Document:

exv10w2

 

Exhibit 10.2

Amendment to

Change of Control Protection Agreement

This Amendment to Change of Control Protection Agreement dated as of June 1, 2005 (the “Amendment”)
is entered into by and between United Defense Industries, Inc., a Delaware corporation (the
“Company”) and
                         (the “Executive”) for the purpose of amending the
provisions of that certain Agreement dated                          between the Company and the
Executive relating to certain payments to the Executive in connection with a termination of
employment following a corporate transaction (as amended prior to the date hereof, the
“Agreement”).

WHEREAS, the Company and the Executive desire to amend the Agreement as set forth below for their
mutual benefit and convenience, in order for its provisions to comply with Section 409A of the
Internal Revenue Code of 1986, as amended;

NOW THEREFORE, in consideration of the premises and covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties do
hereby agree as follows:

1. The following new sentence is hereby added to the last paragraph in Section 4:

	 	   	Notwithstanding any other provision of this Agreement to the contrary, all payments pursuant
to this Section 4 shall be deferred until six months after the Executive’s Date of
Termination to the extent necessary to avoid the application of the additional tax under
Section 409A of the Internal Revenue Code of 1986, as amended.

2. All references in the Agreement to “the Agreement” or “this Agreement” shall mean the Agreement
as modified by this Amendment. As so modified, the Agreement shall continue in full force and
effect.

IN WITNESS WHEREOF, this Amendment has been executed and delivered by the parties hereto as of the
date first set forth above.

	 	 	 	 	 
	UNITED DEFENSE INDUSTRIES, INC.
	 	Executive
	 
	 	 	 	 
	By:
	 	 	 	 
	

	 	 
	 	 
	 
	 	 	 	 
	Title:EX-4.1

CERTIFICATE OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES

OF THE

SERIES E CONVERTIBLE PREFERRED STOCK

OF

P-COM, INC.

The undersigned officer of P-Com, Inc., a Delaware corporation (the “Company”), in accordance
with the provisions of Section 151(g) of the Delaware General Corporation Law, does hereby certify
that, pursuant to the authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Company, the following resolution creating a series of preferred stock
designated as “Series E Convertible Preferred Stock” was duly adopted on May 31, 2005:

RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of
Directors of the Company by Article IV of the Company’s Certificate of Incorporation (the
“Certificate of Incorporation”), there hereby is created out of the authorized shares of preferred
stock, par value $.0001 per share (the “Preferred Stock”), of the Company, a series of Preferred
Stock designated as “Series E Convertible Preferred Stock,” consisting of Two Thousand (2,000)
shares, which series shall have the following designations, powers, preferences and relative and
other special rights and the following qualifications, limitations and restrictions:

1. Designation and Rank. Such series of the Preferred Stock shall be designated as
“Series E Convertible Preferred Stock” (the “Series E Preferred Stock”). The maximum number of
shares of Series E Preferred Stock shall be Two Thousand (2,000) shares. Upon the liquidation,
dissolution or winding up of the affairs of the Company, the Series E Preferred Stock shall rank
(a) prior to the Company’s common stock, par value $.0001 per share (the “Common Stock”), Series A
Junior Participating Preferred Stock, Series B Convertible Preferred Stock, Series C Convertible
Preferred Stock, Series D Convertible Preferred Stock, Series F Convertible Preferred Stock, Series
G Convertible Preferred Stock and all other classes and series of the Company’s capital stock
hereafter created that, by their terms, rank junior to the Series E Preferred Stock (the “Junior
Stock”); (b) pari passu with all classes and series of the Company’s capital stock hereafter
created that, by their terms, rank on parity with the Series E Preferred Stock (the “Pari Passu
Stock”); and (c) junior to all classes and series of the Company’s capital stock hereafter created
that, by their terms, rank senior to the Series E Preferred Stock (the “Senior Stock”). So long as
any shares of Series E Preferred Stock remain outstanding, the Company shall not create or issue
any Senior Stock or any Pari Passu Stock without the prior written consent of a majority of the
shares of Series E Preferred Stock then outstanding. The Series E Preferred Stock shall be
subordinate to and rank junior to all indebtedness of the Company now or hereafter outstanding.

2. Dividends. Commencing on the second anniversary of the Issuance Date (as defined
in Section 5(a) hereof) and on each succeeding anniversary of the Issuance Date (each such date, a
“Dividend Date”), dividends shall be payable cumulatively out of funds legally available therefor,
at the rate of six percent (6%) per annum, as to each outstanding share of Series E Preferred Stock
(each such payment, a “Dividend”). Payment of Dividends on each share of Series E Preferred Stock
shall be made, at the option of the Company (subject to the limitations set forth below), either
(x) in cash or (y) if all of the Required Stock Dividend Conditions (as defined below) are
satisfied, by the issuance of shares of Common Stock by the Company in an amount determined by
dividing the amount of the Dividend that is payable on such share of Series E Preferred Stock by
the average closing bid price of the Common Stock during the ten (10) trading days immediately
preceding the applicable Dividend Date. The “Required Stock Dividend Conditions” shall be
satisfied if all shares of Common Stock to be issued as a Dividend are then (a) authorized and
reserved for issuance and (b) listed or traded on the OTC Bulletin Board or any other national
securities exchange or automated interdealer quotation system.

3. Voting Rights.

(a) General Voting Rights. Except as otherwise expressly provided elsewhere in this
Certificate of Designation or as otherwise required by the Delaware General Corporation Law (the
“DGCL”), (i) each holder of Series E Preferred Stock shall be entitled to vote on all matters
submitted to a vote of the stockholders of the Company and shall be entitled to that number of
votes equal to the number of shares of Common Stock into which such holder’s shares of Series E
Preferred Stock could be converted on the record date for the determination of stockholders
entitled to vote on such matters or, if no such record date is established, on the date such vote
is taken or any written consent of stockholders is solicited, and (ii) the holders of shares of
Series E Preferred Stock and Common Stock shall vote together (or tender written consents in lieu
of a vote) as a single class on all matters submitted to the stockholders of the Company.
Fractional votes shall not, however, be permitted and any fractional voting rights available on an
as-converted basis (after aggregating all shares of Common Stock into which shares of Series E
Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole
number.

(b) Class Voting Rights. The Series E Preferred Stock shall have the following class
voting rights. So long as any shares of the Series E Preferred Stock remain outstanding, the
Company shall not, without the affirmative vote or consent of the holders of at least one-half
(1/2) of the shares of the Series E Preferred Stock outstanding at the time, given in person or by
proxy, either in writing or at a meeting, in which the holders of the Series E Preferred Stock vote
separately as a class amend, alter or repeal the provisions of the Series E Preferred Stock so as
to adversely affect any right, preference, privilege or voting power of the Series E Preferred
Stock.

4. Liquidation Preference.

(a) In the event of the liquidation, dissolution or winding up of the affairs of the Company,
whether voluntary or involuntary, after payment or provision for payment of the debts and other
liabilities of the Company and after payment or provision for payment of all amounts due to the
holders of Senior Stock (if any), the holders of shares of the Series E Preferred Stock then
outstanding shall be entitled to receive, out of the assets of the Company, whether such assets are
capital or surplus of any nature, an amount equal to $1,000.00 per share (the “Liquidation
Preference Amount”) of the Series E Preferred Stock before any payment shall be made or any assets
distributed to the holders of any Junior Stock. If the assets of the Company are sufficient to pay
in part, but are not sufficient to pay in full, the Liquidation Preference Amount payable to the
holders of outstanding shares of the Series E Preferred Stock and any Pari Passu Stock, then all of
said assets available to pay a part of the Liquidation Preference Amount to the holders of the
outstanding shares of Series E Preferred Stock and Pari Passu Stock will be distributed among the
holders of the Series E Preferred Stock and Pari Passu Stock ratably in accordance with the
respective amounts that would be payable on such shares if all amounts payable thereon were paid in
full. The liquidation payment to be paid with respect to any outstanding fractional share of
Series E Preferred Stock shall be equal to the Liquidation Preference Amount multiplied by such
fraction. All payments for which this Section 4(a) provides shall be in cash, property (valued at
its fair market value as determined by an independent appraiser reasonably acceptable to the
holders of a majority of the Series E Preferred Stock), or a combination thereof; provided,
however, that no cash shall be paid to holders of Junior Stock unless each holder of the
outstanding shares of Series E Preferred Stock has been paid in cash the full Liquidation
Preference Amount to which such holder is entitled as provided herein. After payment of the full
Liquidation Preference Amount to which each holder is entitled, such holders of shares of Series E
Preferred Stock will not be entitled to any further participation as such in any distribution of
the assets of the Company.

(b) A consolidation or merger of the Company with or into any other corporation or
corporations or any other entity, or a sale of all or substantially all of the assets of the
Company, or the effectuation by the Company of a transaction or series of transactions in which
more than 50% of the voting shares of the Company is disposed of or conveyed, shall not be deemed
to be a liquidation, dissolution, or winding up within the meaning of this Section 4. The Company
shall not, without the consent of the holders of a majority of the then outstanding Series E
Preferred Stock, merge or consolidate with or into another corporation, unless the securities of
such other corporation issued in exchange for the Series E Preferred Stock have substantially the
same rights, preferences and privileges as the Series E Preferred Stock provided for herein.

(c) Written notice of any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, stating a payment date and the place where the distributable amounts
shall be payable, shall be given by mail, postage prepaid, no less than forty-five (45) days prior
to the payment date stated therein, to the holders of record of the Series E Preferred Stock at
their respective addresses as the same shall appear on the books of the Company.

5. Conversion. The holders of Series E Preferred Stock shall have the following
conversion rights (the “Conversion Rights”):

(a) Right to Convert. At any time on or after the date on which shares of Series E
Preferred Stock are first issued (the “Issuance Date”), the holder of shares of Series E Preferred
Stock may, at such holder’s option, subject to the limitations set forth in Section 7 herein, elect
to convert (a “Voluntary Conversion”) all or any portion of the shares of Series E Preferred Stock
held by such holder into a number of fully paid and nonassessable shares of Common Stock equal to
the quotient obtained by dividing (x) the Liquidation Preference Amount of the shares of Series E
Preferred Stock being converted by (y) the Conversion Price (as defined in Section 5(d) below) then
in effect as of the date of the delivery by such holder of its notice of election to convert. The
Company shall keep written records of the conversion of the shares of Series E Preferred Stock
converted by each holder. A holder shall be required to deliver the original certificates
representing the shares of Series E Preferred Stock upon any conversion of the Series E Preferred
Stock as provided in Section 5(b) below.

(b) Mechanics of Voluntary Conversion. The Voluntary Conversion of Series E Preferred
Stock shall be conducted in the following manner:

(i) Holder’s Delivery Requirements. To convert Series E Preferred Stock into full
shares of Common Stock on any date (the “Voluntary Conversion Date”), the holder thereof shall (A)
transmit by facsimile (or otherwise deliver), for receipt on or prior to 5:00 p.m., New York time
on such date, a copy of a fully executed notice of conversion in the form attached hereto as
Exhibit I (the “Conversion Notice”), to the Company, and (B) with respect to the conversion
of shares of Series E Preferred Stock held by any holder, such holder shall surrender to a common
carrier for delivery to the Company as soon as practicable following such Conversion Date, but in
no event later than six (6) business days after such date, the original certificates representing
the shares of Series E Preferred Stock being converted (or an indemnification undertaking with
respect to such shares in the case of their loss, theft or destruction) (the “Preferred Stock
Certificates”).

(ii) Company’s Response. Upon receipt by the Company of a Conversion Notice, (or a
facsimile copy thereof), the Company shall immediately send, via facsimile, a confirmation of
receipt of such Conversion Notice to the holder that sent such Conversion Notice (the “Converting
Holder”) and the Company or its designated transfer agent (the “Transfer Agent”), as applicable,
shall, within three (3) business days following the date of receipt by the Company of the
Converting Holder’s Preferred Stock Certificates, (x) issue and deliver to the Depository Trust
Company (“DTC”) account on the Converting Holder’s behalf via the Deposit Withdrawal Agent
Commission System (“DWAC”) as specified in the Conversion Notice, registered in the name of
the Converting Holder or its designee, for the number of shares of Common Stock to which the
Converting Holder shall be entitled, and (y) if the Preferred Stock Certificates so surrendered
represent more shares of Series E Preferred Stock than those being converted, issue and deliver to
the Converting Holder a new certificate for such number of shares of Series E Preferred Stock
represented by the surrendered certificate that are not converted.

(iii) Dispute Resolution. In the case of a dispute as to the arithmetic calculation
of the number of shares of Common Stock to be issued upon conversion, the Company shall promptly
issue to the holder the number of shares of Common Stock that is not disputed and shall submit the
arithmetic calculations to the holder via facsimile as soon as possible, but in no event later than
two (2) business days after receipt of such holder’s Conversion Notice. If such holder and the
Company are unable to agree upon the arithmetic calculation of the number of shares of Common Stock
to be issued upon such conversion within one (1) business day of such disputed arithmetic
calculation being submitted to the holder, then the Company shall within one (1) business day
submit via facsimile the disputed arithmetic calculation of the number of shares of Common Stock to
be issued upon such conversion to the Company’s independent, outside accountant. The Company shall
cause the accountant to perform the calculations and notify the Company and the holder of the
results no later than seventy-two (72) hours from the time it receives the disputed calculations.
Such accountant’s calculation shall be binding upon all parties absent manifest error. The
reasonable expenses of such accountant in making such determination shall be paid by the Company,
in the event the holder’s calculation was correct, or by the holder, in the event the Company’s
calculation was correct, or equally by the Company and the holder in the event that neither the
Company’s or the holder’s calculation was correct. The period of time in which the Company is
required to effect conversions under this Certificate of Designation shall be tolled with respect
to the subject conversion pending resolution of any dispute by the Company made in good faith and
in accordance with this Section 5(b)(iii).

(iv) Record Holder. The person or persons entitled to receive the shares of Common
Stock issuable upon a conversion of the Series E Preferred Stock shall be treated for all purposes
as the record holder or holders of such shares of Common Stock on the Conversion Date.

(c) Mandatory Conversion.

(i) Provided all of the Required Conditions (as defined below) are satisfied, the Company may,
at its option, compel each holder (the “Mandatory Conversion Notice”), to convert such portion of
the Series E Preferred Stock owned by him into shares of Common Stock, on the terms and conditions
set forth below. The “Required Conditions” shall be satisfied if (A) the closing bid price per
share of the Common Stock for the ten (10) consecutive trading days prior to delivery of the
Mandatory Conversion Notice equals or exceeds $0.50 (as adjusted for stock splits, stock dividends
or similar events); and (B) all shares of Common Stock issuable upon conversion of the Series E
Preferred Stock are then (y) authorized and reserved for issuance, and (z) listed or traded on the
OTC Bulletin Board or any other national securities exchange or automated interdealer quotation
system.

(ii) As used herein, a “Mandatory Conversion Date” shall be the thirtieth (30th) day after the
delivery by the Company of the Mandatory Conversion Notice (the “Conversion Period”), which
Mandatory Conversion Notice shall certify that each of the Required Conditions have been satisfied.
The Mandatory Conversion Date and the Voluntary Conversion Date collectively are referred to in
this Certificate of Designation as the “Conversion Date.” During the Conversion Period, the holder
shall have the right to convert the Series E Preferred Stock pursuant to Section 5 above.

(iii) Each share of Series E Preferred Stock outstanding on the Mandatory Conversion Date
shall, automatically and without any action on the part of the holder thereof, convert into a
number of fully paid and nonassessable shares of Common Stock equal to the quotient obtained by
dividing (x) the Liquidation Preference Amount of the shares of Series E Preferred Stock
outstanding on the Mandatory Conversion Date divided by (y) the Conversion Price in effect on the
Mandatory Conversion Date; provided, however, that the Company shall not be
obligated to issue the shares of Common Stock issuable upon conversion of any shares of Series E
Preferred Stock unless the Preferred Stock Certificates representing such shares of Series E
Preferred Stock are either delivered to the Company or the holder notifies the Company that such
Preferred Stock Certificates have been lost, stolen, or destroyed, and executes an agreement
satisfactory to the Company to indemnify the Company from any loss incurred by it in connection
therewith. Upon the occurrence of any mandatory conversion of the Series E Preferred Stock
pursuant to this Section 5(c), each affected holder of the Series E Preferred Stock shall surrender
the Preferred Stock Certificates representing the Series E Preferred Stock for which the Mandatory
Conversion Date has occurred to the Company and the Company shall deliver the shares of Common
Stock issuable upon such conversion (in the same manner set forth in Section 5(b)(ii)) to the
holder within three (3) business days of such holder’s delivery of the applicable Preferred Stock
Certificates. If the Preferred Stock Certificates so surrendered represent more shares of Series E
Preferred Stock than those being converted, the Company shall issue to such holder a new
certificate for such number of Series E Preferred Stock represented by the surrendered certificates
which were not converted.

(d) Conversion Price. The term “Conversion Price” shall mean $.50 per share, subject
to adjustment pursuant to Section 5(e) hereof.

(e) Adjustments of Conversion Price.

(i) Adjustments for Stock Splits and Combinations. If the Company shall at any time
or from time to time after the Issuance Date, effect a stock split of the outstanding Common Stock,
the Conversion Price shall be proportionately decreased. If the Company shall at any time or from
time to time after the Issuance Date, combine the outstanding shares of Common Stock, the
Conversion Price shall be proportionately increased. Any adjustments under this Section 5(e)(i)
shall be effective at the close of business on the date the stock split or combination occurs.

(ii) Adjustments for Certain Dividends and Distributions. If the Company shall at any
time or from time to time after the Issuance Date, make or issue or set a record date for the
determination of holders of Common Stock entitled to receive a dividend or other distribution
payable in shares of Common Stock, then, and in each event, the Conversion Price shall be decreased
as of the time of such issuance or, in the event such record date shall have been fixed, as of the
close of business on such record date, by multiplying the Conversion Price then in effect by a
fraction:

(1) the numerator of which shall be the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of business on such record
date; and

(2) the denominator of which shall be the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of business on such record
date plus the number of shares of Common Stock issuable in payment of such dividend or
distribution.

(iii) Adjustment for Other Dividends and Distributions. If the Company shall at any
time or from time to time after the Issuance Date, make or issue or set a record date for the
determination of holders of Common Stock entitled to receive a dividend or other distribution
payable in securities of the Company other than shares of Common Stock, then, and in each such
event, an appropriate adjustment to the Conversion Price shall be made and provision shall be made
(by adjustments of the Conversion Price or otherwise) so that the holders of Series E Preferred
Stock shall receive upon conversions thereof, in addition to the number of shares of Common Stock
receivable thereon, the number of securities of the Company which they would have received had
their Series E Preferred Stock been converted into Common Stock on the date of such event and had
thereafter, during the period from the date of such event to and including the Conversion Date,
retained such securities (together with any distributions payable thereon during such period),
giving application to all adjustments called for during such period under this Section 5(e)(iii)
with respect to the rights of the holders of the Series E Preferred Stock.

(iv) Adjustments for Reclassification, Exchange or Substitution. If the Common Stock
issuable upon conversion of the Series E Preferred Stock at any time or from time to time after the
Issuance Date shall be changed to the same or different number of shares of any class or classes of
stock, whether by reclassification, exchange, substitution or otherwise (other than by way of a
stock split or combination of shares or stock dividends provided for in Sections 5(e)(i), (ii) and
(iii), or a reorganization, merger, consolidation, or sale of assets provided for in Section
5(e)(v)), then, and in each such event, an appropriate adjustment to the Conversion Price shall be
made and provisions shall be made so that the holder of each share of Series E Preferred Stock
shall have the right thereafter to convert such share of Series E Preferred Stock into the kind and
amount of shares of stock and other securities receivable upon reclassification, exchange,
substitution or other change, by holders of the number of shares of Common Stock into which such
share of Series E Preferred Stock might have been converted immediately prior to such
reclassification, exchange, substitution or other change, all subject to further adjustment as
provided herein.

(v) Adjustments for Reorganization, Merger, Consolidation or Sales of Assets.
If at any time or from time to time after the Issuance Date there shall be a capital reorganization
of the Company (other than by way of a stock split or combination of shares or stock dividends or
distributions provided for in Section 5(e)(i), (ii) and (iii), or a reclassification, exchange or
substitution of shares provided for in Section 5(e)(iv)), or a merger or consolidation of the
Company with or into another corporation, or the sale of all or substantially all of the Company’s
properties or assets to any other person (an “Organic Change”), then as a part of such Organic
Change an appropriate adjustment to the Conversion Price shall be made and provision shall be made
so that the holder of each share of Series E Preferred Stock shall have the right thereafter to
convert such share of Series E Preferred Stock into the kind and amount of shares of stock and
other securities or property of the Company or any successor corporation resulting from the Organic
Change. In any such case, appropriate adjustment shall be made in the application of the
provisions of this Section 5(e)(v) with respect to the rights of the holders of the Series E
Preferred Stock after the Organic Change to the end that the provisions of this Section 5(e)(v)
(including any adjustment in the Conversion Price then in effect and the number of shares of stock
or other securities deliverable upon conversion of the Series E Preferred Stock) shall be applied
after that event in as nearly an equivalent manner as may be practicable.

(vi) Record Date. In case the Company shall take record of the holders of its Common
Stock or any other Preferred Stock for the purpose of entitling them to subscribe for or purchase
Common Stock or other securities convertible into Common Stock (“Convertible Securities”), then the
date of the issue or sale of the shares of Common Stock shall be deemed to be such record date.

(f) No Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed hereunder by the Company,
but will at all times in good faith, assist in the carrying out of all the provisions of this
Section 5 and in the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the holders of the Series E Preferred Stock against impairment.
In the event a holder shall elect to convert any shares of Series E Preferred Stock as provided
herein, the Company shall not refuse conversion based on any claim that such holder or any one
associated or affiliated with such holder has been engaged in any violation of law, unless, an
injunction from a court, on notice, restraining and/or adjoining conversion of all or of said
shares of Series E Preferred Stock shall have been issued and the Company posts a surety bond for
the benefit of such holder in an amount equal to 130% of the Liquidation Preference Amount of the
Series E Preferred Stock such holder has elected to convert, which bond shall remain in effect
until the completion of arbitration/litigation of the dispute and the proceeds of which shall be
payable to such holder in the event it obtains judgment.

(g) Certificates as to Adjustments. Upon occurrence of each adjustment or
readjustment of the Conversion Price or number of shares of Common Stock issuable upon conversion
of the Series E Preferred Stock pursuant to this Section 5, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to
each holder of Series E Preferred Stock a certificate setting forth such adjustment and
readjustment, showing in detail the facts upon which such adjustment or readjustment is based. The
Company shall, upon written request of the holder of Series E Preferred Stock, at any time, furnish
or cause to be furnished to such holder a like certificate setting forth such adjustments and
readjustments, the Conversion Price in effect at the time, and the number of shares of Common Stock
and the amount, if any, of other securities or property which at the time would be received upon
the conversion of a share of such Series E Preferred Stock. Notwithstanding the foregoing, the
Company shall not be obligated to deliver a certificate unless such certificate would reflect an
increase or decrease of at least one percent of such adjusted amount.

(h) Issue Taxes. The Company 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 on conversion of shares of Series E Preferred Stock pursuant thereto;
provided, however, that the Company shall not be obligated to pay any transfer
taxes resulting from any transfer requested by any holder in connection with any such conversion.

(i) Notices. All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by facsimile or three (3) business days following
(x) being mailed by certified or registered mail, postage prepaid, return-receipt requested, or (y)
delivered to an express mail delivery service such as Federal Express, with written receipt by the
addressee required, in either case addressed to the holder of record at its address appearing on
the books of the Company. The Company will give written notice to each holder of Series E
Preferred Stock at least twenty (20) days prior to the date on which the Company closes its books
or takes a record (I) with respect to any dividend or distribution upon the Common Stock, (II) with
respect to any pro rata subscription offer to holders of Common Stock or (III) 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 Company will also give written notice to each holder of Series E Preferred Stock
at least twenty (20) 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 such holder prior to
such information being made known to the public.

(j) Fractional Shares. No fractional shares of Common Stock shall be issued upon
conversion of the Series E Preferred Stock. In lieu of any fractional shares to which the holder
would otherwise be entitled, the Company shall pay cash equal to the product of such fraction
multiplied by the average of the Closing Bid Prices of the Common Stock for the five (5)
consecutive trading days immediately preceding the Voluntary Conversion Date or Mandatory
Conversion Date, as applicable.

(k) Reservation of Common Stock. The Company shall, so long as any shares of Series E
Preferred Stock are outstanding, reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of effecting the conversion of the Series E Preferred Stock,
such number of shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all of the Series E Preferred Stock then outstanding.

(l) Retirement of Series E Preferred Stock. Conversion of Series E Preferred Stock
shall be deemed to have been effected on the applicable Voluntary Conversion Date or Mandatory
Conversion Date. The Company shall keep written records of the conversion of the shares of Series
E Preferred Stock converted by each holder. A holder shall be required to deliver the original
certificates representing the shares of Series E Preferred Stock upon any conversion of the Series
E Preferred Stock represented by such certificates.

(m) Regulatory Compliance. If any shares of Common Stock to be reserved for the
purpose of conversion of Series E Preferred Stock 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 Company 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.

6. No Preemptive or Redemption Rights. Except as provided in Section 5 hereof no
holder of the Series E Preferred Stock shall be entitled to rights to subscribe for, purchase or
receive any part of any new or additional shares of any class, whether now or hereinafter
authorized, or of bonds or debentures, or other evidences of indebtedness convertible into or
exchangeable for shares of any class, but all such new or additional shares of any class, or any
bond, debentures or other evidences of indebtedness convertible into or exchangeable for shares,
may be issued and disposed of by the Board of Directors on such terms and for such consideration
(to the extent permitted by law), and to such person or persons as the Board of Directors in its
absolute discretion may deem advisable. Except as provided in Section 5 neither the Company nor
the holder of any Series E Preferred Stock shall have the right to require the Company to redeem
any shares of Series E Preferred Stock.

7. Inability to Fully Convert.

(a) Holder’s Option if Company Cannot Fully Convert. If, upon the Company’s receipt
of a Conversion Notice, the Company cannot issue shares of Common Stock for any reason, including,
without limitation, because the Company (x) does not have a sufficient number of shares of Common
Stock authorized and available for issuance or (y) is otherwise prohibited by applicable law or by
the rules or regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over the Company or its securities, from issuing all
of the Common Stock which is to be issued to a holder of Series E Preferred Stock pursuant to a
Conversion Notice, then the Company shall issue as many shares of Common Stock as it is able to
issue in accordance with such holder’s Conversion Notice, and with respect to the unconverted
Series E Preferred Stock (the “Unconverted Preferred Stock”) the holder, solely at such holder’s
option, may elect, at any time after receipt of notice from the Company that there is Unconverted
Preferred Stock, to void the holder’s Conversion Notice as to the number of shares of Common Stock
the Company is unable to issue (the “Unissued Shares of Common Stock”) and retain or have returned,
as the case may be, the certificates for the shares of the Unconverted Preferred Stock.

(b) Mechanics of Fulfilling Holder’s Election. The Company shall immediately send via
facsimile to a holder of Series E Preferred Stock, upon receipt of a facsimile copy of a Conversion
Notice from such holder which cannot be fully satisfied as described in Section 8(a) above, a
notice of the Company’s inability to fully satisfy such holder’s Conversion Notice (the “Inability
to Fully Convert Notice”). Such Inability to Fully Convert Notice shall indicate (i) the reason
why the Company is unable to fully satisfy such holder’s Conversion Notice and (ii) the number of
shares of Series E Preferred Stock which cannot be converted.

8. Vote to Change the Terms of or Issue Preferred Stock. The affirmative vote at a
meeting duly called for such purpose, or the written consent without a meeting, of the holders of
not less than one-half (1/2) of the then outstanding shares of Series E Preferred Stock, shall be
required to approve any change to this Certificate of Designation or the Company’s Certificate of
Incorporation which would amend, alter, change or repeal any of the powers, designations,
preferences and rights of the Series E Preferred Stock.

9. Lost or Stolen Certificates. Upon receipt by the Company of evidence satisfactory
to the Company of the loss, theft, destruction or mutilation of any Preferred Stock Certificates
representing the shares of Series E Preferred Stock, and, in the case of loss, theft or
destruction, of an indemnity reasonably satisfactory to the Company and, in the case of mutilation,
upon surrender and cancellation of the Preferred Stock Certificate(s), the Company shall execute
and deliver new preferred stock certificate(s) of like tenor and date.

10. Remedies, Characterizations, Other Obligations, Breaches and Injunctive
Relief. The remedies provided in this Certificate of Designation shall be cumulative and
in addition to all other remedies available under this Certificate of Designation, at law or in
equity (including 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 Company to comply with the terms of this Certificate of Designation. Amounts set forth or
provided for herein with respect to 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 Company (or the performance thereof). The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm
to the holders of the Series E Preferred Stock and that the remedy at law for any such breach may
be inadequate. The Company therefore agrees that, in the event of any such breach or threatened
breach, the holders of the Series E Preferred Stock 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.

11. Specific Shall Not Limit General; Construction. No specific provision contained
in this Certificate of Designation shall limit or modify any more general provision contained
herein. This Certificate of Designation shall be deemed to be jointly drafted by the Company and
all initial holders of the Series E Preferred Stock and shall not be construed against any person
as the drafter hereof.

12. Failure or Indulgence Not Waiver. No failure or delay on the part of a holder of
Series E Preferred Stock 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.

13. Waiver. Notwithstanding any provision in this Certificate of Designation to the
contrary, any provision contained herein and any right of the holders of Series E Preferred Stock
granted hereunder may be waived as to all shares of Series E Preferred Stock (and the holders
thereof) upon the written consent of the holders of a majority of the shares of Series E Preferred
Stock then outstanding, unless a higher percentage is required by applicable law, in which case the
written consent of the holders of not less than such higher percentage of shares of Series E
Preferred Stock shall be required.

1

IN WITNESS WHEREOF, the undersigned has executed and subscribed this Certificate and does
affirm the foregoing as true this 31st day of May, 2005.

P-COM, INC.

By:           

Name:

Title:

2

EXHIBIT I

P-COM, INC.

CONVERSION NOTICE

Reference is made to the Certificate of Designation of the Relative Rights and Preferences of the
Series E Preferred Stock of P-Com, Inc. (the “Certificate of Designation”). In accordance with and
pursuant to the Certificate of Designation, the undersigned hereby elects to convert the number of
shares of Series E Preferred Stock, par value $.0001 per share (the “Preferred Shares”), of P-Com,
Inc., a Delaware corporation (the “Company”), indicated below into shares of Common Stock, par
value $.0001 per share (the “Common Stock”), of the Company, by tendering the stock certificate(s)
representing the share(s) of Preferred Shares specified below as of the date specified below.

Date of Conversion:

Number of Preferred Shares to be converted:

Stock certificate no(s). of Preferred Shares to be converted:

	 	 	 
	The Common Stock have been sold: YES      

	 	NO     
	 
	 	 
	Please confirm the following information:

	 	

	 
	 	 
	Conversion Price:

	 	

	 

	 	 
	 
	 	 
	Number of shares of Common Stock

to be issued:

	 	

	 

	 	 

Number of shares of Common Stock beneficially owned or deemed beneficially owned by the Holder
on the Date of Conversion determined in accordance with Section 16 of the Securities Exchange Act
of 1934, as amended:      

Please issue the Common Stock into which the Preferred Shares are being converted and, if
applicable, any check drawn on an account of the Company in the following name and to the following
address:

Issue to:

Facsimile Number:

Authorization:

By:

Title:

Dated:

PRICES ATTACHED

3

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