Subscription Agreement

SUBSCRIPTION AGREEMENT


SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of June 2, 1999, by and among CENTURION INTERNATIONAL, INC., a Nebraska corporation (the "Company"), CORNERSTONE EQUITY INVESTORS IV, L.P., a Delaware limited partnership ("Cornerstone"), PRUDENTIAL PRIVATE EQUITY INVESTORS III, L.P., a Delaware limited partnership ("PPEI"), KUCK INVESTMENT PARTNERS, L.P., a Delaware limited partnership ("Kuck"), and James Anthony Boyle ("Boyle"), Michael McGinley ("McGinley"), and Peter Crowley ("Crowley" and, together with Boyle and McGinley, the "Investors").


WHEREAS, the Company and the Investors desire to enter into an agreement that will provide for the acquisition by (i) Boyle of (A) 11,847 shares of the Company's Common Stock and (B) 1,500 shares of the Company's Series B Preferred, (ii) McGinley of 3,949 shares of Common Stock and 500 shares of Series B Preferred, and (iii) Crowley of 3,949 shares of Common Stock and 500 shares of Series B Preferred, in each case upon the terms and conditions set forth herein.


WHEREAS, the execution and delivery of this Subscription Agreement by each of the Company and the Investors is a condition to the obligations of the parties to that certain Asset and Share Purchase Agreement, dated as of June 2, 1999, by and among Centurion International, Ltd., a company organized under the laws of England and Wales, and Sigma Wireless Technologies Ltd., a company organized under the laws of Ireland (the "Asset and Share Purchase Agreement").


NOW, THEREFORE, in consideration of the mutual undertakings contained herein, the parties hereto agree as follows:


1. Definitions. As used herein, the following terms shall have the following meanings.


"Affiliate" shall mean, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this definition, "control" (including, with its correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).


"Approved Sale" means the sale of the Company, in a single transaction or a series of related transactions, to a third party (which is not an Affiliate of the Approving Stockholders) (a) pursuant to which such third party proposes to acquire all or substantially all of the outstanding Common Stock (whether by merger, consolidation, recapitalization, reorganization, purchase of the outstanding Common Stock or otherwise) or all or substantially all of the consolidated assets of the Company, (b) which has been approved by the Board, holders of a majority of the outstanding Cornerstone Stockholder Shares and holders of a majority of the outstanding PPEI Stockholder Shares, voting together as a single class (the "Approving Stockholders"), (c) pursuant to which all holders of Common Stock receive with respect thereto (whether in such transaction or, with respect 2 to an asset sale, upon a subsequent liquidation) the same form and amount of consideration per share of Common Stock or, if any holders are given an option as to the form and amount of consideration to be received, all holders are given the same option, and (d) in connection with such transaction, no fee is being paid by the Company to Cornerstone or any of its Affiliates.


"Board" means the Company's board of directors.


"Business Day" means any day that is not a Saturday, Sunday or other day on which banks are required or authorized by law to be closed in the State of New York or City of New York.


"Common Stock" means the Company's Common Stock, par value $0.01 per share.


"Company Shares" means all issued and outstanding shares of capital stock of the Company and all rights to acquire capital stock of the Company and all stock appreciation, phantom stock, profit, participation and similar rights with respect to the Company's capital stock of whatever nature.


"Cornerstone Stockholder Shares" means all Stockholder Shares issued or issuable to Cornerstone and its Affiliates or otherwise acquired by such Persons.


"Family Group" means, with respect to an individual holder of Investor Stock, such Person's spouse and descendants (whether natural or adopted) and any trust solely for the benefit of, or any partnership, the only partners of which are, such Person and/or such Person's spouse, their respective ancestors and/or descendants (whether natural or adopted).


"GAAP" means U.S. generally accepted accounting principles, as in effect from time to time and as adopted by the Company with the consent of its independent public accountants, consistently applied.


"Governmental Entity" means individually, and "Government Entities" means collectively, the United States of America or any other nation, any state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of government, including any Tribunal, in each case having jurisdiction over the Company or any of its Subsidiaries.


"Initial Public Offering" means the initial underwritten public offering of the Company's Common Stock pursuant to a registration statement filed under the Securities Act with the Securities and Exchange Commission, which offering results in gross proceeds (before deducting underwriting discounts and expenses) to the Company and any selling Stockholder of at least $40,000,000.


"Investor Stock" means all Company Shares acquired by the Investors hereunder and all Company Shares hereafter acquired by the Investors. Investor Stock will continue to be Investor Stock in the hands of any holder other than the Investors, including all transferees of the Investors (except for the Company and Cornerstone), and except as otherwise provided herein, each such other holder of Investor Stock will succeed to all rights and obligations attributable to the Investors as a


-2- 3 holder of Investor Stock hereunder. Investor Stock will also include shares of the Company's capital stock issued with respect to Investor Stock by way of a stock split, stock dividend or other recapitalization.


"Other Stockholders" means, with respect to a Stockholder, all Stockholders other than such Stockholder.


"Person" means an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.


"Prime Rate" means, for any day, a fluctuating rate of interest per annum equal to the sum of (x) the prime rate of interest announced by Citibank N.A. from time to time, changing when and as said prime rate changes, plus (y) 2.0% per annum.


"PPEI Stockholder Shares " means all Stockholder Shares issued or issuable to PPEI and its Affiliates or otherwise acquired by such Persons.


"Public Sale" means any sale of Stockholder Shares to the public pursuant to an offering registered under the Securities Act or to the public effected through a broker, dealer or market maker pursuant to the provisions of Rule 144 under the Securities Act.


"Put Price" means, with respect to each share of Common Stock, the Common Stock Share Price.


"Recapitalization Agreement" means the Recapitalization Agreement, dated as of April 18, 1997 by and among the Company, Cornerstone, PPEI, Kuck, Lance J. Kuck, Scott M. Kuck and P. Jackson Bell.


"SEC" means the Securities and Exchange Commission.


"Securities Act" means the Securities Act of 1933, as amended from time to time.


"Series A Preferred Stock" means the Company's Series A Convertible Preferred Stock, par value $0.01 per share.


"Series B Preferred" means the Company's Series B Redeemable Preferred Stock, par value $0.01 per share.


"Stock Option Plan" means the Centurion International, Inc. 1997 Stock Option Plan as in effect from time to time.


"Stockholder" means any party to the Stockholders Agreement or this Agreement, the Permitted Transferees of any such party, and any other Person who becomes a party to the Stockholders Agreement or this Agreement.


-3- 4
"Stockholder Shares" means (i) any Common Stock held by the Stockholders, including without limitation any Common Stock issued upon conversion of the Series A Preferred Stock, and (ii) any equity securities issued or issuable directly or indirectly with respect to the securities referred to in clause (i) above by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular shares constituting Stockholder Shares, such shares will cease to be Stockholder Shares when they have been sold in a Public Sale, an Approved Sale, or upon the consummation of an Initial Public Offering. For purposes of this Agreement, a Person will be deemed to be a holder of Stockholder Shares whenever such Person has the right to acquire directly or indirectly such Stockholder Shares (upon conversion or exercise in connection with a Transfer of securities or otherwise, but disregarding any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected.


"Stockholders Agreement" means the Stockholders Agreement, dated as of April 18, 1997, by and among the Company, Cornerstone, PPEI, Kuck, and certain other Persons signatory thereto.


"Subsidiary" means, with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons shall be allocated a majority of partnership, association or other business entity gains or losses or shall be or control the managing director or a general partner of such partnership, association or other business entity.


"Tribunal" means any government, arbitration panel, court or governmental department, commission, board, bureau, agency or instrumentality of the United States of America or any state, province, commonwealth, nation, territory, possession, county, parish, town, township, village, municipality or other Governmental Entity, whether now or hereafter constituted and/or existing.


2. Purchase and Sale of Investor Stock.


(a) The closing of the transactions contemplated by this Agreement (the "Closing") shall take place upon satisfaction or waiver of all conditions to the obligations of the parties hereto to consummate the transactions contemplated hereby or such other date as the parties hereto may mutually determine (the "Closing Date"). On the Closing Date, (i) each of Boyle, McGinley, and Crowley will purchase, and the Company will sell (A) 11,847, 3,949, and 3,949 shares of Common Stock, respectively, at a price of $88.63 per share (the "Common Stock Share Price") and (B) 1,500 and 500 shares of Series B Preferred, respectively, at a price of $100 per share, and (ii) the Company will deliver to each Investor certificates representing such shares, and


-4- 5 each of Boyle, McGinley, and Crowley will deliver to the Company a check or wire transfer of immediately available funds in the aggregate amount of $1,199,999.61, $399,999.87, and $399,999.87, respectively (each, the "Investor Purchase Price")


(b) In connection with the purchase and sale of the Investor Stock hereunder, each Investor represents and warrants to the Company that:


(i) The Investor Stock to be issued to such Investor pursuant to this Agreement will be acquired for such Investor's own account and not with a view to, or intention of, distribution thereof in violation of the Securities Act, or any applicable state securities laws, and such Investor's Investor Stock will not be disposed of in contravention of the Securities Act or any applicable state securities laws.


(ii) Such Investor has not retained a finder, broker, financial advisor or other intermediary who is to be paid a commission, fee or other remuneration for soliciting such Investor to purchase the Investor Stock.


(iii) Such Investor is sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in the Investor Stock and has determined that such investment in the Investor Stock is suitable for such Investor, based upon such Investor's financial situation and needs, as well as such Investor's other securities holdings.


(iv) Such Investor:


(A) has not filed a registration statement which is the subject of a currently effective registration stop order entered pursuant to any state's securities laws within the last five years;


(B) has not been convicted within the last five years of any felony or misdemeanor in connection with the offer, purchase or sale of any security or any felony involving fraud or deceit, including, but not limited to, forgery, embezzlement, obtaining money under false pretenses, larceny or conspiracy to defraud;


(C) is not currently subject to any state administrative enforcement order or judgment entered by the state securities administrator within the last five years or subject to any state's administrative enforcement order or judgment in which fraud or deceit, including, but not limited to, making untrue statements of material facts and omitting to state material facts, was found and the order or judgment was entered within the last five years;


(D) is not subject to any state's administrative enforcement order or judgment which prohibits, denies or revokes the use of any exemption from registration in connection with the offer, purchase or sale of securities; or


(E) is not currently subject to any order, judgment or decree of any court of competent jurisdiction, entered within the last five years, temporarily or preliminarily restraining or enjoining such party from engaging in or continuing any conduct or practice in


-5- 6 connection with the purchase or sale of any security or involving the making of any false filing with the state.


(v) Such Investor is able to bear the economic risk of such Investor's investment in the Investor Stock for an indefinite period of time and the Investor understands that the Investor Stock has not been registered under the Securities Act and cannot be sold unless subsequently registered under the Securities Act or unless an exemption from such registration is available.


(vi) Such Investor has had an opportunity to ask questions and receive answers concerning the terms and conditions of the offering of Investor Stock.


(vii) Such Agreement constitutes the legal, valid and binding obligation of such Investor, enforceable in accordance with its terms, and the execution, delivery and performance of this Agreement by such Investor does not and will not conflict with, violate or cause a breach of any agreement, contract or instrument to which such Investor is a party or any judgment, order or decree to which the Investor is subject.


(c) In connection with the purchase and sale of the Investor Stock hereunder, the Company represents and warrants to each Investor that:


(i) Corporate Organization and Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation with full corporate power and authority to enter into this Agreement and any other agreements contemplated hereby and perform its obligations hereunder and thereunder. The Company and each of its Subsidiaries has the requisite power and authority to own all of the properties owned by it and to conduct its business as now being conducted.


(ii) Authorization. The execution, delivery and performance of this Agreement and any other agreements contemplated hereby by the Company and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite corporate action on the part of the Company, and no other corporate proceedings on its part are necessary to authorize the execution, delivery or performance of this Agreement or any other agreements contemplated hereby. This Agreement and any other agreements contemplated hereby constitute valid and binding obligations of the Company, enforceable in accordance with their terms.


(iii) No Violation. The Company is not subject to or obligated under its articles of incorporation, any applicable law, or rule or regulation of any governmental authority, or any agreement or instrument, or any license, franchise or permit, or subject to any order, writ, injunction or decree, which would be breached or violated by its execution, delivery or performance of this Agreement or the other agreements contemplated hereby.


(iv) Financial Statements. The audited consolidated balance sheets and statements of income, changes in stockholders' equity, and cash flow of the Company and its Subsidiaries as of and for the fiscal years ended December 31, 1996, December 31, 1997 and December 31, 1998 (including the notes thereto), and the unaudited consolidated balance sheet and


-6- 7 statement of income, changes in stockholders' equity and cash flow of the Company and its Subsidiaries as of and for the three month period ended March 31, 1999, copies of which have been delivered by the Company to the Investors, have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby and present fairly the financial condition of the Company as of such dates and the results of operations and cash flows of the Company for such periods.


(v) Capitalization. Immediately following the consummation of the transactions contemplated hereby, the authorized capital stock of the Company shall consist of (i) 1,063,830 shares of Common Stock, of which 819,745 shares shall be issued and outstanding, (ii) 160,000 shares of Series A Preferred, of which 160,000 shares shall be issued and outstanding, and (iii) 90,000 shares of Series B Preferred, of which 87,500 shares shall be issued and outstanding. As of immediately following the consummation of the transactions contemplated hereby, all of the outstanding shares of the Company's capital stock shall be validly issued, fully paid and nonassessable. After giving effect to the consummation of the transactions contemplated by this Agreement, the only shares of capital stock of the Company issued and outstanding, reserved for issuance or committed to be issued will be:


(A) 819,745 outstanding shares of Common Stock;


(B) 160,000 shares of Series A Preferred, which shares are convertible into 160,000 shares of Common Stock;


(C) 87,500 outstanding shares of Series B Preferred;


(D) 160,000 shares of Common Stock reserved for issuance upon the conversion of the Series A Preferred; and


(E) 63,830 shares of Common Stock reserved for issuance under the Company's stock option plans, pursuant to which options to purchase 41,250 shares of Common Stock are outstanding.


Except as set forth above, there are no outstanding rights, options, warrants or other agreements binding upon the Company for the issuance of any shares of its capital stock. The Company has no stock appreciation rights, phantom stock plan or similar rights outstanding.


(vi) Investor Stock. The Investor Stock has been duly and validly authorized and upon issuance thereof pursuant to the terms of this Agreement will be duly and validly issued, fully paid and non-assessable.


(d) In connection with the purchase and sale of the Investor Stock hereunder, each of Cornerstone, PPEI and Kuck represents and warrants to each Investor that:


(i) Authorization. The execution, delivery and performance of this Agreement and any other agreements contemplated hereby by such Person and the consummation of the transactions contemplated hereby and thereby have been duly and v ...