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As filed with the Securities and Exchange Commission on March 3, 1999
Registration No. 333-70937
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933, as amended
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P-COM, INC.
(Exact name of Registrant as specified in its charter)
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<TABLE>
<S> <C>
Delaware 77-0289371
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
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3175 S. Winchester Boulevard, Campbell, CA 95008
(408) 866-3666
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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George P. Roberts
Chairman of the Board and Chief Executive Officer
P-Com, Inc.
3175 S. Winchester Boulevard
Campbell, CA 95008
(408) 866-3666
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
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Copy to:
Warren T. Lazarow, Esq.
Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, California 94303
(650) 424-0160
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Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, check the
following box and list the Securities Act of 1933, as amended, registration
statement number of the earlier effective registration statement for the same
offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, as amended, check the following box and list the
Securities Act of 1933, as amended, registration statement number of the earlier
effective registration statement for the same offering.[_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[_]
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The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment that specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this registration statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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PRELIMINARY PROSPECTUS
(SUBJECT TO COMPLETION, DATED MARCH 3, 1999)
13,000,000 Shares
P-COM, INC.
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COMMON STOCK
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Certain stockholders of P-COM, Inc. are offering for resale and
selling under this prospectus up to 13,000,000 shares of our common stock to be
issued upon conversion of our Series B preferred stock, exercise of warrants to
purchase our common stock and as payment of premiums, failures to satisfy
certain obligations, dividends and anti-dilution adjustments on the Series B
preferred stock and warrants.
The selling stockholders may determine the prices at which they will
sell their shares, which may be the prevailing market price for the shares or in
negotiated transactions. We will not receive any of the proceeds from sales of
the shares.
Our common stock is traded on the Nasdaq National Market (Nasdaq
Symbol: PCMS). On January 20, 1999, the closing price of the common stock was
$7.9063 per share.
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You should carefully consider the risk factors commencing on page 3
before purchasing any of the common stock offered by the selling stockholders.
-------------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
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The date of this prospectus is _____________, 1999.
The information in this prospectus is not complete and may be changed.
The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
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THE COMPANY
P-Com, Inc. develops, manufactures and markets network access systems
for the worldwide wireless telecommunications market. The point-to-point,
spread spectrum and point-to-multipoint radio links provided by P-Com are
designed to satisfy the network requirements of cellular and personal
communications services, corporate communications, public utilities and local
governments. In addition, P-Com provides comprehensive network services
including system and program planning and management, path design and
installation. P-Com also provides network performance monitoring devices.
Our radio systems are sold internationally through strategic partners,
system providers, original equipment manufacturers and distributors as well as
directly to end-users, and domestically primarily through our direct sales
force. Our customers include AT&T Corp., Bell Atlantic Corp., BellSouth Corp.,
Bank of China, Bosch Telecom GmbH, Embratel Particiacoes S.A., Far Eastone
Telecommunications Co., Ltd., Lucent Technologies, Inc., Mercury one2one, Orange
PLC Group, Siemens A.G., Fujitsu Limited, Telekom S.A. Ltd., Tellabs Inc.,
TransAsia Telecomm, Inc., U.S. West Inc., WinStar Communications Corp., MCI
Worldcom Inc., and Post & Telecomm Corp. of Zimbabwe.
In December 1993, we received our initial ISO 9001 registration, a
standard established by the International Organization for Standardization that
provides a methodology by which manufacturers can obtain quality certification
of their design and manufacturing process. In accordance with ISO 9001
requirements, our ISO 9001 registration was subsequently recertified. We also
completed ISO 9001 registration for our United Kingdom sales and customer
support facility in 1996, our Geritel facility in Italy in 1996 and our
Technosystem facility in Italy in 1997 and are in the process of obtaining ISO
9001 registration for our other facilities outside of the United States.
P-Com, Inc. was incorporated in the State of Delaware on August 23,
1991. Our executive offices are located at 3175 S. Winchester Boulevard,
Campbell, California 95008, and our telephone number is (408) 866-3666.
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RISK FACTORS
You should carefully consider the risks described below before making
an investment decision. The risks and uncertainties described below are not the
only ones facing P-Com. Additional risks and uncertainties not presently known
to us or that we currently deem immaterial may also impair our business
operations.
If any of the following risks actually occur, our business, financial
condition and results of operations could be materially adversely affected. In
such case, the trading price of our common stock could decline, and you may lose
all or part of your investment.
This prospectus also contains "forward-looking" statements that
involve significant risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including the risks faced by us described below and
elsewhere in this prospectus.
We cannot predict our success because we have operated for a short period of
time
We were founded in August 1991 and remained in the development stage
until October 1993 when commercial shipments of our first product began. Due to
our limited operating history and limited resources, among other factors,
profitability or significant revenues on a quarterly or annual basis may not
occur in the future. We are subject to all of the risks inherent in the
operation of a new business enterprise, and may not be able to successfully
address these risks.
We have experienced historical losses and may continue to experience losses in
the future
From our beginning to the end of the third quarter of fiscal 1998, we
generated a cumulative net loss of approximately $40.6 million. From the end of
1997 through the third quarter of 1998, our net loss was due primarily to (i) an
acquired in-process research and development charge of approximately $33.9
million recorded in the first quarter of 1998 related to the acquisition of the
assets of the Wireless Communications Group of Cylink Corporation, referred to
herein as the "Cylink Wireless Group," and (ii) a net loss of $42.1 million in
the third quarter of 1998, which included restructuring and other one-time
charges of $26.6 million (comprising a $16.9 million charge to cost of goods
sold (including $14.5 million in inventory write downs related to our existing
core business and $2.4 million in other one-time charges to inventory relating
to the elimination of product lines), a $5.4 million charge to general and
administrative expenses and a $4.3 million charge (including severance benefits,
facilities and fixed assets impairments and goodwill impairments) to
restructuring and other one-time charges).
From October 1993 through September 30, 1998, we generated sales of
approximately $607.2 million, of which 61.4% was generated in the year ended
December 31, 1997 and the first three quarters of 1998. However, we do not
believe such growth rates are indicative of future operating results. Revenues
may not remain at or increase from the levels experienced in 1997 or in the
first three quarters of 1998 and sales have and may continue to decline. In
fact, during the first nine months of 1998, we experienced our lowest rates of
sequential sales growth since we became a public company. In addition, during
the third quarter of 1998, we experienced a decrease in revenue as compared to
the first two quarters of 1998. This decrease in revenue was principally the
result of the market slowdown for our Tel Link
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product line and for the industry segment in general. Net sales for the third
quarter of 1998 (which included sales from many newly acquired businesses that
did not contribute to revenues in the comparable period of 1997) were
approximately 50% less than our sales for the comparable period in 1997. We
expect our sales growth in the near future to be significantly below recent
comparable periods of growth. In recent quarters, we also experienced higher
than historical product price declines. The decline in prices, along with one-
time inventory write-downs, has had a significant downward impact on our gross
margin. We expect pricing pressures to continue for the next several quarters.
We also expect gross margins as a percentage of revenues to continue to be below
comparable periods for the next several quarters.
During 1997 and the first three quarters of 1998, operating expenses
increased more rapidly than we had anticipated and these increases also
contributed to net losses. We plan to continue our investments in operations,
particularly to support product development and the marketing and sales of
recently introduced products. In parallel, we have undertaken cost-cutting
efforts in other areas. However, if sales do not increase, our results of
operations, business and financial condition may be materially adversely
affected. Accordingly, we may not achieve profitability for the next several
quarters. We believe we will likely report an operating loss during the fourth
quarter of fiscal year 1998 and could report a net loss for such quarter.
A substantial amount of our products and services are purchased by a limited
number of customers
To date, approximately four hundred customers have accounted for
substantially all of our sales. However, in 1997, two customers, Orange
Personal Communications Ltd. and Winstar Communications Corp., accounted for 16%
and 11% of our 1997 sales, respectively. During the first three quarters of
1998, four customers accounted for approximately 45% of sales and as of
September 30, 1998, seven customers accounted for approximately 46% of the
backlog scheduled for shipment in the twelve months subsequent to September 30,
1998. Many of our major customers are located in foreign countries, primarily
in the United Kingdom and Europe. We anticipate continuing to sell products and
services to existing customers and adding new customers, most of which we expect
to continue to be located outside of the United States.
Similarly, several of our subsidiaries are dependent on a few
customers. Some of these customers are implementing new networks and are
themselves in the early stages of development. They may require additional
capital to fully implement their planned networks, which may be unavailable to
them on an as-needed basis.
If our customers cannot finance their purchases of our or our
subsidiaries' products or services, then this may materially adversely affect
our business, operations and financial condition. Financial difficulties of
existing or potential customers may also limit the overall demand for our
products and services. Specifically, both current customers and potential future
customers in the telecommunications industry have reportedly undergone financial
difficulties and may therefore limit their future orders. Our ability to
achieve sales in the future will depend in significant part upon our ability to:
. obtain and fulfill orders from, maintain relationships with and provide
support to existing and new customers;
. manufacture systems in volume on a timely and cost-effective basis; and
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. meet stringent customer performance and other requirements and shipment
delivery dates.
Our success will also depend in part on the financial condition,
working capital availability and success of our customers. As a result, any
cancellation, reduction or delay in orders by or shipments, for example, as a
result of manufacturing or supply difficulties or a customer's inability to
finance it purchases of our products or services, may adversely affect our
business. Some difficulties of this nature have occurred in the past and we
believe they will occur in the future.
Finally, acquisitions in the communications industry are common, which
further concentrates the customer base and may cause some orders to be delayed
or cancelled. No assurance can be given that our sales will increase in the
future or that we will be able to support or attract customers. See "- We
experience significant fluctuations in our results of operations."
We experience significant fluctuations in our results of operations
We have experienced and will continue to experience significant
fluctuations in sales, gross margins and operating results. The procurement
process for most of our current and potential customers is complex and lengthy.
As a result, the timing and amount of sales is often difficult to predict
reliably. The sale and implementation of our products and services generally
involves a significant commitment of senior management, as well as our sales
force and other resources. The sales cycle for our products and services
typically involves technical evaluation and commitment of cash and other
resources and delays often occur. Delays are frequently associated with, among
other things:
. customers' seasonal purchasing and budgetary cycles;
. education of customers as to the potential applications of our products
and services, as well as product-life cost savings associated therewith;
. compliance with customers' internal procedures for approving large
expenditures and evaluating and accepting new technologies;
. compliance with governmental or other regulatory standards;
. difficulties associated with customers' ability to secure financing;
. negotiation of purchase and service terms for each sale; and
. price decreases required to secure purchase orders.
Seasonality
Orders for products have typically been strongest towards the end of
the calendar year, with a reduction in shipments occurring during the summer
months, as evidenced in the third quarter of fiscal years 1997 and 1998. This
slow down is primarily related to inactivity in the European market, currently
our major customer base, during such period. To the extent such seasonality
continues, the results of operations will fluctuate from quarter to quarter.
Customer concentration
A single customer's order scheduled for shipment in a quarter can
represent a large portion of our potential sales for such quarter. We have at
times failed to receive expected
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orders, and delivery schedules have been deferred as a result of changes in
customer requirements and commitments, among other factors. As a result, our
operating results for a particular period have been and could in the future be
materially adversely affected by a delay, rescheduling or cancellation of even
one purchase order. In addition, our operating results may be affected by an
inability to obtain such large orders from single customers in the future.
Uncertainty in Telecommunications Industry
Although much of the anticipated growth in the telecommunications
infrastructure is expected to result from the entrance of new service providers,
many new providers do not have the financial resources of existing service
providers. If these new service providers are unable to adequately finance
their operations, they may cancel or delay orders. Moreover, purchase orders
are often received and accepted far in advance of shipment and, as a result, we
typically permit orders to be modified or canceled with limited or no penalties.
Indeed, most of the backlog scheduled for shipment in the twelve months
subsequent to September 30, 1998 can be cancelled. As a result, backlog does
not necessarily indicate future sales for any particular period. In addition,
any failure to reduce actual costs to the extent anticipated when an order is
received substantially in advance of shipment or an increase in anticipated
costs before shipment could materially adversely affect our gross margin for
such orders.
Inventory
Our customers have also increasingly been requiring product shipment
upon ordering rather than submitting purchase orders far in advance of expected
shipment dates. This practice requires us to keep inventory on hand for
immediate shipment. Given the variability of customer need and purchasing
power, it is hard to predict the amount of inventory needed to satisfy customer
demand. If we over- or under-estimate inventory requirements our results of
operations could continue to be adversely affected. In particular, increases in
inventory could materially adversely affect operations if such inventory is not
used or becomes obsolete.
Shipment delays
Most of our sales in recent quarters have been realized near the end
of each quarter. Accordingly, a delay in a shipment near the end of a
particular quarter for any reason may cause sales in a particular quarter to
fall significantly below our expectations. Such delays have occurred in the
past due to, for example, unanticipated shipment rescheduling, pricing
concessions to customers, cancellations or deferrals by customers, competitive
and economic factors, unexpected manufacturing or other difficulties, delays in
deliveries of components, subassemblies or services by suppliers and failure to
receive anticipated orders. We cannot determine whether similar or other delays
might occur in the future, but expect that some or all of such problems might
recur.
Expenses
Magnifying the effects of any revenue shortfall, a material portion of
our expenses are fixed and difficult to reduce should revenues not meet
expectations. The failure to reduce actual costs to the extent anticipated, or
an increase in anticipated costs before shipment of an order or orders could
affect the gross margins for such orders. If we or our competitors announce new
products, services and technologies, it could cause customers to defer or cancel
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purchases of our systems and services. Additional factors have caused and will
continue to cause our performance to vary significantly from period to period.
These factors include:
. new product introductions and . market acceptance by customers
enhancements and related costs; and timing of availability of
new products and services
. weakness in Asia and Latin provided by us or our competitors;
America, resulting in
overcapacity; . acquisitions, including costs and
expenses;
. ability to manufacture and
produce sufficient volumes . use of different distribution and
of systems and meet sales channels;
customer requirements;
. fluctuations in foreign currency
. manufacturing efficiencies and exchange rates;
costs;
. delays or changes in regulatory
. customer confusion due to impact approval of systems and services;
of actions of competitors;
. warranty and customer support
. variations in mix of sales expenses;
through direct efforts or
through distributors or . severance costs;
other third parties;
. consolidation and other
. variations in mix of systems restructuring costs;
and related software tools
sold and services provided; . the pending stockholder class
action lawsuits;
. operating and new product
development expenses; . need for additional financing;
. product discounts; . customization of systems;
. accounts receivable collection, . general economic and political
in particular those acquired in conditions; and
recent acquisitions;
. natural disasters.
. changes in our pricing or
customers' or suppliers' pricing;
. inventory write-downs and
obsolescence;
Our results of operations have been and will continue to be influenced
by competitive factors, including pricing, availability and demand for other
competitive products and services. All of the above factors are difficult for us
to forecast, and could materially adversely affect our business, condition and
results of operations. We believe that period-to-period comparisons are thus
not necessarily meaningful and should not be relied upon as indications of
future performance.
Because of all of the foregoing factors, in some future quarter or
quarters our operating results may continue to be below those projected by
public market analysts, and the price of our common stock may be materially
adversely affected. Net sales for the three month period ending December 31,
1998 were significantly lower than net sales in the comparable period in 1997.
Because of lack of order visibility and the current trend of order delays,
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deferrals and cancellations, we cannot assure you that we will be able to
achieve or maintain our current sales levels.
We reported an operating and net loss for the quarter ending December
31, 1998. Should current market conditions continue to deteriorate, we may also
incur operating and net losses in subsequent periods. Additionally, management
continues to evaluate market conditions in order to assess the need to take
further action to more closely align our cost structure with anticipated
revenues. Any subsequent actions could result in restructuring charges,
inventory write-downs and provisions for the impairment of long-lived assets,
which could materially adversely affect our business, financial condition and
results of operations.
We face many acquisition related risks
We may be unable to realize the full value of our past acquisitions
Since April 1996, we have acquired nine complementary companies and
businesses. Integration and management of these companies into our business is
ongoing. We have encountered or expect to encounter the following problems
relating to such transactions:
. difficulty of assimilating . maintenance of uniform standards,
controls, procedures and policies; operations and personnel of combined
companies;
. potential disruption of ongoing . impairment of relationships with
business; employees and customers as result of
integration of new personnel;
. inability to retain key technical . risks of entering markets in which
and managerial personnel; we have no or limited direct prior
experience; and
. inability of management to maximize . operation of companies in different
financial and strategic position geographical locations with
through integration of acquired different cultures.
businesses;
. additional expenses associated with
amortization of acquired intangible
assets;
. dilution to existing stockholders;
We may not be successful in overcoming any or all of these risks or
any other problems encountered in connection with such acquisitions, and such
transactions may materially adversely affect our business, condition and results
of operations or require divestment of one or more business units.
To be successful, we may have to acquire new businesses
As part of our overall strategy, we plan to continue acquisitions of
or investments in complementary companies, products or technologies and to
continue entering into joint ventures and strategic alliances with other
companies. Our success in future acquisition transactions may, however, be
limited. We compete for acquisition and expansion opportunities against many
entities that have substantially greater resources. We may not be able to
successfully identify suitable candidates, pay for or complete acquisitions, or
expand into new
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markets. Once integrated, acquired businesses may not achieve
comparable levels of revenues, profitability, or productivity to our existing
business, or the stand alone acquired company, or otherwise perform as expected.
Also, as commonly occurs with mergers of technology companies during the pre-
merger and integration phases, aggressive competitors may also undertake formal
initiatives to attract customers and to recruit key employees through various
incentives. Moreover, if we proceed with acquisitions in which the consideration
consists of cash, a substantial portion of our available cash could be used to
consummate our acquisitions, as was the case with the acquisition of the Cylink
Wireless Group. The occurrence of any of these events could have a material
adverse effect on our workforce, business, financial condition and results of
operations. See "-We cannot assure you that we will be able to successfully
manage our growth."
Accounting issues related to acquisitions
In addition, many business acquisitions must be accounted for under
the purchase method of accounting for financial reporting purposes. Many of the
attractive acquisition candidates us are high technology companies which tend to
have insignificant amounts of tangible assets and significant goodwill or
acquisition of these businesses, would typically result in substantial charges
related to the amortization of goodwill. For example, all of our past
acquisitions to date, except the acquisitions of Control Resources Corporation,
RT Masts Limited and Telematics, Inc. have been accounted for under the purchase
method of accounting, and as a result, a significant amount of goodwill is being
amortized. This amortization expense may have a significant effect on our
financial results.
Although we believe the accounting for past acquisitions has been
appropriate, in general the Securities and Exchange Commission has recently been
reviewing more closely the accounting for acquisitions and the resulting charges
for "in-process" research and development costs. Any resulting restatement of
the "in-process" research and development charge we recognized in conjunction
with any of our acquisitions, including the Cylink Wireless Group acquisition,
could result in a lesser charge to income for "in-process" technology and the
creation of a higher recorded value of goodwill or other intangible assets. The
allocation of the purchase price to such additional intangible assets would have
the effect of increasing amortization expense, which could have a material
adverse effect on results of operations, business and financial condition.
We depend on contract manufacturers and limited sources of supply
Our internal manufacturing capacity is very limited. We use contract
manufacturers such as Celeritek, Inc., GSS Array Technology, Remec, Inc.,
Sanmina Corporation, Senior Systems Technology, Inc. and SPC Electronics Corp.
to produce our systems, components and subassemblies and expect to rely
increasingly on these and other manufacturers in the future. We also rely on
outside vendors to manufacture certain other components and subassemblies. Our
internal manufacturing capacity and that of our contract manufacturers may not
be sufficient to fulfill our orders. Our failure to manufacture, assemble and
ship systems and meet customer demands on a timely and cost-effective basis
could damage relationships with customers and have a material adverse effect on
our business, condition and results of operations.
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In addition, certain components, subassemblies and services necessary
for the manufacture of our systems are obtained from a sole supplier or a
limited group of suppliers. In particular, Eltel Engineering S.r.L. and
Associates and Xilinx, Inc. are sole source or limited source suppliers for
critical components used in our radio systems.
Our reliance on contract manufacturers and on sole suppliers or a
limited group of suppliers and increasing reliance on contract manufacturers and
suppliers involves risks. We have experienced an inability to obtain an
adequate supply of finished products and required components and subassemblies.
As a result, we have reduced control over the price, timely delivery,
reliability and quality of finished products, components and subassemblies. We
do not have long-term supply agreements with most of our manufacturers or
suppliers. We have experienced problems in the timely delivery and quality of
products and certain components and subassemblies from vendors. Some suppliers
have relatively limited financial and other resources. Any inability to obtain
timely deliveries of components and subassemblies of acceptable quality or any
other circumstance would require us to seek alternative sources of supply, or to
manufacture finished products or components and subassemblies internally. As
manufacture of our products and certain of our components and subassemblies is
an extremely complex process, finding and educating new vendors could delay our
ability to ship our systems, which could damage relationships with current or
prospective customers and materially adversely affect our business, condition
and results of operations.
We cannot assure you that we will be able to successfully manage our growth
Recently, in response to market declines and poor performance in our
sector generally and our lower than expected performance over the last several
quarters, we introduced measures to reduce operating expenses, including
reductions in our workforce in July, September and November 1998. However,
prior to such measures, we had significantly expanded the scale of our
operations to support then anticipated continuing increased sales and to address
critical infrastructure and other requirements. This expansion included leasing
additional space, opening branch offices and subsidiaries in the United Kingdom,
Italy, Germany, Mexico, Dubai and Singapore, opening design centers in the
United Kingdom and the United States, acquiring a large amount of inventory and
accounts receivable, and acquiring nine businesses. We had also invested
significantly in research and development to support product development and
services. Further, we had hired additional personnel in all functional areas,
including in sales and marketing, manufacturing and operations and finance. We
experienced significantly higher operating expenses than in prior years as a
result of this expansion. A material portion of these expenses remain
significant fixed costs.
In addition, to prepare for the future, we are required to continue to
invest resources in our acquired and new businesses. Currently, we are devoting
significant resources to the development of new products and technologies and
are conducting evaluations of these products. We will continue to invest
additional resources in plant and equipment, inventory, personnel and other
items, to begin production of these products and to provide any necessary
marketing and administration to service and support these new products.
Accordingly, in addition to the effect our recent performance has had on gross
profit margin and inventory levels, our gross profit margin and inventory levels
may be further adversely impacted in the future by start-up costs associated
with the initial production and installation of these new products. Start-
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up costs may include additional manufacturing overhead, additional allowance
for doubtful accounts, inventory and warranty reserve requirements and the
creation of service and support organizations. Additional inventory on hand for
new product development and customer service requirements also increases the
risk of inventory write-downs. Based on the foregoing, if our sales do not
increase, our results of operations will continue to be materially adversely
affected. See "-We have experienced historical losses and may continue to
experience losses in the future."
Expansion of our operations and acquisitions have caused and continue
to impose a significant strain on our management, financial, manufacturing and
other resources and have disrupted our normal business operations. Our ability
to manage any possible future growth may depend upon significant expansion of
our manufacturing, accounting and other internal management systems and the
implementation of a variety of systems, procedures and controls, including
improvements relating to inventory control. In particular, we must successfully
manage the control of overhead expenses and inventories, the development,
introduction, marketing and sales of new products, the management and training
of our employee base, the integration and coordination of a geographically and
ethnically diverse group of employees and the monitoring of third party
manufacturers and suppliers. We cannot be certain that attempts to manage or
expand our marketing, sales, manufacturing and customer support efforts will be
successful or result in future additional sales or profitability. We must also
more efficiently coordinate activities in our companies and facilities in Rome
and Milan, Italy, France, Poland, the United Kingdom, Mexico, Dubai, New Jersey,
Florida, Virginia, Washington and elsewhere. For a number of reasons, we have
in the past and may continue to experience significant problems in these areas.
As a result of the foregoing, as well as difficulty in forecasting revenue
levels, we will continue to experience fluctuations in revenues, costs, and
gross margins.
Any failure to implement efficiently, coordinate and improve systems,
procedures and controls, including improvements relating to inventory control
and coordination with our subsidiaries, at a pace consistent with our business,
could cause continued inefficiencies, additional operational complexities and
expenses, greater risk of billing delays, inventory write-downs and financial
reporting difficulties. Such problems could have a material adverse effect on
our business, condition and results of operations.
A significant ramp-up production of products and services could
require us to make substantial capital investments in equipment and inventory,
in recruitment and training additional personnel and possibly in investment in
additional manufacturing facilities. If under-taken, we anticipate these
expenditures would be made in advance of increased sales. In such event, gross
margins would be adversely affected from time-to-time due to short-term
inefficiencies associated with the addition of equipment and inventory,
personnel or facilities, and cost categories may periodically increase as a
percentage of revenues.
The selling prices of our products and services could decline over time
We believe that average selling prices and possibly gross margins for
our systems and services will decline in the long term. Reasons for such
decline may include the maturation of such systems, the effect of volume price
discounts in existing and future contracts and the
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intensification of competition. To offset declining average selling prices, we
believe we must take a number of steps, including:
. successfully introducing and selling new systems on a timely basis;
. developing new products that incorporate advanced software and other
features that can be sold at higher average selling prices; and
. reducing the costs of our systems through contract manufacturing, design
improvements and component cost reduction, among other actions.
If we cannot develop new products in a timely manner, fail to achieve
customer acceptance or do not generate higher average selling prices, then we
would be unable to offset declining average selling prices. In we are unable to
offset declining average selling prices, our gross margins will decline. See "-
We experience significant fluctuations in results of operations."
We may be unable to collect our account receivables in a timely manner
We are subject to credit risk in the form of trade account
receivables. We may in certain circumstances be unable to enforce a policy of
receiving payment within a limited number of days of issuing bills, especially
for customers in the early phases of business development. In addition, many of
our foreign customers are granted longer payment terms than those typically
existing in the United States. We typically do not require collateral or other
security to support customer receivables, but in some instances we have required
down payments or letters of credit from a customer before booking their order.
We have had difficulties in the past in receiving payment in accordance with our
policies, particularly from customers awaiting financing to fund their expansion
and from customers outside of the United States. The days sales outstanding of
receivables have also recently increased. Such difficulties may continue in the
future, which could have a material adverse effect on our business, financial
condition and results of operations.
Our bank line of credit currently permits us to sell up to $25 million
of our receivables at any one time to a limited group of purchasers on a non-
recourse basis. We have in the past utilized such sales and may continue from
time to time to sell our receivables, as part of an overall customer financing
program. However, we may not be able to locate parties to purchase such
receivables on acceptable terms or at all. See "We experience significant
fluctuations in our results of operations" and "We face uncertainty because of
our international operations."
We may experience problems with product quality, performance and reliability
We have limited experience in producing and manufacturing systems and
contracting for such manufacture. Our customers require very demanding
specifications for quality, performance and reliability. As a consequence,
problems may occur with respect to the quality, performance and reliability of
our systems or related software tools. If such problems occur, we could
experience increased costs, delays or cancellations or reschedulings of orders
or shipments, delays in collecting accounts receivable and product returns and
discounts. If any of
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these events occur, it would have a material adverse effect on our business,
condition and results of operations.
In addition, to maintain our ISO 9001 registration, we must
periodically undergo certification assessment. Failure to maintain such
registration could materially adversely affect our business. We completed ISO
9001 registration for our United Kingdom sales and customer support facility in
1996, our Geritel facility in Italy in 1996, and its Technosystem facility in
Italy in 1997. Other of our facilities are also attempting to obtain ISO 9001
registration. Such registrations may not be achieved and we may be unable to
maintain those registrations we have already completed. Any such failure could
have a material adverse effect on our business, condition and results of
operations.
Changes in financial accounting standards could adversely affect the way we
report our operating results
We prepare our financial statements in conformity with generally
accepted accounting principles ("GAAP"). GAAP is subject to interpretation by
the American Institute of Certified Public Accountants, the Securities and
Exchange Commission and various bodies formed to interpret and create
appropriate accounting policies. A change in these policies can have a
significant effect on our reported results, and may even affect our reporting of
transactions completed before a change is announced. Accounting policies
affecting many other aspects of our business, including rules relating to
software and license revenue recognition, purchase and pooling-of-interests
accounting for business combinations, employee stock purchase plans and stock
option grants have recently been revised or are under review by one or more
groups. Changes to these rules, or the questioning of current practices, may
have a material adverse effect on our reported financial results or in the way
we conduct our business.
In addition, the preparation of financial statements in conformity
with GAAP requires us to make estimates and assumptions that affect the recorded
amounts of assets and liabilities, disclosure of those assets and liabilities at
the date of the financial statements and the recorded amounts of expenses during
the reporting period. A change in the facts and circumstances surrounding these
estimates could result in a change to the estimates and impact future operating
results.
Our products and services may not achieve market acceptance
Our future operating results depend upon the continued growth and
increased availability and acceptance of microcellular, PCN/PCS and wireless
local loop access telecommunications services in the United States and
internationally. The volume and variety of wireless telecommunications services
or the markets for and acceptance of such services may not continue to grow as
expected. The growth of such services may also fail to create anticipated
demand for our systems. Because these markets are relatively new, predicting
which segments of these markets will develop and at what rate these markets will
grow is difficult. In addition to our other products, we have recently invested
significant time and resources in the development of point-to-multipoint radio
systems. If the licensed millimeter wave, spread spectrum microwave radio or
point-to-multipoint microwave radio market and related services for our
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systems fails to grow, or grows more slowly than anticipated, our business,
condition and results of operations will be materially adversely affected.
Certain sectors of the communications market will require the
development and deployment of an extensive and expensive communications
infrastructure. In particular, the establishment of PCN/PCS networks will
require very large capital expenditures. Communications providers may not make
the necessary investment in such infrastructure, and the creation of this
infrastructure may not occur in a timely manner. Moreover, one potential
application of our technology -- use of our systems in conjunction with the
provision of alternative wireless access in competition with the existing
wireline local exchange providers -- depends on the pricing of wireless
telecommunications services at rates competitive with those charged by wireline
telephone companies. Rates for wireless access must become competitive with
rates charged by wireline companies for this approach to be successful. If
wireless access rates are not competitive, consumer demand for wireless access
will be materially adversely affected. If we allocate resources to any market
segment that does not grow, we may be unable to reallocate resources to other
market segments in a timely manner, ultimately curtailing or eliminating our
ability to enter such segments.
Certain current and prospective customers are delivering services and
features that use competing transmission media such as fiber optic and copper
cable, particularly in the local loop access market. To successfully compete
with existing products and technologies, we must offer systems with superior
price/performance characteristics and extensive customer service and support.
Additionally, we must supply such systems on a timely and cost-effective basis,
in sufficient volume to satisfy such prospective customers' requirements and
otherwise overcome any reluctance on the part of such customers to transition to
new technologies. Any delay in the adoption of our systems may result in
prospective customers using alternative technologies in their next generation of
systems and networks.
Prospective customers may not design their systems or networks to
include our systems. Existing customers may not continue to include our systems
in their products, systems or networks in the future. Our technology may not
replace existing technologies and achieve widespread acceptance in the wireless
telecommunications market. Failure to achieve or sustain commercial acceptance
of our currently available radio systems or to develop other commercially
acceptable radio systems would materially adversely affect us. Also, industry
technical standards may change or, if emerging standards become established, we
may not be able to conform to these new standards in a timely and cost-effective
manner.
We operate in an intensely competitive industry
The wireless communications market is intensely competitive. Our
wireless-based radio systems compete with other wireless telecommunications
products and alternative telecommunications transmission media, including copper
and fiber optic cable. We are experiencing intense competition worldwide from a
number of leading telecommunications companies. Such companies offer a variety
of competitive products and services and broader telecommunications product
lines, and include Adtran, Inc., Alcatel Network Systems, California Microwave,
Inc., Digital Microwave Corporation (which has recently acquired other
competitors, including Innova International Corp. and MAS Technology, Ltd.),
Ericsson
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Limited, Harris Corporation-Farinon Division, Larus Corporation, Nokia
Telecommunications, Lucent T.R.T., Utilicom and Western Multiplex Corporation.
Many of these companies have greater installed bases, financial
resources and production, marketing, manufacturing, engineering and other
capabilities than we do. In early 1998, we acquired the Cylink Wireless Group
which competes with a large number of companies in the wireless communications
markets, including U.S. local exchange carriers and foreign telephone companies.
The most significant competition for Cylink Wireless Group's products in the
wireless market is from telephone companies that offer leased line data
services. We face actual and potential competition not only from these
established companies, but also from start-up companies that are developing and
marketing new commercial products and services.
We may also compete in the future with other market entrants offering
competing technologies. Some of our current and prospective customers and
partners have developed, are currently developing or could manufacture products
competitive with ours. Nokia and Ericsson have recently developed new
competitive radio systems.
The principal elements of competition in our market and the basis upon
which customers may select our systems include price, performance, software
functionality, ability to meet delivery requirements and customer service and
support. Recently, certain competitors have announced the introduction of new
competitive products, including related software tools and services, and the
acquisition of other competitors and competitive technologies. We expect
competitors to continue to improve the performance and lower the price of their
current products and services and to introduce new products and services or new
technologies that provide added functionality and other features. New product
and service offerings and enhancements by our competitors could cause a decline
in sales or loss of market acceptance of our systems. New offerings could also
make our systems, services or technologies obsolete or non-competitive. In
addition, we are experiencing significant price competition and expect such
competition to intensify.
We believe that to be competitive, we will need to expend significant
resources on, among other items, new product development and enhancements. In
marketing our systems and services, we will compete with vendors employing other
technologies and services that may extend the capabilities of their competitive
products beyond their current limits, increase their productivity or add other
features. We may not be able to compete successfully in the future.
We may be unable to respond to rapid technological change or introduce
new products in a timely manner
Rapid technological change, frequent new product introductions and
enhancements, product obsolescence, changes in end-user requirements and
evolving industry standards characterize the communications market. Our ability
to compete in this market will depend upon successful development, introduction
and sale of new systems and enhancements and related software tools, on a timely
and cost-effective basis, in response to changing customer requirements.
Recently, we have been developing point-to-multipoint radio systems. Any
success in developing new and enhanced systems, including point-to-multipoint
systems, and related software tools will depend upon a variety of factors. Such
factors include:
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. new product selection; . development and completion of
related software tools, system
performance, quality and
reliability of systems;
. integration of various elements of . development and introduction of
complex technology; competitive systems; and
. timely and efficient implementation . timely and efficient completion
of manufacturing and assembly of of system design.
processes and cost reduction programs;
We have experienced and continue to experience delays in customer
procurement and in completing development and introduction of new systems and
related software tools, including products acquired in acquisitions. Moreover,
we may not be successful in selecting, developing, manufacturing and marketing
new systems or enhancements or related software tools. Also, errors could be
found in our systems after commencement of commercial shipments. Such errors
could result in the loss of or delay in market acceptance, as well as expenses
associated with re-work of previously delivered equipment. Our inability to
introduce in a timely manner new systems or enhancements or related software
tools that contribute to sales could have a material adverse effect on our
business, condition and results of operations.
We face uncertainty because of our international operations
In doing business in international markets, we face economic,
political and foreign currency fluctuations that are more volatile than those
commonly experienced in the United States and other areas. Most of our sales to
date have been made to customers located outside of the United States. We have
also acquired three Italy-based companies, two United Kingdom-based companies
and four U.S. companies with substantial international operations. These
companies sell their products and services primarily to customers in Europe, the
Middle East and Africa. We anticipate that international sales will continue to
account for a majority of our sales for the foreseeable future.
Historically, our international sales have been denominated in British
pounds sterling or United States dollars. With recent acquisitions of foreign
companies, certain of our international sales are denominated in other foreign
currencies, including Italian Lira. A decrease in the value of foreign
currencies relative to the United States dollar could result in decreased
margins from those transactions. For international sales that are United States
dollar-denominated, such a decrease could make our systems less price-
competitive and could have a material adverse effect upon our financial
condition. We have in the past mitigated currency exposure to the British pound
sterling through hedging measures. However, any future hedging measures may be
limited in their effectiveness with respect to the British pound sterling and
other foreign currencies. Additional risks are inherent in our international
business activities. Such risks include:
. changes in regulatory . delays in receiving components and
requirements; materials;
. costs and risks of localizing . availability of suitable export
systems in foreign countries; financing;
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<TABLE>
<CAPTION>
<S> <C>
. timing and availability of export . foreign currency exchange
licenses, tariffs and other trade fluctuations;
barriers;
. difficulties in staffing and . the burden of complying with a wide
managing foreign operations, variety of complex foreign laws and
branches and subsidiaries; treaties;
. difficulties in managing . the difficulty in accounts
distributors; receivable collections; and
. potentially adverse tax consequences; . political and economic instability.
</TABLE>
In addition, many of our customer purchase and other agreements are
governed by foreign laws, which may differ significantly from U.S. laws.
Therefore, we may be limited in our ability to enforce our rights under such
agreements and to collect damages, if awarded.
In many cases, local regulatory authorities own or strictly regulate
international telephone companies. Access to such markets is often difficult
because of established relationships between government owned or controlled
telephone companies and their traditional indigenous suppliers of
telecommunications equipment. The successful expansion of our international
operations in certain markets will depend on our ability to locate, form and
maintain strong relationships with established companies providing communication
services and equipment in targeted regions. The failure to establish regional or
local relationships or to successfully market or sell our products in
international markets could limit our ability to expand operations. Our
inability to identify suitable parties for such relationships, or even if
identified, to form and maintain strong relationships could prevent us from
generating sales of products and services in targeted markets or industries.
Moreover, even if such relationships are established, we may be unable to
increase sales of products and services through such relationships.
Some of our potential markets include developing countries that may
deploy wireless communications networks as an alternative to the construction of
a limited wired infrastructure. These countries may decline to construct
wireless telecommunications systems or construction of such systems may be
delayed for a variety of reasons. If such events occur, any demand for our
systems in these countries will be similarly limited or delayed. Also, in
developing markets, economic, political and foreign currency fluctuations may be
much more volatile than conditions in the United States and other developed
areas. Such volatility could have a material adverse effect on our ability to
develop or continue to do business in such countries.
Recent global financial weakness
Countries in the Asia/Pacific and Latin American regions have recently
experienced weaknesses in their currency, banking and equity markets. These
weaknesses have adversely affected and could continue to adversely affect demand
for products, the availability and supply of product components to us and,
ultimately, our consolidated results of operations.
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We are subject to extensive government regulation
Radio communications are extensively regulated by the United States,
foreign laws and international treaties. Our systems must conform to a variety
of domestic and international requirements established to, among other things,
avoid interference among users of radio frequencies and to permit
interconnection of equipment. Historically, in many developed countries, the
limited availability of radio frequency spectrum has inhibited the growth of
wireless telecommunications networks.
Each country's regulatory process differs. To operate in a
jurisdiction, we must obtain regulatory approval for our systems and comply with
differing regulations. Regulatory bodies worldwide continue to adopt new
standards for wireless communications products. The delays inherent in this
governmental approval process may cause the cancellation, postponement or
rescheduling of the installation of communications systems by us and our
customers. The failure to comply with current or future regulations or changes
in the interpretation of existing regulations could result in the suspension or
cessation of operations. Such regulations or such changes in interpretation
could require us to modify products and services and incur substantial costs to
comply with such regulations and changes.
In addition, we are also affected by domestic and international
authorities' regulation of the allocation and auction of the radio frequency
spectrum. Equipment to support new systems and services can be marketed only if
permitted by governmental regulations and if suitable frequency allocations are
auctioned to service providers. Establishing new regulations and obtaining
frequency allocation at auction is a complex and lengthy process. If PCS
operators and others are delayed in deploying new systems and services, we could
experience delays in orders. Similarly, failure by regulatory authorities to
allocate suitable frequency spectrum could have a material adverse effect on our
results. In addition, delays in the radio frequency spectrum auction process in
the United States could delay our ability to develop and market equipment to
support new services.
We operate in a regulatory environment subject to significant change.
Regulatory changes, which are affected by political, economic and technical
factors, could significantly impact our operations by restricting our
development efforts and those of our customers, making current systems obsolete
or increasing competition. Any such regulatory changes, including changes in
the allocation of available spectrum, could have a material adverse effect on
our business, financial condition and results of operations. We may also find
it necessary or advisable to modify our systems and services to operate in
compliance with such regulations. Such modifications could be extremely
expensive and time-consuming.
We may require additional capital in the future
Future capital requirements will depend upon many factors, including
the development of new products and related software tools, potential
acquisitions, requirements to maintain adequate manufacturing facilities and
contract manufacturing agreements, the progress of research and development
efforts, expansion of marketing and sales efforts, and the status of competitive
products. Additional financing may not be available in the future on acceptable
terms, or at all. In this regard, as a result of the continued existence of a
substantial amount of
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indebtedness incurred through the issuance of our 4 1/4% convertible promissory
notes due 2002 and the incurrence of debt under our bank line of credit, we
could be severely limited in our ability to raise additional financing. Given
the recent price for our common stock, if additional funds are raised by issuing
equity securities, significant dilution to our stockholders could result.
In this regard, we have recently retired approximately $40 million of
our 4 1/4% convertible promissory notes in exchange for approximately 5.3
million shares of our common stock. We may exchange additional 4 1/4%
convertible promissory notes for shares of common stock or, alternatively,
refinance or exchange the remainder of the 4 1/4% convertible promissory notes
and/or the bank debt. We have also recently issued 15,000 shares of Series B
preferred stock and warrants to purchase up to 1,242,257 shares of our common
stock in exchange for a $15 million investment. These transactions have had and
may continue to have a substantial dilutive effect on our stockholders and may
make it difficult for us to obtain additional future financing, if needed. See
"-Risks associated with preferred stock financing."
If adequate funds are not available, we may be required to restructure
or refinance our debt or delay, scale back or eliminate research and
development, acquisition or manufacturing programs. We may also need to obtain
funds through arrangements with partners or others that may require us to
relinquish rights to certain of our technologies or potential products or other
assets.
We are subject to class action litigation
State Actions
On September 23, 1998, a putative class action complaint was filed in
the Superior Court of California, County of Santa Clara, by Leonard Vernon and
Gayle M. Wing on behalf of themselves and other P-Com stockholders who purchased
or otherwise acquired our common stock between April 15, 1997 and September 11,
1998. The plaintiffs allege various state securities laws violations by P-Com
and certain of its officers and directors. The complaint seeks unquantified
compensatory, punitive and other damages, attorneys' fees and injunctive and/or
equitable relief.
On October 16, 1998, a putative class action complaint was filed in
the Superior Court of California, County of Santa Clara, by Terry Sommer on
behalf of herself and other P-Com stockholders who purchased or otherwise
acquired our common stock between April 1, 1998 and September 11, 1998. The
plaintiff alleges various state securities laws violations P-Com and certain of
its officers. The complaint seeks unquantified compensatory and other damages,
attorneys' fees and injunctive and/or equitable relief.
On October 20, 1998, a putative class action complaint was filed in
the Superior Court of California, County of Santa Clara, by Leo Rubin on behalf
of himself and other stockholders who purchased or otherwise acquired our common
stock between April 15, 1997 and September 11, 1998. This complaint is
identical in all relevant respects to that filed on September 23, 1998, which is
described above, other than the fact that the plaintiffs are different.
On October 26, 1998, a putative class action complaint was filed in
the Superior Court of California, County of Santa Clara, by Betty B. Hoigaard
and Steve Pomex on behalf of
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themselves and other P-Com stockholders who purchased or otherwise acquired our
common stock between April 15, 1997 and September 11, 1998. This complaint is
identical in all relevant respects to that filed on September 23, 1998, which is
described above, other than the fact that the plaintiffs are different.
On October 27, 1998, a putative class action complaint was filed in
the Superior Court of California, County of Santa Clara, by Judith Thurman on
behalf of herself and other P-Com stockholders who purchased or otherwise
acquired our common stock between April 15, 1997 and September 11, 1998. This
complaint is identical in all relevant respects to that filed on September 23,
1998, which is described above, other than the fact that the plaintiffs are
different.
On December 3, 1998, the Superior Court of California, County of Santa
Clara, entered an order consolidating all of the above complaints. On January
15, 1999, the plaintiffs filed a consolidated amended class action complaint
superceding all of the foregoing complaints. On March 1, 1999, defendants filed
a demurrer to the consolidated amended complaint and each cause of action stated
therein. The demurrer is set for hearing by the court on May 13, 1999.
Federal Actions
On November 13, 1998, a putative class action complaint was filed in
the United States District Court, Northern District of California, by Robert
Schmidt on behalf of himself and other P-Com stockholders who purchased or
otherwise acquired our common stock between April 15, 1997 and September 11,
1998. The plaintiff alleged violations of the Securities Exchange Act of 1934
by us and certain of our officers and directors. The complaint sought
unquantified compensatory damages, attorneys' fees and injunctive and/or
equitable relief. On January 26, 1999, the plaintiff voluntarily dismissed the
Schmidt action. The court entered an order dismissing the action without
prejudice on January 29, 1999.
On December 3, 1998, a putative class action complaint was filed in
the United States District Court, Northern District of California, by Robert
Dwyer on behalf of himself and other P-Com stockholders who purchased or
otherwise acquired our common stock between April 15, 1997 and September 11,
1998. The plaintiff alleged violations of the Securities Exchange Act of 1934
by P-Com and certain of its officers and directors. The complaint sought
unquantified compensatory damages, attorneys' fees and injunctive and/or
equitable relief. On December 22, 1998 and February 2, 1999, the plaintiff
sought to voluntarily dismiss this action. On February 11, 1999, the court
entered an order dismissing the action without prejudice.
All of these proceedings are at a very early stage and we are unable
to speculate as to their ultimate outcomes. However, we believe the claims in
the complaints are without merit and intend to defend against them vigorously.
An unfavorable outcome in any or all of them could have a material adverse
effect on our business, prospects, financial condition and results of
operations. Even if all of the litigation is resolved in our favor, the defense
of such litigation will entail considerable cost and the significant diversion
of efforts of management, either of which are likely to have a material adverse
effect on our business, prospects, financial condition and results of
operations.
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We face uncertainty regarding protection of proprietary rights
We rely on a combination of patents, trademarks, trade secrets,
copyrights and other measures to protect our intellectual property rights. We
generally enter into confidentiality and nondisclosure agreements with service
providers, customers and others, and attempt to limit access to and distribution
of proprietary rights. We also enter into software license agreements with
customers and others. However, such measures may not provide adequate
protection for our trade secrets or other proprietary information for a number
of reasons. For example, our trade secrets or proprietary technology may
otherwise become known or be independently developed by competitors, and we may
not be able to otherwise meaningfully protect intellectual property rights.
Any of our patents could be invalidated, circumvented or challenged,
or the rights granted thereunder may not provide competitive advantages to us.
Any of our pending or future patent applications might not be issued with the
scope of the claims sought, if at all. Furthermore, others may develop similar
products or software or duplicate our products or software. Similarly, others
might design around the patents owned by us, or third parties may assert
intellectual property infringement claims against us. In addition, foreign
intellectual property laws may not adequately protect our intellectual property
rights abroad. A failure or inability to protect proprietary rights could have
a material adverse effect on our business, financial condition and results of
operations.
Even if our intellectual property rights are adequately protected,
litigation may also be necessary to enforce patents, copyrights and other
intellectual property rights, to protect our trade secrets, to determine the
validity of and scope of proprietary rights of others or to defend against
claims of infringement or invalidity. We have, through our acquisition of the
Cylink Wireless Group, been put on notice from a variety of third parties that
the Group's products may be infringing the intellectual property rights of other
parties. Any such intellectual property litigation could result in substantial
costs and diversion of resources and could have a material adverse effect on our
business, financial condition and results of operations. Litigation, even if
wholly without merit, could result in substantial costs and diversion of
resources, regardless of the outcome. Infringement, invalidity, right to use or
ownership claims by third parties or claims for indemnification resulting from
infringement claims could be asserted in the future and such assertions may
materially adversely affect us. If any claims or actions are asserted against
us, we may seek a license under a third party's intellectual property rights.
However, such a license may not be available under reasonable terms or at all.
We Depend on Key Personnel
Our future operating results depend in significant part upon the
continued contributions of key technical and senior management personnel, many
of whom would be difficult to replace. Future operating results also depend
upon ability to attract and retain qualified management, manufacturing, quality
assurance, engineering, marketing, sales and support personnel. Competition for
such personnel is intense, and we may not be successful in attracting or
retaining such personnel. Only a limited number of persons with the requisite
skills
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to serve in these positions may exist and it may be increasingly difficult for
us to hire such personnel.
We have experienced and may continue to experience employee turnover
due to several factors, including an expanding economy within the geographic
area in which we maintain our principal business offices. Such turnover could
adversely impact our business. We are presently addressing these issues and
intend to pursue solutions designed to provide performance incentives and
thereby retain employees. The loss of any key employee, the failure of any key
employee to perform in his or her position, our inability to attract and retain
skilled employees as needed or the inability of our officers and key employees
to expand, train and manage our employee base could all materially adversely
affect our business.
The year 2000 issue could harm our operations
Numerous currently installed computer systems and software products
are coded to accept only two digit entries in the date code field. Beginning in
the year 2000, these date code fields will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. As a result, in less
than one year, many companies' software and computer systems and/or software
used by many companies may need to be upgraded or replaced to comply with such
Year 2000 ("Y2K") requirements. We have embarked on a global program to address
our readiness for the century change. Our Y2K readiness program involves the
assessment of products, services, internal systems and critical suppliers and,
if required, development of plans for upgrades to or replacement of products,
business systems, suppliers and services that impact our Y2K readiness and/or
development of contingency plans. We have not yet established a comprehensive
contingency plan with respect to the Y2K problem, but intend to establish such a
plan by the end of the second quarter of 1999 as part of our ongoing Y2K
compliance effort.
In November of 1998, we initiated a new Y2K-ready internal business
system at our corporate headquarters. The cost of the upgrade was approximately
$250,000. Further business system upgrades will occur in our Control Resources
Corporation, Technosystem and Geritel subsidiaries by the end of the third
quarter of 1999. Based on evaluation performed to date, we believe that all
"mission critical" internal systems are stable and current, in terms of Y2K
readiness. However, the failure of any internal system to achieve Year 2000
readiness could result in material disruption to our operations. Test and
assessment of all of our current radio products has been completed, with the
exception of Technosystem and Control Resources Corporation products, and Y2K
certification has been achieved. However, the inability of any of our products
to properly manage and manipulate data in the year 2000 could result in
increased warranty costs, customer satisfaction issues, potential lawsuits and
other material costs and liabilities. All Technosystem and Control Resources
Corporation products are expected to complete their Y2K assessment and testing
by the end of the first quarter of 1999.
In November of 1998, we requested a Y2K readiness statement and
progress report from critical suppliers. These suppliers will undergo Y2K site
evaluations between January 1 and the end of June 1999. We expect to obtain all
Y2K readiness statements by the end of the third quarter 1999, and intend to
emphasize obtaining an early response from those suppliers which cannot be
easily replaced. We are aware of the risk posed by single source or
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large volume suppliers that may not be addressing their Y2K readiness. Even
where assurances are received from third parties, a risk remains that failure of
systems and products of other companies on which we rely could have a material
adverse effect on our results.
Our budget for the Y2K Program is expected to be an aggregate of
approximately $2 million. Of this amount, we have incurred approximately
$400,000 to date, including the $250,000 disclosed above. The foregoing
statements are based upon management's best estimates at the present time, which
were derived using numerous assumptions of future events, including the
continued availability of certain resources, third party modification plans and
other factors. These estimates may be incorrect and actual results could differ
materially from those anticipated. Specific factors that might cause such
material differences include, but are not limited to:
. the availability and cost of . success of external customers and
personnel trained in this area; suppliers in addressing the Year 2000
issue; and
. the rate and magnitude of related
labor and consulting costs; . the ability to locate and correct
all relevant computer codes.
. the nature and amount of programming
required to upgrade or replace each
of the affected programs;
Our evaluation is on-going and we expect that new and different
information will become available to us as that evaluation continues.
Consequently, we cannot guarantee that all material elements will be Y2K ready
in time.
Our stock price is volatile
In recent years, the stock market in general, and the market for
shares of small capitalization and technology stocks in particular, have
experienced extreme price fluctuations. Such fluctuations have often been
unrelated to the operating performance of affected companies. We believe that
factors such as announcements of developments related to our business,
announcements of technological innovations or new products or enhancements by us
or our competitors, developments in the Asia/Pacific region, sales by
competitors, including sales to our customers, sales of our common stock into
the public market, including by members of management, developments in our
relationships with customers, partners, lenders, distributors and suppliers,
shortfalls or changes in revenues, gross margins, earnings or losses or other
financial results that differ from analysts' expectations (as recently
experienced), regulatory developments, fluctuations in results of operations and
general conditions in our market or markets served by our customers or the
economy, could cause the price of our common stock to fluctuate, sometimes
reaching extreme and unexpected lows. There can be no assurance that the market
price of our common stock will not continue to decline substantially, or
otherwise continue to experience significant fluctuations in the future,
including fluctuations that are unrelated to our performance. Such fluctuations
could continue to materially adversely affect the market price of our common
stock.
23
<PAGE>
We have a substantial amount of debt
In November 1997, through a private placement of our 4 1/4%
convertible promissory notes, we incurred $100 million of indebtedness. In
December 1998 and January 1999, we retired approximately $40 million of such
indebtedness in exchange for approximately 5.3 million shares of our common
stock. As of September 30, 1998, our total indebtedness including current
liabilities was approximately $201.6 million and our stockholder's equity was
approximately $92.8 million.
Our bank line of credit provides for borrowings of approximately $50
million, which as of December 31, 1998 had been almost fully utilized. The line
of credit requires us to comply with several financial covenants, including the
maintenance of specific minimum ratios. At periods in time since June 30, 1998,
we have amended our existing bank line of credit to prevent defaults with
respect to several financial covenants. Had these amendments not been made, we
would have defaulted on those covenants in our bank line, which would have
triggered cross defaults in the Notes and other debt instruments.
Our ability to make scheduled payments of the principal and interest
on indebtedness will depend on future performance, which is subject in part to
economic, financial, competitive and other factors beyond our control. There
can be no assurance that we will be able to make payments on or restructure or
refinance our debt in the future, if necessary. See "Risks associated with our
preferred stock financing" and "--We may be unable to collect our accounts
receivables in a timely manner."
We have not declared dividends
Since our incorporation in 1991, we have not declared or paid cash
dividends on our common stock, and we anticipate that any future earnings will
be retained for investment in the business. We are required to pay a 6% per
year premium on the Series B preferred stock, payable in cash or common stock
at our option. Any payment of cash dividends in the future will be at the
discretion of our board of directors and will depend upon, among other things,
our earnings, financial condition, capital requirements, extent of indebtedness
and contractual restrictions with respect to the payment of dividends.
It will be difficult for a third party to effect a change of control of P-Com
Members of our board of directors and executive officers, together
with members of their families and entities that may be deemed affiliates of or
related to such persons or entities, beneficially own approximately 6% of the
outstanding shares of common stock. Accordingly, these stockholders are able to
influence the election of the members of our board of directors and influence
the outcome of corporate actions requiring stockholder approval, such as mergers
and acquisitions.
This level of ownership, together with the stockholder rights
agreement, certificate of incorporation, newly issued shares Series B preferred
stock, equity incentive plans, bylaws and Delaware law, may have a significant
effect in delaying, deferring or preventing a change in control of P-Com and may
adversely affect the voting and other rights of other holders of common stock.
24
<PAGE>
The rights of the holders of common stock will be subject to, and may
be adversely affected by, the rights of the holders of the Series B preferred
stock and any other preferred stock that may be issued in the future, including
the Series A Junior Participating preferred stock that may be issued pursuant to
the stockholder rights agreement upon the occurrence of certain triggering
events. In general, the stockholder rights agreement provides a mechanism by
which our board of directors and stockholders may act to substantially dilute
the share position of any takeover bidder that acquires 15% or more of the
common stock. The holders of the Series B preferred stock and warrants and
their transferees have been excluded from triggering the provisions of the
stockholder rights agreement. The issuance of the Series B preferred stock or
the future issuance of the Series A preferred stock or any additional preferred
stock could have the effect of making it more difficult for a third party to
acquire a majority of our outstanding voting stock. See "Risks Associated with
preferred stock Financing" and "Description of Our Capital Stock Rights
agreement."
Possible adverse effect on market price for common stock of shares eligible for
future sale after the offering
Sales of the common stock into the market could materially adversely
affect the market price of the common stock. Substantially all of the shares of
our common stock are eligible for immediate and unrestricted sale in the public
market at any time, including the approximately 5.3 million shares of common
stock issued in exchange for approximately $40 million of our 4 1/4% of
convertible promissory notes and, once the registration statement of which this
prospectus forms a part is declared effective, all shares of common stock
issuable conversion of the Series B preferred stock and exercise of the
warrants.
Risks associated with our preferred stock financing
In December 1998, we raised gross proceeds of $15 million through the
issuance of 15,000 shares of a newly designated Series B convertible
participating preferred stock and warrants to purchase up to 1,242,257 shares of
common stock. While the issuance of the Series B preferred stock and warrants
provided us with additional working capital required to fund continuing
operations, the agreements with the purchasers of the Series B preferred stock
and warrants contain terms and covenants that could result in substantial
dilution to our stockholders, could render future financings and loans and
merger and acquisition activities more difficult and could require us to expend
substantial amounts of cash, even if then unavailable at the time such
expenditure was required. See "Description of Our Capital Stock."
In particular, if we merge with a public company meeting certain
threshold criteria, the holders of the Series B preferred stock will be entitled
to receive in the merger the consideration they would have received had they
converted their stock the day before the public announcement of the merger. If
we merge with a private company or a public company not meeting the defined
threshold criteria, the holders of the Series B preferred stock will be
entitled, at their option, (1) to retain their preferred stock, which will then
convert into common stock of the surviving company, or (2) receive either the
consideration they would have received had they converted their stock the day
before the public announcement of the merger or receive $1,250 per share of
Series B preferred stock then outstanding, up to an aggregate of $18,750,000, in
cash, plus any accrued and unpaid premium and a default interest rate, if
applicable.
25
<PAGE>
Notwithstanding the foregoing, we are permitted to acquire other companies
without having to provide special consideration to the holders of the Series B
preferred stock so long as we do not issue more than 20% of our common stock as
merger consideration. The holders of the warrants are entitled to similar
protections in the event of our merger or consolidation with another company. We
are also prohibited from selling or transferring all or substantially all of our
assets without prior approval by the purchasers of the Series B preferred stock.
These provisions may make our acquisition or asset sale more difficult and
expensive and could discourage some potential purchasers.
Certain covenants that we made in connection with the issuance of the
Series B preferred stock may also have the effect of limiting our ability to
obtain additional financing and issue other securities. We have agreed, until
December 22, 1999, not to issue or agree to issue any equity securities at a
price less than fair market value or any variably or re-setting priced
securities, subject to limited exceptions. In addition, the terms of the Series
B preferred stock financing agreements prohibit us from, among other things,
altering, changing or otherwise adversely affecting the terms of the Series B
preferred stock; creating or issuing any senior or pari passu securities; or
redeeming or paying any dividend on any junior securities.
The terms of the Series B preferred stock financing agreements also
include mandatory redemption features and payment provisions that are triggered
in the event we fail to satisfy certain obligations. Holders of the Series B
preferred stock may require redemption of their shares at a substantial premium,
plus a default interest rate, if applicable, upon the occurrence of certain
events deemed within our control. Upon the occurrence of certain other events
deemed outside of our control, including among others, our failure to obtain
stockholder approval (which we must solicit at our expense) of the potential
issuance of more than 20% of the common stock outstanding on December 22, 1998,
or 8,707,488 shares, at a price less than the greater of book value or fair
market value may be required to make significant payments to the holders of
Series B preferred stock and warrants. All such payments are capped at
$4,950,000 plus a default interest rate, if applicable, and are in lieu of
redemption for these provisions. If the holders of Series B preferred stock
demand redemption or if we are required to make significant payments to such
stockholders, we may not be able to fund such redemption or payments, and even
if funding is available, the expenditures required to fund such redemption or
payments could have a material adverse effect on our financial condition.
The Series B preferred stock is convertible into shares of our common
stock at variable rates based on future trading prices of our common stock and
events that may occur in the future. The number of shares of common stock that
may ultimately be issued upon conversion is therefore presently indeterminable
and could fluctuate significantly based on the issuance by us of other
securities. Also, the warrants are subject to anti-dilution protection and thus
may require the issuance of more shares than originally anticipated. These
factors may result in substantial future dilution to the holders of our common
stock.
In addition to the foregoing, the redemption rights, liquidated
damages provisions, cross default provisions to our debt instruments and other
terms of the Series B preferred stock, under certain circumstances, could lead
to a significant accounting charge to earnings and could materially adversely
affect our business, results of operations and condition. The Series B
preferred stock will be classified as mandatorily redeemable preferred stock.
As a result, on
26
<PAGE>
December 22, 1998, we recognized in our earnings (loss) per share calculation
the fair value of warrants issued and the accretion of the Series B preferred
stock to its fair value. During the period of conversion of the Series B
preferred stock, we will be required to recognize in our earnings (loss) per
share calculation any accretion of the Series B preferred stock to its
redemption value as a dividend to the holders of the Series B preferred stock.
Consequently, we will be required to take a charge of approximately $1.5 million
to our accumulated deficit for the fourth quarter of fiscal 1998 as a result of
the accounting treatment for issuance of the Warrants. Such charge and potential
other future charges relating to the provisions of the Series B preferred stock
financing agreements may materially adversely affect our earnings (loss) per
share and the market price of our common stock both currently and in future
periods. The convertibility features of such Series B preferred stock and
subsequent sales of the common stock underlying both it and the warrants could
materially adversely affect our valuation and the market trading price of our
shares of common stock.
27
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
to the public from our web site at http://ittinfo.com or at the SEC's web site
at http://www.sec.gov.
This prospectus is part of a registration statement (Registration No.
333-70937) we filed with the SEC. The SEC allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and later information filed with the SEC will update and supersede
this information. We incorporate by reference the documents listed below and
any future filings made with the SEC under Section 13a, 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended, until our offering is complete.
(1) our Annual Report on Form 10-K for the year ended December 31, 1997,
filed as of March 31, 1998;
(2) our amended Annual Report on Form 10-K/A for the year ended December
31, 1997, filed as of May 6, 1998;
(3) our quarterly reports on Form 10-Q for the quarters ended March 31,
1998, June 30, 1998 and September 30, 1998, filed as of May 15, 1998, August 14,
1998 and November 13, 1998, respectively;
(4) our current reports on Form 8-K filed as of January 23, 1998, March 16,
1998, April 9, 1998, April 17, 1998, July 17, 1998, September 11, 1998,
September 25, 1998, October 15, 1998, October 23, 1998, December 23, 1998,
December 24, 1998, December 31, 1998, January 4, 1999 (two separate filings),
January 29, 1999 and February 3, 1999, and Form 8-K/A dated as of April 17,
1998, June 12, 1998, September 11, 1998 and January 6, 1999;
(5) the description of our common stock and Series A preferred stock
contained in our registration statements on Form 8-A filed as of January 12,
1995 and Form 8-A/A filed as of February 16, 1995, October 9, 1997, December 22,
1998 and December 24, 1998; and
(6) all future reports and other documents filed by us pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act shall be deemed to be incorporated
by reference herein and to be a part of this prospectus from the date of filing
of such reports and documents. Any statement incorporated herein may modify or
supersede information or statements in this prospectus.
Upon request, we will provide without charge a copy of this
prospectus, and a copy of any and all of the information that has been or may be
incorporated by reference in this prospectus. Requests for such copies should be
directed to P-Com, Inc., 3175 S. Winchester Boulevard, Campbell, California
95008 (telephone (408) 866-3666).
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have authorized no
one to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any
28
<PAGE>
prospectus supplement is accurate as of any date other than the date on the
front of this document.
29
<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the common
stock by the selling stockholders.
DIVIDEND POLICY
To date, we have not paid any cash dividends on shares of our common
stock. We currently anticipate that we will retain any available funds for use
in the operation of its business, and we do not anticipate paying any cash
dividends in the foreseeable future.
PREMIUM
We are required to pay, upon conversion, a 6% per year premium on the
Series B preferred stock, payable in cash or common stock at our option.
RATIO (DEFICIENCY) OF EARNINGS (LOSS) TO FIXED CHARGES
The following table shows our ratio (deficiency) of earnings (loss) to
fixed charges for each of the periods indicated. For purposes of calculating
the ratio (deficiency) of earnings to fixed charges, "earnings" consist of
income (loss) before income taxes plus fixed charges, and "fixed charges"
consist of interest expense incurred including with respect to capital leases,
amortization of interest costs and the portion of rental expense under operating
leases deemed by us to be representative of the interest factor. Earnings did
not cover fixed charges by $4.8 million, $5.4 million and $74.2 million in 1993,
1994 and for the three quarters ended September 30, 1998, respectively.
<TABLE>
<CAPTION>
Year Ended December 31, September 30,
1993 1994 1995 1996 1997 1998
------- ------ ---- ---- ----- -------------
<S> <C> <C> <C> <C> <C> <C>
Ratio (deficiency) of earnings
(loss) to fixed charges <14.3x> <7.9x> 5.9x 9.6x 13.4x <12.0x>
</TABLE>
30
<PAGE>
DESCRIPTION OF OUR CAPITAL STOCK
Our authorized capital stock consists of 95 million shares of common
stock and two million shares of preferred stock. We have designated 500,000
shares of our preferred stock as Series A Junior Participating preferred stock
and 20,000 shares of our preferred stock as Series B Convertible Participating
preferred stock. There are no shares of our Series A preferred stock issued and
outstanding and 15,000 shares of our Series B preferred stock issued and
outstanding.
Common stock
As of January 8, 1999, there were 47,258,691 shares of common stock
outstanding which were held of record by approximately 479 stockholders. The
holders of common stock are entitled to one vote per share on all matters to be
voted upon by the stockholders. Subject to preferences that may be applicable
to any outstanding preferred stock, the holders of common stock are entitled to
receive ratably such dividends, if any, as may be declared from time to time by
our board of directors out of funds legally available therefor. See "Dividend
Policy."
In the event of our liquidation, dissolution or winding up, the
holders of common stock are entitled to share ratably in all assets remaining
after payment of liabilities, subject to prior distribution rights of preferred
stock then outstanding. The common stock has no preemptive or conversion rights
or other subscription rights. There are no redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common
stock are fully paid and nonassessable.
Preferred stock
Our board of directors has the authority to issue the preferred stock
in one or more series and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any series or the designation
of such series, without further vote or action by the holders of common stock.
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<PAGE>
Our board may not create or issue any additional shares of Series B
preferred stock or of the remaining authorized but unissued shares of preferred
stock without the consent of the initial purchasers of the Series B preferred
stock. The issuance of the Series A preferred stock or any newly created
preferred stock may delay, defer or prevent a change in control of P -Com
without further action by the stockholders and may adversely affect the voting
and other rights of the holders of common stock. The issuance of Series A
preferred stock or any newly created preferred stock with voting and conversion
rights may adversely affect the voting power of the holders of common stock,
including the loss of voting control to others. At present we have no plans to
issue any additional preferred stock, other than Series A Preferred and the
Series B preferred stock.
Series A preferred stock
The Series A preferred stock is not redeemable. Each share of Series
A preferred stock will be entitled to an aggregate dividend of 10,000 times any
dividend declared per share of common stock. In the event of liquidation, the
holders of the Series A Preferred will be entitled to the greater of a $10,000
per share payment, plus any accrued and unpaid dividends, or an aggregate
payment of 10,000 times any payment to be made per share of common stock, prior
to any payment to any holder of common stock. Each share of Series A Preferred
will have 10,000 votes, voting together with the common stock. In the event of
any merger, consolidation or other transaction in which our common stock is
exchanged, each share of Series A Preferred will be entitled to receive 10,000
times the amount received per share of common stock. Each of these rights are
protected by customary antidilution provisions. Because of the nature of the
dividend, liquidation and voting rights of the shares of Series A Preferred, the
value of the one-ten-thousandth interest in a share of Series A Preferred
purchasable upon exercise of each right to purchase Series A preferred stock
should approximate the value of one share of common stock. See "-Rights
agreement."
Series B preferred stock
Premium. The Series B preferred stock accrues a 6% per year premium,
-------
payable in cash or common stock at our option.
Conversion Price. Each share of Series B preferred stock has a face
----------------
value of $1,000 and is convertible at the election of the holder into shares of
common stock. From and after June 21, 1999, upon sufficient notice, if the
then-effective conversion price for the Series B preferred stock is less than
$2.264025, instead of converting the Series B preferred stock into common stock
upon a holder's request, we may elect to pay such holder the equivalent value of
the common stock in cash. The conversion price of the Series B preferred stock
is $6.0374 per share until May 14, 1999. Thereafter, the Series B preferred
stock is convertible at the lower of
. $6.0374 per share;
. 105% of the average closing bid prices of our common stock for the 15
consecutive trading days ending on May 14, 1999; and
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<PAGE>
. 101% of the lowest average closing bid prices our common stock over any
3 consecutive days during the 15 consecutive day period ending on the
day prior to the applicable conversion date.
The conversion price is subject to adjustment if we have not achieved
$10 million of written contractual commitments for sales of our point to
multipoint products and services prior to March 24, 1999. In the event we do
not obtain such commitments, the conversion price of 7,500 shares of the Series
B preferred stock shall adjust to the lower of $6.0374 and 101% of the lowest
average closing bid prices our common stock over any 3 consecutive days during
the 15 consecutive day period ending prior to the applicable conversion date
during the period from March 24, 1999 through May 14, 1999. In addition, the
foregoing conversion price of the Series B preferred stock is subject to
adjustment upon the occurrence of certain other events, including:
. our failure to obtain in a timely manner stockholder approval to issue
more than 20% of our common stock on conversion of the Series B
preferred stock and exercise of the warrants issued in connection with
the Series B preferred stock;
. our failure to timely deliver common stock upon submission of a notice
of conversion for the Series B preferred stock;
. our failure to redeem the Series B preferred stock after providing to
the holders of the Series B preferred stock a notice of redemption at
our option;
. our or any of our subsidiaries' public announcement of a merger or
consolidation;
. our issuance of common stock or securities convertible or exchangeable
into common stock at a variable price per share or at a price per share
less than a predetermined amount; and
. the sale by George Roberts, Chief Executive Officer of the Company, or
Michael Sophie, Chief Financial Officer of the Company, of securities at
less than a predetermined per share price.
Registration. We are required by the Series B preferred stock
------------
financing agreements to register and keep registered at least 150%, and in some
instances 200%, of the aggregate number of shares of common stock into which the
Series B preferred stock is convertible and for which the warrants are
exercisable. To help ensure our compliance at all times, we have chosen to
register initially 13 million shares of our common stock. Notwithstanding the
registration of such number of shares, the terms of the Series B preferred stock
financing agreements prohibit us from issuing shares of common stock upon
conversion of the shares of Series B preferred stock or exercise of the warrants
if such issuance would result in any holder's beneficially owning in excess of
4.9% of our then outstanding common stock. In addition, until stockholder
approval is obtained, we are subject to the 20% limit imposed by Nasdaq. See
"Risks associated with our preferred stock financing."
Automatic Conversion. Assuming certain conditions are met, the Series
--------------------
B preferred stock will automatically convert into common stock on December 22,
2001.
Redemption at Holder's Option. Upon the occurrence of certain events
-----------------------------
deemed within the Company's control, each then outstanding share of the Series B
preferred stock is
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<PAGE>
redeemable at a holder's option at the greater of $1,330 per share, plus a 6%
per year premium and any default amounts, or a predetermined redemption formula
based on the average of the closing bid prices for our common stock during the
period beginning on the date of the holder's redemption notice and ending on the
date of redemption. Such events include:
. our failure to obtain in a timely manner stockholder approval to issue
more than 20% of our common stock on conversion of the Series B
preferred stock and exercise of the warrants issued in connection with
the Series B preferred stock;
. our failure to deliver in a timely manner common stock upon submission
of a notice of conversion;
. our failure to remove restrictive legends on our common stock when
required under the Series B preferred stock financing agreements;
. our announcement of our intention not to issue common stock upon
conversion of the Series B preferred stock or exercise of the warrants;
. our knowing breach of any material covenant or term in the Series B
preferred stock financing agreements;
. our material breach, as a result of performance under the Series B
preferred stock financing agreements, of any agreement to which we are
or become a party;
. our knowing commission of any act or omission that constitutes a breach
of any representation or warranty in any of the Series B preferred stock
financing agreements;
. our failure to maintain sufficient common stock reserved for conversion
of the Series B preferred stock or exercise of the warrants (to the
extent no additional stockholder approval is required to obtain an
increase in authorized shares, if required);
. our knowing and material breach of any agreement involving indebtedness
for borrowed money or purchase price which results in or which would
result in acceleration of the maturity of such debt; and
. our failure to use best efforts to avoid the occurrence of certain
events that could result in cash payments to holders of the Series B
preferred stock as described below.
In certain circumstances, we may be able to avoid redemption if we
cure such events prior to the redemption election by a holder. If we are unable
to avoid redemption and are unable to redeem the Series B preferred stock upon
request, we must redeem that portion that is permitted and, thereafter, use our
best efforts to remedy the impairment preventing redemption. In addition,
certain of the foregoing events may also require us make additional payments,
either in cash or additional shares of common stock or Series B preferred stock.
Cash Payments. Upon the occurrence of certain other events deemed
-------------
outside of the Company's control, we are required to make significant cash
payments to the holders of the Series B preferred stock. Such events include:
34
<PAGE>
. the suspension or de-listing of our common stock from trading on the
Nasdaq National Market System or certain other markets acceptable to the
initial purchasers of the Series B preferred stock;
. the suspension of the registration statement of which this prospectus is
a part after its effective date for more than a predetermined period of
time;
. failure to maintain sufficient common stock reserved for conversion of
the Series B preferred stock or exercise of the warrants (to the extent
additional stockholder approval is required to obtain an increase in
authorized shares, if required);
. failure to have declared effective additional registration statements
that may be required under the Series B preferred stock financing
agreements for shares of common stock issuable as a result of premiums,
failures to satisfy certain obligations, anti-dilution protections or
adjustments in the conversion rate of the Series B preferred stock;
. failure to obtain in a timely manner stockholder approval to issue more
than 20% of our common stock on conversion of the Series B preferred
stock and exercise of the warrants issued in connection with the Series
B preferred stock; and
. declaration of or being put into bankruptcy or receivership or failure
to pay our debts generally as and when due.
All cash payments required to be made as a result of such an event,
together with all cash payments required to be made under the other Series B
preferred stock financing agreements, are capped at an aggregate of $1,333 per
share plus a default interest rate, if applicable. In addition to the foregoing
cash payments, upon the occurrence of such an event, the holders can require us
to list our common stock on the over-the-counter electronic bulletin board
which, as of the date hereof, has no limitation relating to issuance of more
than 20% of our common stock or similar restriction and, thereafter, require us
to honor all requested conversions.
Redemption at Our Option. So long as an event pursuant to which the
------------------------
holders of Series B preferred stock are entitled to redemption or an event
requiring us to make a cash payment as described above has not occurred (or if
such event has occurred in the past, it has been cured for at least the six
immediately preceding consecutive months without the occurrence of any other
such event), the Series B preferred stock is redeemable at our option in certain
limited circumstances at premiums varying from 115% to 160% of the original
issue price of the Series B preferred stock, plus a 6% premium per year and a
default interest rate, if applicable. More particularly, the Series B preferred
stock is redeemable:
. on three dates between December 22, 1998 and December 22, 1999 at premiums
varying between 130% and 120% of the original issue price of the Series B
preferred stock, plus a 6% premium per year and any default amounts, provided
our common stock is then trading at less than $2.264025;
. after December 22, 1999 and prior to December 22, 2000, the Company may
redeem the Series B preferred stock at the greater of 160% of the original
issue price of the
35
<PAGE>
Series B preferred stock, plus a 6% premium per year and any default
amounts, or the Redemption Formula Amount; and
. after December 22, 2000, if (1) the closing bid price for our common
stock exceeds a predetermined substantial threshold, we may redeem the
Series B preferred stock at 115% of the original issue price of the
Series B preferred stock, plus a 6% premium per year and any default
amounts, or (2) we simultaneously close a firm commitment underwriting
with a minimum $8.00 per share price and a minimum aggregate amount of
$30 million, we may redeem the Series B preferred stock at the greater
of 120% of the original issue price of the Series B preferred stock plus
a 6% premium per year and any default amounts, or predetermined
redemption formula based on the average of the closing bid prices for
our common stock during the period beginning on the date of the holder's
redemption notice and ending on the date of redemption.
We must redeem all of the Series B preferred stock unless in excess of
$5 million of Series B preferred stock (in $1 million increments) will be
redeemed. If we fail to redeem the Series B preferred stock after providing a
notice of redemption, we forfeit all future redemptions at our option and the
conversion rate of the Series B preferred stock will be adjusted.
Protective Provisions. The Series B preferred stock is senior to the
---------------------
Series A preferred stock and common stock in respect of the right to receive
dividend payments and liquidation preferences. The Series B preferred stock has
no voting power, except as otherwise provided by applicable law or pursuant to
certain contractual protections described herein. In connection with the
issuance of the Series B preferred stock, we have agreed, until December 22,
1999, not to issue or agree to issue any equity securities at a price less than
fair market value or at a variable or re-settable price, subject to limited
exceptions. In addition, we are prohibited from, among other things, altering,
changing or otherwise adversely affecting the terms of the Series B preferred
stock; creating or issuing any senior or pari passu securities; redeeming or
paying any dividend on any junior securities; acting so as to generate taxation
under Section 305 of the Internal Revenue Code of 1986, as amended; and selling
or transferring all or substantially all of our assets without prior approval by
the purchasers of the Series B preferred stock.
Change of Control. If we merge with a public company meeting certain
-----------------
threshold criteria, the holders of the Series B preferred stock will be entitled
to receive in the merger the consideration they would have received had they
converted their stock the day before the public announcement of the merger. If
we merge with a private company or a public company not meeting the threshold
criteria, the holders of the Series B preferred stock will be entitled, at their
option, (1) to retain their preferred stock, which will thereafter convert into
common stock of the surviving company, or (2) receive either the consideration
they would have received had they converted their stock the day before the
public announcement of the merger or receive $1,250 per share of Series B
preferred stock then outstanding, up to an aggregate of $18,750,000, in cash,
plus any accrued and unpaid premium and a default interest rate, if applicable.
Notwithstanding the foregoing, we are permitted to acquire other companies
without having to provide special consideration to the holders of the Series B
preferred stock so long as we do not issue more than 20% of our common stock as
merger consideration. The holders of the Warrants are entitled to similar
protections in the event of our merger or consolidation with another
36
<PAGE>
company. We are also prohibited from selling or transferring all or
substantially all of our assets without prior approval by the purchasers of the
Series B preferred stock.
Warrants. The Warrants are immediately exercisable until the earlier
--------
of: (1) December 22, 2003 and (2) the date on which the closing of a
consolidation, merger or other business combination with or into another entity
pursuant to which we do not survive. The exercise price for the common stock
underlying the Warrant is $3.47 (subject to adjustment). In the event we merge
or consolidate with any other company, the warrantholders are entitled to
similar choices as to the consideration they will receive in such merger or
consolidation as are provided to the holders of the Series B preferred stock.
In addition, the number of shares issuable upon exercise of the Warrants is
subject to anti-dilution adjustment if we sell common stock or securities
convertible into or exercisable for common stock (excluding certain issuances
such as common stock issued under employee, director or consultant benefit
plans) at a price per share less than $3.47 (subject to adjustment).
The foregoing description is only a summary and is qualified in its
entirety by reference to the Securities Purchase Agreement dated as of December
21, 1998 by and among the Company and the purchasers listed therein, the
Registration Rights Agreement dated as of December 21, 1998 by and among the
Company and the purchasers listed therein, the warrants issued by us to the
purchasers and the Series B Certificate of Designation attached hereto or to the
Current Report on Form 8-K dated as of December 24, 1998 as Exhibits 10.38,
10.39, 10.40A, 10.40B, and 10.40C, and 3.2D and 3.2E, respectively, and
incorporated herein by reference.
Delaware anti-takeover law and certain charter provisions
We are subject to Section 203 of the Delaware General Corporation Law.
Section 203, subject to certain exceptions, prohibits a Delaware corporation
from engaging in any business combination with any interested stockholder for a
period of three years following the date that such stockholder became an
interested stockholder, unless:
. prior to such date, the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder;
. upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced (for the purposes of determining the number of
shares outstanding, under Delaware law, those shares owned (1) by persons
who are directors and also officers and (2) by employee stock plans in
which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in
a tender or exchange offer are excluded from the calculation); or
. on or subsequent to such date, the business combination is approved by the
board of directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at
least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder.
37
<PAGE>
Section 203 defines a business combination to include:
. any merger or consolidation involving the corporation and the interested
stockholder;
. any sale, transfer, pledge or other disposition of 10% or more of the
assets of the corporation involving the interested stockholder;
. subject to certain exceptions, any transaction which results in the
issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder;
. any transaction involving the corporation which has the effect of
increasing the proportionate share of the stock of any class or series of
the corporation beneficially owned by the interested stockholder; or
. the receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation.
In general, Section 203 defines an interest stockholder as any entity
or person beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.
Certain provisions of our Stockholders' Rights Plan, Certificate of
Incorporation, equity incentive plans, Bylaws and Delaware law may have a
significant effect in delaying, deferring or preventing a change in control of
the Company and may adversely affect the voting and other rights of other
holders of common stock. In particular, we have a classified Board of Directors
and the Board of Directors has the ability (subject to approval by the initial
holders of the Series B preferred stock) to issue blank check preferred stock
without further stockholder approval, as was the case with the Series B
preferred stock, may have the effect of delaying, deferring or preventing a
change in control of the Company and may adversely affect the voting and other
rights of other holders of common stock.
Rights agreement
On September 26, 1997, the board of directors approved a Stockholder
Rights Agreement that was executed by P-Com and BankBoston, N.A., the Rights
Agent, on October 1, 1997 and restated on December 21, 1998. Pursuant to the
stockholder rights agreement, rights to purchase Series A preferred stock were
distributed as a dividend at the rate of one preferred share purchase right on
each outstanding share of its common stock held by stockholders of record as of
the close of business on November 3, 1997, and will be distributed at the same
rate for each share of common stock issued thereafter. Each right to purchase
Series A preferred stock entitles its holder to buy one ten-thousandth of one
share of Series A preferred stock at an exercise price of $125.00, but only once
the rights to purchase Series A preferred stock become exercisable upon the
occurrence of certain triggering events. The rights to purchase Series A
Preferred Stock will expire on November 1, 2007.
The rights to purchase Series A preferred stock become exercisable
only if a person or group acquires 15% or more of our common stock or announces
a tender offer, the
38
<PAGE>
consummation of which would result in ownership by a person or group of 15% or
more of our common stock, such person or group to be known as an acquiring
person. If,
(1) subject to limited exceptions, any acquiring person:
. merges into P-Com and P-Com survives;
. transfers assets to P-Com or its subsidiaries in exchange for our
common stock or otherwise acquires additional shares of our common
stock;
. sells or purchases or otherwise acquires or disposes of assets to,
from or with P-Com or any subsidiary on terms less favorable than in
an arm's length negotiated transaction;
. sells or purchases or otherwise acquires or disposes of assets to,
from or with P-Com or any subsidiary having a fair market value of
more than $5 million;
. receives compensation from P-Com or any subsidiary, except for
standard compensation for full time employment; or
. receives the benefit of any financial assistance or tax advantages
from P-Com or any subsidiary;
(2) subject to limited exceptions, any person becomes an acquiring person;
or
(3) subject to limited exceptions, while there is an acquiring person, we
reclassify or recapitalize our capital stock (including a reverse
stock split) or we merge or consolidate with any subsidiary causing
more than a 1% increase in any class of our then outstanding equity
securities which is owned by an acquiring person,
then each unexercised right to purchase Series A preferred stock will entitle
its holder to purchase, at the rights to purchase Series A preferred stock's
then-current exercise price, a number of one ten-thousandths of a share of our
Series A preferred stock having a market value of twice the then-current
exercise price of a right to purchase Series A preferred stock on the date any
of the foregoing events occurred. The holders of the Series B preferred stock
and warrants and their transferees have been excluded from the definition of
acquiring person and therefore also from triggering the provisions of the
stockholder rights agreement. Consequently, even if such a holder acquires 15%
or more of our common stock, the rights to purchase Series A preferred stock
will not become exercisable.
In addition, if after a person or group becomes an acquiring person,
. we consolidate with or merge with and into any other person (other than a
subsidiary) and we do not survive;
. any person (other than a subsidiary) consolidates or merges with us in a
transaction in which we survive and any of our common stock is exchanged
for cash, property or stock of any other person; or
. we or any subsidiary sells or otherwise transfers to any person (other
than a subsidiary) assets or earning power in excess of 50% of our assets
or earning power and our subsidiaries;
39
<PAGE>
then each unexercised right to purchase Series A preferred stock will entitle
its holder to receive, at the right to purchase Series A preferred stock's then-
current exercise price, shares of common stock of the principal party involved
in such transaction with us equal in value to twice the then-current exercise
price of a right on the date of any of the foregoing events.
At any time after any person or group becomes an acquiring person, but
before such acquiring person becomes the beneficial owner of more than 50% of
our common stock, our board of directors, in its sole discretion, may exchange
all or part of the unexercised rights to purchase Series A preferred stock for a
number of one ten-thousandths of a share of our Series A preferred stock equal
to the then current exercise price of a right to purchase Series A preferred
stock divided by the fair market value of one ten-thousandth of a share of our
Series A preferred stock on the earlier of the date the acquiring person became
an acquiring person or, if applicable, the date on which a tender or exchange
offer was first made pursuant to which the offeror became an acquiring person.
At any time prior to the date an acquiring person becomes an acquiring person,
the board of directors, in its sole discretion, may redeem all of the rights to
purchase Series A preferred stock for $0.001 per such right, payable at our
board of director's option in cash or property, including our common stock.
Transfer agent and registrar
The transfer agent and registrar for the common stock is Boston
EquiServe LLP, 289 San Antonio Road, Suite 100, Los Altos, California 94022.
Its telephone number is (650) 947-3226.
40
<PAGE>
SELLING STOCKHOLDERS
To help ensure our compliance with the Series B preferred stock
financing agreements, we have chosen to register 13 million shares of common
stock on behalf of the selling stockholders. We cannot determine the number of
shares of common stock that we will ultimately issue in connection with the
Series B preferred stock financing because:
. the conversion price of the Series B preferred stock may vary with the
market price of our common stock;
. we may choose to pay dividends on the Series B preferred stock in shares
of common stock;
. we may be required to issue common stock upon our failure to satisfy
certain obligations; and
. the number of shares that we may issue upon conversion of the Series B
preferred stock and exercise of the warrants is subject to certain anti-
dilution protections. "See "Description of Our Capital- Stock -Preferred
stock Series B preferred stock."
Because of these factors, we may not issue the entire 13 million
shares of common stock covered by this prospectus. In fact, we may issue
materially more or materially less than 13 million shares of common stock.
The 13 million shares covered by this prospectus represent
approximately 27.5% of our outstanding shares of common stock as of January 8,
1999. Notwithstanding the registration of the 13 million shares of common stock
covered by this prospectus, the terms of the Series B preferred stock financing
agreements prohibit us from issuing to any selling shareholder shares of common
stock upon conversion of the Series B preferred stock or exercise of the
warrants if such issuance would result in us issuing more than 20% of our
outstanding common stock without shareholder approval or such selling
shareholder beneficially owning in excess of 4.9% of our outstanding common
stock.
The following table sets forth the aggregate number of shares of
common stock beneficially owned by each selling shareholder as of January 8,
1999 and the percentage of all shares of common stock held by such selling
shareholder before and after giving effect to the offering based on 47,258,691
shares of common stock outstanding as of January 8, 1999. We considered the
following factors and made the following assumptions regarding the table:
. beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities and including any securities that grant the selling
securityholders the right to acquire common stock within 60 days of
January 8, 1999;
. the conversion price of the Series B preferred stock in effect as of the
date of this prospectus, which is $6.0374;
41
<PAGE>
. the exercise price of the warrants in effect as of the date of this
prospectus, which is $3.47;
. the selling stockholders will sell all of the securities offered by this
prospectus; and
. the selling securityholders will not sell any other of our securities
than they may own.
Notwithstanding these assumptions, the selling securityholders may
sell less than all of the shares listed on the table. In addition, the shares
listed below may be sold pursuant to this prospectus or in privately negotiated
transactions. Accordingly, we cannot estimate the number of shares of common
stock that the selling stockholders will sell under this prospectus.
<TABLE>
<CAPTION>
Percent of Percent of
Number Outstanding Number Outstanding
of Shares Shares of Shares Shares
Beneficially Beneficially Beneficially Beneficially
Owned Prior Owned Before Owned After Owned After
Name of Selling Stockholder to Offering the Offering the Offering the Offering
- -------------------------------------- -------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Marshall Capital Management, Inc...... 1,118,030 (1) 2.3% 0 0%
Castle Creek Technology Partners LLC.. 1,366,482 (2) 2.9% 0 0%
Capital Ventures International........ 1,242,257 (3) 2.6% 0 0%
</TABLE>
- -------------------
1. Consists of 745,353 shares of common stock issuable upon the conversion of
Series B preferred stock and 372,677 shares of common stock issuable upon
the exercise of warrants.
2. Consists of 910,988 shares of common stock issuable upon the conversion of
Series B preferred stock and 455,494 shares of common stock issuable upon
the exercise of warrants. Pursuant to a management agreement, Castle Creek
Partners LLC shares voting and investment power with respect to the
securities held by Castle Creek Technology Partners LLC with Castle Creek
Technology Partners LLC. John Ziegelman and Daniel Asher, as managing
members of Castle Creek Partners LLC, may be deemed as a result thereof to
be beneficial owners of such securities. Messrs. Asher and Ziegelman
disclaim such beneficial ownership.
3. Consists of 828,171 shares of common stock issuable upon the conversion of
Series B preferred stock and 414,086 shares of common stock issuable upon
the exercise of warrants. Heights Capital Management, Inc., a Delaware
corporation, the investment manager for Capital Ventures International, has
voting control and investment discretion over transactions by Capital
Ventures International.
42
<PAGE>
RECENT DEVELOPMENTS
In December 1998 and January 1999, we exchanged an aggregate of
$39,889,000 of our 4 1/4% convertible subordinated notes due 2002 for an
aggregate of 5,279,257 shares of unrestricted common stock. We may engage in
similar transactions in the future.
PLAN OF DISTRIBUTION
The shares of common stock will be offered and sold by the selling
stockholders for their own accounts. Each selling stockholder will act
independently of P-Com in making decisions with respect to the timing, manner
and size of each sale. We will not receive any proceeds from the sale of the
common stock through this prospectus. We have agreed to pay the expenses of
registration of the common stock offered hereby, including legal and accounting
fees, but excluding underwriter's discounts and commissions, if any.
The shares offered hereby may be sold from time to time at negotiated
prices, at fixed prices which may be changed, at market prices prevailing at the
time of sale or at prices related to prevailing market prices. The selling
stockholders may effect such transactions in the over-the-counter market or any
exchange on which the securities are listed, by selling the shares to or through
broker-dealers, including block trades in which brokers or dealers will attempt
to sell the shares as agent but may position and resell the block as principal
to facilitate the transaction, or in one or more underwritten offerings on a
firm commitment or best effort basis. sales of selling stockholders' shares may
also be made pursuant to Rule 144 under the Securities Act, where applicable.
To the extent required under the Securities Act, the aggregate amount
of selling stockholders' shares being offered and the terms of the offering, the
names of any such agents, brokers, dealers, transferees or underwriters and any
applicable fee or commission with respect to a particular offer will be set
forth in an accompanying prospectus supplement. Any underwriters, dealers,
brokers or agents participating in the distribution of the shares may receive
compensation in the form of underwriting discounts, concessions, commission or
fees from the selling stockholders and/or purchasers of selling stockholders'
shares for whom they may act (which compensation as to a particular broker-
dealer might be in excess of customary commissions). Each selling stockholder
will be responsible for any such payments. The aggregate proceeds to a selling
stockholder from the sale of its shares offered by this prospectus will be the
purchase price of such shares less discounts or commissions, if any.
From time to time, the selling stockholders may pledge, hypothecate or
grant a security interest in some or all of the shares, and the pledgees,
secured parties or persons to whom such securities have been hypothecated shall,
upon foreclosure in the event of default, be deemed to be selling stockholders
under this prospectus. From time to time, the selling stockholders may also
transfer, pledge, donate or assign shares to lenders or others and each of such
persons will be deemed to be a selling stockholder for purposes of this
prospectus. The number of the selling stockholders' shares beneficially owned
by a selling stockholder who transfers, pledges, donates or assigns shares will
decrease as and when they take such actions. The plan of distribution for
selling stockholders' shares sold by this prospectus will otherwise remain
unchanged, except that the transferees, pledgees, donees or other successors
will be a
43
<PAGE>
selling stockholder under this prospectus. There is, however, no assurance that
any selling stockholder will sell any or all of the shares described in this
prospectus, and any selling stockholder may transfer, devise or gift such
securities by other means not described in this prospectus.
In addition, the selling stockholders may, from time to time, sell
short the shares of P-Com, and in such instances, this prospectus may be
delivered in connection with such short sales and the shares offered hereby may
be used to cover such short sales. A selling stockholder may enter into hedging
transactions with broker-dealers, and the broker-dealers may engage in short
sales of the shares in the course of holding the positions they assume with such
selling stockholder, including, without limitation, in connection with
distribution of the shares by such broker-dealers. The selling stockholders may
also enter into option or other transactions with broker-dealers that involve
the delivery of the shares to the broker-dealers, who may then resell or
otherwise transfer such shares. The selling stockholders may also loan or
pledge the shares to a broker-dealer and the broker-dealer may sell the shares
as loaned or upon a default may sell or otherwise transfer the pledge shares.
The selling stockholders, any underwriter, any broker-dealer or any
agent that participates with the selling stockholders in the distribution of the
shares may be deemed to be "underwriter" within the meaning of the Securities
Act, and any discounts, commissions or concessions received by them and any
profit on the resales of the shares purchased by them may be deemed to be
underwriting commissions under the Securities Act.
To comply with securities laws of certain states, if applicable, the
shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the shares may not be sold
unless they have been registered or qualified for sale in the applicable state
or an exemption from the registration or qualification requirement is available.
Pursuant to a Registration Rights Agreement entered into in connection
with the Series B preferred stock financing, we have agreed to keep the
registration statement of which this prospectus is a part continuously effective
until the earlier of the date that all of the shares issued or issuable upon
conversion of the Series B preferred stock or exercise of the warrants have been
sold or until all such shares are immediately freely saleable under Rule 144.
In this regard, we are required to supplement and/or amend the registration
statement of which this prospectus is a part if more shares than are registered
hereby are issued or issuable upon conversion of the Series B preferred stock
and exercise of the warrants or to supplement or change the selling stockholders
hereunder. The Registration Rights Agreement requires P-Com to indemnify the
selling stockholders, any underwriter and the respective directors, officers,
partners, members, employees, agents and controlling persons of each selling
stockholder against certain liabilities in connection with the offer and sale of
the shares hereunder, including under the Securities Act. Similarly, each
selling stockholder is required to indemnify P-Com and its directors, the
officers who sign the registration statement of which this prospectus is a part,
it employees, agents and controlling persons against certain liabilities in
connection with the offer and sale of the shares hereunder, including the
Securities Act, to the extent that liability occurs as a result of reliance with
written information furnished to P-Com by such selling stockholder expressly for
use in connection with the registration statement of which this prospectus is a
part.
44
<PAGE>
To the extent indemnification is prohibited, the selling stockholders and P-Com
are required to contribute to payments the parties may be required to make in
respect of otherwise indemnifiable claims.
LEGAL MATTERS
The validity of the common stock offered in this prospectus and
certain other legal matters will be passed upon for the Company by Brobeck,
Phleger & Harrison LLP, Palo Alto, California. As of the date of this
prospectus, attorneys of Brobeck, Phleger & Harrison LLP and family members
thereof beneficially owned an aggregate of approximately 64,000 shares of the
Company's common stock.
EXPERTS
The financial statements incorporated in this prospectus by reference
to the Annual Report on Form 10-K of P-Com, Inc. for the year ended December 31,
1997 have been so incorporated by reference in the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
45
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Company.............................................. 2
Risk Factors............................................. 3
Where You Can Find More Information...................... 28
Use of Proceeds.......................................... 30
Dividend Policy.......................................... 30
Premium.................................................. 30
Ratio (Deficiency) Of Earnings (Loss) To Fixed Charges... 30
Description of Our Capital Stock......................... 31
Selling Stockholders..................................... 41
Recent Developments...................................... 43
Plan of Distribution..................................... 43
Legal Matters............................................ 45
Experts.................................................. 45
</TABLE>
13,000,000 Shares
P-COM, INC.
common stock
-------------
PROSPECTUS
-------------
___________, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14 Other Expenses of Issuance and Distribution.
All expenses incurred in connection with the issuance and distribution
of the securities being registered will be paid by the Registrant. The
following is an itemized statement of these expenses. All amounts except
Securities and Exchange Commission and Nasdaq Stock Market listing fees and the
placement agent fee to PaineWebber Incorporated are estimates.
<TABLE>
<S> <C>
Registration Statement-SEC............................................................ $ 25,806.31
Nasdaq listing fee.................................................................... $ 17,500
Printing and engraving................................................................ $ 15,000
Legal fees............................................................................ $ 325,000
Accounting fees and expenses.......................................................... $ 100,000
Placement agent fee to PaineWebber Incorporated....................................... $ 657,754
Miscellaneous......................................................................... $300,000.69
-----------
Total............................................................................ $ 1,441,061
===========
</TABLE>
Item 15 Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("Section 145")
authorizes a court to award or a corporation's Board of Directors to grant
indemnification to directors and officers in terms sufficiently broad to permit
such indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act. Article
VII of the Registrant's Bylaws provides for mandatory indemnification of its
directors and permissible indemnification of its officers, employees and other
agents to the maximum extent permitted by the Delaware General Corporation Law.
The Registrant has entered into Indemnification Agreements with its officers and
directors which are intended to provide the Registrant's officers and directors
with further indemnification to the maximum extent permitted by the Delaware
General Corporation Law. Reference is also made to the underwriting agreements,
the purchase agreements and registration rights agreements entered into in
connection with the Company's three public offerings, the Company's nine
acquisitions, the sale of the Notes and the sale of the Series B preferred
stock, each of which contains provisions indemnifying officers and directors of
the Company and other persons against certain liabilities, including, in some
cases, those arising under the Securities Act.
Item 16 Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
- ------------ --------------------------------------------------------------
<S> <C>
3.2 Restated Certificate of Incorporation, as filed with the
Delaware Secretary of State filed on March 9, 1995*
3.2A Certificate of Amendment of Restated Certificate of
Incorporation, as filed with the Delaware Secretary of State on
June 16, 1997*
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C>
3.2C Certificate of Designation for the Series A Junior Participating preferred stock,
as filed with the Delaware Secretary of State on December 21, 1998*
3.2D Certificate of Designation for the Series B Convertible Participating preferred
stock, as filed with the Delaware Secretary of State on December 21, 1998*
3.2E Certificate of Correction of Certificate of Designations for the Series B
Convertible Participating preferred stock, as filed with the Delaware Secretary of
State on December 23, 1998*
4.1 Specimen of common stock Certificate*
4.8 Amended and Restated Rights Agreement, dated as of December 21, 1998, between the
Company and BankBoston, N.A.*
5.1 Opinion of Brobeck, Phleger & Harrison LLP*
10.22B Low Capacity Digital Radio Agreement dated February 13, 1995 by and between the
Company and Siemens
10.38 Securities Purchase Agreement dated as of December 21, 1998 by and among the
Company and the purchasers listed therein*
10.39 Registration Rights Agreement dated as of December 21, 1998 by and among the
Company and the purchasers listed therein*
10.40A Warrant to purchase shares of common stock, dated as of December 21, 1998, issued
by the Company to Castle Creek Technology Partners LLC*
10.40B Warrant to purchase shares of common stock, dated as of December 21, 1998, issued
by the Company to Capital Ventures International*
10.40C Warrant to purchase shares of common stock, dated as of December 21, 1998, issued
by the Company to Marshall Capital Management, Inc.*
12.2 Ratio of Earnings to Fixed Charges*
23.1 Consent of PricewaterhouseCoopers LLP*
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)*
24.1 Powers of Attorney (including in the signature page of this registration statement)*
</TABLE>
- --------------------------
*Previously filed.
II-2
<PAGE>
* Previously filed.
Item 17 Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(b) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(c) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of
II-3
<PAGE>
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant, P-Com, Inc., a corporation organized and existing under
the laws of the State of Delaware, certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this amendment no. 1 to this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Campbell, State of California, on the 3rd day of March, 1999.
P-COM, INC.
By: /s/ George P. Roberts
----------------------------------------
George P. Roberts, Chairman of the Board
and Chief Executive Officer
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- -------------- ------------------------------------------------------------------------------------
<S> <C>
3.2 Restated Certificate of Incorporation, as filed with the Delaware Secretary of
State filed on March 9, 1995*
3.2A Certificate of Amendment of Restated Certificate of Incorporation, as filed with
the Delaware Secretary of State on June 16, 1997*
3.2C Certificate of Designation for the Series A Junior Participating preferred stock,
as filed with the Delaware Secretary of State on December 21, 1998*
3.2D Certificate of Designation for the Series B Convertible Participating preferred
stock, as filed with the Delaware Secretary of State on December 21, 1998*
3.2E Certificate of Correction of Certificate of Designations for the Series B
Convertible Participating preferred stock, as filed with the Delaware Secretary of
State on December 23, 1998*
4.1 Specimen of common stock Certificate*
4.8 Amended and Restated Rights Agreement, dated as of December 21, 1998, between the
Company and BankBoston, N.A.*
5.1 Opinion of Brobeck, Phleger & Harrison LLP*
10.22B Low Capacity Digital Radio Agreement dated February 13, 1995 by and between the
Company and Siemens
10.38 Securities Purchase Agreement dated as of December 21, 1998 by and among the
Company and the purchasers listed therein*
10.39 Registration Rights Agreement dated as of December 21, 1998 by and among the
Company and the purchasers listed therein*
10.40A Warrant to purchase shares of common stock, dated as of December 21, 1998, issued
by the Company to Castle Creek Technology Partners LLC*
10.40B Warrant to purchase shares of common stock, dated as of December 21, 1998, issued
by the Company to Capital Ventures International*
10.40C Warrant to purchase shares of common stock, dated as of December 21, 1998, issued
by the Company to Marshall Capital Management, Inc.*
12.2 Ratio of Earnings to Fixed Charges*
23.1 Consent of PricewaterhouseCoopers LLP*
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)*
24.1 Powers of Attorney (including in the signature page of this registration statement)*
</TABLE>
* Previously filed.
<PAGE>
EX-10.22(B)
SIEMENS
Notwithstanding the forecast attachment to the agreement, first deliveries and
relevant P.O.'s are agreed as follows:
<TABLE>
<CAPTION>
P.O. Number STI Internal Quantity
- ----------- ------------ --------
working order reference and eqt. type
----------------------- -------------
<S> <C> <C>
C059/07301 51KK59 23 38
C059/07302 711417 2 2
C059/07303 51G807 4 2
C059/07304 51G770 90 12
8
</TABLE>
Deliveries: - All of the 23 GHz type eqt. Will be delivered during
- ----------
April 1995 at an expected rate of 25 eqt./week.
- The 38 GHz type are 4FSK modulation and for delivery before
March 10th 1995 with the expection of last P.O. C059//07304
for which 2FSK eqt. Are requested, subject to final customer
acceptance, and for delivery FCA Campbell end of February
1995.
Detail configuration of the above orders will be transmitted as soon as part
number of the products will be communicated to Siemens Telecomicazioni S.p.A
Milano, 13/02/1995
[SIGNATURE ILLEGIBLE] /s/ Pier Antoniucci
- -------------------------- ----------------------------
For STI For P-COM
<PAGE>
P_Com Tel-Link Forecast Rev. D1 2/13/1995
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION Feb 95 Mar 95 Apr 95 May 95 Jun 95 Jul 95 Aug 95 Total T/R
23 28 23 28 23 28 23 28 23 28 23 28 23 28 23 28
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1.10 3X64 kb/s 1 + O (23 G)
- -----------------------------------------------------------------------------------------------------------------------------
1.11 3x64 kb/s 1 + O (38G)
- -----------------------------------------------------------------------------------------------------------------------------
1.20 2Mb/s 1 + O (23G) 10 10 10 10
- -----------------------------------------------------------------------------------------------------------------------------
1.21 2Mb/s 1 + 0 (38G)
- -----------------------------------------------------------------------------------------------------------------------------
1.30 2x2Mb/s 1 + 0 (23G) 12 4 10 14 4 4 48
- -----------------------------------------------------------------------------------------------------------------------------
1.31 2x2Mb/s 1 + 0 (38G) 10 10 20
- -----------------------------------------------------------------------------------------------------------------------------
1.40 4x2Mb/s 1 + 0 (23G) 10 14 16 14 12 4 70
- -----------------------------------------------------------------------------------------------------------------------------
1.41 4x2Mb/s 1 + 0 (38G) 6 4 10 10 10 40
- -----------------------------------------------------------------------------------------------------------------------------
1.50 Universal 1 + 0 (23G) 2 2 2 6
- -----------------------------------------------------------------------------------------------------------------------------
1.51 Universal 1 + 0 (38G) 2 2
- -----------------------------------------------------------------------------------------------------------------------------
1.60 Univ. Cap & Mod. 1 + 0 (23G)
- -----------------------------------------------------------------------------------------------------------------------------
1.61 Univ. Cap & Mod. 1 + 0 (38G)
- -----------------------------------------------------------------------------------------------------------------------------
2.10 2Mb/s 1 + 1 (23G)
- -----------------------------------------------------------------------------------------------------------------------------
2.11 2Mb/s 1 + 1 (38G)
- -----------------------------------------------------------------------------------------------------------------------------
2.20 2x2Mb/s 1 + 1 (23G)
- -----------------------------------------------------------------------------------------------------------------------------
2.21 2x2Mb/s 1 + 1 (38G)
- -----------------------------------------------------------------------------------------------------------------------------
2.30 4x2Mb/s 1 + 1 (23G) 16 8 20 32 32 32 140
- -----------------------------------------------------------------------------------------------------------------------------
2.31 4x2Mb/s 1 + 1 (38G) 8 8
- -----------------------------------------------------------------------------------------------------------------------------
2.40 Universal 1 + 1 (2/4) 23G 8 4 12
- -----------------------------------------------------------------------------------------------------------------------------
2.41 Universal 1 + 1 (2/4)(38G) 4 4 8
- -----------------------------------------------------------------------------------------------------------------------------
2.50 Univ. Cap & Mod. 1 + 1 (23G)
- -----------------------------------------------------------------------------------------------------------------------------
2.51 Univ. Cap & Mod. 1 + 1 (38G)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
All the configuration of items 1,2,7,8 include: 48V PSU, Antenna (30cm-38G/60cm-
23G) w/pole mount, link manager port, FEC, 4 FSK modulation, inat. material and
manual
<PAGE>
P_Com Tel-Link Forecast Rev.01 2/13/1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Item Description Feb 95 Mar 95 Apr 95 May 95 Jun 95 Jul 95 Aug 95 TOTAL T/R
23 38 23 38 23 38 23 38 23 38 23 38 23 38 23 38
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7.10 8X2Mb/s 1+0 (23G)
- --------------------------------------------------------------------------------------------------------------------------------
7.11 8X2Mb/s 1+0 (38G)
- --------------------------------------------------------------------------------------------------------------------------------
7.20 16X2Mb/s 1+0 (23G)
- --------------------------------------------------------------------------------------------------------------------------------
7.21 16X2Mb/s 1+0 (38G)
- --------------------------------------------------------------------------------------------------------------------------------
7.30 Universal 1+0 (8/16) 23G
- --------------------------------------------------------------------------------------------------------------------------------
7.31 Universal 1+0 (8/16) 38G
- --------------------------------------------------------------------------------------------------------------------------------
8.10 8X2Mb/s 1+1 (23G)
- --------------------------------------------------------------------------------------------------------------------------------
8.11 8X2Mb/s 1+1 (38G)
- --------------------------------------------------------------------------------------------------------------------------------
8.20 16X2Mb/s 1+1 (23G) 8 8
- --------------------------------------------------------------------------------------------------------------------------------
8.21 16x2Mb/s 1+1 (38G) 5 5
- --------------------------------------------------------------------------------------------------------------------------------
8.30 Universal 1+1 (8/16) 23G
- --------------------------------------------------------------------------------------------------------------------------------
8.31 Universal 1+1 (8/16) 38G
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL T/R 10 6 14 4 28 6 54 14 70 25 58 10 50 18 314 83
- --------------------------------------------------------------------------------------------------------------------------------
4.10 24 V PSU
- --------------------------------------------------------------------------------------------------------------------------------
4.20 EOW - Bridging 2 8
- --------------------------------------------------------------------------------------------------------------------------------
4.30 EOW PT - PT 4 4 28 2 24 6 35 14 54 22 38 10 38
- --------------------------------------------------------------------------------------------------------------------------------
4.40 dat channel
- --------------------------------------------------------------------------------------------------------------------------------
4.70 120 OHM I/O
- --------------------------------------------------------------------------------------------------------------------------------
4.01 H.P. Amplifier 23G 10 28 10 10
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
All the configurations of items 1,2,7,8 include: 48v PSU, Antenna
(30cm-38G/80cm-23G) w/pole mount, link manager port, FEC, 4 FSK modulation, ??,
material and manual.
<PAGE>
LOW CAPACITY DIGITAL RADIO
PRODUCT AGREEMENT
This Agreement is made by and between:
P-COM INC. a corporation under the law of Delaware and having its registered
office at 200 E. Hacienda Ave. Campbell, CA 95008, hereinafter referred to as
"P-COM"
and
SIEMENS TELECOMUNICAZIONI S.P.A. a corporation under the law of Italy and having
its registered office at 20060 Cassina de' Pecchi, Italy, S.S. Padana Superiore
km. 158, hereinafter referred to as "Siemens"
(P-COM and Siemens are hereinafter referred to jointly as the "Parties" and
individually as a "Party")
whereas P-COM has developed the Tel-Link radio Product Line presently covering
the 23, 38 and 50 GHz frequency bands and allowing the transport of one or more
1.5 (T1) or 2 (E1) Mbit/s traffic signals;
whereas Siemens is willing to introduce the products of the Tel-Link Product
Line into its own catalogue and to place orders to buy certain amounts of these
products;
being the recitals hereinabove integral part of the present Agreement
NOW THEREFORE THE PARTIES AGREE AS FOLLOWS
ARTICLE 1. PURPOSE OF THE AGREEMENT
1.1 The purpose of this Agreement is to set forth rules that allow Siemens to
include the Tel-Link Product Line (hereinafter "the Products", which terms shall
also be construed as designating equipment, subset, assembly or part of the Tel-
Link Product Line where The context so admits) in its products catalogue.
1.2 As a consequence P-COM agrees to Sell and Siemens agrees to buy the Products
in accordance with purchase orders that may be issued from time to time by
Siemens to The price, terms and conditions herein contained.
ARTICLE 2. SPECIFICATIONS OF THE PRODUCTS AND RELEVANT SIEMENS ACCEPTANCE TEST
2.1 P-COM grants that the characteristics and specifications of the Products at
the date of the Agreement are those listed in the Attachment I hereto.
Page 1 of 9
<PAGE>
2.2 In the spirit of the present Agreement, should P-COM decide to modify the
Products with enhancements or extensions, P-COM is willing to make available to
Siemens the above mentioned enhancements and extensions and to timely provide
Siemens with sufficient information and documentation in order to promote the
enhanced and extended Products in the market.
2.3 if the enhanced Products should not grant full backword compatibility, P-
COM undertakes to produce the previous version of the Products for Siemens for a
minimum period of 24 months after the commercial availability of the enhanced
Products.
2.4 The characteristics and conditions related with the Quality Assurance are
detailed in the Attachment 2 hereto.
ARTICLE 3. MARKETING RIGHTS
3.1 Siemens will have the non exclusive right to promote, sell or lease, as a
single equipment or together with other products or systems, the Products in any
market freely and with no limitations.
3.2 Siemens will have the right to include the Products in its catalogue with
Siemens trade-mark and brand name. To this purpose P-COM agrees to deliver to
Siemens the Products properly marked and externally coloured in accordance with
Siemens' instructions, provided that such instructions will not be in conflict
with the production process of the Products.
3.3 P-COM warrants that it does not have nor will undertake any obligation with
anybody conflicting with the rights granted to Siemens pursuant to this
Agreement
ARTICLE 4. PRICES
4.1 The prices from P-COM to Siemens of the Product are given in the Attachment
3 to this Agreement. Prices are fixed throughout each calendar year and will be
revised annually in a joint meeting to be held by the Parties by 30th of
September of the previous year. Basic criterion adopted in defining price is to
allow Siemens to withhold a reasonable margin, estimated by the Parties in
approximately 25% on the most competitive market price recognized by the Parties
provided P-COM can also obtain a reasonable margin.
4.2 Price vs. quantity matrix is given in the Attachment 3, based on the total
number of transmitters/receivers of the Products ordered by Siemens for delivery
within the year.
The initial price level of each year will be defined during the annual meeting
according to the quantity objective indicated by Siemens.
In case after six months of each year the total ordered transmitter/receiver do
not reach 1/3 (one third) of the minimum quantity of the initial price level,
The purchase order price for the second six months will automatically switch to
the lower quantity level.
Viceversa, whenever during a year Siemens inform P-COM that the total expected
ordered quantity for the same year would exceed the minimum of the initial price
level agreed for that year, the purchase order price will switch to the higher
quantity level three months after the notification by Siemens of the higher
volume.
For year 1995 the initial price level will be level 3 while the quantities in
Attachment 3 have to be considered reduced by 1/3 (one third).
Page 2 of 9
<PAGE>
4.3 In the event that during the one year time frame of validity of certain
price levels, the competitive market price - which is used as reference in
defining price - reduces considerably, the Parties agree to meet and jointly
review the price in accordance with such modified market conditions and
following the basic criterion indicated at point 4.1.
ARTICLE 5. CONDITIONS OF SUPPLY
5.1 Unless otherwise agreed in relation with a specific project the following
terms and conditions shall be applicable to all orders for the purchase of the
Products (or portion thereof) to be supplied by P-COM to Siemens and such terms
and conditions shall take preference over any conflicting or inconsistent terms
of Siemens' purchase orders or P-COM conditions of sale.
5.2 Siemens, shall purchase the Products by issuing a written purchase order, to
be transmitted by fax, identifying the transmitters/receivers of the Products to
be purchased, the quantity, price, total purchase order price, shipping
instructions (if any), delivery dates and place and any other specific
information impacting on the equipment delivery schedule. P-COM shall confirm,
by confirmed telefax, any purchase order within one (1) week of P-COM's receipt
thereof, provided its terms are in accordance with those of this Agreement or
better ones, if so agreed by the Parties.
5.3 Price, in U.S. dollars are defined in the Attachment 3 to this Agreement.
Price shall include the full cost of ordered products, suitably packed.
5.4 Depending of the specific indications of the purchase order, the ordered
Products will be delivered, at the price indicated in Attachment 3, in one of
the following ways:
- - for European Communities and E.F.T.A. Countries and other European Countries
with equivalent import custom duties, FCA country of destination, import
custom duties paid, (in accordance with Incoterms 1990);
- - for other European Countries with import custom duties higher than E.E.C.
(7.5%), FCA country of destination, import custom duties paid (in accordance
with Incoterms 1990), but P-COM will debit the duties incremental difference
to Siemens;
- - for all the other Countries, FCA Campbell U.S.A. (in accordance with
Incoterms 1990). Delivery dates will be those specified in the order and in
any case the lead time will not be less than the standard lead time declared
by P-COM with the exception of different lead time accepted by P-COM in
writing for specific orders.
P-COM declares that standard lead time from the reception of purchase order to
delivery FCA is 4 weeks provided that the order is within the boundaries of the
monthly rolling forecast covering the subsequent 3 months as defined herebelow;
any variations in standard lead time will be promptly notified by written notice
to Siemens.
5.5 Siemens will issue monthly a rolling forecast (with the best possible
indications of frequency, bit rate and configurations) indicating requested
deliveries for the coming six months - divided in months - of which the first
month is covered by firm orders and the subsequent two months are binding in
terms of quantities and configurations.
It is understood that the binding forecast of the subsequent two months allow
Siemens to reduce actual orders of 15% in the second month and of 30% in the
third month.
First forecast is in Attachment 4; next forecast will be issued by Siemens on
the last working day of the month that follows the date of signature of the
Agreement.
Page 3 of 9
<PAGE>
5.6 Unless otherwise agreed by the Parties in relation with a specific project,
Siemens' payment to P-COM shall be made for 100% of the relevant price of each
delivered batch, thirty (30) days end of the month date of invoice after
shipment of each complete batch of supply and issuance of relevant invoice.
5.7 In the event that P-COM fails for reasons other than causes of force majeure
to deliver FCA each batch of the Products or parts thereof at the respective
dates accepted in the relevant purchase order, Siemens may claim from P-COM
penalties equivalent to 1% (one percent) of the corresponding price of the
delayed batch per week of delay without exceeding 10% (ten percent) of said
price. P-COM shall inform immediately Siemens in the event it anticipates any
delay in its deliveries and the Parties shall make their best efforts to
minimise the consequences thereof.
If due to joint efforts of the Parties, the delay in P-COM deliveries does not
delay Siemens' performance of its obligation towards its customer and therefore
no penalties are charged to Siemens, P-COM may elect to reimburse in full to
Siemens all extra or special costs incurred by Siemens during above mentioned
joint efforts instead of being charged penalties hereunder.
In the event Siemens cancels or delays by more than three months any shipment
firmed up in the first three months of the rolling forecast, P-COM will make its
best efforts to redirect the shipment elsewhere to the extent possible. Failing
that P-COM shall inform Siemens in writing within 1 week and Siemens will be
under the obligation to buy and pay for the equipment as follows:
. 100% of the equipment scheduled to ship in the month following cancellation;
. 75% of the equipment scheduled to ship in the period contained between 1
month and 2 months from the date of cancellation;
. 50% of the equipment scheduled to ship in the period contained between 2
months and 3 months from the date of cancellation.
Upon Siemens request P-COM cooperate in safely storing the equipment and will
advise Siemens of the cost to be born.
5.8 Notwithstanding the article 11 (Duration), P-COM undertakes to supply, for 5
year after the expiration of the present Agreement, equipment to Siemens for all
the expansions of the contracts signed by Siemens during the validity of the
present Agreement.
5.9 If specific market opportunities pursued by Siemens in relation with the
Products require a local content (either explicitly or as a competitive
advantage), P-COM and Siemens will jointly analyse and decide the best strategy
to be followed with respect to the granting of the manufacturing rights to the
third party addressed in the specific project. Terms and conditions for the
above manufacturing transfer will be negotiated in good faith by the Parties.
ARTICLE 6. INSPECTION ON THE PRODUCTS MANUFACTURING PROCESS.
6.1 In order to certify the quality of the Products and of its manufacturing
process and to allow Siemens to fulfill its contractual obligations with the
customer, Siemens may at any reasonable time inspect, in P-COM' and/or P-COM'
subcontractors' facilities, the various manufacturing steps of the products
which will or may be used in the performance of this Agreement and inspect and
test material and workmanship related to the Products
Page 4 of 9
<PAGE>
purchased hereunder Siemens shall give P-COM reasonable prior notice of the
dates on which the inspections will take place. All inspections and tests shall
be performed in such a manner as not to delay the work unduly.
The Parties will jointly define specific procedures to carry out the
inspections.
ARTICLE 7. WARRANTY AND SPARE PARTS
7.1 The Products to be supplied by P-COM hereunder shall be warranted to
conform to the specification which are or will become applicable as a result of
this Agreement and its Attachment 1 and to be free from design errors and
defects in materials and workmanship under normal use and service for a period
of twenty four (24) months after the date of the FCA delivery by P-COM provided
always that:
1. said warranty shall not extend to natural wear and tear or to any damage
arising in consequence of negligence in handling the Products by Siemens or
Siemens' customer;
2. Siemens shall have notified P-COM of the defects in writing or by confirmed
telefax promptly after Siemens was informed of the defects.
7.2 The defect will be made good at P-COM expenses by repair or replacement at
P-COM option. P-COM shall warrant repaired or replaced items under the same
conditions as above, for a period expiring either simultaneously with the
initial warranty of the delivered product or six (6) months after installation
of such replaced item, whichever is later. Transportation and insurance cost for
defective or deficient parts returned to P-COM Shall be at Siemens' charge and
transportation and insurance costs for parts replaced or repaired by P-COM shall
be at P-COM charge.
The Parties agree that standard turnaround time for repair is two (2) weeks.
7.3 P-COM warranty is limited to the repair or replacement of defective or
deficient parts. Labour cost relating to the reinstallation of items repaired or
replaced under the above warranty shall be borne by Siemens.
7.4 P-COM shall furnish to Siemens, in accordance to orders that Siemens may
issue from time to time, any and all spare parts for the Products supplied to
Siemens under this Agreement. P-COM' commitment shall be valid for the term of
10 years after the sale of the last Products, and shall survive the termination
of this Agreement.
7.5 Terms and conditions set forth in this Agreement for the purchase of the
Products will be applied as well to the purchase of spare-parts
ARTICLE 8. TRAINING AND DOCUMENTATION
8.1 P-COM agrees to and will provide to Siemens all updated technical
documentation necessary for the correct installation, operation and maintenance
of the Products and to be delivered to the customer together with the Products.
The documentation will be issued in English and will be printed under Siemens
label and brand name. Siemens request for different languages will be evaluated
and, if approved by P-COM, quoted.
Page 5 of 9
<PAGE>
8.2 Notwithstanding above article 8.1, P-COM will provide to Siemens all
updated technical information that allow Siemens to prepare a complete
documentation to be supplied to the customer together with the Products.
8.3 P-COM agrees to provide to Siemens, during 1995, a training course for
Siemens's personnel on installation, operation, maintenance and repair at no
cost for Siemens. The training course will take place in P-COM' facilities and
each Party will be responsible for costs and living expenses of its own
personnel.
ARTICLE 9. DETAILED PROVISIONS IN RELATION WITH THE INTEGRATION OF THE
PRODUCTS WITH OTHER SIEMENS PRODUCTS.
9.1 Whereas Siemens needs to incorporate the Products into its own TMN systems,
P-COM undertakes to modify its TMN interfaces and protocols in order to
correctly match the Siemens TMN systems.
P-COM and Siemens will cooperate in defining responsibilities and cost for
developing the above interfaces and protocols.
9.2 Whereas Siemens needs to incorporate the Products into their offering for
mobile radio networks, P-COM agrees to do its best efforts to ease mechanical
and electrical integration of the Products into Siemens Base Station (SBS)
equipment and related OMC.
9.3 For the purpose of integration into SBS and for other market requirements,
the "one-unit" ID4, presently available at prototype level, may be of interest
to Siemens, which will define in due time the requirements.
P-COM hereby agrees to start production delivery of the "one-unit" ID4 5 months
after a firm order of 300 units.
9.4 Siemens will also be allowed to mechanically and electrically integrate the
Products or parts thereof; into other products of the Siemens telecommunication
catalogue, in order to provide the customer with integrated network solutions.
ARTICLE 10. CONFIDENTIAL INFORMATION
10.1 Subject to the conditions of this paragraph 10.1 P-COM agrees that it will
defend Siemens, at its cost and expense, and will indemnify and hold harmless
Siemens, from and against all suits, claims, losses, damages and expenses
arising from any actual infringement of any third party's patent right based on
the sale or use of the Products purchased under this Agreement.
Siemens shall give P-COM prompt written notice of any such claim or action upon
Siemens become aware of same. In addition Siemens shall, at P-COM' cost, provide
all reasonable assistance in P-COM' defense or settlement efforts and P-COM
shall have sole authority to defend or settle such claim.
In the event that a final injunction is obtained against the sale or use of an
infringing product of the Products by Siemens and/or its customer, P-COM will,
at its expenses, obtain for Siemens and/or its customers:
1. the right to continue using the Products,
2. the right to replace or modify the Products so that it becomes non
infringing or
Page 6 of 9
<PAGE>
3 if such remedies are not reasonably available, grant to Siemens a refund or
credit equal to the amount paid by Siemens to P-COM for the infringing
product.
P-COM shall not be liable for any infringement of patent rights if such
infringement is based upon the use of the product in combination with other
equipment, software, products or devices not furnished by P-COM if such claim
would have been avoided in the absence of such combination.
The foregoing states the entire warranty and liability of P-COM with respect to
any alleged or actual patent rights infringement.
10.2 Each Party will hold in confidence as it does for its own confidential
information of the same importance, and use only for purposes of this Agreement,
all technical and commercial information (oral or written) provided by the other
Party and designated as confidential. Each Party warrants that the measures it
takes with respects to its own confidential information are reasonably
calculated to protect its confidentiality. These obligations will be subject to
exceptions for information which:
. is in the public domain, or enters the public domain through no fault of the
receiving Party;
. is disclosed to third Parties by the disclosing Party without similar
obligations of confidentiality;
. the receiving Party learns from a third Party without violation of the
disclosing Party's rights with respect to the information;
. is already known to the receiving Party at the time of disclosure;
. is disclose with the prior written consent of the disclosing Party;
. is required to be disclosed by a court or other governmental body or to a
prospective or current customer in the context of a tender offer or the
execution of a supply contract.
ARTICLE 11. DURATION
11.1 This Agreement shall become effective at the date of signature by the
Parties and shall have an initial three-year term, automatically renewable for
successive one-year term, unless terminated by any Party upon written notice to
the other Party given at least six (6) months prior to the end of the initial
term or any subsequent one year period, or unless terminated as provided in the
Article 12 below.
ARTICLE 12. EARLY TERMINATION
12.1 Notwithstanding anything contained in the Article 11 of this Agreement as
far as the term is concerned, each Party hereto reserves and shall have the
right and option to terminate, by written notice, this Agreement at any time as
follows:
(a) in the event of breach of a material term of this Agreement (including non-
payments of amounts due and the unability to fulfill obligations as per
article 2.1, 7.1 and 7.2), this Agreement may be terminated by the Party not
in breach by giving a 60 days' notice to the Party in-breach, except in the
event such breach is remedied within such 60 days notice period or an agreed
plan to remedy has been worked out by the Parties within the same 60 days
period;
*CONFIDENTIAL TREATMENT REQUESTED.
Page 7 of 9
<PAGE>
(b) in the event the other Party shall make an assignment for the benefit of
creditors, shall admit in writing its inability to pay its debts as they
become due, or shall file a voluntary petition for relief under applicable
bankruptcy laws, or shall file any other petition or similar request with a
court having competent jurisdiction for voluntary relief, looking to
reorganisation, arrangement, composition, readjustment, liquidation,
custodianship, dissolution, winding-up or similar relief under bankruptcy
laws or any similar laws or regulations, or shall file any answer admitting
or not contesting the material allegations of a petition filed against it in
any such proceeding, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver, custodian or liquidator of such party
with result to all or any substantial part of its properties.
12.1 In case of early termination generated by P-COM under the clause 12.1 (b)
Siemens will be granted the licence to manufacture and sale the Products without
any limitations and P-COM undertakes to promptly disclose to Siemens all
technical information, drawings, and manufacturing details that will allow
Siemens to exercise the above licence rights.
ARTICLE 13. FORCE MAJEURE
13.1 Neither of the Parties shall be liable for delays or failure in the
performance of this Agreement arising from any of the following causes, which
are beyond the control of the Party affected:
. acts of God, or public enemy or war (declared or undeclared);
. acts of governmental or quasigovernmental authorities or any department or
agency thereof, or regulations or restrictions imposed by law or by court
actions, including without limitations
1. acts of persons engaged in subversive activities or sabotage;
2. fires, flood, explosions, earthquakes, or other catastrophes;
3. epidemics or quarantines;
4. strikes, slowdowns, lock outs or labour stoppages or disputes of any
kind;
5. freight embargoes or interruptions of transportation;
6. any other cause similar or dissimilar beyond the control of the Party
concerned or its subcontractors.
ARTICLE 14. APPLICABLE LAW AND ARBITRATION
14.1 This Agreement shall be governed by and construed in accordance with the
Swiss Federal code of obligations excluding however any reference to the "1980,
Wien Sale Convention".
14.2 The Parties hereto agree that they shall use their best efforts to settle
amicably any disputes arising between them out of or in connection with this
Agreement. Failing that, any and all such disputes shall be finally and
exclusively settled through arbitration in Geneva Switzerland, by three
Arbitrators appointed and acting in accordance with the Rules of Conciliation
and Arbitration of the International Chamber of Commerce. Arbitration
proceedings shall be conducted in the English language.
Performance by the Parties relevant to this Agreement shall not be suspended
during the pendency of any dispute or arbitration hereunder.
Page 8 of 9
<PAGE>
ARTICLE 15. LIMITATION OF LIABILITY
15.1 Except is otherwise expressely provided for in this Agreement, any Party
shall in no circumstances be liable to the other Party for any loss which is in
form or substances a loss of profits or loss of opportunity of earning profits
or for any consequential loss whatsoever.
ARTICLE 16. COMING INTO FORCE
16.1 The present Agreement will come into force when the two following events
have occured:
1. signature by the Parties;
2. approval by Siemens' Board.
The latter is considered given in absence of any written notice of non approval
within 30 days after the signature of the Agreement.
ARTICLE 17. NON DISCLOSURE CLAUSE
17.1 The Parties shall not disclose to any third party, in any form, the
existence and the contents of the present Agreement until its coming into force,
in accordance with the Art 16 hereabove.
IN WITNESS HEREOF this Agreement has been executed in duplicate
For and on behalf of For and on behalf of
Siemens Telecomunicazioni P-COM
by [SIGNATURE ILLEGIBLE] by /s/ George Roberts
-------------------------- ---------------------------
on 13 Feb. 1995 on Feb. 13, 1995
Page 9 of 9
<PAGE>
SIDE LETTER
Whereas P-COM and Siemens Telecomunicazioni (jointly the Parties) have signed on
February 13, 1995 a Product Agreement;
notwithstanding the fact that such Agreement has not yet come into force, per
Art.16, the Parties undertake to immediately operate in accordance with the
provisions of the Agreement, with particular reference to forecast, orders and
deliveries.
In case the Agreement shall not come into force as per its Art. 16, the Parties
commit themselves to completely fulfill the obligations accepted in the period
from the date of signature to the date of non approval.
In case the Agreement shall come into force the obligations above will become
integral part of the Agreement.
Milan (Italy), the 13th of February 1995
For and on behalf of Siemens Telecomunicazioni For and on behalf of P-COM
[SIGNATURE ILLEGIBLE] /s/ George Roberts
- ------------------------ -------------------------
?????? Feb. 13, 1995
- ------------------------ -------------------------
<PAGE>
SIDE LETTER
With reference to the Agreement signed on February 13th 1995, Siemens and P-
Com agree on the level 4 of price discounts to be applied for orders to be
delivered within end [June 1995].
By that date Siemens will either confirm the level for the whole year or
indicate a new level, based on the results of the promotion activities.
Milan (Italy), the 13th of February 1995
For and on behalf of Siemens Telecomunicazioni For and on behalf of P-COM
[SIGNATURE ILLEGIBLE] /s/ George Roberts
- ------------------------ -------------------------
________________________ _________________________
<PAGE>
SIDE LETTER
This is to confirm the commitment of Siemens Telecomunicazioni to purchase from
P-COM, in the period between the date of the OEM Agreement and the end of the
year 1996 a minimum of 80 (eighty) Tel Link 38 GHz radio terminals equipped with
30 cm antenna, 2FSK modulation and IEI capacity. The price, inclusive of freight
and duties will be US$ 7,700.
It is understood that, during this period ST will do its best efforts to sell
the 80 terminals in the above mentioned configuration. However, should ST fail
this respect, P-COM undertakes to reconfigure the equipment at 4 FSK (2x2 or 4x2
Mbit/s) at its own expenses.
Milan (Italy), the 13th of February 1995
For and on behalf of Siemens Telecomunicazioni For and on behalf of P-COM
[SIGNATURE ILLEGIBLE] /s/ George Roberts
- ------------------------- -------------------------
??????? Feb. 13, 1995
- ------------------------- -------------------------
<PAGE>
ATTACHMENT 1
PRODUCT SPECIFICATIONS AND DESCRIPTION
<PAGE>
Siemens Specification for 23GHz Radios
WARNING
The information contained in this document is the exclusive property of P-Com
Inc. and should not be disclosed to any third party without the written consent
of P-Com.
Table of Contents
<TABLE>
<CAPTION>
<S> <C> <C>
Section 1 General Specifications Page 2
Section 2 Digital Interface Specifications Page 3
Section 3 Transmitter Specifications Page 4
Section 4 Receiver Specifications Page 5
Section 5 Miscellaneous Specifications Page 6
Section 6 Service Channel Specifications Page 6
Section 7 Alarms Specifications Page 7
Section 8 Loopback Specifications Page 7
Section 9 Power Supply Specifications Page 7
Section 10 Environmental Specifications Page 8
Section 11 Mechanical Specifications Page 8
Section 12 Shock Specifications Page 8
Section 13 Vibration Specifications Page 8
Section 14 IDU to ODU Interconnect Specifications Page 9
Section 15 Antenna Specification Page 9
Section 16 Protection Configuration Specification Page 9
Section 17 EMC and Transient Specifications Page 10
Section 18 Relaibility Specifications Page 10
</TABLE>
Appendices
Appendix "A" Input Jitter Tolerance Mark Page 11
Appendix "B" Jitter Gain Mask Page 12
Appendix "C" Transmit Spectrum Page 13-17
Appendix "D" Channel Plans Page 18-23
The specifications listed in the following sections are the minimum or
guaranteed specifications, over the environmental ranges specified, for the
P-Com Tel-Link 23 E1 radio system provided to Siemens. As a minimum, the
Tel-Link 23 E1 radio system compiles with prETS 300 198 November 1993. The
specifications apply to both unprotected (1+0) and protected (1+1) systems
except where otherwise specified.
Issue 1.1 1
<PAGE>
Siemens Specification for 23GHz Radios
Section 1: General:
Operating Frequency: 21.2 to 23.6 GHz
23A option; (Germany)
- ---------------------
ODU Bands Tx frequencies: Low Band [22001 - 22589] MHz
High Band [23009 - 23597] MHz
Frequency Agility: [588] MHz
Transmit/Receive Spacing 1008 MHz
23B option; (U.K.)
- ------------------
ODU Bands Tx frequencies: Low Band [21896 - 22344] MHz
High Band [23128 - 23578] MHz
Frequency Agility: [448] MHz
Transmit/Receive Spacing 1232 MHz
RF Channel Spacing: 1E1 & 2E1 = [3.5] MHz, 4E1 = [7] MHz
Tuning Step Size:
Minimum [1.75] MHz
1E1 & 2E1 [1 to 168] channels per ODU band
4E1 [1 to 84] channels per ODU band
Modulation Type: [4 FSK IEI] systems will use [2FSK] due to
bandwidth)
Flexibility: Any IDU (any capacity) to be used with any ODU
Connectors: Front Access IDU, [2U] High. Rear access
option.
DC Power 2 position plug with screw terminals
Digital 1/0 (2.048 Mb/s) 120 ohm DB-25 Female or 75 ohm BNC.
IDU to ODU 50 ohm "N" Female
Alarms Port DB-25 Male
Computer DB-9 Female
EOW RJ-11, 4 pin
EOW Bridge RJ-11, 8 pin
Data Channels 1 & 2 (East) DB-9 Female
Data Channels 1 & 2 (West) DB-9 Male
Issue 1.1 2
<PAGE>
Siemens Specification for 23GHz Radios
Section 2: Digital Interface:
Digital Capacity: Complies with CCITT G.703
1 x 2.048 Mb/s
2 x 2.048 Mb/s
4 x 2.048 Mb/s
Universal Bit Rate (1,2, or 4 x 2.048 Mb/s
selectable by P.C. Software)
Digital I/O Tolerence +/- 50ppm
Digital I/O Connectors: 120 Ohm Balanced - DB-25 Female
or 75ohm Unbalanced-BNC
Digital Line Code: HDB3
Alarm Indication Signal: AIS inserted with the following conditions;
1. Loss of signal from the Multiplexer to
radio will transmit AIS to the far and over
the radio link. 2. Receiver failure or
B.E.R. greater than 1 x10-4 less than 1x10-
3 will send AIS to the receiver
multiplexer. AIS is adjustable, OFF, 1x10-
3, or 1x10-4
AIS Delay:
Loss of input from multiplexer 25ms
Receiver failure 4ms
Defection of 1x10-3 B.E.R 100ms
Defection of 1x10-4 B.E.R 500ms
Scrambling: Digital signals are scrambled to ensure the
radiated RF spectrum does not contain
discrete spectral components as a result of
repetitive patterns in the input data
stream or carrying internally generated
AIS.
Input Jitter Tolerance: per CCITT G.823/G921. See appendix "A" for
mask. No errors when using a PRBS 215-1
signal.
Output Jitter Tolerance: When using a PRBS 215-1 signal:
0.09 UI p-p 20 Hz to 100 KHz
0.09 UI p-p 18 KHz to 100 KHz
Jitter Gain per CCITT G.823/G921. See appendix "B" for
mask. No errors when using a PRBS 215-1
signal.
3
<PAGE>
Siemens Specification for 23GHz Radios
Section 3: Transmitter
Power Output:
Standard Power +16 dBm minimum 40 mW) at antenna port
High Power +21 dBm minimum 126 mW) at antenna port
Frequency Stability:
Over Temperature: 8 ppm
Years 1 to 4 1 ppm
Years 5 to 10 0.5 ppm
10 year period total 15 ppm
Transmitter Mute: 50 dB when loss of lock Modulator or
Synthesizer
Attenuation Range: 0-30 dB via P.C. software
Intermediate Frequency: 408.33 MHz
Composite Data Rate:
1 x 2.048 Mb/s 2.57 Mb/s
2 x 2.048 Mb/s 5.13 Mb/s
4 x 2.048 Mb/s 10.25 Mb/s
Occupied Bandwidth:
1 x 2.048 Mb/s 2.65 MHz (using * level FSK modulation)
2 x 2.048 Mb/s 2.65 MHz
4 x 2.048 Mb/s 5.30 MHz
Spectrum Efficiency:
1 x 2.048 Mb/s 0.97 bit/sec/Hz (using * level FSK
modulation
2 x 2.048 Mb/s 1.94 bit/sec/Hz
4 x 2.048 Mb/s 1.94 bit/sec/Hz
TX Spurious Emissions:
30 MHz to 21.2 GHz -90 dBW
21.1 GHz to 55 GHz -60 dBW
TX Spectrum Mask: Refer to Appendix "C"
*CONFIDENTIAL TREATMENT REQUESTED.
4
<PAGE>
Siemens Specification for 23GHz Radios
Section 4: Receiver:
Type: Dual Conversion
Intermediate Frequencies: 2667 MHz & 140 MHz
RX Noise Bandwidth:
1 x 2.048 Mb/s 3.08 MHz
2 x 2.048 Mb/s 3.08 MHz
4 x 2.048 Mb/s 6.15 MHz
Maximum RSL for 1x10-6 B.E.R -15 dBm
Maximum RSL for 1x10-3 B.E.R -13 dBm
Receiver Sensitivity, Dynamic Range, and System Gain specifications reflect 2
FSK modulation for 1x2 Mb/s systems, while 2x2 Mb/s and 4x2 Mb/s specifications
reflect 4 FSK modulation.
Sensitivity for 1x10-6 B.E.R. with F.E.C.
1 x 2.048 Mb/s -86 dBm
2 x 2.048 Mb/s -80 dBm
4 x 2.048 Mb/s -77 dBm
Dynamic Range for 1x10-6 B.E.R. with F.E.C.
1 x 2.048 Mb/s 71 dB
2 x 2.048 Mb/s 65 dB
4 x 2.048 mb/s 62 dB
Standard PowerHigh Power
System Gain for 1x10-6 B.E.R. with F.E.C. with F.E.C.
1 x 2.048 Mb/s 102 dB 107 dB
2 x 2.048 Mb/s 96 dB 101 dB
4 x 2.048 Mb/s 93 dB 98 dB
Sensitivity for 1x10-3 B.E.R. with F.E.C.
1 x 2.048 Mb/s -87 dBm
2 x 2.048 Mb/s -85 dBm
4 x 2.048 Mb/s -82 dBm
Dynamic Range for 1x10-3 B.E.R. with F.E.C.
1 x 2.048 Mb/s 74 dB
2 x 2.048 Mb/s 72 dB
4 x 2.048 Mb/s 69 dB
Standard PowerHigh Power
System Gained for 1x10-3 B.E.R. with F.E.C. with F.E.C.
1 x 2.048 Mb/s 103 dB 108 dB
2 x 2.048 Mb/s 101 dB 106 dB
4 x 2.048 Mb/s 98 dB 103 dB
RX Spurious Emissions:
30 MHz to 21.2 GHz -90 dBW
21.2 GHz to 55 GHz -60 dBW
Unfaded B.E.R. 1x10 - 10
Issue 1.1 5
<PAGE>
Siemens Specification for 23GHz Radios
Section 5: Miscellaneous:
Co-Channel Interference: 21 dB for one decade B.E.R. degradation
referenced to 1x10-6 B.E.R thresholds.
This applies to all bit rates.
Adjacent Channel Interference: For one decade B.E.R. degradation
referenced to 1x10-6 thresholds B.E.R.,
using a modulated carrier similar to
the wanted RX signal.
1 x 2.048 Mb/s 0 dB with a 3.5 MHz separation
2 x 2.048 Mb/s 0 dB with a 3.5 MHz separation
4 x 2.048 Mb/s 0 dB with a 7 MHz separation
Forward Error Correction: Standard Feature Reed-Solomon Type,
corrects five bytes per frame.
Link ID's 1-100. Eliminates the possibility of an
unwanted transmitter locking up a wanted
receiver in densely populated areas of
radios.
Section 8: Service Channels:
Number of Service Channels: Three
One EOW (Engineering Orderwire) -
Optional One Data Channel
One NMS Channel - equipped as a second
data channel
Service Channel #1 EOW (Engineering Orderwire) - optional
Type: Analog
Impedance: 600 ohms Balanced
Coding Scheme: A-Law PCM
Frequency Response: 300-3400 Hz
Bridge Input Level: -14dBm to +1 dBm adjustable through
keypad
Bridge Output Level: -11dBm to +4 dBm adjustable through
keypad
Signalling: E&M type-E lead to ground. "Call" button
on front panel of IDU.
I/O Connector RJ-11, 4 pin modular
Bridge: 2 way, 4 wire balance bridge
Bridge connector: RJ-45, 8 pin modular
Service Channel #2 Digital Data Channel
Type: Digital
Mode: Asynchronous
Interface: RS-233C, RS-422/RS-423
Speed: 0-9600 bit/s
I/O Connector: DB-9
Service Channel #3 NMS Channel or Digital Data Channel #2
Type: Digital
Mode: Asynchronous
Interface: RS-232C, RS-422/RS-423
Speed: 0-9600 bit/s
I/O Connector: DB-9
Issue 1.1 8
<PAGE>
Siemens Specification for 23GHz Radios
Section 7: Alarms:
Front Panel indicators:
On-Line LED Green indicates power is applied to
unit.
IDU LED Green indicates normal. Flashes or
solid red in alarm.
ODU LED Green indicates normal. Flashes or
solid red in alarm.
CBL (Cable) LED Green indicates normal. Red when
cable short or open.
RMT (Remote) LED Green indicates normal. Flashes or
solid yellow when far end terminal
is not normal operation.
External Alarms: Up to eight external alarms can be
used per IDU for site alarms such
as Open door, Temperature, A/C
Fail, ect.
Alarm Relays: Five form "C" relays. These alarm
relays can be "mapped" using the
optional P.C. software.
Transmit Mute: The alarms that will cause the
transmitter to mute are:
Modulator
LO/Synthesizer
Time Delay for TX Mute:
Alarm recognition to TX Mute: less than 10 millseconds
Alarm Clearing to TX Output Restoral: 2 seconds
Resuiting Power Reduction 50 dB
Section 8: Loopbacks: Three types of loopbacks are
offered:
IDU Loopback: Loops the aggregate date before the
"N" connector of the IDU. Tests all
circuits in the IDU for operation.
An external BERT set is needed to
test for error performance. Traffic
affecting on all tributaries.
ODU Loopback: Used only with the Loopback Test
Transistor (LBT) to allow testing
of an entire terminal. The LBT
consists of a number and a 1008 or
1232 MHz oscillator.
Link Loopback: Loops the far end tributary at the
line driver and returns the E1
signal to the local end. Affects
only the tributary selected. An
external BERT set is needed to
perform error rate tests.
Issue 1.1 7
<PAGE>
Siemens Specification for 23GHz Radios
Section 9: Power Supply:
Input Voltage:
Standard: -48 VDC
Range: -38.4 VDC to -62.4 VDC
Optional: +24/-24V DC. (-20%, +30%)
Power Consumption:
Standard Power 50 watts includes service channel
options installed
High Power 55 watts includes service channel
options installed
Section 10: Environment:
Temperature Range - Operational:
Outdoor Unit -30 degrees C to +60 degrees C
Indoor Unit -10 degrees C to +55 degrees C
Temperature Range - Storage: -40 degrees C to +70 degrees C for
both IDU and ODU
Relative Humidity:
Outdoor Unit up to 100% for all weather
operation
Indoor Unit 95% at +55 degrees C
Altitude: 4,500 meters (15,000 feet)
Section 11. Mechanical:
Dimensions:
Outdoor Unit 250mm dia x 200 mm depth (10" dia x
8" depth)
Indoor Unit 89 mm H, x 483 mm W. x 267 mm D
(3.5" H, X 19" W, x 10.5" D)
44 mm H version different from
89 mm H version
Specification are listed in
attachment 61.
Weight:
Outdoor Unit 4.5 kg (10lbs)
Indoor Unit 3.6 kg (8 lbs)
Section 12: Shock: per ETS 300 019-1-3
IDU: 5g Operational, 10g Survival
ODU: 5g Operational, 10g Survival
Section 13: Vibration: per ETS 300 019-1-3
IDU: 0.25g random, 5 Hz to 200 Hz
Operational
0.25g random, 5 Hz to 200 Hz
Survival
ODU 0.9g random, 5 Hz to 500 Hz
Operational
2.4g random, 5 Hz to 500 Hz
Survival
Issue 1.1 8
<PAGE>
Siemens Specification for 23GHz Radios
Section 14: IDU to ODU Interconnection:
Number of Cables: One
Type: RG-8/U - Belden 9913 or equivalent
Impedance: 50 ohms unbalanced
Maximum Distance: 300 meters
IDU Connector Type: "N" type Female
ODU Connector Type: "N" type Female
Cable Length Criteria:
DC Resistance: 4 ohms
AC Resistance: 27 DB at [408.33] MHz for 300 meter run
Shielding 100%
Signals on Interconnect Cable: Frequency Level
TX IF [408.33] MHz + 13 dBm +/-2 dB
RX IF [140] MHz -25 to -5 dBm
Telemetry, TX [10] MHz 0 dBm nominal
Telemetry, RX [18] MHz -20 to 0 dBm
Power DC -48 VDC @ 1 amp max
Section 15: Antenna Specification.
Diameter: 60 cm
Frequency Band: 21.2-23.6 GHz
Gain, min 39 dBi
Radiation Pattern: As per ETS 300 198 Figure 3
3dB beamwidth: 1.5 degrees
Cross polarisation discrimination As per ETS 300 198 Figure 3
Section 16: Protected Configuration (1+1) Specifications.
Number of tributaries: Up to four
Impedance: 120 ohm balanced
or 75 ohm unbalanced
PSS Indicators: "A" On Line, "B" On Line
PSS Manual Switch: "A" On Line, "B" On Line, Auto
Switching Type: Combined Tx and Rx.
RF Branching losses:
Dual antenna system None
Single antenna system:
Equal loss splitter. Main [4.5] dB, Standby [4.5] dB
Unequal loss splitter. Main [2] dB, Standby [7.5] dB
Total switching time [0.5] sec
Muting level [50] dB hour operational
Mechanical dimension [1RU height]
Issue 1.1 9
<PAGE>
Siemens Specification for 23GHz Radios
Section 17: EMC and Transient Specifications.
Conducted Emissions: 150 kHz, 30 MHz, average peak
CISPR-22
Radiated Emissions: 30 MHz - 1 GHz, 3m and 10m ranges
EN55022
DIN VDE 0876
Conducted Immunity: IEC 801-2 ESD
Radiated Immunity: IEC 801-3
Lightning Protection: IEC 801-5 Class 2 & 4 with optional arrestors.
Section 18: Reliability Specifications.
IDU MTBF: 177,355 hours (20.25 years)
ODU MTBF: 105,233 hours (12.0 years)
Calculated using MIL-HDBK-217 Rev F
Issue 1.1
10
<PAGE>
Siemens Specifications for 23GHz Radios
Input Jitter Tolerance Mask
Appendix "A"
[GRAPH APPEARS HERE]
---------------------------------------------
E1 Jitter Tolerance Mask
CCITT G.823 (Above Curve = in Spec)
Corner Points:
-------------------------------
1Hz 2.9IU
20 1.5
2.4K 1.5
18K .2
100K .2
---------------------------------------------
FREQUENCY (Hz)
Issue 1.0 10 bis
<PAGE>
Siemens Specification for 23GHz Radios
Appendix "B"
Jitter Gain Mask
[GRAPH APPEARS HERE]
----------------------------------------------
E1 Jitter Transfer Mask
CCITT G.823/1.431 (Below Curve = in Spec)
Corner Points:
---------------------
1Hz +0.5dB
40 +0.5
400 -19.5
15K -19.5
---------------------------------------
[GRAPH APPEARS HERE]
FREQUENCY (HZ)
Issue 1.0 11
<PAGE>
Siemens Specifications for 23GHz Radios
Appendix "C"
Transmit Spectrum Mask
per BAPT 211 ZV 02/23 GHz
Issue 1.0
12
<PAGE>
Spektrumsmaske A fur 3,5 MHz Kanalabstand
[GRAPH APPEARS HERE]
Spektrale Leistungsdichte / (dB) bezogen auf den Maximalwert
--------------------------------------
0,0 MHz 0 dB
--------------------------------------
+ or -1.25 MHz 0 dB
--------------------------------------
+ or -2.125 MHz -18 dB
--------------------------------------
+ or -2.875 MHz -18 dB
--------------------------------------
+ or -4.0 MHz -45 dB
--------------------------------------
+/-5.0 MHz -45 dB
---------------------------------
Ausgabe: August 1993
13
<PAGE>
Spektrumsmaske B fur 3,5 MHz Kanalabstand
[GRAPH APPEARS HERE]
-----------------------------------
0.0 MHz 0 dB
-----------------------------------
+/-1.4 MHz 0 dB
-----------------------------------
+/-2.8 MHz -23 dB
-----------------------------------
+/-3.4 Mhz -23 dB
-----------------------------------
+/-7.0 MHz -45 dB
-----------------------------------
+/-10.0 MHz -45 dB
-----------------------------------
Ausgabe: August 1993
14
<PAGE>
Spektrumsmaske A fur 7 MHz Kanalabstand
[GRAPH APPEARS HERE]
-----------------------------------
0.0 MHz 0 dB
-----------------------------------
+/-3.0 MHz 0 dB
-----------------------------------
+/-4.75 MHz -18 dB
-----------------------------------
+/-6.25 Mhz -18 dB
-----------------------------------
+/-8.5 MHz -45 dB
-----------------------------------
+/-10.0 MHz -45 dB
-----------------------------------
Ausgabe: August 1993
15
<PAGE>
Speltrunsmaske B fur 7 MHz Kanalabstand
[Spektrate Leistungsdichte / (dB) bezogen auf den Maximailwert]
[GRAPH APPEARS HERE]
0.0 MHz 0dB
+2.8 MHz 0dB
+5.6 MHz -23dB
+6.8 Mhz -23dB
+14.0 MHz -45dB
+20.0 MHz -45dB
Augusabe: August 1993
16
<PAGE>
Siemens Specification for 23GHz Radios
Appendix "D"
23 GHz Channel Plans
Issue 1.0 17
<PAGE>
23B, Out Door Unit 13566 Rev.01
- --------------------------------------------------------------------------------
10.0 Frequency Plan
3.5 MHz Plan
<TABLE>
<CAPTION>
BAND 1
RX Freq
BAND 1 BAND 1 BAND I BAND 2 BAND 2 BAND 2 BAND 2
CHAN TX - LO LOx2 TX FREQ LO LOx2 RX
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21897.75 12786.375 25572.75 23129.75 9727.375 19454.75 21897.75
2 21901.25 12788.125 25576.25 23133.25 9729.125 19458.25 21901.25
3 21904.75 12789.875 25579.75 23136.75 9730.875 19461.75 21904.75
4 21908.25 12791.625 25583.25 23140.25 9732.625 19465.25 21908.25
5 21911.75 12793.375 25586.75 23143.75 9734.375 19468.75 21911.75
6 21915.25 12795.125 25590.25 23147.25 9736.125 19472.25 21915.25
7 21918.75 12796.875 25593.75 23150.75 9737.875 19475.75 21918.75
8 21922.25 12798.625 25597.25 23154.25 9739.625 19479.25 21922.25
9 21925.75 12800.375 25600.75 23157.75 9741.375 19482.75 21925.75
10 21929.25 12802.125 25604.25 23161.25 9743.125 19486.25 21929.25
11 21932.75 12803.875 25607.75 23164.75 9744.875 19489.75 21932.75
12 21936.25 12805.625 25611.25 23168.25 9746.625 19493.25 21936.25
13 21939.75 12807.375 25614.75 23171.75 9748.375 19496.75 21939.75
14 21943.25 12809.125 25618.25 23175.25 9750.125 19500.25 21943.25
15 21946.75 12810.875 25621.75 23178.75 9751.875 19503.75 21946.75
16 21950.25 12812.625 25625.25 23182.25 9753.625 19507.25 21950.25
17 21953.75 12814.375 25628.75 23185.75 9755.375 19510.75 21953.75
18 21957.25 12816.125 25632.25 23189.25 9757.125 19514.25 21957.25
19 21960.75 12817.875 25635.75 23192.75 9758.875 19517.75 21960.75
20 21964.25 12819.625 25639.25 23196.25 9760.625 19521.25 21964.25
21 21967.75 12821.375 25642.75 23199.75 9762.375 19524.75 21967.75
22 21971.25 12823.125 25646.25 23203.25 9764.125 19528.25 21971.25
23 21974.75 12824.875 25649.75 23206.75 9765.875 19531.75 21974.75
24 21978.25 12826.625 25653.25 23210.25 9767.625 19535.25 21978.25
25 21981.75 12828.375 25656.75 23213.75 9769.375 19538.75 21981.75
26 21985.25 12830.125 25660.25 23217.25 9771.125 19542.25 21985.25
27 21988.75 12831.875 25663.75 23220.75 9772.875 19545.75 21988.75
28 21992.25 12833.625 25667.25 23224.25 9774.625 19549.25 21992.25
29 21995.75 12835.375 25670.75 23227.75 9776.375 19552.75 21995.75
30 21999.25 12837.125 25674.25 23231.25 9778.125 19556.25 21999.25
31 22002.75 12838.875 25677.75 23234.75 9779.875 19559.75 22002.75
32 22006.25 12840.625 25681.25 23238.25 9781.625 19563.25 22006.25
33 22009.75 12842.375 25684.75 23241.75 9783.375 19566.75 22009.75
34 22013.25 12844.125 25688.25 23245.25 9785.125 19570.25 22013.25
35 22016.75 12845.875 25691.75 23248.75 9786.875 19573.75 22016.75
36 22020.25 12847.625 25695.25 23252.25 9788.625 19577.25 22020.25
37 22023.75 12849.375 25698.75 23255.75 9790.375 19580.75 22023.75
38 22027.25 12851.125 25702.25 23259.25 9792.125 19584.25 22027.25
39 22030.75 12852.875 25705.75 23262.75 9793.875 19587.75 22030.75
40 22034.25 12854.625 25709.25 23266.25 9795.625 19591.25 22034.25
41 22037.75 12856.375 25712.75 23269.75 9797.375 19594.75 22037.75
42 22041.25 12858.125 25716.25 23273.25 9799.125 19598.25 22041.25
</TABLE>
- --------------------------------------------------------------------------------
P-Com, Inc. Confidential Page 25 of 29
<PAGE>
23B, Out Door Unit 13566 Rev.01
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
43 22044.75 12859.875 25719.75 23276.75 9800.875 19601.75 22044.75
44 22048.25 12861.625 25723.25 23280.25 9802.625 19605.25 22048.25
45 22051.75 12863.375 25726.75 23283.75 9804.375 19608.75 22051.75
46 22055.25 12865.125 25730.25 23287.25 9806.125 19612.25 22055.25
47 22058.75 12866.875 25733.75 23290.75 9807.875 19615.75 22058.75
48 22062.25 12868.625 25737.25 23294.25 9809.625 19619.25 22062.25
49 22065.75 12870.375 25740.75 23297.75 9811.375 19622.75 22065.75
50 22069.25 12872.125 25744.25 23301.25 9813.125 19626.25 22069.25
51 22072.75 12873.875 25747.75 23304.75 9814.875 19629.75 22072.75
52 22076.25 12875.625 25751.25 23308.25 9816.625 19633.25 22076.25
53 22079.75 12877.375 25754.75 23311.75 9818.375 19636.75 22079.75
54 22083.25 12879.125 25758.25 23315.25 9820.125 19640.25 22083.25
55 22086.75 12880.875 25761.75 23318.75 9821.875 19643.75 22086.75
56 22090.25 12882.625 25765.25 23322.25 9823.625 19647.25 22090.25
57 22093.75 12884.375 25768.75 23325.75 9825.375 19650.75 22093.75
58 22097.25 12886.125 25772.25 23329.25 9827.125 19654.25 22097.25
59 22100.75 12887.875 25775.75 23332.75 9828.875 19657.75 22100.75
60 22104.25 12889.625 25779.25 23336.25 9830.625 19661.25 22104.25
61 22107.75 12891.375 25782.75 23339.75 9832.375 19664.75 22107.75
62 22111.25 12893.125 25786.25 23343.25 9834.125 19668.25 22111.25
63 22114.75 12894.875 25789.75 23346.75 9835.875 19671.75 22114.75
64 22118.25 12896.625 25793.25 23350.25 9837.625 19675.25 22118.25
65 22121.75 12898.375 25796.75 23353.75 9839.375 19678.75 22121.75
66 22125.25 12900.125 25800.25 23357.25 9841.125 19682.25 22125.25
67 22128.75 12901.875 25803.75 23360.75 9842.875 19685.75 22128.75
68 22132.25 12903.625 25807.25 23364.25 9844.625 19689.25 22132.25
69 22135.75 12905.375 25810.75 23367.75 9846.375 19692.75 22135.75
70 22139.25 12907.125 25814.25 23371.25 9848.125 19696.25 22139.25
71 22142.75 12908.875 25817.75 23374.75 9849.875 19699.75 22142.75
72 22146.25 12910.625 25821.25 23378.25 9851.625 19703.25 22146.25
73 22149.75 12912.375 25824.75 23381.75 9853.375 19706.75 22149.75
74 22153.25 12914.125 25828.25 23385.25 9855.125 19710.25 22153.25
75 22156.75 12915.875 25831.75 23388.75 9856.875 19713.75 22156.75
76 22160.25 12917.625 25835.25 23392.25 9858.625 19717.25 22160.25
77 22163.75 12919.375 25838.75 23395.75 9860.375 19720.75 22163.75
78 22167.25 12921.125 25842.25 23399.25 9862.125 19724.25 22167.25
79 22170.75 12922.875 25845.75 23402.75 9863.875 19727.75 22170.75
80 22174.25 12924.625 25849.25 23406.25 9865.625 19731.25 22174.25
81 22177.75 12926.375 25852.75 23409.75 9867.375 19734.75 22177.75
82 22181.25 12928.125 25856.25 23413.25 9869.125 19738.25 22181.25
83 22184.75 12929.875 25859.75 23416.75 9870.875 19741.75 22184.75
84 22188.25 12931.625 25863.25 23420.25 9872.625 19745.25 22188.25
85 22191.75 12933.375 25866.75 23423.75 9874.375 19748.75 22191.75
86 22195.25 12935.125 25870.25 23427.25 9876.125 19752.25 22195.25
87 22198.75 12936.875 25873.75 23430.75 9877.875 19755.75 22198.75
88 22202.25 12938.625 25877.25 23434.25 9879.625 19759.25 22202.25
89 22205.75 12940.375 25880.75 23437.75 9881.375 19762.75 22205.75
90 22209.25 12942.125 25884.25 23441.25 9883.125 19766.25 22209.25
91 22212.75 12943.875 25887.75 23444.75 9884.875 19769.75 22212.75
92 22216.25 12945.625 25891.25 23448.25 9886.625 19773.25 22216.25
</TABLE>
- --------------------------------------------------------------------------------
P-Com, Inc. Confidential Page 26 of 29
<PAGE>
23B, Out Door Unit 13566 Rev.01
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
93 22219.75 12947.375 25894.75 23451.75 9888.375 19776.75 22219.75
94 22223.25 12949.125 25898.25 23455.25 9890.125 19780.25 22223.25
95 22226.75 12950.875 25901.75 23458.75 9891.875 19783.75 22226.75
96 22230.25 12952.625 25905.25 23462.25 9893.625 19787.25 22230.25
97 22233.75 12954.375 25908.75 23465.75 9895.375 19790.75 22233.75
98 22237.25 12956.125 25912.25 23469.25 9897.125 19794.25 22237.25
99 22240.75 12957.875 25915.75 23472.75 9898.875 19797.75 22240.75
100 22244.25 12959.625 25919.25 23476.25 9900.625 19801.25 22244.25
101 22247.75 12961.375 25922.75 23479.75 9902.375 19804.75 22247.75
102 22251.25 12963.125 25926.25 23483.25 9904.125 19808.25 22251.25
103 22254.75 12964.875 25929.75 23486.75 9905.875 19811.75 22254.75
104 22258.25 12966.625 25933.25 23490.25 9907.625 19815.25 22258.25
105 22261.75 12968.375 25936.75 23493.75 9909.375 19818.75 22261.75
106 22265.25 12970.125 25940.25 23497.25 9911.125 19822.25 22265.25
107 22268.75 12971.875 25943.75 23500.75 9912.875 19825.75 22268.75
108 22272.25 12973.625 25947.25 23504.25 9914.625 19829.25 22272.25
109 22275.75 12975.375 25950.75 23507.75 9916.375 19832.75 22275.75
110 22279.25 12977.125 25954.25 23511.25 9918.125 19836.25 22279.25
111 22282.75 12978.875 25957.75 23514.75 9919.875 19839.75 22282.75
112 22286.25 12980.625 25961.25 23518.25 9921.625 19843.25 22286.25
113 22289.75 12982.375 25964.75 23521.75 9923.375 19846.75 22289.75
114 22293.25 12984.125 25968.25 23525.25 9925.125 19850.25 22293.25
115 22296.75 12985.875 25971.75 23528.75 9926.875 19853.75 22296.75
116 22300.25 12987.625 25975.25 23532.25 9928.625 19857.25 22300.25
117 22303.75 12989.375 25978.75 23535.75 9930.375 19860.75 22303.75
118 22307.25 12991.125 25982.25 23539.25 9932.125 19864.25 22307.25
119 22310.75 12992.875 25985.75 23542.75 9933.875 19867.75 22310.75
120 22314.25 12994.625 25989.25 23546.25 9935.625 19871.25 22314.25
121 22317.75 12996.375 25992.75 23549.75 9937.375 19874.75 22317.75
122 22321.25 12998.125 25996.25 23553.25 9939.125 19878.25 22321.25
123 22324.75 12999.875 25999.75 23556.75 9940.875 19881.75 22324.75
124 22328.25 13001.625 26003.25 23560.25 9942.625 19885.25 22328.25
125 22331.75 13003.375 26006.75 23563.75 9944.375 19888.75 22331.75
126 22335.25 13005.125 26010.25 23567.25 9946.125 19892.25 22335.25
127 22338.75 13006.875 26013.75 23570.75 9947.875 19895.75 22338.75
128 22342.25 13008.625 26017.25 23574.25 9949.625 19899.25 22342.25
</TABLE>
- --------------------------------------------------------------------------------
P-Com, Inc. Confidential Page 27 of 29
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BAND 1 7MHz Plan
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Chan. Tx LO LOx2 Rx Freq LO LOx2 Rx Freq
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21899.50 12787.25 25574.50 23131.50 9728.25 19456.50 21899.50
2 21906.50 12790.75 25581.50 23138.50 9731.75 19463.50 21906.50
3 21913.50 12794.25 25588.50 23145.50 9735.25 19470.50 21913.50
4 21920.50 12797.75 25595.50 23152.50 9738.75 19477.50 21920.50
5 21927.50 12801.25 25602.50 23159.50 9742.25 19484.50 21927.50
6 21934.50 12804.75 25609.50 23166.50 9745.75 19491.50 21934.50
7 21941.50 12808.25 25616.50 23173.50 9749.25 19498.50 21941.50
8 21948.50 12811.75 25623.50 23180.50 9752.75 19505.50 21948.50
9 21955.50 12815.25 25630.50 23187.50 9756.25 19512.50 21955.50
10 21962.50 12818.75 25637.50 23194.50 9759.75 19519.50 21962.50
11 21969.50 12822.25 25644.50 23201.50 9763.25 19526.50 21969.50
12 21976.50 12825.75 25651.50 23208.50 9766.75 19533.50 21976.50
13 21983.50 12829.25 25658.50 23215.50 9770.25 19540.50 21983.50
14 21990.50 12832.75 25665.50 23222.50 9773.75 19547.50 21990.50
15 21997.50 12836.25 25672.50 23229.50 9777.25 19554.50 21997.50
16 22004.50 12839.75 25679.50 23236.50 9780.75 19561.50 22004.50
17 22011.50 12843.25 25686.50 23243.50 9784.25 19568.50 22011.50
18 22018.50 12846.75 25693.50 23250.50 9787.75 19575.50 22018.50
19 22025.50 12850.25 25700.50 23257.50 9791.25 19582.50 22025.50
20 22032.50 12853.75 25707.50 23264.50 9794.75 19589.50 22032.50
21 22039.50 12857.25 25714.50 23271.50 9798.25 19596.50 22039.50
22 22046.50 12860.75 25721.50 23278.50 9801.75 19603.50 22046.50
23 22053.50 12864.25 25728.50 23285.50 9805.25 19610.50 22053.50
24 22060.50 12867.75 25735.50 23292.50 9808.75 19617.50 22060.50
25 22067.50 12871.25 25742.50 23299.50 9812.25 19624.50 22067.50
26 22074.50 12874.75 25749.50 23306.50 9815.75 19631.50 22074.50
27 22081.50 12878.25 25756.50 23313.50 9819.25 19638.50 22081.50
28 22088.50 12881.75 25763.50 23320.50 9822.75 19645.50 22088.50
29 22095.50 12885.25 25770.50 23327.50 9826.25 19652.50 22095.50
30 22102.50 12888.75 25777.50 23334.50 9829.75 19659.50 22102.50
31 22109.50 12892.25 25784.50 23341.50 9833.25 19666.50 22109.50
32 22116.50 12895.75 25791.50 23348.50 9836.75 19673.50 22116.50
33 22123.50 12899.25 25798.50 23355.50 9840.25 19680.50 22123.50
34 22130.50 12902.75 25805.50 23362.50 9843.75 19687.50 22130.50
35 22137.50 12906.25 25812.50 23369.50 9847.25 19694.50 22137.50
36 22144.50 12909.75 25819.50 23376.50 9850.75 19701.50 22144.50
37 22151.50 12913.25 25826.50 23383.50 9854.25 19708.50 22151.50
38 22158.50 12916.75 25833.50 23390.50 9857.75 19715.50 22158.50
39 22165.50 12920.25 25840.50 23397.50 9861.25 19722.50 22165.50
40 22172.50 12923.75 25847.50 23404.50 9864.75 19729.50 22172.50
41 22179.50 12927.25 25854.50 23411.50 9868.25 19736.50 22179.50
42 22186.50 12930.75 25861.50 23418.50 9871.75 19743.50 22186.50
43 22193.50 12934.25 25868.50 23425.50 9875.25 19750.50 22193.50
44 22200.50 12937.75 25875.50 23432.50 9878.75 19757.50 22200.50
45 22207.50 12941.25 25882.50 23439.50 9882.25 19764.50 22207.50
46 22214.50 12944.75 25889.50 23446.50 9885.75 19771.50 22214.50
47 22221.50 12948.25 25896.50 23453.50 9889.25 19778.50 22221.50
48 22228.50 12951.75 25903.50 23460.50 9892.75 19785.50 22228.50
49 22235.50 12955.25 25910.50 23467.50 9896.25 19792.50 22235.50
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
50 22242.50 12958.75 25917.50 23474.50 9899.75 19799.50 22242.50
- --------------------------------------------------------------------------------
51 22249.50 12962.25 25924.50 23481.50 9903.25 19806.50 22249.50
- --------------------------------------------------------------------------------
52 22256.50 12965.75 25931.50 23488.50 9906.75 19813.50 22256.50
- --------------------------------------------------------------------------------
53 22263.50 12969.25 25938.50 23495.50 9910.25 19820.50 22263.50
- --------------------------------------------------------------------------------
54 22270.50 12972.75 25945.50 23502.50 9913.75 19827.50 22270.50
- --------------------------------------------------------------------------------
55 22277.50 12976.25 25952.50 23509.50 9917.25 19834.50 22277.50
- --------------------------------------------------------------------------------
56 22284.50 12979.75 25959.50 23516.50 9920.75 19841.50 22284.50
- --------------------------------------------------------------------------------
57 22291.50 12983.25 25966.50 23523.50 9924.25 19848.50 22291.50
- --------------------------------------------------------------------------------
58 22298.50 12986.75 25973.50 23530.50 9927.75 19855.50 22298.50
- --------------------------------------------------------------------------------
59 22305.50 12990.25 25980.50 23537.50 9931.25 19862.50 22305.50
- --------------------------------------------------------------------------------
60 22312.50 12993.75 25987.50 23544.50 9934.75 19869.50 22312.50
- --------------------------------------------------------------------------------
61 22319.50 12997.25 25994.50 23551.50 9938.25 19876.50 22319.50
- --------------------------------------------------------------------------------
62 22326.50 13000.75 26001.50 23558.50 9941.75 19883.50 22326.50
- --------------------------------------------------------------------------------
63 22333.50 13004.25 26008.50 23565.50 9945.25 19890.50 22333.50
- --------------------------------------------------------------------------------
64 22340.50 13007.75 26015.50 23572.50 9948.75 19897.50 22340.50
- --------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
Siemens Specification for 38 GHz Radios
WARNING
The information contained in this document is the exclusive property of P-Com
Inc. and should not be disclosed to any third party without the written consent
of P-Com.
Table of Contents
<TABLE>
<CAPTION>
<S> <C> <C>
Section 1 General Specifications Page 2
Section 2 Digital Interface Specifications Page 3
Section 3 Transmitter Specifications Page 4
Section 4 Receiver Specifications Page 5
Section 5 Miscellaneous Specifications Page 6
Section 6 Service Channel Specifications Page 6
Section 7 Alarms Specifications Page 7
Section 8 Loopback Specifications Page 7
Section 9 Power Supply Specifications Page 7
Section 10 Environmental Specifications Page 8
Section 11 Mechanical Specifications Page 8
Section 12 Shock Specifications Page 8
Section 13 Vibration Specifications Page 8
Section 14 IDU to ODU Interconnect Specifications Page 9
Section 15 Antenna Specification Page 9
Section 16 Protection Configuration Specification Page 9
Section 17 EMC and Transient Specifications Page 10
Section 18 Relaibility Specifications Page 10
</TABLE>
Appendices
Appendix "A" Input Jitter Tolerance Mark Page 11
Appendix "B" Jitter Gain Mask Page 12
Appendix "C" Transmit Spectrum Page 13
Appendix "D" Channel Plans Page 14-20
The specifications listed in the following sections are the minimum or
guaranteed specifications, over the environmental ranges specified, for the
P-Com Tel-Link 38 E1 radio system provided to Siemens. As a minimum, the
Tel-Link 38 E1 radio system compiles with prETS 300 197 November 1993. The
specifications apply to both unprotected (1+0) and protected (1+1) systems
except where otherwise specified.
Issue 1.1 1
<PAGE>
SIEMENS SPECIFICATION FOR 38 GHZ RADIOS
Section 1: General:
Operating Frequency: 37.0 GHz to 39.5 GHz
ODU Bands TX: Band 1 [37058 - 37618] MHz
Band 2 [37618 - 38178] MHz
Band 3 [38318 - 38878] MHz
Band 4 [38878 - 39438] MHz
ODU Bands RX: Band 1 [38318 - 38878] MHz
Band 2 [38878 - 39438] MHz
Band 3 [37058 - 37618] MHz
Band 4 [37618 - 38178] MHz
Transmit/Receive Spacing 1260 MHz
RF Channel Spacing: 1E1 & 2E1 = [3.5] MHz, 4E1 = [7] MHz
Frequency Agility: 560 MHz
Turning Step Size:
Minimum [1.75] MHz
1E1 & 2E1 [1] to [160] channels per ODU band
4E1 [1] to [90] channels per ODU band
Modulation Type: [4 FSK(IEI] systems will use [2 FSK]
due to bandwidth)
Flexibility: Any IDU (any capacity to be used with
any ODU
Connectors: Front Access IDU, [2 U] high. Rear
access option
DC Power 2 position plug with screw terminals
Digital 1/O (2.048 mb/s) 120 ohm DB-25 Female or 75 ohm BNC.
IDU to ODU 50 ohm "N" Female
Alarms Port DB-25 Male
Computer DB-9 Female
EOW RJ-11.4 pin
EOW Bridge RJ-11.5 pin
Data Channels 1 & 2 (East) DB-9 Female
Data Channels 1 & 2 (West) DB-9 Male
Issue 1.1. 2
<PAGE>
Siemens Specification for 38 GHz Radios
Section 2: Digital Interface:
Digital Capacity: Complies with CCITT G.703
1 x 2.048 Mb/s
2 x 2.048 Mb/s
4 x 2.048 Mb/s
Universal Bit Rate (1, 2, or 4 x 2.048 Mb/s
selectable by P.C. software)
Digital I/O Tolerance +/- 50 ppm
Digital I/O Connectors: 120 Ohm Balanced - DB-25 Female
or 75 ohm Unbalance-BNC
Digital Line Code: HDB3
Alarm Indication Signal: AIS will be inserted with the following
conditions:
1. Loss of signal from the Multiplexer to
radio will transmit AIS to the far and over
the radio link.
2. Receiver failure or B.E.R. greater than
1x10-4 and less than 1x10-3 will send AIS
to the receive multiplexer.
AIS is adjustable, OFF, 1x10-3, or 1x10-4
AIS Delay:
Loss of Input from multiplexer (25) ms
Receiver failure (4) ms
Detection of 1x10-3 B.E.R. (100) ms
Detection of 1x10-4 B.E.R. (500) ms
Scrambling: Digital signals are scrambled to ensure the
radiated RF spectrum does not contain
discrets spectral components as a result of
repetitive patterns in the Input data
stream or carrying internally generated
AIS.
Input Jitter Tolerance: per CCITT G.823/G921. See appendix "A" for
mask. No errors when using a PRBS 215-1
signal.
Output Jitter Tolerance: When using a PRBS 215-1 signal:
(0.09) UI p-p, (20) Hz to (100) KHz
(0.09) UI p-p, (18) Kz to (100) KHz
Jitter Gain per CCITT G.823/G921. See appendix "B" for
mask. No errors when using a PRBS 215-1
signal.
Issue 1.1
3
<PAGE>
Siemens Specification for 38 GHz Radios
Section 3: Transmitter.
Power Output: (+15) dBm minimum (31.6 mW) at antenna port
Frequency Stability:
Over Temperature: (8) ppm
Years 1 to 4 (1) ppm
Years 5 to 10 (0.5) ppm
10 year period total (15) ppm
Transmitter Mute: (50) dB when loss of lock of Modulator or
Synthesizer
Attenuation Range: (0) - (50) dB
(0) - (25) db Electrical (IDU, NMS access)
(0) - (25) db Mechanical (in ODU)
Immediate Frequency: (408.33) MHz
Composite Data Rate:
1 x 2.048 Mb/s (2.57) Mb/s
2 x 2.048 Mb/s (5.13) Mb/s
4 x 2.048 Mb/s (10.25) Mb/s
Occupied Bandwidth:
1 x 2.048 Mb/s (2.65) MHz (using level FSK modulation)
2 x 2.048 Mb/s (2.65) MHz
4 x 2.048 Mb/s (5.30) MHz
Spectrum Efficiency:
1 x 2.048 Mb/s (0.97) bit/sec/Hz
(using level FSK modulation)
2 x 2.048 Mb/s (1.94) bit/sec/Hz
4 x 2.048 Mb/s (1.94) bit/sec/Hz
TX Spurious Emissions:
30 MHZ to 21.2 GHz (-90) dBW
21.2 GHz to 66 GHz (-60) dBW
66 GHz to 80 GHz (-60) dBW
TX Spectrum Mask: Refer to Appendix "C"
Issue 1.1 4
<PAGE>
Siemens Specification for 38 GHz Radios
Section 4: Receiver:
Type: Dual Conversion
Intermediate Frequencies" 2415MHz & 140MHz
Noise Figure: 13dB
- -RX Noise Bandwidth:
1 x 2.048 Mb/s 3.08MHz
2 x 2.048 Mb/s 3.08MHz
4 x 2.048 Mb/s 6.15MHz
Maximum RSL for 1x10-6 B.E.R. -15 dBm
Maximum RSL for 1x10-3 B.E.R. -13 dBm
Receiver Sensitivity, Dynamic Range, and System Gain specifications reflect 2
FSK modulation for 1 x 2 Mb/s systems, while 2 x 2 Mb/s and 4 x 2 Mb/s
specifications reflect 4 FSK modulation.
Sensitivity for 1x10-6 B.E.R. with F.E.C.
1 x 2.048 Mb/s -81dBm
2 x 2.048 Mb/s -78dBm
4 x 2.048 Mb/s -75dBm
Dynamic Range for 1x10-6 B.E.R. with F.E.C.
1 x 2.048 Mb/s 66dB
2 x 2.048 Mb/s 63dB
4 x 2.048 Mb/s 60dB
System Gain for 1x10-6 B.E.R. with F.E.C.
1 x 2.048 Mb/s 96dB
2 x 2.048 Mb/s 93dB
4 x 2.048 Mb/s 90dB
Sensitivity for 1x10-3 B.E.R. with F.E.C.
1 x 2.048 Mb/s -83dBm
2 x 2.048 Mb/s -80dBm
4 x 2.048 Mb/s -77dBm
Dynamic Range for 1x10-3 B.E.R. with F.E.C.
1 x 2.048 Mb/s 70dB
2 x 2.048 Mb/s 67dB
4 x 2.048 Mb/s 64dB
System Gain for 1x10-3 B.E.R. with F.E.C.
1 x 2.048 Mb/s 98dB
2 x 2.048 Mb/s 95dB
4 x 2.048 Mb/s 92dB
RX Spurious Emissions:
30 MHz to 21.2 GHz -90dBW
21.2 GHz to 66 GHz -60dBW
66 GHz to 80 GHz -60dBW
Unfaded B.E.R. 1x10 - 10
Issue 1.1. 5
<PAGE>
Siemens Specification for 38 GHz Radios
Section 5: Miscellaneous:
Co-Channel Interference: 21dB for one decade B.E.R. degradation
referenced to 1x10-6 B.E.R. threshold. This
applies to all bit rates.
Adjacent Channel Interference: For one decade B.E.R. degradation referenced
to 1x10-6 B.E.R. threshold, using a
modulated carrier similar to the wanted RX
signal.
1 x 2.048 Mb/s 0dB with a 3.5 MHz separation
2 x 2.048 Mb/s 0dB with a 3.5 MHz separation
4 x 2.048 Mb/s 0dB with a 7 MHz separation
Forward Error Correction: Standard Feature, Reed-Solomon Type,
corrects five bytes per frame.
Link ID's 1 - 100. Eliminates the possibility of an
unwanted transmitter locking up a wanted
receiver in densely populated areas of
radios.
Section 6: Service Channels:
Number of Service Channels: Three
One EOW (Engineering Orderwire) - Optional
One Data Channel
One NMS Channel - equipped as a second data
channel
Service Channel #1 EOW (Engineering Orderwire) - Optional
Type: Analog
Impedance: 600 ohms Balanced
Coding Scheme: A-Law PCM
Frequency Response: 300-3400 Hz
Bridge Input Level: -14dBm to +1 dBm adjustable through keypad
Bridge Output Level: -11dBm to +4 dBm adjustable through keypad
Signalling: E&M type-E head to ground. "Call" button on
front panel of IDU.
I/O Connector RJ-11, 4 pin modular
Bridge: 2 way- 4 wire balance bridge
Bridge connector: RJ-45, 8 pin modular
Service Channel #2 Digital Data Channel
Type: Digital
Mode: Asynchronous
Interface: RS-232C, RS-422/RS-423
Speed: 0-9600 bit/s
I/O Connector DB-9
Service Channel #3 NMS Channel or Digital Data Channel #2
Type: Digital
Mode: Asynchronous
Interface: R8-232C, RS-422/RS-423
Speed: 0-9600 bit/s
I/O Connector DB-9
* 7MHz separation guaranteed
35MHz separation to be tested before confirmation
Issue 1.1. 6
<PAGE>
Siemens Specification for 38 GHz Radios
Section 7: Alarms:
Front Panel Indicators:
On-Line LED Green indicates power is applied to
unit.
IDU LED Green indicates normal. Flashes or
solid red in alarm.
ODU LED Green indicates normal. Flashes or
solid red in alarm.
CBL (Cable) LED Green indicates normal. Red when cable
short or open.
RMT (Remote) LED Green indicates normal. Flashes or
solid yellow when far end terminal is
not in normal operation.
External Alarms: Up to eight external alarms can be
used per IDU for site alarms such as
Open door, Temperature, A/C Fail, etc.
Alarm Relays: Five form "C" relays. These alarm
relays can be "mapped" using the
optional P.C. software.
Transmit Mute: The alarms that will cause the
transmitter to mute are:
Modulator
LO/Synthesizer
Time Delay for TX Mute:
Alarm recognition to Tx Mute: less than 10 milliseconds
Alarm Clearing to Tx Output Restoral: 2 seconds
Resulting Power Reduction: 50 dB
Section 8: Loopbacks: Three types of loopbacks are offered:
IDU Loopback: Loops the aggregate date before the
"N" connector of the IDU. Tests all
circuits in the IDU for operation. An
external BERT set is needed to test
for error performance. Traffic
effecting on all tributaries.
ODU Loopback: Used only with the Loopback Test Translator
(LBT) to allow testing of an entire
terminal. The LBT consists of a mixer and a
1280 MHz oscillator.
Link Loopback: Loops the far end tributary at the line
driver and returns the E1 signal to the
local end. Affects only the tributary
selected. An external BERT set is needed to
perform error rate tests.
Issue 1.1. 7
<PAGE>
Siemens Specification for 38 GHz Radios
Section 9: Power Supply:
Input Voltage:
Standard: -48 VDC
Range: -38.4 VDC to -62.4 VDC
Optional: +24/-24 VDC. (-20%, +30%)
Power Consumption: 50 watts includes service channel
options installed
Section 10: Environmental:
Temperature Range-Operational
Outdoor Unit -30 degrees C to +60 degrees C
Indoor Unit -10 degrees C to +55 degrees C
Temperature Range-Storage: -40 degrees C to +70 degrees C for
both IDU and ODU
Relative Humidity:
Outdoor Unit: up to 100% for all weather operation
Indoor Unit 95% at +55 degrees C
Attitude: 4,500 meters (15,000 feet)
Section 11: Mechanical:
Dimensions:
Outdoor Unit 250 mm dia x 200 mm depth (10" dia
x 8" depth)
Indoor Unit 89 mm H, x 483 mm W, x 267 mm D
(3.5" H, x 19" W x 10.5" D)
44 mm H version different from
89 mm H version
Specification Listed on Attachment
Weight:
Outdoor Unit 4.5 kg (10 lbs)
Indoor Unit 3.5 kg (8 lbs)
Section 12: Shock: per ETS 300 019-1-3
IDU: 5g Operational, 10g Survival
ODU: 5g Operational, 10g Survival
Section 13: Vibration: per ETS 300 019-1-3
IDU: 0.25g random, 5Hz to 200 Hz
Operational
0.5g random, 5Hz to 200 Hz Survival
ODU O.9g ramdon, 5Hz to 500 Hz
Operational
2.4g random, 5Hz to 500 Hz Survival
Issue 1.1.
8
<PAGE>
Siemens Specification for 38 GHz Radios
Section 14: IDU to ODU Interconnection:
Number of Cables: One
Type: RG-8/U - Belden 9913 or equivalent
Impedance: 50 ohms unbalanced
Maximum Distance: 300 meters
IDU Connector Type: "N" type Female
ODU Connector Type: "N" type Female
Cable Length Criteria:
DC Resistance: 4 ohms
AC Resistance: 27 dB at 408.33MHz for 300 meter run
Shielding 100%
Signals on Interconnect Cable: Frequency Level
TX IF 408.33MHz +13 dBm +/- 2dB
RX IF 140MHz -25 to -5 dBm
Telemetry, TX 10MHz 0 dBm nominal
Telemetry, RX 18MHz -20 to 0 dBm
Power DC -48 VDC @ 1 amp max
Section 15: Antenna Specification.
Frequency Band: 37.0 - 39.5 GHz
Diameter: 30 cm 60cm
Gain, min 37.5dBl 44dBl
Radiation Pattern: As per ETS 300 197 Figure 2. Type 2C
3 dB beamwidth: 0.8 degrees 1.6 degrees
Section 16: Protected Configuration (1+1) Specifications.
Number of tributaries: Up to four
Impedance: 120 ohm balanced
or 75 ohm unbalanced
PSS Indicators: "A" On Line, "B" On Line
PSS Manual Switch: "A" On Line, "B" On Line, Auto
Switching Type: Combined Tx and Rx.
RF Branching losses:
Dual antenna system None
Single antenna system:
Equal loss splitter: Main *dB, Standby *dB
Unequal loss splitter: Main *dB, Standby *dB
Total switching time: 0.5 SCC
Muting Level: 50 dB from operational
Mechanical Dimension 1 RU Weight
Issue 1.1. 9
<PAGE>
Siemens Specification for 38 GHz Radios
Section 17: EMC and Transient Specifications.
Conducted Emissions: 150KHz-30MHz, average peak
CISPR-22
Radiated Emissions: 30MHz-1GHz, 3m and 10m ranges
EN55022
DIN VDE 0876
Conducted Immunity: IEC 801-2 ESD
Radiated Immunity: IEC 801-3
Lightning Protection: IEC 801-5 Class 2 & 4 with optional arrestors.
Section 18: Reliability Specifications.
IDU MTBF: 177,355 hours (20.25 years)
ODU MTBF: 105,233 hours (12.0 years)
Calculated using MIL-HDBK-217 Rev F
Issue 1.1. 10
<PAGE>
Siemens Specification for 38 GHz Radios
Input Jitter Tolerance Mask
Appendix "A"
[GRAPH APPEARS HERE]
---------------------------------------------
E1 Jitter Tolerance Mask
CCITT G.823 (Above Curve = In Spec)
Corner Points:
--------------------
1Hz 2.9 UI
20 1.5
2.4K 1.5
18K .2
100K .2
=============================================
Frequency (Hz)
Issue 1.0. 10 bis
<PAGE>
Siemens Specification for 38 GHz Radios
Appendix
[GRAPH APPEARS HERE]
-------------------------------------------------
E1 Jitter Transfer Mask
CCITT G.823I1.431 (Below Curve = In Spec)
Corner Points:
--------------------
1Hz +0.5 dB
40 +0.5
400 - 19.5
15K - 19.5
=================================================
Frequency (Hz)
Issue 1.0. 11
<PAGE>
Siemens Specification for 38 GHz Radios
Appendix "C"
Transmit Spectrum Mask
per BAPT 211 ZV 12/38 GHz
Issue 1.0 12
<PAGE>
Spectral shape for 7MHz channel spacing
[Spectral power-density/(dB) normalized to the maximum value]
[GRAPH APPEARS HERE]
------------------------------
0.0 MHz 0 dB
------------------------------
+/-3.3 MHz 0 dB
------------------------------
+/-6.1 MHz -25 dB
------------------------------
+/-6.8 MHz -25 dB
------------------------------
+/-12.8 MHz -45 dB
------------------------------
+/-20.0 MHz -45 dB
------------------------------
Edition: September 1993
13
<PAGE>
Spectral shape for 7MHz channel spacing (3,5MHz-channel-width, co-channel
operation)
Spectral power-density/(dB) normalized to the maximum value)
[GRAPH APPEARS HERE]
----------------------------------
0 MHz 0 dB
----------------------------------
+/-1.65 MHz 0 dB
----------------------------------
+/-3.05 MHz -25 dB
----------------------------------
+/-3.40 MHz -25 dB
----------------------------------
+/-6.40 MHz -45 dB
----------------------------------
+/-10.00 MHz -45 dB
----------------------------------
Edition: September 1993
14
<PAGE>
Siemens Specification for 38 GHz Radios
Appendix "D"
38 GHz Channel Plans
15
<PAGE>
38 GHz E1 Channel Plan, 3.5 MHz Spacing, Band 2 ODU
<TABLE>
<CAPTION>
3.5 MHz Channel, 1260 T/A 3.5 MHz Channel, 1260 T/A 3.5 MHz Channel, 1260 T/A
CH # TX Frequency AX Frequency CH # TX Frequency AX Frequency CH # TX Frequency AX Frequency
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 37620.75 38879.75 41 37759.75 39019.75 81 37899.75 39159.75
2 37623.25 38883.25 42 37763.25 39023.25 82 37903.25 39163.25
3 37626.75 38886.75 43 37766.75 39026.75 83 37906.75 39166.75
4 37630.25 38890.25 44 37770.25 39030.25 84 37910.25 39170.25
5 37633.75 38893.75 45 37773.75 39033.75 85 37913.75 39173.75
6 37637.25 38897.25 46 37777.25 39037.25 86 37917.25 39177.25
7 37640.75 38900.75 47 37780.75 39040.75 87 37920.75 39180.75
8 37644.25 38904.25 48 37784.25 39044.25 88 37924.25 39184.25
9 37647.75 38907.75 49 37787.75 39047.75 89 37927.75 39187.75
10 37651.25 38911.25 50 37791.25 39051.25 90 37931.25 39191.25
11 37654.75 38914.75 51 37794.75 39054.75 91 37934.75 39194.75
12 37658.25 38918.25 52 37798.25 39058.25 92 37938.25 39198.25
13 37661.75 38921.75 53 37801.75 39061.75 93 37941.75 39201.75
14 37665.25 38925.25 54 37805.25 39065.25 94 37945.25 39205.25
15 37668.75 38928.75 55 37808.75 39068.75 95 37948.75 39208.75
16 37672.25 38932.25 56 37812.25 39072.25 96 37952.25 39212.25
17 37675.75 38935.75 57 37815.75 39075.75 97 37955.75 39215.75
18 37679.25 38939.25 58 37819.25 39079.25 98 37959.25 39219.25
19 37682.75 38942.75 59 37822.75 39082.75 99 37962.75 39222.75
20 37686.25 38946.25 60 37826.25 39086.25 100 37966.25 39226.25
21 37689.75 38949.75 61 37829.75 39089.75 101 37969.75 39229.75
22 37693.25 38953.25 62 37833.25 39093.25 102 37973.25 39233.25
23 37696.75 38956.75 63 37836.75 39096.75 103 37976.75 39236.75
24 37700.25 38960.25 64 37840.25 39100.25 104 37980.25 39240.25
25 37703.75 38963.75 65 37843.75 39103.75 105 37983.75 39243.75
26 37707.25 38967.25 66 37847.25 39107.25 106 37987.25 39247.25
27 37710.75 38970.75 67 37850.75 39110.75 107 37990.75 39250.75
28 37714.25 38974.25 68 37854.25 39114.25 108 37994.25 39254.25
29 37717.75 38977.75 69 37857.75 39117.75 109 37997.75 39257.75
30 37721.25 38981.25 70 37861.25 39121.25 110 38001.25 39261.25
31 37724.75 38984.75 71 37864.75 39124.75 111 38004.75 39264.75
32 37728.25 38988.25 72 37868.25 39128.25 112 38008.25 39268.25
33 37731.75 38991.75 73 37871.75 39131.75 113 38011.75 39271.75
34 37735.25 38995.25 74 37875.25 39135.25 114 38015.25 39275.25
35 37738.75 38998.75 75 37878.75 39138.75 115 38018.75 39278.75
36 37742.25 39002.25 76 37882.25 39142.25 116 38022.25 39282.25
37 37745.75 39005.75 77 37885.75 39145.75 117 38025.75 39285.75
38 37749.25 39009.25 78 37889.25 39149.25 118 38029.25 39289.25
39 37752.75 39012.75 79 37892.75 39152.75 119 38032.75 39292.75
40 37756.25 39016.25 80 37896.25 39156.25 120 38036.25 39296.25
<CAPTION>
3.5 MHz Channel, 1260 T/A
CH # TX Frequency AX Frequency
<S> <C> <C>
121 38039.75 39299.75
122 38043.25 39303.25
123 38046.75 39306.75
124 38050.25 39310.25
125 38053.75 39313.75
126 38057.25 39317.25
127 38060.75 39320.75
128 38064.25 39324.25
129 38067.75 39327.75
130 38071.25 39331.25
131 38074.75 39334.75
132 38078.25 39338.25
133 38081.75 39341.75
134 38085.25 39345.25
135 38088.75 39348.75
136 38092.25 39352.25
137 38095.75 39355.75
138 38099.25 39359.25
139 38102.75 39362.75
140 38106.25 39366.25
141 38109.75 39369.75
142 38113.25 39373.25
143 38116.75 39376.75
144 38120.25 39380.25
145 38123.75 39383.75
146 38127.25 39387.25
147 38130.75 39390.75
148 38134.25 39394.25
149 38137.75 39397.75
150 38141.25 39401.25
151 38144.75 39404.75
152 38148.25 39408.25
153 38151.75 39411.75
154 38155.25 39415.25
155 38158.75 39418.75
156 38162.25 39422.25
157 38165.75 39425.75
158 38169.25 39429.25
159 38172.75 39432.75
160 38176.25 39436.25
</TABLE>
<PAGE>
38 GHz E1 Channel Plan, 3.5 MHz Spacing, Band 4 ODU
<TABLE>
<CAPTION>
- -------------------------------- -------------------------------- -------------------------------- ---------------------------------
3.5 MHz Channel, 1260 T/A 3.5 MHz Channel, 1260 T/A 3.5 MHz Channel, 1260 T/A 3.5 MHz Channel, 1260 T/A
CH# TX Frequency RX Frequency CH# TX Frequency RX Frequency CH# TX Frequency RX Frequency CH# TX Frequency RX Frequency
- -------------------------------- -------------------------------- -------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 38879.75 37619.75 41 39019.75 37759.75 81 39159.75 37899.75 121 39299.75 38039.75
2 38883.25 37623.25 42 39023.25 37763.25 82 39163.25 37903.25 122 39303.25 38043.25
3 38886.75 37626.75 43 39026.75 37766.75 83 39166.75 37906.75 123 39306.75 38046.75
4 38890.25 37630.25 44 39030.25 37770.25 84 39170.25 37910.25 124 39310.25 38050.25
5 38893.75 37633.75 45 39033.75 37773.75 85 39173.75 37913.75 125 39313.75 38053.75
6 38897.25 37637.25 46 39037.25 37777.25 86 39177.25 37917.25 126 39317.25 38057.25
7 38900.75 37640.75 47 39040.75 37780.75 87 39180.75 37920.75 127 39320.75 38060.75
8 38904.25 37644.25 48 39044.25 37784.25 88 39184.25 37924.25 128 39324.25 38064.25
9 38907.75 37647.75 49 39047.75 37787.75 89 39187.75 37927.75 129 39327.75 38067.75
10 38911.25 37651.25 50 39051.25 37791.25 90 39191.25 37931.25 130 39331.25 38071.25
11 38914.75 37654.75 51 39054.75 37794.75 91 39194.75 37934.75 131 39334.75 38074.75
12 38918.25 37658.25 52 39058.25 37798.25 92 39198.25 37938.25 132 39338.25 38078.25
13 38921.75 37661.75 53 39061.75 37801.75 93 39201.75 37941.75 133 39341.75 38081.75
14 38925.25 37665.25 54 39065.25 37805.25 94 39205.25 37945.25 134 39345.25 38085.25
15 38928.75 37668.75 55 39068.75 37808.75 95 39208.75 37948.75 135 39348.75 38088.75
16 38932.25 37672.25 56 39072.25 37812.25 96 39212.25 37952.25 136 39352.25 38092.25
17 38935.75 37675.75 57 39075.75 37815.75 97 39215.75 37955.75 137 39355.75 38095.75
18 38939.25 37679.25 58 39079.25 37819.25 98 39219.25 37959.25 138 39359.25 38099.25
19 38942.75 37682.75 59 39082.75 37822.75 99 39222.75 37962.75 139 39362.75 38102.75
20 38946.25 37686.25 60 39086.25 37826.25 100 39226.25 37966.25 140 39366.25 38106.25
21 38949.75 37689.75 61 39089.75 37829.75 101 39229.75 37969.75 141 39369.75 38109.75
22 38953.25 37693.25 62 39093.25 37833.25 102 39233.25 37973.25 142 39373.25 38113.25
23 38956.75 37696.75 63 39096.75 37836.75 103 39236.75 37976.75 143 39376.75 38116.75
24 38960.25 37700.25 64 39100.25 37640.25 104 39240.25 37980.25 144 39380.25 38120.25
25 38963.75 37703.75 65 39103.75 37843.75 105 39243.75 37983.75 145 39383.75 38123.75
26 38967.25 37707.25 66 39107.25 37847.25 106 39247.25 37987.25 146 39387.25 38127.25
27 38970.75 37710.75 67 39110.75 37850.75 107 39250.75 37990.75 147 39390.75 38130.75
28 38974.25 37714.25 68 39114.25 37854.25 108 39254.25 37994.25 148 39394.25 38134.25
29 38977.75 37717.75 69 39117.75 37857.75 109 39257.75 37997.75 149 39397.75 38137.75
30 38981.25 37721.25 70 39121.25 37861.25 110 39261.25 38001.25 150 39401.25 38141.25
31 38984.75 37724.75 71 39124.75 37864.75 111 39264.75 38004.75 151 39404.75 38144.75
32 38988.25 37728.25 72 39128.25 37868.25 112 39268.25 38008.25 152 39408.25 38148.25
33 38991.75 37731.75 73 39131.75 37871.75 113 39271.75 38011.75 153 39411.75 38151.75
34 38995.25 37735.25 74 39135.25 37875.25 114 39275.25 38015.25 154 39415.25 38155.25
35 38998.75 37738.75 75 39138.75 37878.75 115 39278.75 38018.75 155 39418.75 38158.75
36 39002.25 37742.25 76 39142.25 37882.25 116 39282.25 38022.25 156 39422.25 38162.25
37 39005.75 37745.75 77 39145.75 37885.75 117 39285.75 38025.75 157 39425.75 38165.75
38 39009.25 37749.25 78 39149.25 37889.25 118 39289.25 30029.25 158 39429.25 38169.25
39 39012.75 37752.75 79 39152.75 37892.75 119 39292.75 30032.75 159 39432.75 38172.75
40 39016.25 37756.25 80 39156.25 37896.25 120 39296.25 38036.25 160 39436.25 38176.25
</TABLE>
<PAGE>
38 GHz E1 Channel Plan MHz Spacing, Band 2 ODU
- ---------------------------------------------
7 MHz Channel. 1260 T/R
CH # TX Frequency RX Frequency
- ---------------------------------------------
1 37621.50 38881.50
- ---------------------------------------------
2 37628.50 38888.50
- ---------------------------------------------
3 37635.50 38895.50
- ---------------------------------------------
4 37642.50 38902.50
- ---------------------------------------------
5 37649.50 38909.50
- ---------------------------------------------
6 37656.50 38916.50
- ---------------------------------------------
7 37663.50 38923.50
- ---------------------------------------------
8 37670.50 38930.50
- ---------------------------------------------
9 37677.50 38937.50
- ---------------------------------------------
10 37684.50 38944.50
- ---------------------------------------------
11 37691.50 38951.50
- ---------------------------------------------
12 37698.50 38958.50
- ---------------------------------------------
13 37705.50 38965.50
- ---------------------------------------------
14 37712.50 38972.50
- ---------------------------------------------
15 37719.50 38979.50
- ---------------------------------------------
16 37726.50 38986.50
- ---------------------------------------------
17 37733.50 38993.50
- ---------------------------------------------
18 37740.50 39000.50
- ---------------------------------------------
19 37747.50 39007.50
- ---------------------------------------------
20 37754.50 39014.50
- ---------------------------------------------
21 37761.50 39021.50
- ---------------------------------------------
22 37768.50 39028.50
- ---------------------------------------------
23 37775.50 39035.50
- ---------------------------------------------
24 37782.50 39042.50
- ---------------------------------------------
25 37789.50 39049.50
- ---------------------------------------------
26 37796.50 39056.50
- ---------------------------------------------
27 37803.50 39063.50
- ---------------------------------------------
28 37810.50 39070.50
- ---------------------------------------------
29 37817.50 39077.50
- ---------------------------------------------
30 37824.50 39084.50
- ---------------------------------------------
31 37831.50 39091.50
- ---------------------------------------------
32 37838.50 39098.50
- ---------------------------------------------
33 37845.50 39105.50
- ---------------------------------------------
34 37852.50 39112.50
- ---------------------------------------------
35 37859.50 39119.50
- ---------------------------------------------
36 37866.50 39125.50
- ---------------------------------------------
37 37873.50 39133.50
- ---------------------------------------------
38 37880.50 39140.50
- ---------------------------------------------
39 37887.50 39147.50
- ---------------------------------------------
40 37894.50 39154.50
- ---------------------------------------------
41 37901.50 39161.50
- ---------------------------------------------
42 37908.50 39168.50
- ---------------------------------------------
43 37915.50 39175.50
- ---------------------------------------------
44 37922.50 39182.50
- ---------------------------------------------
45 37929.50 39189.50
- ---------------------------------------------
46 37936.50 39196.50
- ---------------------------------------------
47 37943.50 39203.50
- ---------------------------------------------
48 37950.50 39210.50
- ---------------------------------------------
49 37957.50 39217.50
- ---------------------------------------------
50 37964.50 39224.50
- ---------------------------------------------
51 37971.50 39231.50
- ---------------------------------------------
52 37978.50 39238.50
- ---------------------------------------------
53 37985.50 39245.50
- ---------------------------------------------
54 37992.50 39252.50
- ---------------------------------------------
55 37999.50 39259.50
- ---------------------------------------------
56 38006.50 39266.50
- ---------------------------------------------
57 38013.50 39273.50
- ---------------------------------------------
58 38020.50 39280.50
- ---------------------------------------------
59 38027.50 39287.50
- ---------------------------------------------
60 38034.50 39294.50
- ---------------------------------------------
61 38041.50 39301.50
- ---------------------------------------------
62 38048.50 39308.50
- ---------------------------------------------
63 38055.50 39315.50
- ---------------------------------------------
64 38062.50 39322.50
- ---------------------------------------------
65 38069.50 39329.50
- ---------------------------------------------
66 38076.50 39335.50
- ---------------------------------------------
67 38083.50 39348.50
- ---------------------------------------------
68 38090.50 39350.50
- ---------------------------------------------
69 38097.50 39357.50
- ---------------------------------------------
70 38104.50 39364.50
- ---------------------------------------------
71 38111.50 39371.50
- ---------------------------------------------
72 38118.50 39378.50
- ---------------------------------------------
73 38125.50 39385.50
- ---------------------------------------------
74 38132.50 39392.50
- ---------------------------------------------
75 38139.50 39399.50
- ---------------------------------------------
76 38146.50 39406.50
- ---------------------------------------------
77 38153.50 39413.50
- ---------------------------------------------
78 38160.50 39420.50
- ---------------------------------------------
79 38167.50 39427.50
- ---------------------------------------------
80 38174.50 39434.50
- ---------------------------------------------
<PAGE>
38 GHz E1 Channel Plan MHz Spacing, Band 4 ODU
<TABLE>
<CAPTION>
- --------------------------------------
7 MHz Channel, 1260 T/R
CH # TX Frequency RX Frequency
- --------------------------------------
<S> <C> <C>
1 38881.50 37621.50
- --------------------------------------
2 38888.50 37628.50
- --------------------------------------
3 38895.50 37635.50
- --------------------------------------
4 38902.50 37642.50
- --------------------------------------
5 38909.50 37649.50
- --------------------------------------
6 38916.50 37656.50
- --------------------------------------
7 38923.50 37663.50
- --------------------------------------
8 38930.50 37670.50
- --------------------------------------
9 38937.50 37677.50
- --------------------------------------
10 38944.50 37684.50
- --------------------------------------
11 38951.50 37691.50
- --------------------------------------
12 38958.50 37698.50
- --------------------------------------
13 38965.50 37705.50
- --------------------------------------
14 38972.50 37712.50
- --------------------------------------
15 38979.50 37719.50
- --------------------------------------
16 38986.50 37726.50
- --------------------------------------
17 38993.50 37733.50
- --------------------------------------
18 39000.50 37740.50
- --------------------------------------
19 39007.50 37747.50
- --------------------------------------
20 39014.50 37754.50
- --------------------------------------
21 39021.50 37761.50
- --------------------------------------
22 39028.50 37768.50
- --------------------------------------
23 39035.50 37775.50
- --------------------------------------
24 39042.50 37782.50
- --------------------------------------
25 39049.50 37789.50
- --------------------------------------
26 39056.50 37796.50
- --------------------------------------
27 39063.50 37803.50
- --------------------------------------
28 39070.50 37810.50
- --------------------------------------
29 39077.50 37817.50
- --------------------------------------
30 39084.50 37824.50
- --------------------------------------
31 39091.50 37831.50
- --------------------------------------
32 39098.50 37838.50
- --------------------------------------
33 39105.50 37845.50
- --------------------------------------
34 39112.50 37852.50
- --------------------------------------
35 39119.50 37859.50
- --------------------------------------
36 39126.50 37866.50
- --------------------------------------
37 39133.50 37873.50
- --------------------------------------
38 39140.50 37880.50
- --------------------------------------
39 39147.50 37887.50
- --------------------------------------
40 39154.50 37894.50
- --------------------------------------
41 39161.50 37901.50
- --------------------------------------
42 39168.50 37980.50
- --------------------------------------
43 39175.50 37915.50
- --------------------------------------
44 39182.50 37922.50
- --------------------------------------
45 39189.50 37929.50
- --------------------------------------
46 39196.50 37936.50
- --------------------------------------
47 39203.50 37943.50
- --------------------------------------
48 39210.50 37950.50
- --------------------------------------
49 39217.50 37957.50
- --------------------------------------
50 39224.50 37964.50
- --------------------------------------
51 39231.50 37971.50
- --------------------------------------
52 39238.50 37978.50
- --------------------------------------
53 39245.50 37985.50
- --------------------------------------
54 39252.50 37992.50
- --------------------------------------
55 39259.50 37999.50
- --------------------------------------
56 39266.50 38006.50
- --------------------------------------
57 39273.50 38013.50
- --------------------------------------
58 39280.50 38020.50
- --------------------------------------
59 39287.50 38027.50
- --------------------------------------
60 39204.50 38034.50
- --------------------------------------
61 39301.50 38041.50
- --------------------------------------
62 39308.50 38048.50
- --------------------------------------
63 39315.50 38055.50
- --------------------------------------
64 39322.50 38062.50
- --------------------------------------
65 39329.50 38069.50
- --------------------------------------
66 39336.50 38076.50
- --------------------------------------
67 39343.50 38083.50
- --------------------------------------
68 39350.50 38090.50
- --------------------------------------
69 39357.50 38097.50
- --------------------------------------
70 39364.50 38104.50
- --------------------------------------
71 39371.50 38111.50
- --------------------------------------
72 39378.50 38118.50
- --------------------------------------
73 39385.50 38125.50
- --------------------------------------
74 39392.50 38132.50
- --------------------------------------
75 39399.50 38139.50
- --------------------------------------
76 39400.50 38140.50
- --------------------------------------
77 39413.50 38153.50
- --------------------------------------
78 39420.50 38160.50
- --------------------------------------
79 39427.50 38167.50
- --------------------------------------
80 39434.50 38174.50
- --------------------------------------
</TABLE>
19
<PAGE>
[LETTERHEAD OF P-COM APPEARS HERE]
Link Manager Features:
The control product is a PC based (Windows) program. Either local site or remote
site terminal can be controlled and monitored by the software. The software will
provide the following functionality:
1. Channel Control
2. Link ID
3. Transmit Power Set
4. Transmitter Mute
5. Bit Rate Selection (1x2, 2x2, 4x2)
6. AGC Level Display
7. B.E.R. Performance Display
8. Loopback Set and Test:
a) IDU Loopback
b) ODU Loopback (requires external equipment)
c) Link Loop (per line)
d) Local Loop (per line)
e) Link Test (per line)
9. Enable/Invert Line Alarming
10. Configure B.E.R. Triggered AIS
11. Display ODU Band
12. Set T/R Address
12. Alarms display, and alarm history display of:
a) B.E.R. alarm
b) Cable Solid alarm
c) Cable Open alarm
d) Cable Short alarm
e) Configuration alarm
f) External Input
g) IDU Solid alarm
h) Line alarm (AIS, LOS, USD) USD = Unexpected Signal Detected
i) Loopback condition
j) ODU Solid alarm
k) Peer Channel alarm
l) Receive Mute
m) Remote alarm
n) Telemetry alarm
o) Transmit Mute alarm
p) Clock Recovery alarm
14. Clear Alarm History
<PAGE>
ATTACHMENT 2
QUALITY ASSURANCE
<PAGE>
ATTACHMENT 2
__________________
QUALITY ASSURANCE
1. SCOPE
To evaluate the supplier Q.A. System and the quality requirements for the
"Product Family".
2. SUPPLIER EVALUATION
The supplier evaluation is carried out through the questionnaire 018-004/21 PQ,
to be filled up by the supplier and delivered to Siemens.
Siemens reserves the right to perform quality audits based on the questionnaire
and/or the supplier Quality Assurance Plan.
3. Q.A. PRODUCT REQUIREMENTS
Each product will be defined by a detailed technical specification (see
attachment 1 to this Agreement).
Besides the specific mechanical and electrical parameters therein contained, the
following general requirements shall be met:
REQUIREMENTS
3.1 Environmental conditions
3.1.1 Storage
Weatherprotected, not temperature controlled storage location. According
to ETS 300 019-1-1 class 1.2 and ETS 300019-2-1 test specification T 1.2
3.1.2 Transportation
Public transportation According to ETS 300 019-1-2 class 2.3 and ETS
300019-2-2 test specification T 2.3
SUPPLIER'S COMMENTS
3.1.1 storage IAW Technical specifications currently in your possession.
3.1.2 To date, P-COM equipment[ has not been evaluated for compliance to
referenced specifications.]**
<PAGE>
REQUIREMENTS
3.1.3 In use
3.1.3.1 Indoor locations
Partly temperature controlled locations (customers premises). According
to ETS 300-1-3 and to ETS 019-2-3 test specification T 3.2.
3.1.3.2 Outdoor locations
Non weatherprotected locations.
According to ETS 300 019-14 class 4.1E and to ETS 300 019-2-4 test
specification T 4.1E.
3.2 Documents control
The supplier shall provide a list of units and sub-assemblies with
their part-number and their issue.
Any design change shall result in a change of the issue; a description
of the new issue shall be provided and the compatibility with the
previously delivered units shall be guaranteed.
3.3 Components control
High quality components shall be used; their qualification shall be
carried out through a dedicated procedure. Siemens reserves the right to
require the list of component used, their qualification procedure and
test results.
3.4 Workmanship requirements
The supplier shall have documented workmanship standards, suitable for
the used technology. Repairs also shall be considered.
SUPPLIER'S COMMENTS
3.1.3.1 Indoor use IAW Technical specification currently in your possession
3.1.3.2 Outdoor use IAW Technical specification currently in your possession.
3.2 The control, approval, issue, all changes to P-COM documents is
accomplished in accordance with P-COM QAP 4.5 document control.
3.3 The selection and qualification of all products is accomplished in
accordance with P-COM QAP 4.4 Design control
3.4 Workmanship standard for all P-COM products is IPC-A-610.
Repairs are accomplished in accordance with IPC-R-700 as directed by P-
COM Material Review Board (MRB)
<PAGE>
REQUIREMENTS
3.5 Final test documentation and declaration of conformity
For each delivered product a declaration of conformity according to EN
45014 shall be provided.
Moreover each product shall be accompanied by a final test report
containing the main test results agreed upon between Siemens and supplier.
The whole equipment, as well as the single replaceable parts, shall be
identified by a serial number.
For every delivered equipment a document shall indicate the serial numbers
of the equipment and of the relevant replaceable parts.
3.6 Product traceability
The supplier shall provide a traceability method to follow the
manufacturing history of each unit and the possible problems arisen during
the production cycle.
3.7 Reliability
For each product the supplier shall provide the MTBF value, for the
complete equipment and for each replaceable part, and its calculation
method.
3.8 Safety
Each product shall be designed according to the safety procedure EN 60950
3.9 Packing
Each product shall be packed in a single, suitable box.
SUPPLIER'S COMMENTS
3.5 P-COM provides with all equipment shipped, a certificate of Conformance.
which identifies each Top assembly part, by serial number. In addition P-COM can
make provisions to include a copy the final Systems Test Data for each
individual Indoor Unit (IOU) and Outdoor Unit (ODU) in the respective shipping
container
3.6 All products manufacture by P-COM are processed through the manufacturing
cycle on a Production, Assembly Traveler which identifies specific operations,
applicable drawings/documentation, and quality inspection points.
3.7 MTBF shall be provided using parts count reliabilty, prediction performed
to the requirements of MIL-HDBK-217F Notice 1
3.8 Product compliant to EN60950
3.9 All products are shipped individual containers, accompanied by any
applicable installation hardware in accordance with P-COM QAP 4.15
<PAGE>
REQUIREMENTS
3.10 Flammability
All molded materials shall meet the flammability requirements according to
IEC 695 T 2.2 or, alternatively, according to UL 94 V-0 (Preferred) or UL
94 V-1. Moreover the oxygen index shall be greater than or equal to 28%
according to ASTM method D2863-77.
3.11 Manufacturing Quality Plan
The supplier shall provide the Manufacturing Quality Plan complete with
the quality control steps, the control criteria, the data acquisition
documents, the responsible department and the test markings.
SUPPLIER'S COMMENTS
3.10 To date, P-COM equipment has not been evaluated for compliance to
requirements specifications.
3.11 In the case that customer Quality requirements exceed or differ from the
P-COM Quality Assurance Manual and its supporting Quality Assurance Procedures,
a Customer Specific Quality Plan can and will be generated.
<PAGE>
- --------------------------------------------------------------------------------
Rep. 0610 Data 03.02.93 Ed. 01 Em. V3-02/0209 Firma
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- --------------------------------------------------------------------------------
VALUTAZIONE DEI FORNITORI DI
SOTTOINSIEMI ELETTRONICI
Original electronic manufacturer
(OEM) evaluation
P-COM INC.
Fornitore : ..........................................................
Vendor
NOME E FIRMA DEL
RESPONSABILE DELL 'ASSICURAZIONE QUALITA
QUALITY ASSURANCE MANAGER NAME AND SIGNATURE:
Kenneth Bean P-COM, Director of Quality Kenneth Bean
..............................................................................
Data : .................
DATE FEB 8 1995
- --------------------------------------------------------------------------------
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
---------------
SIEMENS SOTTOINSIEMI ELECTRONICI
ORIGINAL ELECTRONIC MANUFACTURER EVALUATION FOGLIO 1/12
- --------------------------------------------------------------------------------
<PAGE>
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- --------------------------------------------------------------------------------
1. SCOPO
SCOPE
I1 questionario riporta i criteri generali per la valutazione de fornitori
di lavorazioni.
The questionnaire defines the general criteria to evaluate vendors
functional electronic subsystems.
2. STRUTTURA
STRUCTURE
I1 documento e strutturato sottoforma di check-list, ed e diviso in tre
parti;
The documents is structured, as a check-list form, in three parts:
* Informazioni generali
General informations
* Organizzazione del Sistema Qualita Aziendale
Quality Assurance system
* Qualita nella produzione.
Manufacturing quality.
3. APPLICABILITA'
APPLICABILITY
I1 documento si applica per la valutazione dei nuovi fornitori il cui Sistema
di Qualita e sconosciuto. Inoltre puo essere usato durante gli audits di
qualita.
The document shall be applied to evaluate new suppliers whose Quality System is
unknown. Moreover it can be used as a basis for quality audits.
- --------------------------------------------------------------------------------
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
SIEMENS SOTTOINSIEMI ELETTRONICI
ORIGINAL ELECTRONIC MANUFACTURER EVALUATION Foglio 2/12
- --------------------------------------------------------------------------------
<PAGE>
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- --------------------------------------------------------------------------------
4. INFORMAZIONI GENERALI
GENERAL INFORMATION
P-COM INC.
4.1 Ragione Sociale ...................................
Company name
3175 S. Winchester Blvd.
- Indirizzo Campbell, CA 95008
...................................
Address
- Telefono (408) 866-3666
...................................
Phone
- Fax (408) 866-3655
...................................
4.2 Appartenenza ad un gruppo
Group member Yes
American Electronics Association
................................................................................
................................................................................
4.3 Capitale sociale N/A
...................................
Capital stock
4.4 Fatturato dell'ultimo anno 9.2M
...................................
Last year sales
4.5 Investimenti (ultimo anno) ...................................
Investments (last year)
- Ricerca e Sviluppo $6.9M
...................................
R and D
- Produzione N/A
...................................
Production
- Qualita N/A
...................................
Quality
4.6 Politica costi di riduzione
Cost reduction policy Yes
................................................................................
................................................................................
- --------------------------------------------------------------------------------
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
------------------
SIEMENS SOTTOINSIEMI ELECTRONICI
ORIGINAL ELECTRONIC MANUFACTURER EVALUATION Foglio 3/12
- --------------------------------------------------------------------------------
<PAGE>
________________________________________________________________________________
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4.7 Principali prodotti
Main product
Microwave Radio Equipment
................................................................................
................................................................................
................................................................................
4.8 Settori del mercato verso i quali e indirizzato, in %, il prodotto (TLC,
consumer...)
% of product distribution over market segment (TLC, consumer ...)
................................................................................
Telecommunications 100%
................................................................................
................................................................................
4.9 Ripartizione del prodotto per aree geografiche di mercato
Product distribution over geographic areas
Europe 60% North America 16%
................................................................................
Central & South America 24%
................................................................................
4.10 Principali Clienti (none e % di fatturato)
Main customers (name and % of sales)
................................................................................
N/A
................................................................................
................................................................................
4.11 Altri clienti apparteneti al gruppo Siemens
other customers from Siemens corporate Yes (NO)
................................................................................
................................................................................
________________________________________________________________________________
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
SIEMENS SOTTOINSIEMI ELETTRONICI -------------
ORIGINAL ELECTRONIC MANUFACTURER EVALUATION Foglio 4/12
________________________________________________________________________________
<PAGE>
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- ------------------------------------------------------------------------
4.12 N degrees dipendenti della Societa December 31, 1994
Company employees ...........................
- Ricerca e Sviluppo 29
R and O ...........................
- Ingegneria N/A
Engineering ...........................
- Controllo qualita (staff) 8
Quality Assurance ...........................
- Produzione 23
Production ...........................
- Approvigionamento N/A
Purchasing ...........................
- Ispezione in arrivo N/A
Incoming inspection ...........................
- Test fabbricazione N/A
Manufacturing test ...........................
- Test finale N/A
Final test ...........................
- Amministrazione e servizi 7
Administration and services ...........................
Sales & Marketing 11
--
78
- -------------------------------------------------------------------------
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
---------------
SIEMENS SOTTOINSIEMI ELETTRONICI
ORIGINAL ELECTRONIC MANUFACTURER EVALUATION Foglio 5/12
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
<PAGE>
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- --------------------------------------------------------------------------------
5. ORGANIZZAZIONE DEL SISTEMA QUALITA'
QUALITY ASSURANCE SYSTEM ORGANIZATION
5.1 E' disponibile l'organigramma generale della Societa?
Is Company organization diagram available? Yes
- Se si, allegare
If yes, enclose [X]
5.2 Esiste un Manuele del Sistema Qualita aziendale? Yes
Do you have a Company Quality System Manual?
- Se si, allegare
If yes, enclose [X]
- Data dell'ultimo aggiornamento Revision E dated 3-94 Yes
Last issue date
- Chi e responsabile degli aggiornamenti?
Who is responsible for the updating?
Director of Quality
5.3 Il Sistema Qualita aziendale e organizzato in accordo alle norme ISO 90017
Is the Quality system organized accuring to Iso 9001 standard? Yes
Se si:
If yes:
- Il sistema e gia certificato?
Is the system already certified? Yes No
- La certificazione e in corso?
Is the certification in progress? No
- La certificazione e programmata
Is the certification planned? No
- Quando? N/A
When
- --------------------------------------------------------------------------------
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
----------------
SIEMENS SOTTOINSIEM ELETTRONICI Foglio 6/12
ORIGINAL ELECTRONIC MANUFACTURER EVALUATION
- --------------------------------------------------------------------------------
<PAGE>
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- -----------------------------------------------------------------------------
5.4 Esiste l'organigramma dell'organizzazione del Sistema Qualita?
Is the Quality organization diagram available? [Yes] No
- Se si, allegare [x]
If yes, enclose
5.5 La Societa ha sviluppato proprie procedure scritte che definiscono
le attivita delle seguenti funzioni?:
Do you have written procedures defining the following activities?
- Ricerca e sviluppo
R and D [Yes] No
- Ingegneria
Engineering [Yes] No
- Assicurazione Qualita
Quality Assurance [Yes] No
- Approvvigionamenti
Purchasing [Yes] No
- Accettazione materiali
Incoming Inspection [Yes] No
- Magazzini
Stores [Yes] No
- Produzione
Production [Yes] No
- Controllo di linea
Manufacturing Test [Yes] No
- Collaudo finale
Final Test [Yes] No
5.6 Quale ente e responsible dell'aggiornamento delle procedure?
Which department is responsible for the procedures updating?
........The Applicable departments are responsible..............................
for updating their respective procedures.
- --------------------------------------------------------------------------------
SIEMENS VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
-------------
SOTTOINSIEMI ELETTRONICI Foglio 7/12
ORIGINAL ELECTRONIC MANUFACTURER EVALUATION
- --------------------------------------------------------------------------------
<PAGE>
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- --------------------------------------------------------------------------------
5.7 Compiti della Qualita
Quality jobs
Quality Management: establish policies and procedures necessary to insure
Quality, integrity and Reliability of all P-COM products.
Quality Engineering: Implementation and enforcement of quality requirements,
including but not limited to generation and maintenance of procedures, vendor
surveillance and control, analysis of quality data for continous improvement
coordination of all failure analysis of corrective action.
Inspection: product inspection and tabulation, segregation and quarantine of
Non-conforming.
- Esegue valutazioni sulla qualita di processo?
Does the Q.A. evaluate the quality process? Yes
- Esistono procedure scritte di controllo di processo?
Do you have a written procedure to control the process? Yes
- Esegue valutazioni sulla qualita di prodotto?
Does the Q.A. evaluate the quality product? Yes
- Esistono procedure scritte di controllo di prodotto?
Do you have a written procedure to control the product? Yes
- La qualita partecipa alla gestione delle non conformita?
Is the Q.A. involved in non conformities management? Yes
- Esiste una procedura scritta relativa all segregazione e
segregazione e revisione delle parti non conformi?
Do you have a written procedure relevant to non conformities
segregation? Yes
- La qualita esercita un azione di coordinamento nello sviluppo delle
azioni correttive?
Does Q.A. coordinate the corrective actions? Yes
- I risultati raggiunti sono oggetto di un rapporto scritto?
Do you have a written report relevant to the corrective actions
results? Yes
- Esiste una procedura scritta relativa alle azioni correttive?
Do you have a written procedure relevant to the corrective
actions? Yes
5.8 Esiste una procedura scritta per qualificare i fornitori?
Do you have a written procedures to qualify vendors? Yes
- --------------------------------------------------------------------------------
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
---------------
SIEMENS SOTTOINSIEMI ELETTRONICI
ORIGINAL ELECTRONIC MANUFACTURER EVALUATION Foglio 8/12
- --------------------------------------------------------------------------------
<PAGE>
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- --------------------------------------------------------------------------------
5.9 Esiste una lista fornitori?
Do you have a qualified vendor list? Yes
5.10 Chi e l'ente responsabile della qualificazione dei fornitori?
Which department is responsible to qualify vendors?
Purchasing and Quality Management
________________________________________________________________________________
5.11 La Qualita e responsabile della qualificazione del prodotto?
Is the Q.A. responsible of the product qualification No
Se No, chi e responsabile? Design Engineering
If No, Who is responsible?
5.12 E' disponibile il, piano di qualificazione del prodotto con i relativi
tests elettrici e ambientali?
Is the product qualification plan, with the relevant
electrical/environmental tests, available? Yes
Se Si, allegare
If Yes, enclose [ ] *NOTE: Product qualification is performed and
data is recorded. Records of tests are
available for on-site review
5,13 Viene effettuata la stima del tasso di guasto del prodotto?
Do you perform the product failure rate evaluation? Yes
Se si, siete in grado di fornire il valore di MTBF?
If yes, are you able to give the MTBF value and to specify the
evaluation methods? Yes
- --------------------------------------------------------------------------------
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
---------------
SIEMENS SOTTOINSIEME ELETTRONICI
ORIGINAL ELECTRONIC MANUFACTURER EVALUATION Foglio 9/12
<PAGE>
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
6. QUALITA' NEILA PRODUZIONE
PRODUCTION QUALITY [Yes] No
6.1 E' disponibile il flow-chart produttivo?
Is the MFR flow-chart available? [Yes] No
- Se Si, allegare
If Yes, enclose [X]
6.2 Ci sono procedure scritte per l'incoming inspection?
There are a written procedure for incoming inspection? [Yes] No
6.3 I dati di incoming inspection sono registrati e disponibili?
Are the incoming inspection data recorded and available? [Yes] No
6.4 Esiste una procedura scritta per la protezione contro le
cariche elettrostatiche?
There is a written procedure for ESD precautions? [Yes] No
- Se No, vengono applicate precauzioni contro le
cariche elettrostatiche?
If No, ESDS precautions are applied? [Yes] No
6.5 Vengono effettuati i controlli di linea?
Does the company perform the line controls?
- Esistono procedure scritte per guidare l'attivita
del personale?
There are written procedure to drive the personnel
activity? [Yes] No
6.6 La rintracciabilita dei prodotti e assicurata?
The products traceablity is guaranteed? [Yes] No
- Come? All products manufactured by P-COM are processed through the
How? manufacturing cycle on a production assenbly traveler, which
identifies specific operations, applicable drawings,
documentation and quality inspection points. These records
are retained in accordance with P-COM QAP 4.16, Quality
records.
- La relativa documentazione di fabbricazione e in edizione
controllata?
There is a controlled issue of the relevant MFR
documentation? [Yes] No
- --------------------------------------------------------------------------------
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
---------------
SIEMENS SOTTOINSIEMI ELECTTRONICI
ORIGINAL ELECRONIC MANUFACTURER EVALUATION Foglio 10/12
- --------------------------------------------------------------------------------
<PAGE>
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- --------------------------------------------------------------------------------
6.7 Esiste una zona dedicata per il collaudo finale?
Do you have a dedicated area for the final test? [Yes] No
6.8 Esiste una procedura scritta per il collaudo finale?
Do you have a written procedure for the final test? [Yes] No
6.9 La strumentazione e' in regime di taratura?
The instrumentation is under calibration control? [Yes] No
- Esiste un reparto di taratura?
Do you have a calibration department? Yes [No]
- Esiste una procedura scritta per la taratura?
Do you have a written procedure for the calibration? [Yes] No
- E' prevista la rimozione della strumentazione non conforme?
Is the non-conforming instrumentation removed? [Yes] No
- Esistono documenti per la raccolta dei risultati della
taratura?
Do you have a data collection relevant to calibration results? [Yes] No
- Presso quali Istituti Metrologici si procede alla taratura
dei campioni primari?
Which Metrologic Institutes are incharged to calibrate the standards?
All standards and records demonstrate traceability to the National Institute of
Standards and Technology
6.10 Esiste una procedura di riparazione?
Does the company have a written procedure for repairing? Yes No
- Se si allegare [_] *Repairs are accomplished in accordance
If Yes, enclose with IPC-R-700 as directed by P-COM
Material Review Board (MRB)
- --------------------------------------------------------------------------------
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
---------------
SIEMENS SOTTOINSIEMI ELETTRONICI Foglio 11/12
ORIGINAL ELECTRONIC MANUFACTURER EVALUATION
- --------------------------------------------------------------------------------
<PAGE>
________________________________________________________________________________
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________________________________________________________________________________
7. OSSERVAZIONI DEL FORNITORE
VENDOR'S REMARKS
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
________________________________________________________________________________
VALUTAZIONE DEI FORNITORI DI 018-004/21-PQ
SIEMENS SOTTOINSIEMI ELETTRONICI -------------
ORIGINAL ELECRONIC MANUFACTURER EVALUATION Foglio 12/12
________________________________________________________________________________
(C) SIEMENS TELECOMUNICAZIONI S.P.A.
<PAGE>
P COM
QUALITY ASSURNACE
MANNUAL
[PHOTO APPEARS HERE] [PHOTO APPEARS HERE]
RESEARCH & DEVELOPMENT CUSTOMER SERVICE
QUALITY SYSTEM
[PHOTO APPEARS HERE] [PHOTO APPEARS HERE]
MANFACTURING & TEST SALES & MARKETING
DOC. CONTROL
FEB 08 1995
<PAGE>
- --------------------------------------------------------------------------------
QUALITY ASSURANCE MANUAL
COPY CONTROL NO.______
[_] UNCONTROLLED COPY
This Quality Assurance Manual addresses the requirements of ISO9001 -
1987(BS5750: Part 1, EN29001 - 1987) and is the property of P-Com, Inc., and
must be returned upon request.
This manual describes in outline form the organization and the quality related
systems within the Company, and is intended to assist the recipient in
understanding how the Company's Quality System works.
The Quality System outlined is enforced by separate Quality Assurance Procedures
that are considered confidential and may not be distributed outside the Company.
This manual in whole or part may not be copied without the written permission of
the President of the Company.
P-Com, Inc.
3175 S. Winchester Boulevard
Campbell, CA 95008
U.S.A.
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
ISO 9001 CROSS REFERENCE TABLE........................................ 3
ISO 9001 CROSS REFERENCE.............................................. 3
1.0 QUALITY POLICY STATEMENT.......................................... 4
2.0 APPLICABLE DOCUMENTS.............................................. 5
3.0 GLOSSARY.......................................................... 5
4.0 CORPORATE PROFILE................................................. 6
5.0 ORGANIZATION...................................................... 7
6.0 MANAGEMENT RESPONSIBILITY......................................... 8
7.0 QUALITY SYSTEM.................................................... 10
8.0 PROCEDURE SUMMARY................................................. 11
LOCATION MAP.......................................................... 17
RECORD OF REVISIONS................................................... 18
<PAGE>
- --------------------------------------------------------------------------------
ISO 9001 CROSS REFERENCE
------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
ISO 9001 QAM
PARA REQUIREMENTS PARA PAGE QAP #
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4.1.1 Quality Policy 1.0 4
- -------------------------------------------------------------------------------------------------------------------------
4.1.2.1 Responsibility and Authority 5.0 7
- -------------------------------------------------------------------------------------------------------------------------
4.1.2.3 Management Representative 6.0 8
- -------------------------------------------------------------------------------------------------------------------------
4.1.3 Management Review 8.1 11 03.70.002
- -------------------------------------------------------------------------------------------------------------------------
4.2 Quality System 7.0 10
- -------------------------------------------------------------------------------------------------------------------------
4.3 Contract Review 8.2 11 03.70.003
- -------------------------------------------------------------------------------------------------------------------------
4.4.1 Design Control 8.3 11 03.70.004
- -------------------------------------------------------------------------------------------------------------------------
4.4.5 Design Verification 8.3.5 12 03.70.004
- -------------------------------------------------------------------------------------------------------------------------
4.4.6 Design Changes 8.3.6 12 03.70.004
- -------------------------------------------------------------------------------------------------------------------------
4.5 Document Control 8.4 12 03.70.005
- -------------------------------------------------------------------------------------------------------------------------
4.6 Purchasing 8.5 13 03.70.006
- -------------------------------------------------------------------------------------------------------------------------
4.7 Purchaser Supplied Product 8.6 13 03.70.007
- -------------------------------------------------------------------------------------------------------------------------
4.8 Product Identification and Traceability 8.7 13 03.70.008
- -------------------------------------------------------------------------------------------------------------------------
4.9 Process Control 8.8 14 03.70.009
- -------------------------------------------------------------------------------------------------------------------------
4.10 Inspection and Testing 8.9 14 03.70.010
- -------------------------------------------------------------------------------------------------------------------------
4.11 Inspection, Measuring and Test Equipment 8.10 14 03.70.011
- -------------------------------------------------------------------------------------------------------------------------
4.12 Inspection and Test Status 8.11 15 03.70.012
- -------------------------------------------------------------------------------------------------------------------------
4.13 Control of Non-Conforming Material 8.12 15 03.70.013
- -------------------------------------------------------------------------------------------------------------------------
4.13.1 Non-conformance Review and Disposition 8.12.1 15 03.70.013
- -------------------------------------------------------------------------------------------------------------------------
14.14 Corrective Action 8.13 15 03.70.014
- -------------------------------------------------------------------------------------------------------------------------
14.15.1 Handling, Storage, Packaging and Delivery 8.14 15 03.70.015
- -------------------------------------------------------------------------------------------------------------------------
4.16 Quality Records 8.15 16 03.70.016
- -------------------------------------------------------------------------------------------------------------------------
4.17 Internal Quality Audits 8.16 16 03.70.017
- -------------------------------------------------------------------------------------------------------------------------
4.18 Training 8.17 16 03.70.018
- -------------------------------------------------------------------------------------------------------------------------
4.19 Servicing 8.18 16
- -------------------------------------------------------------------------------------------------------------------------
4.20 Statistical Techniques 8.19 16 03.70.019
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
1.0 QUALITY POLICY STATEMENT
- ----------------------------
It is the policy of P-Com, Inc., to provide the Customer with products that
conform to all aspects of generally accepted industrial standards and
specified contract requirements.
Quality is of vital importance to the Company and we totally commit to a
Quality Assurance Management System that conforms to the requirements of
ISO9001:1987.
All employees are responsible for quality, and are responsible for achieving
the specified levels of quality at all stages of work that have an effect on
the final quality of the product supplied.
We undertake, by practical example and training, to ensure that each
employee has a proper understanding of the quality function and it's direct
relevance and significant contribution to our success.
1.1 MANAGEMENT CERTIFICATION
I hereby certify that this Quality Assurance Manual accurately describes the
Quality Assurance Management System in use within P-Com, Inc., and
encompasses the requirements of ISO 9001:1987.
President and CEO /s/ George P. Roberts Date:3/21/94
---------------------- -------
George P. Roberts
<PAGE>
- --------------------------------------------------------------------------------
1.2 COMPANY CONTACTS
All questions concerning P-Com's commitment to the contents of this Quality
Assurance Manual may be directed to either George Roberts, President and
CEO, or Kenneth Bean, Quality Assurance Manager, by the following methods:
Tel: 408-866-3666
Fax: 408-566-3655
Mail: P-Com, Inc.
3175 S. Winchester Boulevard
Campbell, CA 95008
U.S.A.
2.0 APPLICABLE DOCUMENTS
- ------------------------
ISO 9001:1987 Quality Systems
BS 5750 Part 1:1987 Quality Systems
EN 29001:1987 Quality Systems
ANSI/ASQC Q91 Quality Systems
QAP 03.70.002 Management Review - QAP 4.1
QAP 03.70.003 Contract Review - QAP 4.3
QAP 03.70.004 Design Control - QAP 4.4
QAP 03.70.005 Document Control - QAP 4.5
QAP 03.70.008 Purchasing - QAP 4.6
QAP 03.70.007 Purchaser Supplied Product - QAP 4.7
QAP 03.70.008 Product l.D. and Traceability - QAP 4.8
QAP 03.70.009 Process Control - QAP 4.9
QAP 03.70.010 Inspection and Testing - QAP 4.10
QAP 03.70.011 Inspection, Measuring and Test Equipment - QAP 4.11
QAP 03.70.012 Inspection and Test Status - QAP 4.12
QAP 03.70.013 Control of Non-conforming Product - QAP 4.13
QAP 03.70.014 Corrective Action - QAP 4.14
QAP 03.70.015 Handling, Storage, Packaging and Delivery - QAP 4.15
QAP 03.70.016 Quality Records - QAP 4.16
QAP 03.70.017 Internal Quality Audits - QAP 4.17
QAP 03.70.018 Training - QAP 4.18
QAP 03.70.019 Statistical Techniques - QAP 4.20
3.0 GLOSSARY
- ------------
QUALITY: The totality of features and characteristics of the product that
bear on its ability to satisfy stated or implied needs.
QUALITY ASSURANCE MANAGEMENT SYSTEM: All the planned and systematic actions
necessary to provide adequate confidence in the product to satisfy given
requirements for quality.
<PAGE>
- --------------------------------------------------------------------------------
4.0 CORPORATE PROFILE
- ----------------------
P-Com Inc. was founded in August 1991, for the express purpose of
developing, manufacturing and marketing millimeter wave radio products for
the telecommunications industry. These products meet a critical need for
high quality, cost effective, digital transmission in short distance
applications. In general, the P-Com management team is dedicated to removing
the gap that exists between the products that are currently available and
the needs of the market.
P-Com millimeter wave radio products meet the crucial requirement of
minimizing the customer's "cost of ownership". The design philosophy that
governs all P-Com product development decisions is one that results in a
product that is low in cost, high in reliability and simple to install and
maintain. Given the competitive nature of the telecommunications service
industry, these attributes play a key role in the successful and profitable
operation of a customers telecommunications network.
4.1 COMPANY MISSION
To design, develop and manufacture high quality radio transmission products
for the worldwide wireless telecommunications market.
[MAP APPEARS HERE]
<PAGE>
- --------------------------------------------------------------------------------
QUALITY ASSURANCE MANUAL
5.0 ORGANIZATION
- -----------------
The Company organization and lines of authority are detailed in Figure 1.
[CHART APPEARS HERE]
<PAGE>
- --------------------------------------------------------------------------------
6.0 MANAGEMENT RESPONSIBILITY
- -------------------------------
The Company's organization is designed to provide effective direction,
communication and management to meet the requirements defined in the
Qualify Policy Statement.
6.1 PRESIDENT and CHIEF EXECUTIVE OFFICER (CEO)
The President and CEO holds responsibility within the Company to
formulate, in association with the key Executives, overall Company policy.
He is responsible for the development and implementation of strategies for
the control of all aspects of the business through designated Company
personnel. The President shall be deputized Quality Assurance Manager in
his absence.
6.2 EXECUTIVE VICE PRESIDENT and CHIEF TECHNICAL OFFICER (CTO)
Reporting to the President of the Company, the Executive Vice-President
has overall responsibility for the introduction of advanced technologies
into the product, business development and strategic business alliance
activities.
6.3 QUALITY ASSURANCE MANAGER
The Quality Assurance Manager is the management representative reporting
to the President and is responsible for ensuring full implementation and
maintenance of the ISO 9001 quality system and the internal auditing
required to verify its effectiveness. In addition to these
responsibilities, he has issuing and revision control of the Company's
Qualify Assurance Manual and related Quality Assurance Procedures (QAP's).
6.3.1 SENIOR QUALITY ENGINEER
The Senior Quality Engineer reporting to the Quality Assurance Manager
develops and initiates standards and methods for inspection, testing, and
evaluation of materials and products. The Senior Quality Engineer also
directs Inspectors engaged in product inspection and tabulating data
concerning materials, product, or process quality and reliability. In
addition, duties include maintaining the procedures for disposition of
non-conforming materials and product in conjunction with the appropriate
corrective action follow-up.
6.4 VICE PRESIDENT (V.P.), OPERATIONS
Reporting to the President of the Company, the Operations V.P. is
responsible for organizing and introducing the product manufacturing
strategy and manufacturing control systems combined with providing
services and facilities for the Company's operation.
6.4.1 PROGRAM MANAGER
Reporting to the Operations V.P. the Program Manager is responsible for
providing technical support for other Company functions and creating a
Master Design Schedule to satisfy the Market Requirements Specification
and the business objectives as defined by senior management. The Program
Manager also identifies critical issues and expediting improvements
through staff meetings and design reviews with consideration to estimated
parts and labor costs.
<PAGE>
- --------------------------------------------------------------------------------
6.4.2 PRODUCTION MANAGER
Reporting to the Operations V.P. the Production Manager prepares
operational schedules and coordinates manufacturing activities to ensure
production and quality of products. Other responsibilities include
planning production operations, establishing priorities and sequences for
manufacturing products.
6.4.3 MATERIALS MANAGER
Reporting to the Operations V.P. the Materials Manager is responsible for
directing and coordinating the purchasing and distribution of components
for the design and manufacture of products, capital equipment, and
liaison with arranging contracts with suppliers and subcontractors.
6.5 SENIOR VICE PRESIDENT (VP), MARKETING & SALES
Reporting to the President of the Company, the Marketing V.P. is
responsible for developing the customer base and obtaining sales orders
through marketing and sales strategy action plans. Other responsibilities
include communicating the Company's corporate image in the market place
while defining the market requirements for use by design engineering. He
also provides technical publications, operation manuals, training
materials and seminars for existing or potential customers.
6.5.1 MARKETING MANAGER
Reporting to the Marketing & Sales V.P., the Product Marketing Manager is
responsible for: a) product definition to Engineering based upon customer
inputs, competitive research, industry standards and cost targets, b)
corporate and product promotional literature, trade shows, public
relations, customer demonstrations/presentations and sales support
(assistance in proposal generation).
6.5.2 DIRECTOR OF SALES
Reporting to the Marketing & Sales V.P., the Director of Sales is
responsible for expanding the customer base, developing the Marketing
Plan, obtaining sales orders, and meeting the revenue objectives of the
corporation. Other responsibilities include ensuring customer
satisfaction, relaying customer requests for product improvement and
customer support functions of the corporation. The Director of Sales acts
as a liaison between the customer and the corporation.
6.6 VICE PRESIDENT (V.P.), FINANCE/CONTROLLER
Reporting to the President of the Company, the Finance V.P. is
responsible for preparation of the Company's assets. Other
responsibilities include management of Human Resources and Administrative
functions.
6.7 VICE PRESIDENT (V.P.), ENGINEERING
Reporting to the President, the Engineering V.P. is responsible for
planning, budgeting, and managing the technical resources for the
Company. Responsibilities also include technical direction for the
Company, and organizing the engineering team to insure the technical
integrity of products developed and that the requirements as defined by
Marketing are satisfied.
6.7.1 DIRECTOR, MICROWAVE ENGINEERING
Reporting to the Engineering V.P., the Microwave Engineering Director is
responsible for managing a team of design engineers, technicians and
consultants that provide all the microwave circuit designs and associated
system interfaces including all the required documentation and control
procedures.
<PAGE>
- --------------------------------------------------------------------------------
6.7.2 DIRECTOR, SIGNAL PROCESSING (SP) ENGINEERING
Reporting to the Engineering V.P., the SP Engineering Director is
responsible for managing a team of design engineers, technicians and
consultants that provide all the SP electronics circuit designs and
associated system interfaces including all the required documentation and
control procedures.
7.0 QUALITY SYSTEM
- ----------------------
The Quality System within the Company is based on a four tier
documentation system composed of the following.
. Level 1, Quality Assurance Manual
. Level 2, Quality Assurance Procedures (QAP's)
. Level 3, Company Standards and Procedures
. Level 4, Industrial Standards and Database
7.1 LEVEL 1
The Quality Assurance Manual describes in outline form the Management's
organization and the quality related systems in operation within the
Company to meet the requirements of ISO 9001:1987. It assists the
customer in making an assessment of our ability to meet the specified
quality assurance requirements.
7.2 LEVEL 2
The systems outlined in the Quality Assurance Manual are enforced by
separate Quality Assurance Procedures (QAP's) which describe the
operational procedures of the related systems and define the responsible
personnel and the objective evidence generated for substantiation.
The QAP's are confidential to the Company and not for general
distribution. However, at the discretion of the Company President, they
may be made available for review by the customer.
7.3 LEVEL 3
The QAP's are supported by a number of related non-product design
documents such as Company Standards and Procedures that contain details
describing the administrative system, such as how to conduct a Design
Review meeting.
Separate from Company Standards and Procedures are the product design
documents describing tasks or work instructions that are in direct
support of the product. such as a Test Procedure.
Both non-product design and product design documents are confidential to
the Company and are not for general distribution. However, at the
discretion of the Company President, they may be made available for
review by the customer.
7.4 LEVEL 4
Level four documents are industrial engineering standards, design rules
or Customer documents that form reference materials as a database
supporting internal Company Standards and Procedures.
<PAGE>
QUALITY ASSURANCE MANUAL No: 03.70.001
Rev: E
Date: 3-94
Page: 11 of 18
- --------------------------------------------------------------------------------
8.0 PROCEDURE SUMMARY
- -------------------------
The following sections give a brief overview of each QAP that describes
in detail the operational procedures of the related systems in support
of ISO 9001 :1987. Next to each QAP title the corresponding document
number is given in parenthesis as applicable.
8.1 MANAGEMENT REVIEW - QAP 4.1(03.70.002)
It is company policy that the Quality System is reviewed by the
President every six months. The review meeting is chaired by the
President, and attended by the Vice Presidents, the Quality Assurance
Manager, and any other personnel deemed necessary.
The agenda includes a review, of actions taken from previous meetings,
results of Internal Quality Audits, Non-conformance Reports, customer
complaints and overall effectiveness of the Quality System.
The minutes of the meeting and relevant documentation are retained by
the Quality Assurance Manager.
8.2 CONTRACT REVIEW - QAP 4.3(03.70.003)
It is the policy of P-Corn to document all inquiries, quotations,
contracts, bid proposals, purchase orders and associated data.
This documentation is reviewed to establish that requirements can be
achieved and that all contracts and specifications are adequately
defined. Deviations are resolved with the customer before processing and
amendments to requirements are documented.
8.3 DESIGN CONTROL - QAP 4.4(03.70.004)
8.3.1 GENERAL
P-Corn has established Standards and Procedures for control and
verification of the product design to ensure that all specified contract
requirements are satisfied.
8.3.2 DESIGN AND DEVELOPMENT PLANNING
The Marketing Requirement Specification is used by the Program Manager
to create a Master Design Schedule for the design project. Additional
planning schedules are produced containing planning information for
engineers and personnel from other functions. These are regularly
reviewed, documented and the information circulated to all appropriate
groups within the company.
Quality Plans are written describing how the quality requirements of the
contract are achieved.
The Engineering V.P. has overall responsibility for the product design
function and assigns design and verification activities to the
Engineering Directors. The design resources consist of teams of
specialist engineers and technicians with the necessary capital
equipment.
8.3.3 DESIGN INPUT
The Marketing Requirement Specification and specific customer contracts
are the source documents for the design input requirements.
Technical engineering specifications are developed for the product and
for defined subdivisions of the product. Detail requirements are refined
during the design process.
<PAGE>
QUALITY ASSURANCE MANUAL No: 03.70.001
Rev: E
Date: 3-94
Page: 12 of 18
- --------------------------------------------------------------------------------
8.3.3 CON'T
The Product Design Specification defines the functionality of the
product system and identifies the regulatory, customer specific,
marketing, product safety, and engineering requirements.
8.3.4 DESIGN OUTPUT
During the design process acceptance criteria are established for all
appropriate product systems and sub-systems.
Design calculations, system analysis, drawings, process instructions,
test procedures, specifications, user manuals, etc., are generated as
design outputs.
8.3.5 DESIGN VERIFICATION
Design reviews are regularly held to control all aspects of the design
process and are part of the Master Design Schedule.
Verification that the design meets the specified contract requirements
is conducted at various levels of product system. Testing against
defined acceptance criteria and qualification programs are carried out.
8.3.6 DESIGN CHANGES
P-Com has Standards and Procedures for the documentation and recording
of design changes. The Engineering Change Order (ECO) system provides
the method to evaluate, approve, and incorporate design changes into
product design documentation.
8.3.7 PRODUCT RELEASE
P-Com has Standards and Procedures defining the requirements for a
uniform method of releasing a product and its technical documentation to
manufacturing. The system also provides the method of controlling
documentation during the engineering development cycle and construction
of breadboard and/or prototype product.
8.4 DOCUMENT CONTROL - QAP 4.5(03.70.005)
84.1 DOCUMENT APPROVAL AND ISSUE
P-Com operates Standards and Procedures for the registration, issue and
circulation of all product design documents and non product documents
including the Quality Manual, Quality Assurance Procedures, Company
Standards, Procedures and Database.
The Document Control department ensures that only the applicable issues
of documents are used and obsolete documents are removed.
8.4.2 DOCUMENT CHANGE AND MODIFICATION
Company Standards and Procedures provide for the initiation, evaluation,
approval and implementation of all documentation changes. The Document
Control department maintains a log of all proposed and approved ECO's
for product design documents. Approval Sheets for changes of non product
design documents are also maintained within Document Control.
<PAGE>
QUALITY ASSURANCE MANUAL No: 03.70.001
Rev: E
Date: 3-94
Page: 13 of 18
- --------------------------------------------------------------------------------
8.5 PURCHASING - QAP 4.6 (03.70.006)
8.5.1 GENERAL
All purchasing related activities are conducted under controlled
conditions which provide for objective assessment of all suppliers and
ensure that purchasing information is correct before release to the
supplier.
8.5.2 ASSESSMENT OF SUPPLIERS/SUBCONTRACTORS
It is Company policy that, wherever possible, purchased material and
subcontracted services are obtained from a company approved source.
The Company maintains lists of approved sources and carries out
supplier/sub-contractor evaluations to ensure conformance with
requirements. Products purchased from non-approved sources are
identified to the customer.
8.5.3 PURCHASING DATA
All purchasing documents clearly describe the material and sub-
contractor services ordered. Purchase Orders are reviewed and approved
before release.
8.5.4 VERIFICATION OF PURCHASED PRODUCT/SERVICE
When contractually specified by the customer, Quality Assurance
requirements may be verified at P-Com by the customer. It is Company
policy to provide for and assist those customers who require such
verification.
8.6 PURCHASER SUPPLIED PRODUCT - QAP 4.7(03.70.007)
Purchaser Supplied Product in this type of industry is typically
equipment and/or documentation supplied to P-Com for design and
production related work. The Marketing Manager is responsible for the
care and control of documentation and the Quality Assurance Manager is
responsible for equipment.
8.7 PRODUCT IDENTIFICATION AND TRACEABILITY - QAP 4.8(03.70.008)
Components, printed circuit assemblies (PCA's), modules, and top
assemblies used to produce the product shall be assigned unique part
numbers. All of these shall be physically marked with their
corresponding part numbers and revision where practical using a
permanent method. In the case of purchased off the shelf components and
size limitations, the storage or handling container shall be marked with
the corresponding part number and revision.
PCA's, modules, and top assemblies used to produce the product are
assigned and indelibly marked with serial numbers. Records of the serial
numbers used for the final product assembly are maintained.
Components are excluded from individual serial number assignments except
when deemed necessary by the Design department for critical applications
requiring source lot traceability. These components are identified on
purchase documentation such as Source Control Drawings and Specification
Control Documents, drawings/schematics, and Bills of Material.
<PAGE>
QUALITY ASSURANCE MANUAL No: 03.70.001
Rev: E
Date: 3-94
Page: 14 of 18
- --------------------------------------------------------------------------------
8.8 PROCESS CONTROL - QAP 4.9(03.70.009)
GENERAL
The company ensures that the procedures that control the planning and
operation of the manufacturing process are implemented. This is
accomplished through documented work instructions and appropriate
equipment for process, assembly and test.
Product quality standards are maintained in accordance with industrial
reference standards, codes of practice, Quality Plans and contract
specified requirements.
8.8.1 SPECIAL PROCESSES
There are no special processes.
8.9 INSPECTION AND TESTING - QAP 4.10(03.70.010)
8.9.1 RECEIVING INSPECTION AND TESTING
All incoming materials are checked for compliance with the purchase
order detail. Any damaged or incorrect materials are identified,
segregated and processed using formal control procedures. Incoming
material released for urgent purposes is identified and recorded in
accordance with formal positive recall procedures.
8.9.2 IN-PROCESS INSPECTION AND TESTING
At defined stages of the process and assembly operation, the product is
identified, inspected and tested to establish conformance to documented
specified requirements.
Product is not progressed until satisfactorily inspected and tested
except when released under positive recall procedures.
Non-conforming product is identified and segregated in accordance with
formal procedures.
8.9.3 FINAL INSPECTION AND TESTING
Inspection and testing of the finished product is completed in
accordance with the Quality Plan or documented procedures to verify
conformance to the contract specified requirements.
All necessary data and release documentation is made available before
dispatch.
8.9.4 INSPECTION AND TEST RECORDS
All inspection records are retained for manufactured products indicating
acceptance to defined criteria.
8.10 INSPECTION, MEASURING AND TEST EQUIPMENT - QAP 4.11 (03.70.011)
The Company operates a system for ensuring that inspection, measuring
and test equipment used to determine the conformance of product to
contract specified requirements are periodically calibrated, serviced
and adjusted to maintain the accuracy to required limits.
Calibration system and records are maintained in compliance to
applicable national standards.
<PAGE>
QUALITY ASSURANCE MANUAL No: 03.70.001
Rev: E
Date: 3-94
Page: 15 of 18
- --------------------------------------------------------------------------------
8.11 INSPECTION AND TEST STATUS - QAP 4.12(03.70.012)
The inspection and test status of product during the process and
assembly stages of the operation is identified by unique routing card.
A unique routing card is provided for each defined module, subassembly
or product recording its progress through the manufacturing process and
its conformance to inspection and tests performed.
The Quality Assurance Manager is responsible for the release of
conforming product.
8.12 CONTROL OF NON-CONFORMING PRODUCT - QAP 4.13(03.70.013)
Incoming material, work in progress, and finished product that does not
conform to specified requirements is prevented from inadvertent use by
identification, segregation and disposition in accordance with
documented procedures.
8.12.1 NON-CONFORMANCE REVIEW AND DISPOSITION
In the documented procedures, the Quality Engineer is responsible for
the review of Non-conformance Reports with other members of the Company
Material Review Board to determine the appropriate disposition of non-
conforming material and product.
A Deviation Authorization may be requested from the customer for non-
conforming product that is proposed for use or repair.
8.13 CORRECTIVE ACTION - QAP 4.14(03.70.014)
The Company maintains documented procedures for the investigation and
analysis of the cause for non-conforming material and product resulting
in corrective actions to prevent recurrence.
8.14 HANDLING, STORAGE, PACKAGING AND DELIVERY - QAP 4.15(03.70.015)
8.14.1 GENERAL
Procedures for handling, storage, packaging and delivery of material,
work in process and finished product are maintained by the Company.
Special Company Standards and Procedures establish the minimum
requirements for electrostatic discharge control where sensitive
electronic parts, assemblies or products are manufactured, assembled,
tested, serviced, handled, packaged or stored.
8.14.2 HANDLING
The Company handles all materials in such a manner as to prevent damage,
deterioration or loss.
8.14.3 STORAGE
Secure storage areas are provided and Company Standards and Procedures
control the receipt and issuing of materials.
Lists of materials requiring special storage conditions, or having a
limited shelf life are maintained and controls applied to conform with
requirements. The materials requiring special storage conditions are
maintained in the appropriate environment and materials having limited
shelf life are discarded in an approved manner when shelf life has
expired. Material Safety Data Sheet regulations are applied for storage
and handling of material. Lists of such materials are maintained.
<PAGE>
QUALITY ASSURANCE MANUAL No: 03.70.001
Rev: E
Date: 3-94
Page: 16 of 18
- --------------------------------------------------------------------------------
8.14.4 PACKAGING
Company Standards and Procedures control the marking and packaging of
the product to ensure conformance to specified contract requirements.
8.14.5 DELIVERY
After final inspection and test, documented procedures provide for the
protection of the product in stores and during delivery to the customer.
Delivery documentation is provided and instructions are carried out in
accordance with specified contract requirements.
8.15 QUALITY RECORDS - QAP 4.16 (03.70.016)
The quality records identified in the Quality Assurance Procedures are
filed and maintained by the applicable department and are under the
jurisdiction of the Quality Assurance Manager for demonstration of the
Quality System effectiveness.
The records are retained for a minimum of five years or for a period
specified by customer contract.
8.16 INTERNAL QUALITY AUDITS - QAP 4.17(03.70.017)
All quality activities are subject to a planned and documented audit to
verify compliance with the defined Quality System.
Audits are conducted at predetermined intervals and are carried out by
trained personnel under the control of the Quality Assurance Manager.
The results of these audits are recorded and used to improve the
effectiveness of the Quality System.
8.17 TRAINING - QAP 4.18 (03.70.018)
The Company maintains procedures for identifying the training needs of
all employees in performing assigned tasks and in increasing their
quality awareness.
Training records are held for each employee registering their education,
experience and training requirements.
8.18 SERVICING
The design philosophy of products manufactured by the Company precludes
the need for regular maintenance. Servicing procedures are therefore not
required.
8.19 STATISTICAL TECHNIQUES - QAP 4.20(03.70.019)
The Company promotes the use of statistical tools and techniques in a
systematic way to continually reduce variation in processes, products,
and incoming materials. The Quality Assurance Manager is the Statistical
Coordinator for the Company.
<PAGE>
QUALITY ASSURANCE MANUAL No: 03.70.001
Rev: E
Date: 3-94
Page: 17 of 18
- --------------------------------------------------------------------------------
LOCATION MAP
- ------------
[MAP APPEARS HERE]
<PAGE>
QUALITY ASSURANCE MANUAL No: 03.70.001
Rev: E
Date: 3-94
Page: 18 of 18
- --------------------------------------------------------------------------------
RECORD OF REVISIONS
- -------------------
<TABLE>
<CAPTION>
REVISION DESCRIPTION DATE APPROVED
BY
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Initial draft. 10-12-92 KB
- -----------------------------------------------------------------------------------------------------------
2 Adds expanded Procedure Summary pages 8 through 14. 11-06-92 KB
- -----------------------------------------------------------------------------------------------------------
3 Introduced modified front sheet, organization chart, 12-17-92 KB
management responsibilities and procedure summary
- -----------------------------------------------------------------------------------------------------------
A Formal Release 01-08-93 K Bean
- -----------------------------------------------------------------------------------------------------------
B Update 5.0, 6.0 10-20-93 K Bean
- -----------------------------------------------------------------------------------------------------------
C Add ISO cross reference table and rewrite para. 8.19 11-18-93 K Bean
- -----------------------------------------------------------------------------------------------------------
D Add QAP 4.20 to Applicable Documents 11-29-93 K Bean
- -----------------------------------------------------------------------------------------------------------
E Correct address page 1 & para. 1.2. Update Location Map 03-21-94 K Bean
page 17.
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
STANDARD/PROCEDURE APPROVAL
Standard/Procedure Number 03.70.001 Revision E Date 03-14-94
Standard/Procedure Title Quality Assurance Manual
As a minimum, the originator and the Director of the department issuing the
Standard/Procedure are the required approvals. For Company Standards, the
President must also approve.
Approvals:
/S/ Kenneth Bean 3-14-94 /S/ George Roberts 3/21/94
- --------------------------------- --------------------------------
QA Manager Date President Date
<PAGE>
ATTACHMENT 3
PRICES
<PAGE>
ATTACHMENT 3
___________
PRICES AND DISCOUNTS SCHEDULE FCA EUROPEAN COUNTRIES OR FCA CAMPBELL
(in U.S. Dollars)
1. PRICES: Prices are listed in the "Tel-Link Series List Prices" annexed to
this Attachment (3 sheets)
2. DISCOUNTS: As per table herebelow
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
LEVEL TOTAL ANNUAL 23GHZ 38GHZ 50GHZ
QUANTITY
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------
1 101 less than or equal to 500 35% 35% T B D
- ----------------------------------------
2 501 less than or equal to 1000 41% 38.5% T B D
- ----------------------------------------
3 1001 less than or equal to 2000 45% 42.5% T B D
- ----------------------------------------
4 more than 2001 47.5% 45% T B D
- ----------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
. Price to be considered valid for the whole 1995
. Items 1, 2 and 8E1/16E1 capacity systems are inclusive of
items 4.6 (Link Manager Port)
4.8 (FEC)
4.9 (4FSK modulator)
. Spare parts ordered together with main purchase order will entitle the same
above discounts
. Items 5 and 6: no discounts
<PAGE>
TEL-LINK SERIES LIST PRICES - E1 STANDARD RADIOS
<TABLE>
<CAPTION>
Tel-Link 38 Tel-Link 23
Item Description List Price List Price
<S> <C> <C> <C>
1 Non-Protected Terminal,
48VDC input pwr,
Antenna w/Pole Mount,
Instal. Material & Manual:
2-FSK, 30cm Ant. 4-FSK,80cm Ant.
1.1 3x64 Kb/s Capacity $12,230 $13,715 See note 6.
1.2 1E1 Capacity $11,850 $13,365
1.3 2E1 Capacity $12,450 $14,010
1.4 4E1 Capacity $13,010 $14,640
1.5 Universal- Capacity Only (1E1, 2E1, 4E1) $13,490 $15,180
1.6 Universal- Capacity & Mod. (2- or 4-FSK) $13,990 $15,680
2 Protected Terminal, Two Ant. Solution,
-48VDC Input pwr,
Antenna w/Pole Mount,
Instal. Material & Manual:
2-FSK, 90cm Ant. 4-FSK, 80cm Ant.
2.1 1E1 Capacity $25,910 $28,880
2.2 2E1 Capacity $27,050 $30,170
2.3 4E1 Capacity $28,170 $31,430
2.4 Universal- Capacity Only (1E1, 2E1, 4E1) $29,130 $32,510
2.5 Universal- Capacity & Mod. (2. or 4-FSK) $30,130 $35,510
3 Spares
2-FSK 4-FSK
3.1 IDU-3x04 Kb/s $3,950 See note 6.
3.2 IDU-1E1 $ 3,500 $ 3,850
3.3 IDU-2E1 $ 4,070 $ 4,480
3.4 IDU-4E1 $ 4,630 $ 5,095
3.5 IDU- Universal- Capacity Only (1E1, 2E1, 4E1) $ 5,110 $ 5,620
3.6 IDU- Universal- Capacaity & Mod. (2. or 4-FSK) $5,620
3.7 PSS-1E1, 2E1 or 4E1 (Protected Terminals Only) $2,150
3.8 ODU $ 9,760 $10,980
(2 required per link)
3.9 ODU Switch (Single Antenna Protection Option Only) $1,980
3.10 30cm Antenna w/Pole Mount Hrdwr $ 450 $ 845
3.11 60cm Antenna w/Pole Mount Hrdwr $ 795 $ 1,190
4 Terminal Options (Add to terminal price)
4.1 +24/-24 VDC Input Pwr $ 745
4.2 Eng. Orderwire (EOW) w/handset & cord - Bridging $ 825
4.3 Eng. Orderwire (EOW) w/handset & cord - Point-to-Point Only $ 275
4.4 Data Channel 1 $ 590
4.5 Data Channel 2/MS8 Port $ 590
4.6 Link Manager Port $ 485
4.7 120 Ohm Bal. I/0 $ 450
4.8 Forward Error Correction (FEC) $1,250
4.9 4-FSK Modulation $ 500 N/A
4.10 High Power Amplifier N/A $ 1,490
4.11 30cm Antenna (purchased with terminal) N/A ($345)
4.12 60cm Antenna (purchased with terminal) $ 345 N/A
4.13 Single Antenna Protection (Prot. Terminals Only) $2,950
</TABLE>
Siemans-TS-E1 Rev. 1.0. 12/16/94 Page 1 of 3
<PAGE>
Tel-Link Series List Prices-E1 Standard Radios
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Tel-Link 38 Tel-Link 23
- ------------------------------------------------------------------------------------------------------------------------------
Item Description List Price List Price
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
5 Software Products
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
5.1 Link Manager $4,900
- ------------------------------------------------------------------------------------------------------------------------------
5.2 Network Manager TBD
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
6 Miscellaneous
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
6.1 Crimp Tool $ 100
- ------------------------------------------------------------------------------------------------------------------------------
6.2 Test Cord- ODU AGC $ 50
- ------------------------------------------------------------------------------------------------------------------------------
6.3 Operations Manual $ 75
- ------------------------------------------------------------------------------------------------------------------------------
6.4 EOW Handset W/Cord $ 40
- ------------------------------------------------------------------------------------------------------------------------------
6.5 Digital Voltmeter $ 220
- ------------------------------------------------------------------------------------------------------------------------------
6.6 IDU-ODU Coax Cable (250 FT) $ 550
- ------------------------------------------------------------------------------------------------------------------------------
6.7 ODU Rem. Mount. KG (WG) not Incl. $ 390
- ------------------------------------------------------------------------------------------------------------------------------
6.8 OUD Holsting Handle $ 295
- ------------------------------------------------------------------------------------------------------------------------------
6.9 Flexible Waveguide 30" (38G or 23G) $ 750
- ------------------------------------------------------------------------------------------------------------------------------
6.10 Protection Upgrade kit - Dual Antenna Solution $2,150
- ------------------------------------------------------------------------------------------------------------------------------
6.11 Protection Upgrade kit - Single Antenna Solution $5,100
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Pricing Notes
- -----------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
1. All prices are in US$ and are F.O.B factory.
- ------------------------------------------------------------------------------------------------------------------------------
2. Payment terms are not 30 days unless otherwise specified.
- ------------------------------------------------------------------------------------------------------------------------------
3. All prices are subject to Terms and Conditions of the Agreement.
- ------------------------------------------------------------------------------------------------------------------------------
4. Volume Discounts are provided as in Table A.1.
- ------------------------------------------------------------------------------------------------------------------------------
5. O.D.U. IDU interconnect cable not included; recommend local purchase of Belden 913 RG? (FIG-8) cable or equivalent.
- ------------------------------------------------------------------------------------------------------------------------------
6. 3x64 KB/s products are always 2-FSK, 7 MHz channel bandwidth.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2 of 3
<PAGE>
LIST PRICES FOR TEL-LINK SERIES RADIOS
23 GHZ AND 38 GHZ
8E1 AND 16E1 CAPACITY SYSTEMS
- --------------------------------------------------------------------------------
The list prices, exclusive of any discounts, for the 23GHz and 38GHz radios, in
8E1 and 16E1 capacities are as shown below. List prices for all options are
provided as listed in the existing pricelist given to Siemens (Siemens-TS-E1,
Rev 1.0 dated 12/16/94):
23 GHZ RADIOS
23 GHz Radio, Non-Protected, Standard Power, 8E1 Capacity $16,105
4FSK Modulation, 60cm Antenna w/Pole Mount, -48VDC input
w/Installation Kit and Operations Manual
23 GHz Radio, Non-Protected, Standard Power, 16E1 Capacity $18,520
4FSK Modulation, 60cm Antenna w/Pole Mount, -48VDC input
w/Installation Kit and Operations Manual
23GHz Radio, Non-Protected, Standard Power, 8E1/16E1 Universal $19,000
Capacity, 4FSK Modulation, 60cm Antenna w/Pole Mount, -48VDC
w/Installation Kit and Operations Manual
23 GHz Radio, Protected, Standard Power, 8E1 Capacity $34,960
4FSK Modulation, 60cm Antenna w/Pole Mount, -48VDC input
w/Installation Kit and Operations Manual
23 GHz Radio, Protected, Standard Power, 16E1 Capacity $39,790
4FSK Modulation, 60cm Antenna w/Pole Mount, -48VDC input
w/Installation Kit and Operations Manual
23GHz Radio, Protected, Standard Power, 8E1/16E1 Universal $40,750
Capacity, 4FSK Modulation, 60cm Antenna w/Pole Mount, 48VDC
w/Installation Kit and Operations Manual
38 GHZ RADIOS
38 GHz Radio, Non-Protected, Standard Power, 8E1 Capacity $14,310
4FSK Modulation, 30cm Antenna w/Pole Mount, -48VDC input
w/Installation Kit and Operations Manual
38 GHz Radio, Non-Protected, Standard Power, 16E1 Capacity $16,455
4FSK Modulation, 30cm Antenna w/Pole Mount, -48VDC input
w/Installation Kit and Operations Manual
38 GHz Radio, Non-Protected, Standard Power, 8E1/16E1 Universal $16,935
Capacity, 4FSK Modulation, 30cm Antenna w/Pole Mount, -48VDC
w/Installation Kit and Operations Manual
38 GHz Radio, Protected, Standard Power, 8E1 Capacity $31,370
4FSK Modulation, 30cm Antenna w/Pole Mount, -48VDC input
w/Installation Kit and Operations Manual
38 GHz Radio, Protected, Standard Power, 16E1 Capacity $35,660
4FSK Modulation, 30cm Antenna w/Pole Mount, -48VDC input
w/Installation Kit and Operations Manual
38 GHz Radio, Protected, Standard Power, 8E1/16E1 Universal $36,620
Capacity, 4FSK Modulation, 30cm Antenna w/Pole Mount, -48VDC
w/Installation Kit and Operations Manual
Page 3 of 3
<PAGE>
FORECAST
<PAGE>
<TABLE>
<CAPTION>
P_Com Tel-Link Forecast Rev. 01 2/13/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Item Description Feb 95 Mar 95 Apr 95 May 95 Jun 95 Jul 95 Aug 95 TOTAL T/R
23 38 23 38 23 38 23 38 23 38 23 38 23 38 23 38
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
1.10 3X64 kb/s 1+0 (23 G)
- ------------------------------------------------------------------------------------------------------------------------------------
1.11 3X64 kb/s 1+0 (38 G)
- ------------------------------------------------------------------------------------------------------------------------------------
1.20 2Mb/s 1+0 (23 G) 10 10 10 30
- ------------------------------------------------------------------------------------------------------------------------------------
1.21 2Mb/s 1+0 (38 G) 12 4 10 14 4 4 48
- ------------------------------------------------------------------------------------------------------------------------------------
1.30 2x2Mb/s 1+0 (23 G)
- ------------------------------------------------------------------------------------------------------------------------------------
1.31 2x2Mb/s 1+0 (38 G) 10 10 20
- ------------------------------------------------------------------------------------------------------------------------------------
1.40 4x2Mb/s 1+0 (23 G) 10 14 16 14 12 4 70
- ------------------------------------------------------------------------------------------------------------------------------------
1.41 4x2Mb/s 1+0 (38 G) 6 4 10 10 10 40
- ------------------------------------------------------------------------------------------------------------------------------------
1.50 Universal 1+0 (23G) 2 2 2 6
- ------------------------------------------------------------------------------------------------------------------------------------
1.51 Universal 1+0 (38G) 2 2
- ------------------------------------------------------------------------------------------------------------------------------------
1.60 Univ.Cap. & Mod. 1+0 (23G)
- ------------------------------------------------------------------------------------------------------------------------------------
1.61 Univ.Cap. & Mod. 1+1 (38G)
- ------------------------------------------------------------------------------------------------------------------------------------
2.10 2Mb/s 1+1 (23G)
- ------------------------------------------------------------------------------------------------------------------------------------
2.11 2Mb/s 1+1 (38G)
- ------------------------------------------------------------------------------------------------------------------------------------
2.20 2x2Mb/s 1+1 (23G)
- ------------------------------------------------------------------------------------------------------------------------------------
2.21 2x2Mb/s 1+1 (38G)
- ------------------------------------------------------------------------------------------------------------------------------------
2.30 4x2Mb/s 1+1 (23G) 16 8 20 32 32 32 140
- ------------------------------------------------------------------------------------------------------------------------------------
2.31 4x2Mb/s 1+1 (38G) 8 8
- ------------------------------------------------------------------------------------------------------------------------------------
2.40 Universal 1+1 (2/4) 23G 8 4 12
- ------------------------------------------------------------------------------------------------------------------------------------
2.41 Universal 1+1 (2/4) 38G 4 4 8
- ------------------------------------------------------------------------------------------------------------------------------------
2.50 Univ. Cap. & Mod. 1+1 (23G)
- ------------------------------------------------------------------------------------------------------------------------------------
2.51 Univ. Cap. & Mod. 1+1 (38G)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
All the configurations of items 1,2,7,8 include: 48v PSU, Antenna
(30cm-38G/cm-23G) w/pole mount, link manager port, FEC, 4 FSK modulation, inst.
material and manual
<PAGE>
P_Com Tel-Link Forecast Rev. 01 2/13/1995
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION Feb 95 Mar 95 Apr 95 May 95 Jun 95 Jul 95 Aug 95 Total T/R
- ------------------------------------------------------------------------------------------------------------------------------------
7.10 3x2Mb/s 1 + 0 (23G)
- ------------------------------------------------------------------------------------------------------------------------------------
7.11 3x2Mb/s 1 + 0 (38G)
- ------------------------------------------------------------------------------------------------------------------------------------
7.20 16x2Mb/s 1 + 0 (23G)
- ------------------------------------------------------------------------------------------------------------------------------------
7.21 16x2Mb/s 1 + 0 (38G)
- ------------------------------------------------------------------------------------------------------------------------------------
7.30 Universal 1 + 0 (8/16) 23G
- ------------------------------------------------------------------------------------------------------------------------------------
7.31 Universal 1 + 0 (8/16) 38G
- ------------------------------------------------------------------------------------------------------------------------------------
8.10 8x2Mb/s 1 + 1 (23G)
- ------------------------------------------------------------------------------------------------------------------------------------
8.11 8x2Mb/s 1 + 1 (38G)
- ------------------------------------------------------------------------------------------------------------------------------------
8.20 16x2Mb/s 1 + 1 (23G) 8 8
- ------------------------------------------------------------------------------------------------------------------------------------
8.21 16x2Mb/s 1 + 1 (38G) 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
8.30 Universal 1 + 1 (8/16) 23G
- ------------------------------------------------------------------------------------------------------------------------------------
8.31 Universal 1 + 1 (8/16) 38G
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL T/R 10 6 44 4 28 6 54 14 70 25 58 10 50 18 314 83
- ------------------------------------------------------------------------------------------------------------------------------------
4.10 24V PSU
- ------------------------------------------------------------------------------------------------------------------------------------
4.20 EOW - Bridging 2 8
- ------------------------------------------------------------------------------------------------------------------------------------
4.30 EOW PT - PT 4 4 28 2 24 6 35 14 54 22 38 10 38
- ------------------------------------------------------------------------------------------------------------------------------------
4.40 data channel
- ------------------------------------------------------------------------------------------------------------------------------------
4.70 120 OHM I/O
- ------------------------------------------------------------------------------------------------------------------------------------
4.01 H.P. Amplifier 23G 10 28 10 10
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
All the configurations of items 1,2,7, 8 include: 48v PSU, Antenna
(30cm-38G/60cm-23G) w/pole mount, link manager port, FEC 4 FSK modulation,
inst. material and manual
