From Rules of the Game: All About Grappling (Part Two)
Attack Your Opponent: You can make an attack with an unarmed strike, natural weapon, or light weapon against another character you are grappling. You take a -4 penalty on such attacks.
You can't attack with two weapons while grappling, even if both are light weapons. If you have multiple natural weapons, however, you can use all of them while grappling. In many cases, though, you're better off making an opposed grapple check to damage your opponent rather than making an attack with a natural weapon (see the section on damaging your opponent for details).
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Draw a Light Weapon: You can draw a light weapon while grappling as a move action. This requires a successful grapple check.
Damage Your Opponent: You can make an opposed grapple check to deal damage to your opponent when grappling. If you win the opposed check, you deal nonlethal damage equivalent to an unarmed strike (
1d3 points for Medium attackers or 1d2 points for Small attackers 2d6 for Colossal attackers, 1d8 Gargantuan, 1d6 Huge, 1d4 Large, 1d3 Medium, 1d2 Small, 1 Tiny or smaller; plus Strength modifiers). If you want to deal lethal damage, you take a -4 penalty on your grapple check.
Monks (and a few other characters), deal more damage with unarmed strikes than other characters, and the damage is lethal. However, a monk can choose to deal their damage as nonlethal damage when grappling without taking the usual -4 penalty for changing lethal damage to nonlethal damage.
If a creature has natural weaponry, it deals lethal natural weapon damage with a successful opposed grapple check (its natural weapons are just like unarmed strikes). A creature with natural weaponry can choose to deal nonlethal damage in a grapple by taking a -4 penalty. Even if a creature has natural weaponry, it doesn’t use those natural weapons as part of this action. It must use the “Attack Your Opponent” action (described above) to do so.