STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of January 7, 1999, by and among CCW
ACQUISITION CORP., a Delaware corporation (the "Company"), the several persons
named in Schedule I hereto (each a "WCAS Purchaser" and collectively the "WCAS
Purchasers"), the several persons named in Schedule II hereto (each a
"Blackstone Purchaser" and collectively the "Blackstone Purchasers"), the
several persons named in Schedule III hereto (each a "Signal Purchaser" and
collectively the "Signal Purchasers") and the several persons named in Schedule
IV hereto (each a "Management Purchaser" and collectively the "Management
Purchasers"). The WCAS Purchasers, the Blackstone Purchasers, the Signal
Purchasers and the Management Purchasers are herein sometimes referred to
collectively as the "Stockholders."
WHEREAS, the Company and the Stockholders have entered into a
Securities Purchase Agreement, dated as of December 29, 1998 (the "Purchase
Agreement"), pursuant to which (i) the Company (on behalf of itself and
Centennial Cellular Corp. ("Centennial"), the corporation that will survive the
"Merger" referred to in Section 21 hereof) has agreed to sell to the
Stockholders an aggregate 9,638,554 shares of Class A Common Stock, $.01 par
value ("Common Stock"), of the Company, and (ii) Centennial will issue to one of
the Stockholders a Senior Subordinated Note of the Company due 2009, in the
principal amount of $180,000,000 (the "Note");
WHEREAS, upon the consummation of all the transactions contemplated by
the Purchase Agreement and the "Merger Agreement" (as defined in Section 7
hereof), each Stockholder will own the number of shares of Common Stock of the
Company appearing opposite the name of such Stockholder on Schedule I, Schedule
II, Schedule III or Schedule IV hereto, as the case may be; and
WHEREAS, the Company and each of the Stockholders desire to make
certain arrangements among themselves with respect to the governance of the
Company and the other matters set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
SECTION 1. Voting Agreement.
(a) From and after the Closing Date (as defined in the Purchase
Agreement), at each annual or special stockholders meeting called for the
election of directors, and whenever the stockholders of the Company act by
written consent with respect to the election of directors, each Stockholder
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agrees to vote or otherwise give such Stockholder's consent in respect of all
shares of capital stock of the Company (whether now or hereafter acquired) owned
by such Stockholder, and take all other appropriate action, and the Company
shall take all necessary and desirable actions within its control, in order to
cause:
(i) the authorized number of directors on the Board of Directors
of the Company (the "Board") to be established at nine;
(ii) the election to the Board of:
a) three directors designated by the holders of a majority
of the Common Stock then held by all WCAS Purchasers (the "WCAS
Designees") so long as the WCAS Purchasers own (in the aggregate)
not less than 25% of the shares of Common Stock owned by them on
the date hereof, which directors will initially be Xxxxxx X.
XxXxxxxxx, Xxxxxxx X. xx Xxxxxx and Xxxxxxx X. Xxxxxx;
b) two directors designated by the holders of a majority of
the Common Stock then held by all Blackstone Purchasers (the
"Blackstone Designees") so long as the Blackstone Purchasers own
(in the aggregate) not less than 25% of the shares of Common
Stock owned by them on the date hereof, which directors will
initially be Xxxx X. Xxxxxxxx and Xxxxxxxx X. Xxxxxx; and
c) the Chief Executive Officer and the Chief Operation
Officer of the Company (initially Xxxxxxx X. Small and Xxxx X.
Xxxx, respectively);
all of which persons shall hold office, subject to their earlier
removal in accordance with clause (iii) below, the By-laws of the
Company and applicable corporate law, until their respective
successors shall have been elected and shall have qualified;
(iii) the removal from the Board (with or without cause) of any
director elected in accordance with subpart a) or b) of clause (ii)
above upon the written request of the Stockholders that designated
such director;
(iv) upon any vacancy in the Board as a result of any individual
designated as provided in clause (ii) above ceasing to be a member of
the Board, whether by resignation or otherwise, the election to the
Board as promptly as possible of an individual designated by the
Stockholders that designated such individual (or, in the case of a
director specified in subpart c) of clause (ii) above, an individual
meeting such qualifications); and
(v) their respective designees to the Board of Directors of the
Company to elect Xxxxxx X. XxXxxxxxx (or such other person as may be
designated by the WCAS Purchasers) as Chairman of the Board of
Directors.
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(b) The two directors not designated pursuant to clause (ii) of
paragraph (a) above shall be directors (the "Outside Directors") that shall be
elected by the stockholders of the Company. In any such election, the
Stockholders shall vote their shares only for persons that (x) are not employees
or officers of (i) the Company or any of its subsidiaries or (ii) the
Stockholders or their respective stockholders, members or partners and (y)
otherwise qualify as "independent directors" under the rules applicable to
Nasdaq National Market companies as in effect on the date hereof and satisfy any
other requirements under applicable law or the rules of any exchange or
quotation system on which the Common Stock is then listed or traded.
(c) Each Stockholder agrees to use its best efforts to cause its
designees to the Board to vote or otherwise give such Director's consent to the
creation and maintenance of:
(i) a Compensation Committee of the Board consisting of three
directors, two of whom shall be WCAS Designees, if any then exist, and the
third of whom shall be a Blackstone Designee, if any then exist, which
Compensation Committee shall approve all grants of stock options to
employees of the Company, all increases in compensation of officers of the
Company, all annual bonuses granted to officers of the Company and all
other employee benefits (including, without limitation, vacation policy,
benefit plans, company automobiles and insurance) granted to officers of
the Company, and shall have such other duties and responsibilities as the
Board of Directors may from time to time determine;
(ii) an Audit Committee of the Board of Directors, consisting of three
directors, one of whom shall be a WCAS Designee, if any then exist, one of
whom shall be a Blackstone Designee, if any then exist, and one of whom
shall be an Outside Director, which Audit Committee shall review and
approve the financial statements of the Company as audited by the Company's
independent certified public accountants, and shall have such other duties
and responsibilities as the Board of Directors may from time to time deter-
mine; and
(iii) such other committees as the Board shall from time to time deem
appropriate, consisting of at least two directors, at least one of whom
shall be a WCAS Designee, if any then exist, and at least one of whom shall
be a Blackstone Designee, if any then exist, which committees shall have
such duties and responsibilities as the Board may from time to time
determine.
To the extent there are no WCAS Designees or Blackstone Designees, the
committee seats allocated to them above shall be filled as the Board shall
determine.
(d) No Stockholder shall grant any proxy or enter into or agree to be
bound by any voting trust with respect to Common Stock held by it, nor shall any
Stockholder enter into any stockholder agreement or arrangement of any kind with
respect to Common Stock held by it, which conflicts or is inconsistent in any
manner with the provisions of this Agreement.
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SECTION 2. Restrictions on Transfers by Management Purchasers. In
addition to the other restrictions set forth herein, each Management Purchaser
hereby agrees that such Management Purchaser shall not sell or in any other way,
directly or indirectly, transfer, assign, distribute or otherwise dispose of any
shares of capital stock (whether now owned or hereafter acquired) then held by
such Management Purchaser except:
(i) any transfer made with the prior written consent of the holders of
a majority in interest of the shares of Common Stock then held by the WCAS
Purchasers;
(ii) any transfer by such Management Purchaser to the spouse or lineal
descendants of such Management Purchaser, including without limitation any
transfer by bequest or devise, or to a trust or trusts for the benefit of
such Management Purchaser or any of the foregoing;
(iii) any transfer of shares of capital stock that are the subject of
an effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act"); or
(iv) any transfer of shares of capital stock pursuant to Section 3 or
4 hereof;
provided, in the case of a transfer pursuant to clause (i) or (ii) above, that
any such transferee that is not already a party to this Agreement shall agree in
writing to be bound by, and to comply with, all provisions of this Agreement as
though such transferee were a Management Purchaser.
SECTION 3. Tag-Along Rights.
(a) Subject to the provisions of paragraph (d) below, if a WCAS
Purchaser or group of WCAS Purchasers (for purposes of this Section 3, a
"Selling Stockholder") wishes to directly or indirectly sell, transfer or
otherwise dispose of all or any portion of the Common Stock held by him, her or
it at any time, then such Selling Stockholder shall promptly deliver a notice
(an "Offering Notice") to the Company in writing of the proposed transfer,
specifying the number of such shares of Common Stock to be transferred by such
Selling Stockholder (such specified shares, the "Offered Shares"), the name of
the proposed purchaser or purchasers, the proposed purchase price per share, the
proposed date of transfer, the payment terms and all other material terms and
conditions thereof. In the event that the terms and/or conditions set forth in
the Offering Notice are thereafter amended in any respect, the Selling
Stockholder shall also give written notice (an "Amended Notice") of the amended
terms and conditions of the proposed transaction to the Company. Upon its
receipt of any Offering Notice or Amended Notice, the Company shall promptly,
but in all events within three (3) business days of its receipt thereof, forward
copies thereof to each of the Blackstone Purchasers, Signal Purchasers and
Management Purchasers (collectively, the "Other Stockholders"). The Selling
Stockholder shall provide such additional information with respect to the
proposed transfer as may be reasonably requested by the Company or the Other
Stockholders.
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(b) Each Other Stockholder shall have the right and option,
exercisable upon written notice to the Company and the Selling Stockholder
within 15 days after receipt by such Other Stockholder of the Offering Notice,
or, if later, within 7 days after receipt by such Other Stockholder of the most
recent Amended Notice, to participate in the proposed transfer of shares by the
Selling Stockholder to the proposed purchaser on the same terms and conditions
as the Selling Stockholder (such participation right being hereinafter referred
to as a "tag-along" right); provided that no Other Stockholder shall be required
to make any representations or warranties or covenants, or bear any liability,
with respect to any other Stockholder or with respect to the Company or the
Company's business other than such Other Stockholder's pro rata share (based on
the number of shares of Common Stock to be transferred) of any indemnity
obligations for representations and warranties regarding the Company or its
business. Each Other Stockholder may participate in such transfer with respect
to all or any part of that number of shares of Common Stock which is equal to
the product obtained by multiplying (i) the number of Offered Shares by (ii) a
fraction, the numerator of which is the number of shares of Common Stock at the
time owned by such Other Stockholder and the denominator of which is the
aggregate number of shares of Common Stock then owned by the Stockholders. Any
Other Stockholders that have not notified the Selling Stockholder and the
Company of their intent to exercise their tag-along rights within 7 days after
receipt of an Amended Notice shall be deemed to have elected not to exercise
such rights with respect to the transaction contemplated by such Amended Notice
(regardless of their election pursuant to the Offering Notice or any prior
Amended Notice relating to such transaction), but only if such Amended Notice
sets forth the provisions of this sentence.
(c) Any Other Stockholder participating in the proposed disposition
shall deliver to the Company, as agent for such Other Stockholder, for transfer
to the proposed acquiror one or more certificates, properly endorsed for
transfer and with all stock transfer taxes paid and stamps affixed, which
represent the number of shares of Common Stock that such Other Stockholder
elects to dispose of pursuant to paragraph (b) above. The consummation of such
proposed disposition shall be subject to the sole discretion of the Selling
Stockholder, who shall have no liability or obligation whatsoever to any Other
Stockholder participating therein other than to obtain for such Other
Stockholder the same terms and conditions as those set forth in the Offering
Notice (or most recent Amended Notice, as the case may be). Upon the
consummation of any such sale, the Company (i) shall transfer to the acquiror a
stock certificate or certificates representing the number of shares of Common
Stock to be disposed of by any Other Stockholders and (ii) shall promptly
thereafter remit to each Other Stockholder (i) that portion of the proceeds of
the disposition to which such Other Stockholder is entitled by reason of such
participation and (ii) a stock certificate representing any balance of shares of
Common Stock that were not so disposed of (or all shares of Common Stock, in the
event the proposed disposition is not consummated).
(d) Anything to the contrary herein notwithstanding, the provisions of
this Section 3 shall not apply to (i) any transfer by a WCAS Purchaser to any
other WCAS Purchasers or affiliates thereof, (ii) any distribution or transfer
by any WCAS Purchaser that is a limited partnership to its limited partners or
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(iii) in the case of a WCAS Purchaser who is an individual, transfer by such
WCAS Purchaser to the spouse or lineal descendants of such WCAS Purchaser,
including, without limitation, transfer by bequest or devise, or to a trust or
trusts for the benefit of such WCAS Purchaser or any of the foregoing; provided
that in the case of a transfer pursuant to clause (i) or (iii) above, such
transferee agrees in writing to be bound by this Agreement as though such
transferee were a WCAS Purchaser.
(e) Each WCAS Purchaser, severally and not jointly, represents and
warrants to the Signal Purchasers that as of the date hereof there is no
contract, commitment or understanding between such person and any Blackstone
Purchaser with respect to "tag-along" or similar rights relating to shares of
capital stock of the Company, other than this Agreement. Each Blackstone
Purchaser, severally and not jointly, represents and warrants to the Signal
Purchasers that as of the date hereof there is no contract, commitment or
understanding between such person and any WCAS Purchaser with respect to
"tag-along" or similar rights relating to shares of capital stock of the
Company, other than this Agreement.
SECTION 4. Drag-Along Rights. In the event that any of the WCAS
Purchasers or the Company receives a bona fide offer from a third party not
affiliated with any WCAS Purchaser to purchase at least 80% of the outstanding
shares of capital stock of the Company and a majority in interest of the WCAS
Purchasers desires to accept such offer, and so long as the WCAS Purchasers
collectively own a greater number of outstanding shares of Common Stock than the
Blackstone Purchasers, such WCAS Purchasers shall have the right to require all
(but not less than all) of the Stockholders to sell all (or such lesser
percentage as may be necessary to achieve recapitalization accounting treatment,
but in no event less than 80%) of the shares of capital stock (together with any
options or warrants to acquire capital stock) then held by them (including all
or the same percent of all shares, options and warrants held by such WCAS
Purchasers) on the following terms:
(i) such sale shall only be a sale for cash or marketable securities
and all expenses of the transaction, including, without limitation, legal,
accounting and investment banking fees and expenses, shall be borne by the
Company (for purposes of this paragraph, "marketable securities" shall mean
securities which are debt or equity securities that are actively traded on
a national securities exchange located in the United States or on Nasdaq
that are part of an issue with a public capitalization in excess of $100
million and that may be freely traded without limitation as to volume on
such exchange or Nasdaq immediately following receipt thereof or at any
time thereafter by each Stockholder);
(ii) the proceeds from such sale (and, in the case of a sale of less
than all of the outstanding shares of Common Stock of the Company, the
number of shares to be sold by each Stockholder) shall be allocated among
the Stockholders on a pro rata basis, based on the number of shares of
Common Stock (treating all "in the money" options and warrants as the
number of shares of Common Stock issuable upon the exercise thereof, less
such number of shares of Common Stock the aggregate fair market value of
which (based on the value attributed in such sale) would be required to pay
the aggregate exercise price therefor, and treating any shares of
convertible preferred stock or debt of the Company on an "as-converted"
basis) then held by each Stockholder;
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(iii) not less than 20 days prior to the closing date of such sale,
such WCAS Purchasers shall notify each of the other Stockholders in writing
of such sale, the terms thereof and the closing date thereof, and shall
provide additional written notification promptly upon any amendment or
modification to any thereof, all of which terms shall apply equally to all
Stockholders except that no Other Stockholder shall be required to make any
representations, warranties or covenants, or bear any liability, with
respect to the Company or the Company's business or with respect to any
other Stockholder;
(iv) at the closing of such sale, each of the Stockholders shall
deliver certificates evidencing the Common Stock, options and warrants
then held by it and to be sold in such sale, duly endorsed for transfer or
accompanied by stock powers executed in blank, against payment of the
purchase price therefor by wire transfer to the account or accounts
specified by such Stockholder; and
(v) the Other Stockholders shall not be obligated to participate in
such sale if all of the WCAS Purchasers shall not have concurrently sold
all or the same percentage of their shares of Common Stock, options and/or
warrants to be sold by them in connection with such sale.
SECTION 5. Preemptive Rights.
(a) The Company hereby grants to each Stockholder the right to
purchase such Stockholder's Proportionate Percentage (as hereinafter defined) of
any future Eligible Offering (as hereinafter defined). For the purposes of this
Section 5, the following terms shall have the meanings set forth below:
"Proportionate Percentage" means, with respect to any Stockholder as
of any date, the result (expressed as a percentage) obtained by dividing
(i) the number of shares of Common Stock owned by such Stockholder as of
such date by (ii) the total number of shares of Common Stock outstanding as
of such date.
"Eligible Offering" means an offer by the Company to sell to any
person or persons (including any of the Stockholders) for cash, cash
equivalents or indebtedness any equity securities of the Company, or any
security convertible into or exchangeable for, or carrying rights or
options to purchase, equity securities of the Company, other than an
offering by the Company:
(i) of shares of Common Stock or options to purchase shares of
Common Stock in connection with or pursuant to any stock option or
stock purchase plan approved by the Board of Directors of the Company
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to full-time employees, officers, directors, consultants and/or
advisors to the Company or its subsidiaries;
(ii) in a public offering (a "Public Offering") registered under
the Securities Act.
(b) The Company shall, before issuing any securities pursuant to an
Eligible Offering, give written notice thereof to each Stockholder. Such notice
shall specify the security or securities the Company proposes to issue, the
proposed date of issuance, the consideration that the Company intends to receive
therefor and all other material terms and conditions of such proposed issuance.
For a period of 15 days following the date of such notice, each Stockholder
shall be entitled, by written notice to the Company, to elect to purchase all or
any part of such Stockholder's Proportionate Percentage of the securities being
sold in the Eligible Offering; provided, however, that if two or more securities
shall be proposed to be sold as a "unit" in an Eligible Offering, any such
election must relate to such unit of securities. To the extent that elections
pursuant to this Section 5(b) shall not be made with respect to any securities
included in an Eligible Offering within such 15-day period, then the Company may
issue such securities, but only for consideration not less than, and otherwise
on no less favorable terms to the Company than, those set forth in the Company's
notice and only within 60 days after the end of such 15-day period. In the event
that any such offer is accepted by a Stockholder or Stockholders, the Company
shall sell to such Stockholder or Stockholders, and such Stockholder or
Stockholders shall purchase from the Company, for the consideration and on the
terms set forth in the notice as aforesaid, the securities that such Stockholder
or Stockholders shall have elected to purchase.
SECTION 6. Right of First Offer.
(a) If any Blackstone Purchaser (for purposes of this Section 6, a
"Seller") desires to sell, exchange or in any other manner dispose of (other
than in a manner permitted by Section 6(d) hereof) any shares of capital stock
of the Company held by it, then such Seller shall give to the Company a written
notice (a "Notice of Desire to Sell") which shall set forth in reasonable detail
the class and number of shares of capital stock which it desires to sell and
may, if the Seller so chooses to specify, set forth any other terms and
conditions of the desired disposition. The Company shall deliver such Notice of
Desire to Sell to each of the WCAS Purchasers promptly upon receipt thereof. A
Seller may deliver a Notice of Desire to Sell whether or not such Seller has
received an offer from a third party to purchase such shares of capital stock.
(b) The WCAS Purchasers shall have the right, exercisable upon written
notice to the Seller within 15 days after receipt of any Notice of Desire to
Sell (the "Offer Notice"), to offer to purchase any or all shares of capital
stock proposed to be sold by the Seller at a purchase price equal to the
proposed purchase price specified in the Notice of Desire to Sell if so
specified, or as proposed in the Offer Notice if not specified in the Notice of
Desire to Sell, and otherwise on the terms and conditions specified in the
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Notice of Desire to Sell to the extent so specified and any additional terms and
conditions proposed in the Offer Notice (collectively, including with respect to
purchase price, the "Offer Terms"). Each Offer Notice shall state the number of
shares to be purchased by the WCAS Purchasers delivering such Offer Notice (the
"Purchasing Stockholders") and that the Purchasing Stockholders will purchase
such shares within 45 days thereafter (or such longer period as is necessary to
obtain any necessary consents or approvals or to otherwise comply with
applicable law). In the event that more than one WCAS Purchaser exercises its
right to offer to purchase pursuant to this paragraph (b), the allocation among
such WCAS Purchasers of any shares actually sold pursuant to this paragraph (b)
shall be as agreed by such WCAS Purchasers.
(c) If the WCAS Purchasers deliver, within the period specified in
paragraph (b) above, an Offer Notice with respect to capital stock that is the
subject of the Notice of Desire to Sell, the Seller shall be entitled to sell
such capital stock to such Purchasing Stockholders, on the Offer Terms within
the 45-day period specified in paragraph (b) above (or such longer period as is
necessary to obtain any necessary consents or approvals or to otherwise comply
with applicable law). Following the period specified in paragraph (b) above, the
Seller may (subject to any other applicable restrictions hereunder) transfer
such capital stock to any third party; provided that, if an Offer Notice with
respect to all of such shares of capital stock was delivered within the 15 day
period specified in paragraph (b) above, the Seller may not sell such shares to
such third party on material terms which are the same as or more favorable, in
the aggregate, to such third party than the material terms set forth in the
Offer Terms. Any such sale with respect to which definitive documentation is not
entered into within 60 days after the expiration of the period specified in
paragraph (b) above, or which is not consummated within 60 days of the execution
of such definitive documentation (or such longer period as is necessary to
obtain any necessary consents or approvals or to otherwise comply with
applicable law) shall again be subject to the requirements of this Section 6.
(d) Anything herein to the contrary notwithstanding, and subject to
any other applicable restrictions hereunder, no right of first offer hereunder
shall apply with respect to (i) a transfer by a Blackstone Purchaser to an
affiliate of such Blackstone Purchaser; provided, however, that any such
transferee that is not already a party to this Agreement shall agree in writing
to be bound by, and to comply with, all provisions of this Agreement as though
such transferee were a Blackstone Purchaser, (ii) any distribution or transfer
by a Blackstone Purchaser that is a limited partnership to its limited partners,
(iii) any transfer by a Blackstone Purchaser to the public pursuant to an
offering registered under the Securities Act or sold in compliance with Rule 144
under the Securities Act and (iv) any transfer by a Blackstone Purchaser
pursuant to Section 3 or Section 4.
SECTION 7. Restrictions.
(a) While this Agreement is in effect, in addition to any other vote
of stockholders that may be required by law or by the Certificate of
Incorporation of the Company, the Company shall not, without the consent of (i)
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the holders of a majority of the Common Stock then held by all the WCAS
Purchasers and (ii) the holders of a majority of the Common Stock then held by
all the Blackstone Purchasers:
(i) amend, alter or repeal its Certificate of Incorporation or its
By-laws in any manner that adversely affects the respective rights,
preferences or voting power of the Common Stock, or the rights of the
Stockholders hereunder, it being understood that, in the event of any such
amendment or alteration that adversely affects only the Signal Purchasers
and/or the Management Purchasers, such amendment or alteration shall also
require the consent of a majority in interest of the Signal Purchasers
and/or the Management Purchasers, as the case may be; or
(ii) enter into, or permit any of its subsidiaries to enter into, any
transaction with (w) any of its or any subsidiary's officers, directors or
employees; (x) any person related by blood or marriage to any such person;
(y) any entity in which any such person owns any beneficial interest; or
(z) any stockholder of the Company (or any affiliate of any such
stockholder) that owns, either individually or collectively with all
stockholders affiliated with such stockholder, at least 25% of the
outstanding capital stock of the Company; provided, however, that this
clause (ii) shall not apply to (A) normal employment arrangements, benefit
programs and employee incentive option programs on reasonable terms, (B)
any transaction with a director of the Company (or an affiliate of such
director) that is approved by the Board of Directors of the Company in
accordance with the provisions of Section 144(a)(1) of the Delaware General
Corporation Law, (C) customer transactions in the ordinary course of
business, (D) the closing of the transactions contemplated by the Purchase
Agreement and the Agreement and Plan of Merger, dated as of July 2, 1998,
as amended (the "Merger Agreement"), between the Company and Centennial,
and (E) the transactions contemplated by the Registration Rights Agree-
ment, dated as of the date hereof among the parties hereto..
(b) Except as expressly set forth in Section 1 hereof, each
Stockholder agrees not to, and agrees to cause its affiliates not to, directly
or indirectly, alone or in concert with others, without the prior written
consent of the holders of a majority of the shares of Common Stock held by the
WCAS Purchasers, take any of the following actions set forth below:
(i) effect, seek, offer, engage in, propose (whether publicly or
otherwise) or participate in:
a) any acquisition of beneficial ownership of equity or debt
securities of the Company or any of its subsidiaries other than (1)
pursuant to the Purchase Agreement, (2) pursuant to Section 5 hereof,
(3) acquisitions from other Stockholders or (4) any stock dividend,
stock reclassification or other distribution or dividends to the
holders of Common Stock generally;
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b) any tender or exchange offer, merger, consolidation, share ex-
change, business combination, recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction involving
the Company or any material portion of its business or any purchase of
all or any substantial part of the assets of the Company or any
material portion of its business; or
c) any "solicitation" of "proxies" (as such terms are used in the
proxy rules of the Securities and Exchange Commission ("SEC")) without
regard to the exclusion set forth in Section 14a-1(1)(2)(iv) under the
Exchange Act from the definition of "solicitation" with respect to
the Company or any of its affiliates or any action resulting in
Stockholder or any of its affiliates becoming a "participant" in any
"election contest" (as such terms are used in the proxy rules of the
SEC) with respect to the Company or any of its subsidiaries;
(ii) propose any matter for submission to a vote of stockholders of
the Company;
(iii) seek to place a representative on the Company Board, or seek the
removal of (other than for cause or in accordance with Section 1(a)(iii))
any director of the Company; or
(iv) form, join or in any way participate in or assist in the
formation of a group (within the meaning of Section 13(d)(3) of the
Exchange Act) with respect to any Common Stock, other than any such group
consisting exclusively of Stockholders and their affiliates.
SECTION 8. Right and Option to Repurchase Shares of Common Stock From
Management Purchasers Upon Termination of Employment.
(a) In the event that any Management Purchaser ceases to be employed
by the Company or Centennial or any subsidiary thereof on a full-time basis for
any reason (including, without limitation, as a result of his death, disability,
incapacity, retirement, resignation or dismissal with or without "cause" (as
defined below)), the WCAS Purchasers shall have the right and option, but not
the obligation, to purchase from such Management Purchaser (or in the case of
his death, his legal representative), in such proportions as the WCAS Purchasers
shall agree, any or all of the shares of Common Stock purchased by such
Management Purchaser pursuant to the Purchase Agreement (the "Repurchase
Shares"). In the event that the WCAS Purchasers exercise such right and option,
the WCAS Purchasers shall pay to such Management Purchaser as the purchase price
for such Repurchase Shares (the "Purchase Price"), an amount per share equal to
the fair market value thereof as of the date such Management Purchaser ceased to
be so employed by the Company or Centennial or any subsidiary thereof, such
fair market value to be determined in good faith by the Board on a basis
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consistent with the manner of determining the fair market value of the Common
Stock for purposes of offering of the Company's Common Stock to equity investors
(the "Fair Market Value").
(b) The WCAS Purchasers may exercise the right and option described in
Section 8(a) above by giving such Management Purchaser (or in the case of his
death, his legal representative) a written notice of election to purchase at any
time within 60 days after the date such employment ceases, which notice of
election shall specify the number of shares to be purchased by each electing
WCAS Purchaser and the Purchase Price for such shares. The closing for the
purchase by the WCAS Purchasers of Repurchase Shares pursuant to Section 8(a)
will take place at the offices of Welsh, Carson, Xxxxxxxx & Xxxxx on the date
specified in the written notice of election with respect to such shares, which
date shall be a business day not later than 60 days (or such longer period as is
necessary to obtain any necessary consents or approvals or to otherwise comply
with applicable law) after the date such notice is given. At such closing, the
Management Purchaser (or in the case of his death, his legal representative)
will deliver such shares, duly endorsed for transfer, against payment in cash of
the Purchase Price thereof.
(c) In the event that the WCAS Purchasers choose not to exercise their
rights and options under Section 8(a) hereof within the 60 day period referred
to in Section 8(b), the Company shall have the right and option, but not the
obligation, to purchase from the Management Purchaser whose employment was
terminated (or in the case of his death, his legal representative) any or all of
the Repurchase Shares. In the event that the Company exercises such right and
option, the purchase price for such shares shall be the Purchase Price
determined in accordance with Section 8(a).
(d) The Company may exercise the right and option described in Section
8(c) above by giving such Management Purchaser (or in the case of his death, his
legal representative) a written notice of election to purchase at any time
within 30 days after the expiration of the 60 day period referred to in Section
8(b) above, which notice of election shall specify the number of Repurchase
Shares to be purchased and the Purchase Price for such shares. The closing for
the purchase by the Company of Repurchase Shares pursuant to Section 8(c) will
take place at the offices of the Company on the date specified in the written
notice of election with respect to such shares, which date shall be a business
day not later than 60 days (or such longer period as is necessary to obtain any
necessary consents or approvals or to otherwise comply with applicable law)
after the date such notice is given. At such closing, the Management Purchaser
(or in the case of his death, his legal representative) will deliver such
shares, duly endorsed for transfer, against payment in cash of the Purchase
Price thereof.
SECTION 9. Financial and Other Information. For so long as any
Stockholder holds at least 25% of the Common Stock held by it as of the date
hereof, the Company shall furnish to such Stockholder:
(i) within 90 days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its subsidiaries as of the
end of such fiscal year and the related consolidated statements of
12
operations, changes in stockholders' equity and changes in financial
position of the Company and its subsidiaries for the fiscal year then
ended, together with supporting notes thereto, certified without
qualification as to scope of audit by a firm of independent certified
public accountants of recognized national standing selected by the Board of
Directors of the Company;
(ii) within 45 days after the end of each quarter in each fiscal year
(other than the last quarter in each fiscal year), a consolidated balance
sheet of the Company and its subsidiaries and the related consolidated
statements of operations, changes in stockholders' equity and changes in
financial position of the Company and its subsidiaries for the quarter then
ended, unaudited but certified by the principal financial officer of the
Company, such balance sheet to be as of the end of such quarter and such
statements of operations, changes in stockholders' equity and changes in
financial position to be for such quarter and for the period from the
beginning of the fiscal year to the end of such quarter, in each case
subject to normal year-end adjustments;
(iii) within 30 days after the end of each month in each fiscal year,
a consolidated balance sheet of the Company and its subsidiaries and the
related consolidated statement of operations for the month then ended,
unaudited but certified by the principal financial officer of the Company,
such balance sheet to be as of the end of such month and such statement of
operations to be for such month and for the period from the beginning of
the fiscal year to the end of such month, in each case subject to normal
year-end adjustments;
(iv) promptly upon filing, copies of all registration statements,
prospectuses, periodic reports and other documents filed by the Company
with the SEC; and
(v) promptly, from time to time, such other information regarding the
operations, business, affairs and financial condition of the Company or
any subsidiary as such Stockholder may reasonably request, subject to such
confidentiality agreements as the Company may reasonably request.
SECTION 10. Legend on Stock Certificates. Each certificate
representing shares of Common Stock owned by any Stockholder shall conspicuously
bear the following legend until such time as the shares represented thereby are
no longer subject to the provisions hereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF A STOCKHOLDERS
AGREEMENT, DATED AS OF JANUARY 7, 1999, AMONG THE
COMPANY AND THE OTHER PARTIES THERETO. COPIES MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
HOLDER OF RECORD OF THIS CERTIFICATE TO THE COMPANY."
13
The Company covenants that it shall keep a copy of this Agreement on
file at the address listed in Section 19 for the purpose of furnishing copies to
the holders of record of shares of Common Stock.
SECTION 11. Duration of Agreement. (a) This Agreement (other than the
provisions of Sections 1, 10, 11(b) and 15 through 25) shall terminate upon the
earlier to occur of (i) the tenth anniversary of the date hereof or (ii) the
consummation of (x) a Public Offering by the Company of Common Stock having an
aggregate offering price to the public of not less than $50,000,000, and (y) the
sale, transfer or other disposition (including a distribution by a limited
partnership to its partners) by either the WCAS Purchasers or the Blackstone
Purchasers to persons or entities not required to become parties hereto of at
least 50% of the shares of Common Stock held by the WCAS Purchasers or the
Blackstone Purchasers, as the case may be, on the date hereof.
(b) The provisions of Sections 1, 10, 11(b) and 15 through 25 shall
terminate upon the earlier to occur of (i) the tenth anniversary of the date
hereof or (ii) the consummation of (x) a Public Offering by the Company of
Common Stock having an aggregate offering price to the public of not less than
$50,000,000, and (y) the sale, transfer or other disposition (including a
distribution by a limited partnership to its partners) by both of the WCAS
Purchasers and the Blackstone Purchasers to persons or entities not required to
become parties hereto of at least 50% of the shares of Common Stock held by the
WCAS Purchasers or the Blackstone Purchasers, respectively, on the date hereof.
SECTION 12. Advisory and Monitoring Fee. On each anniversary of the
date of this Agreement, the Company shall pay advisory and monitoring fees of
(i) $450,000, plus reasonable expenses, to WCA Management Corporation, or
another entity or entities designated by the holders of a majority of the Common
Stock held by the WCAS Purchasers, for so long as the WCAS Purchasers hold at
least 25% of the shares of Common Stock held by the WCAS Purchasers on the date
hereof, and (ii) $300,000, plus reasonable expenses, to Blackstone Management
Partners III L.L.C., or another entity or entities designated by the holders of
a majority of the Common Stock held by the Blackstone Purchasers, for so long as
the Blackstone Purchasers hold at least 25% of the shares of Common Stock held
by the Blackstone Purchasers on the date hereof. To the extent that payment of
such monitoring fees is prohibited by any provision of any credit agreement or
other debt instrument, the Company shall use commercially reasonable efforts to
cause the lender or holder of such debt instrument to waive any such
prohibition. If, despite such efforts, such lender or holder is unwilling to
permit the Company to pay such monitoring fee, then any amounts not so paid
shall accrue and shall bear interest at the rate of 13% per annum until paid,
and the Company shall promptly pay such sums when no such prohibitions exist.
SECTION 13. Representations and Warranties by the Stockholders. Each
Stockholder, severally and not jointly, represents and warrants to the Company
and the other Stockholders as follows:
14
(a) The execution, delivery and performance of this Agreement by such
Stockholder will not violate any provision of applicable law, any order of any
court or other agency of government, or any provision of any indenture,
agreement or other instrument to which such Stockholder or any of his, her or
its properties or assets is bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument.
(b) This Agreement has been duly executed and delivered by such
Stockholder, and when executed by the other parties hereto will constitute the
legal, valid and binding obligation of such Stockholder, enforceable in
accordance with its terms.
(c) The shares of Common Stock listed opposite the name of such
Stockholder on Schedule I, Schedule II, Schedule III or Schedule IV hereof, as
the case may be, constitute all the shares of Common Stock of the Company owned
by such Stockholder as of the date hereof (except that Welsh, Carson, Xxxxxxxx &
Xxxxx VIII, L.P., owns one additional share of Common Stock).
SECTION 14. Representations and Warranties by the Company. The Company
hereby incorporates by reference and makes the representations and warranties
set forth in the Purchase Agreement, to the extent applicable to this Agreement
or the transactions contemplated hereby, as of the date hereof.
SECTION 15. Headings. Headings of articles, sections and paragraphs of
this Agreement are inserted for convenience of reference only and shall not
affect the interpretation or be deemed to constitute a part hereof.
SECTION 16. Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein shall, for any reason, be held to be invalid, illegal or unenforceable,
such illegality, invalidity or unenforceability shall not affect any other
provisions of this Agreement.
SECTION 17. Benefits of Agreement. Nothing expressed by or mentioned
in this Agreement is intended or shall be construed to give any person other
than the parties hereto and their respective successors and permitted assigns
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and permitted
assigns. Notwithstanding anything in this Section 17 to the contrary, subject to
compliance with the terms of this Agreement, each Stockholder shall have the
right to assign its interests hereunder in whole or in part to any transferee of
the Common Stock held by such Stockholder in compliance with this Agreement;
provided, however, that such transferee shall agree in writing with the parties
hereto to be bound by, and to comply with, all applicable provisions of this
Agreement and to be deemed to be a Stockholder for purposes of this Agreement
15
(it being understood that for purposes of this Agreement any successor to or
assigns of any (i) WCAS Purchaser shall be deemed to be a WCAS Purchaser, (ii)
Blackstone Purchaser shall be deemed to be a Blackstone Purchaser, (iii)
Purchaser shall be deemed to be a Signal Purchaser and (iv) Management Purchaser
shall be deemed to be a Management Purchaser); provided, further, however, that
whether or not such transferee is assigned any interest hereunder, any
transferee of a Stockholder shall agree in writing with the parties hereto to be
bound by, and to comply with, all applicable provisions of this Agreement and to
be deemed to be a Stockholder for purposes of this Agreement in the manner
provided above so long as such transferee is, with respect to the transferring
Stockholder, a transferee of the type specified in clause (i) or (iii) of
Section 3(d). Any Stockholder may assign to any of its affiliates which are also
Stockholders all or any part of its tag-along rights with respect to a
particular proposed sale pursuant to Section 3 or its rights to purchase
securities pursuant to Section 5; provided the aggregate number of shares of
Common Stock to which such rights apply with respect to all such affiliated
Stockholders, taken as a whole, shall not be increased thereby. Except as
expressly permitted hereby, each party's rights and obligations under this
Agreement shall not be subject to assignment or delegation by any party hereto,
and any attempted assignment or delegation in violation hereof shall be null and
void ab initio.
SECTION 18. Notice of Transfer. To the extent that any Stockholder
shall transfer any shares of Common Stock, notice of which transfer is not
otherwise required to be delivered to the Stockholders hereunder, such
Stockholder shall, within three days following consummation of such transfer,
deliver notice thereof to the Company and the other Stockholders; provided,
however, that no such notice shall be required to be delivered unless the
aggregate number of shares of Common Stock transferred by such Stockholder and
its affiliates since the date of the last notice delivered by such Stockholder
pursuant to this Section 17 exceeds 1% of the outstanding Common Stock.
SECTION 19. Notices. Any notice or other communications required or
permitted hereunder shall be deemed to be sufficient and received if contained
in a written instrument delivered in person or by courier or duly sent by first
class certified mail, postage prepaid, or by facsimile addressed to such party
at the address or facsimile number set forth below:
(1) if to the Company, to it at:
0000 Xxxxxx Xxxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: President
with a copy to:
16
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
(2) if to any Stockholder, to the address of such Stockholder
appearing in Schedule I, Schedule II, Schedule III or Schedule IV hereto;
or, in any case, at such other address or facsimile number as shall have been
furnished in writing by such party to the other parties hereto. All such
notices, requests, consents and other communications shall be deemed to have
been received (a) in the case of personal or courier delivery, on the date of
such delivery, (b) in the case of mailing, on the fifth business day following
the date of such mailing and (c) in the case of facsimile, when received.
SECTION 20. Entire Agreement; Modification. This Agreement (including
the Schedules hereto) constitutes the entire agreement of the parties with
respect to the subject matter hereof and may not be amended or modified except
by an instrument in writing signed by the Company and a majority in interest of
(i) the WCAS Purchasers, (ii) the Blackstone Purchasers and (iii) only in the
case of any such modification affecting their rights hereunder, the Signal
Purchasers and/or the Management Purchasers, as the case may be. Any waiver of
any provision of this Agreement must be in a writing signed by the party against
whom enforcement of such waiver is sought.
SECTION 21. Covenants Bind Successors and Assigns. All the covenants,
stipulations, promises and agreements in this Agreement contained by or on
behalf of any party shall bind its successors and permitted assigns, whether so
expressed or not. Without limiting the generality of the foregoing, upon the
consummation of the merger contemplated by the Merger Agreement (the "Merger"),
the corporation that survives the Merger shall succeed to all obligations of
the Company set forth herein and, immediately following such Merger, shall
execute and deliver to each Stockholder a supplement hereto in form and
substance reasonably acceptable to each Stockholder acknowledging that it is
bound by all such obligations of the Company.
SECTION 22. Counterparts. This Agreement may be executed in any number
of counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
SECTION 23. Changes in Common Stock. If, and as often as, there are
any changes in the Common Stock by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof as may be required so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock as so changed.
17
SECTION 24. Specific Performance. Each party hereto agrees that a
remedy at law for any breach or threatened breach by such party of this
Agreement would be inadequate and therefore agrees that any other party hereto
shall be entitled to specific performance of this Agreement in addition to any
other available rights and remedies in case of any such breach or threatened
breach.
SECTION 25. Governing Law. This Agreement shall be governed by,
enforceable under, and construed in accordance with the laws of the State of
Delaware.
18
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as a sealed instrument, all as of the day and year first above
written.
CCW ACQUISITION CORP.
By /s/Xxxxxx X. XxXxxxxxx
Name: Xxxxxx X. XxXxxxxxx
Title: President
WELSH, CARSON, XXXXXXXX & XXXXX VII, L.P.
By WCAS VII Partners, L.P., General Partner
By /s/ Xxxxx XxxXxxxx
General Partner
WELSH, CARSON, XXXXXXXX & XXXXX VIII, L.P.
By WCAS VIII Associates, L.L.C., General Partner
By /s/ Xxxxx XxxXxxxx
Managing Member
WCAS CAPITAL PARTNERS III, L.P.
By WCAS CP III Associates, L.L.C., General Partner
By /s/ Xxxxx XxxXxxxx
Managing Member
WCAS INFORMATION PARTNERS, L.P.
By /s/Xxxxxx X. XxXxxxxxx
General Partner
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxx X. Xxxx
Xxxxxx X. XxXxxxxxx
Xxxxx XxxXxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. xx Xxxxxx
Xxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxx
Xxxxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
D. Xxxxx Xxxxxxx
By /s/ Xxxxx X. XxxXxxxx
Xxxxx X. XxxXxxxx
Individually and
as Attorney-in-fact
WCA MANAGEMENT CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President
XXXXXXX X. XXXXXXXX TRUST
By: /s/ X.X. Xxxxx
Trustee
XXXX X. XXXXXXXX TRUST
By: /s/ X.X. Xxxxx
Trustee
XXXXXX X. XXXXXXXX TRUST
By: /s/ X.X. Xxxxx
Trustee
BLACKSTONE CCC CAPITAL PARTNERS L.P.
By: Blackstone Management Associates III L.L.C.,
Its general partner
By /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Senior Managing Director
BLACKSTONE CCC OFFSHORE CAPITAL
PARTNERS L.P.
By: Blackstone Management Associates III L.L.C.,
Its general partner
By /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Senior Managing Director
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP III L.P.
By: Blackstone Management Associates III L.L.C.,
Its general partner
By /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Senior Managing Director
SIGNAL/CENTENNIAL PARTNERS, L.L.C.
By: SIGNAL/CENTENNIAL ASSOCIATES LLC
By: SIGNAL PARTNERS LLC
By /s/ Xxxxxxx X. Xxxxxx
Managing Member
XXXXXX X. XXXXX & CO., INC., TRUSTEE F/B/O
XXXXXXX X. SMALL ROLLOVER XXX
By: /s/ Xxxxxxx X. Small
Title:
/s/ Xxxxxxx X. Small
Xxxxxxx X. Small
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
SCHEDULE I
WCAS Purchasers
Number of Shares
Name and Address of Purchaser of Common Stock
Welsh, Carson, Xxxxxxxx & Xxxxx VII, L.P. 648,117
Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P. 4,791,333
WCAS Information Partners, L.P 22,741
WCAS Capital Partners III, L.P. 542,169
WCA Management Corporation 56,852
Xxxxxxx X. Xxxxx 51,776
Xxxxxxx X. Xxxxxx 51,776
Xxxxx X. Xxxxxxxx 48,364
Xxxxxxx X. Xxxxxxxx Trust 1,137
Xxxx X. Xxxxxxxx Trust 1,137
Xxxxxx X. Xxxxxxxx Trust 1,137
Xxxxxx X. XxXxxxxxx 51,776
Xxxxxx X. Xxxx 39,448
Xxxxxx X. Xxxxxxxxx 20,012
Xxxxxxx X. xx Xxxxxx 4,548
Xxxx X. Xxxxxxx 4,207
Xxxxxxxx X. Xxxxxx 4,548
Xxxxxxx X. Xxxxxx 4,548
D. Xxxxx Xxxxxxx 1,137
Xxxxxxxxx X. Xxxxxx 1,478
Xxxxx X. XxxXxxxx 455
--------------
TOTAL: 6,348,696
x/x Xxxxx, Xxxxxx, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxxx
SCHEDULE II
Blackstone Purchasers
Number of Shares
Name and Address of Purchaser of Common Stock
Blackstone CCC Capital Partners L.P. 2,490,358
Blackstone CCC Offshore Capital
Partners L.P. 452,055
Blackstone Family Investment
Partnership III L.P. 187,814
---------
TOTAL 3,130,227
c/o The Blackstone Group
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxx
Telecopy: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxxxxx
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
SCHEDULE III
Signal Purchasers
Number of Shares
Name and Address of Purchaser of Common Stock
Signal/Centennial Partners, L.L.C. . 142,131
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with a copy to:
X'Xxxxxxxx, Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx, Esq.
SCHEDULE IV
Management Purchasers
Number of Shares
Name and Address of Purchaser of Common Stock
Xxxxxxx X. Small 6,000
Xxxxxxx X. Small Rollover XXX 4,000
Xxxxx X. Xxxxxxx 2,500
Xxxxxx X. Xxxx 5,000
------
TOTAL: 17,500
c/o Centennial Cellular Corp.
0000 Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
