same was so adjourned. In case any sale
of all or any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Secured Parties until the sale price is paid by
the purchaser or purchasers thereof, but the Secured Parties shall not incur any liability
in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon like notice.
At any public (or, to the extent permitted by law, private) sale made pursuant to this
Section, the Secured Parties may bid for or purchase, free (to the extent permitted by law)
from any right of redemption, stay, valuation or appraisal on the part of Grantor (all said
rights being also hereby waived and released to the extent permitted by law), the Collateral
or any part thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to the Secured Parties from Grantor as a credit against the
purchase price, and the Secured Parties may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to Grantor therefor. For
purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall
be treated as a sale thereof; the Secured Parties shall be free to carry out such sale
pursuant to such agreement and Grantor shall not be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the Secured
Parties shall have entered into such an agreement all Obligations have been paid in full.
As an alternative to exercising the power of sale herein conferred upon it, the Secured
Parties may proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver.

Section 6.2. Application of Proceeds. The Secured Parties shall apply the proceeds of
any collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows:

(a) FIRST, to the payment of all costs and expenses incurred by the Secured Parties in
connection with such collection or sale or otherwise in connection with this Agreement or any of
the Obligations, including all court costs and the fees and expenses of its agents and legal
counsel, and any other costs or expenses incurred in connection with the exercise of any right or
remedy hereunder, under the Purchase Agreement, the Notes and the other Transaction Documents;

(b) SECOND, to the payment in full of the Obligations; and

(c) THIRD, to Grantor, its successors or assigns, or to whomsoever may be lawfully entitled to
receive the same, or as a court of competent jurisdiction may otherwise direct.

Subject to the foregoing, the Secured Parties shall have absolute discretion as to the time of
application of such proceeds, moneys or balances in accordance with this Agreement. Upon any sale
of the Collateral by the Secured Parties (including pursuant to a power of sale granted by statute
or under a judicial proceeding), the receipt of any such proceeds, moneys or balances by the
Secured Parties or of the officer making the sale shall be a sufficient discharge to the purchaser
or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the Secured Parties or such
officer or be answerable in any way for the misapplication thereof.

Section 6.3. Grant of License to Use Intellectual Property. For the purpose of
enabling the Secured Parties to exercise rights and remedies under this Article at such time as the
Secured Parties shall be lawfully entitled to exercise such rights and remedies, Grantor hereby
grants to the Secured Parties an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to Grantor) to use, license or sub-license any of the Collateral
consisting of intellectual property now owned or hereafter acquired by Grantor, and wherever the
same may be located, and including in such license reasonable access to all media in which any of
the licensed items may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Secured Parties may be exercised,
at the option of the Secured Parties, only following the Secured Parties’ demand for payment of the
Notes.

ARTICLE VII. Miscellaneous

Section 7.1. Notices. All communications and notices hereunder to the Grantor and to
the Secured Parties shall (except as otherwise expressly permitted herein) be in writing and
delivered to the Grantor or the Secured Parties, as the case may be, as provided in the Purchase
Agreement.

Section 7.2. Security Interest Absolute. All rights of the Secured Parties hereunder,
the Security Interest and all obligations of Grantor hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Purchase Agreement, the Notes,
any Transaction Document or any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or
place of payment of, or in any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to any departure from the Purchase Agreement, the Notes, any
Transaction Document or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent
under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or
(d) any other circumstance that might otherwise constitute a defense available to, or a discharge
of, Grantor in respect of the Obligations or this Agreement.

Section 7.3. Survival of Agreement. All covenants, agreements, representations and
warranties made by Grantor herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement shall be considered to have been relied
upon by the Secured Parties and shall survive the making of the loan and the execution and delivery
to the Secured Parties of the Notes, regardless of any investigation made by the Secured Parties or
on their behalf; and shall continue in full force and effect until this Agreement shall terminate.

Section 7.4. Binding Effect; Several Agreement; Successors and Assigns. This
Agreement shall become effective as to Grantor when a counterpart hereof executed on behalf of
Grantor shall have been delivered to the Secured Parties and a counterpart hereof shall have been
executed on behalf of the Secured Parties, and thereafter shall be binding upon Grantor and the
Secured Parties and their respective successors and assigns, and shall inure to the benefit of
Grantor, the Secured Parties and their respective successors and assigns, except that Grantor shall
not have the right to assign or transfer its rights or obligations hereunder or any interest herein
or in the Collateral (and any such assignment or transfer shall be void) except as expressly
contemplated by this Agreement, the Purchase Agreement, the Notes or the other Transaction
Documents.

Section 7.5. Secured Parties’ Fees and Expense; Indemnification.

(a) Grantor agrees to pay upon demand to the Secured Parties the amount of any and all
reasonable expenses, including all reasonable fees, disbursements and other charges of its
counsel and of any experts or agents, which the Secured Parties may incur in connection with
(i) the administration of this Agreement (including the customary fees and charges of the
Secured Parties for any audits conducted by them or on their behalf with respect to the
accounts inventory), (ii) the custody or preservation of, or the sale of, collection from or
other realization upon any of the Collateral, (iii) the exercise, enforcement or protection
of any of the rights of the Secured Parties hereunder or (iv) the failure of Grantor to
perform or observe any of the provisions hereof.

(b) Grantor agrees to indemnify the Secured Parties and the agent, contractors and
employees of the Secured Parties (collectively, the “Indemnitees”) against, and hold
each of them harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable fees, disbursements and other charges of counsel, incurred by
or asserted against any of them arising out of, in any way connected with, or as a result
of, the execution, delivery, or performance of this Agreement or any agreement or instrument
contemplated hereby or any claim, litigation, investigation or proceeding relating hereto or
to the Collateral, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnitee.

(c) Any such amounts payable as provided hereunder shall be additional Obligations
secured hereby. The provisions of this Section shall remain operative and in full force and
effect regardless of the termination of this Agreement, the Purchase Agreement, the Notes or
the other Transaction Documents, the consummation of the transactions contemplated hereby,
the repayment of any of the Obligations, the invalidity or unenforceability of any term or
provision of this Agreement, the Purchase Agreement, the Notes or the other Transaction
Documents, or any investigation made by or on behalf of the Secured Parties. All amounts
due under this Section shall be payable on written demand therefor.

Section 7.6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY OF THE
CONFLICTS OF LAW PRINCIPLES WHICH WOULD RESULT IN THE APPLICATION OF THE SUBSTANTIVE LAW OF ANOTHER
JURISDICTION. THIS AGREEMENT SHALL NOT BE INTERPRETED OR CONSTRUED WITH ANY PRESUMPTION AGAINST
THE PARTY CAUSING THIS AGREEMENT TO BE DRAFTED.

Section 7.7. Waivers; Amendment. 

(a) No failure or delay of the Secured Parties in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any
other or further exercise thereof or the exercise of any other right or power. The rights and
remedies of the Secured Parties hereunder and under the Purchase Agreement are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement, the Purchase Agreement, the Notes or the other Transaction Documents
or consent to any departure by Grantor therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice to or demand on Grantor in
any case shall entitle Grantor to any other or further notice or demand in similar or other
circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements, in writing entered into by the Secured Parties and Grantor.

Section 7.8. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE
PURCHASE AGREEMENT OR THE NOTES. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE PURCHASE AGREEMENT
AND THE NOTES, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

Section 7.9. Severability. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a particular provision in
a particular jurisdiction shall not in and of itself affect the validity of such provision in any
other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions.

Section 7.10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when taken together shall
constitute but one contract. Each party shall be entitled to rely on a facsimile signature of any
other party hereunder as if it were an original.

Section 7.11. Jurisdiction; Consent to Service of Process. 

(a) Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Agreement, the
Purchase Agreement or the Notes, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New York State
or, to the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the Secured Parties may
otherwise have to bring any action or proceeding relating to this Agreement, the Purchase
Agreement, the Notes or the other Transaction Documents against Grantor or its properties in
the courts of any jurisdiction.

(b) Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to this
Agreement, the Purchase Agreement, the Notes or the other Transaction Documents in any New
York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

(c) Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 7.1. Nothing in this Agreement will affect the right
of any party to this Agreement to process in any other manner permitted by law.

Section 7.12. Termination. This Agreement and the Security Interest shall terminate
when all the Obligations have been paid in full, at which time the Secured Parties shall execute
and deliver to Grantor, at Grantor’s expense, all Uniform Commercial Code termination statements
and similar documents which Grantor shall reasonably request to evidence such termination. Any
execution and delivery of termination statements or documents pursuant to this Section shall be
without recourse to or warranty by the Secured Parties.

Section 7.13. Prejudgment Remedy Waiver. Grantor acknowledges that this Agreement,
the Purchase Agreement, the Notes and the other Transaction Documents evidence a commercial
transaction and that it could, under certain circumstances have the right, to notice of and hearing
on the right of the Secured Parties to obtain a prejudgment remedy, such as attachment, garnishment
and/or replevin, upon commencing any litigation against Grantor. Notwithstanding, Grantor hereby
waives all rights to notice, judicial hearing or prior court order to which it might otherwise have
the right under any state or federal statute or constitution in connection with the obtaining by
the Secured Parties of any prejudgment remedy by reason of this Agreement, the Purchase Agreement,
the Notes, the other Transaction Documents or by reason of the Obligations or any renewals or
extensions of the same. Grantor also waives any and all objection which it might otherwise assert,
now or in the future, to the exercise or use by the Secured Parties of any right of setoff,
repossession or self help as may presently exist under statute or common law.

1

IN WITNESS WHEREOF, the parties have duly executed this Security Agreement as of the
day and year first written above.

P-COM, INC.

By: _/s/ Daniel W. Rumsey     

	 	 	 	Name: Daniel W. Rumsey

Title: Chief Restructuring Officer

SDS CAPITAL GROUP SPC, LTD.

By: /s/ Scott E. Derby 

	 	 	 	Name: Scott E. Derby

Title: General Counsel

2

EXHIBIT A

Secured Parties

SDS Capital Group SPC, Ltd.

c/o SDS Capital Management LLC

53 Forest Avenue, Suite 202

Old Greenwich, CT 06870

Attention: Scott Derby

3

SCHEDULE A

Places of Business; Chief Executive Office; Filing Locations

State of Incorporation:

Delaware

Chief Executive Office:

3175 S. Winchester Boulevard

Campbell, CA 95008

Filing Locations:

Secretary of State of the State of Delaware

4

SCHEDULE 3.3

Existing Liens

Silicon Valley Bank has a blanket lien on all of the Grantor’s assets pursuant to a Credit
Facility dated September 17, 2004 between the Grantor and Silicon Valley Bank.

5

SCHEDULE 3.4

Absence of Other Liens

Silicon Valley Bank has a blanket lien on all of the Grantor’s assets pursuant to a Credit
Facility dated September 17, 2004 between the Grantor and Silicon Valley Bank.

6

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