<PAGE>
                                                                   Exhibit 10.17

                     SEVERANCE AGREEMENT AND GENERAL RELEASE

      This Severance Agreement and General Release (this "Agreement") is entered
into by and between Peter W. Chehayl (including all successors, assigns and
heirs, "Employee") and Centennial Communications Corp., and any and all of its
affiliates, subsidiaries, predecessors, successors and assigns and any of its
employees, directors, officers and shareholders (collectively "Employer").

                                    RECITALS

      A.    Employee resigned as an officer of Employer effective August 31,
            2002 (the "Resignation Date").

      B.    Employee and Employer wish to permanently resolve any and all claims
            and disputes, whether known or unknown, which exist or may exist on
            Employee's behalf, including but not limited to any claims arising
            out of Employee's employment with Employer and the termination of
            that employment.

      NOW THEREFORE, in exchange for the consideration, covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
Employer and Employee agree as follows:

      1.    Employer shall pay Employee the amounts set forth on Exhibit 1
            hereto, subject to applicable tax withholdings. Employee
            acknowledges that Employee has been paid for any and all allowances
            or payments due and owing to Employee at the Resignation Date.
            Except as expressly provided herein, Employee acknowledges that he
            is not entitled to receive any vacation accrual or other payments or
            benefits after the Resignation Date.

      2.    Effective on the Resignation Date, Employee will cease to
            participate in any Employer sponsored plans and benefits, including
            without limitation any employee stock option plan, employee stock
            purchase plan and 401(k) plan. All funds previously contributed to
            any stock purchase plan will be returned to Employee in accordance
            with the terms of such plan.

      3.    Employee hereby irrevocably fully waives, releases, acquits and
            forever discharges Employer from any and all claims, charges,
            complaints, liabilities, allegations, demands, injuries, debts,
            breaches, violations, acts or omissions and causes of action, known
            or unknown, suspected or unsuspected, past or present, foreseen or
            unforeseen, in law or in equity which Employee now has, ever had or
            may hereafter have against Employer arising out of, directly or
            indirectly, or in any way relating to, Employee's employment with
            Employer or the termination of such employment, including any claims
            pursuant to any local, state, federal, or other laws, including
            without limitation, Puerto Rico and Dominican
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            Republic laws (collectively, "Claims").

      4.    Employee further covenants not to, directly or indirectly, bring any
            such Claims against Employer. Employee represents to Employer that
            he is the sole owner of any and all Claims that he is relinquishing
            by executing this Agreement and that no other person has any
            interest in any such Claims. Employee acknowledges that he has had
            the benefit of advice of competent legal counsel with respect to the
            decision to enter into this Agreement.

      5.    Employee represents and warrants to Employer that on or prior to the
            date hereof, Employee has (except as otherwise provided herein) (i)
            returned to Employer all keys, vehicles, computers, telephones,
            beepers, inventory and/or any other property of Employer including
            any and all confidential and proprietary information that is in
            Employee's possession or control and will make no further use of
            same after the date hereof and (ii) repaid Employer all amounts
            owing to Employer on account of advances and other expenses.

      6.    Employee understands, acknowledges and agrees that he is waiving any
            and all Claims, which include without limitation, claims of wrongful
            discharge, breach of contract, lost wages, emotional distress,
            claims under Title VII of the Civil Rights Act of 1964, the Civil
            Rights Act of 1991, the Age Discrimination in Employment Act, as
            amended, the Americans with Disabilities Act, the Federal
            Rehabilitation Act of 1973, Employee Retirement Income Security of
            1974, as amended, the Equal Pay Act of 1963, claims of unjustified
            dismissal (Law 80 of May 30, 1976); benefits of any kind, damages of
            any kind, any claim on wages under Puerto Rico's Civil Code; all
            claims involving violations of the Employer's rules, policies and
            procedures; wage and salary claims; Act No. 96 of June 26, 1956; Act
            No. 223 of July 23, 1974, Act No. 289 of 1946; Act No. 180 of July
            27, 1998; Act No. 84 of August 1, 1995; Act No. 379 of May 15, 1948
            and Act No. 148 of June 30, 1969; discrimination on account of sex,
            religion, race, age, political ideas, social condition or origin,
            national origin, disability or any other reason prohibited by Puerto
            Rico Act No. 100 of June 30, 1959, Puerto Rico Act No. 69 of 1985,
            Puerto Rico Act No. 17 of April 22, 1988, Puerto Rico Act No. 3 of
            March 13, 1942, the Constitution of the Commonwealth of Puerto Rico,
            and any other Civil Rights laws; Family and Medical Leave Act;
            Federal Rehabilitation Act of 1973; ADEA, the Americans with
            Disabilities Act of 1990, Puerto Rico Act No. 44 of 1985; Puerto
            Rico Act No. 115 of December 20, 1991; the Workers' Compensation Law
            of Puerto Rico; Puerto Rico Act No. 45 of April 18, 1935; Puerto
            Rico Act No. 139 of June 26, 1956 (SINOT); the Insurance Code of
            Puerto Rico; the Occupational Safety and Health Act (OSHA); Puerto
            Rico Safety and Health Act of 1975 (PROSHA); the Consolidated
            Omnibus Budget Reconciliation Act of 1985 ("COBRA");
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            the Health Insurance Portability and Accountability Act of 1996; or
            under any other federal, state or Commonwealth of Puerto Rico law,
            including Article 1802 of the Civil Code of Puerto Rico and all
            statutes on libel and defamation and further including without
            limitation any other federal, state or local laws and regulations
            relating to employment and/or employment discrimination, including
            any Commonwealth of Puerto Rico laws.

      7.    Each party hereto promises and agrees that, unless compelled by
            legal process, it will not disclose to any third party (including,
            without limitation, any present or former employee of Employer) and
            will keep confidential the fact or terms of this Agreement,
            including without limitation the amounts referred to in this
            Agreement. Each party hereto may disclose the terms contained herein
            to attorneys, accountants, immediate family members and other
            professional advisors to whom the disclosure is necessary to
            accomplish the purposes for which such party has contacted such
            advisors. The parties agree that this Agreement may be filed
            publicly with the Securities and Exchange Commission.

      8.    Employee acknowledges that due to the position Employee has occupied
            and the responsibilities Employee has had while employed by
            Employer, Employee has received confidential and proprietary
            information concerning Employer. Employee hereby promises and agrees
            that, unless compelled by legal process, Employee will not disclose
            to any third party and will keep confidential all such confidential
            and proprietary information received, developed or learned by
            Employee while employed by Employer, including without limitation
            information concerning Employer's products, procedures, policies,
            customers, sales, prices, financial information, technical
            information, network information, employee information, marketing
            strategies, and the terms of Employer's contracts with third
            parties.

      9.    Employee agrees that for a period of two years from the Resignation
            Date, he will not directly or indirectly induce or attempt to induce
            any employee of the Employer to leave the employ of the Employer or
            in any way interfere with the relationship between the Employer and
            any employee thereof. Employee agrees that he will not now, or in
            the future, deliberately disrupt, damage, injure or interfere with
            the business of Employer.

      10.   Employee agrees that he will not now, or in the future, make any
            disparaging statements (whether oral or written) concerning
            Employer.

      11.   In exchange for the consideration to be received by Employee
            hereunder, which Employee expressly acknowledges is sufficient and
            satisfactory, Employee agrees that for a period of one year from the
            date hereof, Employee agrees that he will not, directly or
            indirectly, own, manage,
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            control, participate in, consult with, render services for or in any
            manner engage in any business in the Service Area (as defined below)
            which shall compete with any business conducted by the Employer on
            the date hereof. For purposes ` of this covenant, the term Service
            Area means all geographic areas in which Employer operates on the
            date hereof. Employee acknowledges that he fully understands the
            scope and meaning of this non-compete provision and agrees that it
            is reasonable in light of the circumstances.

      12.   Employee hereby acknowledges and agrees that a violation of Section
            8, 9, 10, 11 or 12 will cause irreparable injury to Employer and
            Employer will be entitled, in addition to any other rights and
            remedies Employer may have at law or in equity, to seek an
            injunction enjoining and restraining Employee from doing or
            continuing to do any such violative act.

      13.   This Agreement and any documents referred to herein shall, in all
            respects, be interpreted, enforced, and governed by and under the
            laws of the State of New Jersey.

      14.   Employee acknowledges that nothing herein shall be interpreted to be
            an admission of liability by Employer.

      15.   Employee agrees that all covenants contained in this Agreement shall
            survive its execution.

      16.   If any provision of this Agreement is deemed to be invalid or
            unenforceable, the remainder of the Agreement shall not be affected,
            and a suitable and equitable provision shall be substituted for the
            invalid and unenforceable provision in order to carry out, as far as
            may be valid and enforceable, the intent and purpose of such invalid
            or unenforceable provision.

      17.   Employee acknowledges and agrees that no promises or representations
            were made to Employee by any person which do not appear written
            herein and that Employee has not relied on any such promise or
            representation. This Agreement contains the entire agreement of the
            parties on the subject matter thereof. This Agreement may not be
            modified except by a writing signed by the parties or as provided in
            paragraph 16. This Agreement may be executed in one or more
            counterparts, each of which will be deemed to be an original copy of
            this Agreement with signatures by fax counting for all purposes as
            original signatures.

      18.   Employee hereby acknowledges that Employee has read and understands
            this Agreement and that Employee signs this Agreement voluntarily,
            with full knowledge of any and all rights which he may have, and
            without
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            coercion and was given the opportunity to review this Agreement with
            her attorney. Employee further acknowledges that the waivers
            Employee has made in this Agreement are knowing, conscious and
            voluntary and are made with full appreciation that Employee is
            forever foreclosed from pursuing any of the claims so waived. After
            having sufficient time to carefully read all the terms and
            conditions of this Agreement, Employee affirms that he completely
            understands the same, as well as their consequences. Employee
            acknowledges that he has been informed that he can, and must, seek
            legal counsel before signing this Agreement, and that a reasonable
            time of at least twenty-one (21) days has been given to seek such
            legal counsel. The parties agree that Employee has a period of seven
            (7) days from the date this Agreement is signed to revoke the same.
            For such reason, the parties agree that any payments to be made to
            Employee hereunder will be made after the seven (7) day period has
            expired.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth below.


SEPTEMBER 1, 2002

CENTENNIAL COMMUNICATIONS CORP.


By:  /s/ Michael J. Small
     --------------------
Name:  Michael J. Small
Title: Chief Executive Officer


PETER W. CHEHAYL


By: /s/ Peter W. Chehayl
    --------------------
Name:  Peter W. Chehayl
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                                    EXHIBIT 1

      1.    Side Letter. Benefits and other compensation described in letter
            agreement dated September 1, 2002 and attached hereto.

      2.    Vacation. Earned and unused vacation will be paid to Employee as
            soon as reasonably practicable after the date hereof.

      3.    Personal Property. Employee shall be permitted to maintain
            possession of his wireless telephone and laptop computer. Employee
            will begin paying monthly changes on his wireless phone, effective
            November 1, 2002.

      4.    Outplacement Services. Employer will reimburse Employee's reasonable
            and documented outplacement services expenses incurred by Employee
            until the earlier to occur of (i) August 31, 2003 or (ii) the date
            when Employee accepts employment with a subsequent employer.

      5.    Medical Benefits. Employer will continue to cover Employee under its
            medical and dental benefits programs in accordance with prior
            practice and subject to customary Employee contributions until the
            earlier to occur of (i) August 31, 2003 or (ii) the date that
            Employee has obtained similar benefits from a subsequent employer.

      6.    Bonus. Employee shall be eligible to receive a bonus of $31,250, in
            the event Employer generates certain financial results for the
            quarter ending August 31, 2002. Such bonus shall be paid (if at all)
            in the same manner as is paid to other eligible employees.

      7.    Financial Assistance. Employee will continue to receive
            reimbursement of reasonable and documented financial assistance
            expenses in accordance with prior practice until August 31, 2003.
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                         CENTENNIAL COMMUNICATIONS CORP.


September 1, 2002


Dear Mr. Chehayl:

This letter is being delivered to you in connection with the Severance Agreement
and General Release (the "Release Agreement") dated the date hereof. Capitalized
terms used herein and not defined herein have the meanings given to such terms
in the Release Agreement.

Notwithstanding any provision in the Release Agreement to the contrary, during
the period of time from the Resignation Date up to and including August 31, 2003
(the "Transition Period"), Employee shall continue as an employee of Employer.
In consideration for the services to be performed by Employee to Employer during
the Transition Period, Employee shall continue to receive payment of his base
salary of $205,000 per annum in accordance with past practice. In addition,
during the Transition Period, Employee may exercise any stock options in
accordance with the terms of his option agreement. Except as expressly provided
herein or in the Release Agreement (including the exhibits), Employee shall be
entitled to no other compensation or other payments from Employer.

Employee has voluntarily elected during the Transition Period that he does not
wish to participate in Employer's 401K plan, stock purchase plan or any other
Employee benefit plan.

On August 31, 2003, Employee shall, without any further action on the part of
Employee or Employer, be deemed to have resigned from the employ of Employer,
and a termination of Employee pursuant to Section 9(a) of his option agreements
shall be deemed to have occurred. Accordingly, Employee shall have until
September 30, 2003 to exercise any vested stock options.
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During the Transition Period, Employee agrees to make himself available to
Employer for such purposes as Employer may reasonably request. During the
Transition Period, Employee agrees that he (1) is not an officer of Employer,
(2) has no authority to bind Employer to any contract or agreement (whether oral
or written) or to assume or create any obligation or responsibility, express or
implied, on behalf of or in the name of Employer and (3) will not hold himself
out as having any such authority.


Centennial Communications Corp.


By: /s/ Michael J. Small
    --------------------
Name:  Michael J. Small
Title: Chief Executive Officer

Accepted and Agreed
as of the date first above written


By: /s/ Peter W. Chehayl
   ---------------------
Name:  Peter W. Chehayl