<PAGE>
Registration No. 33-_______
As filed with the Securities and Exchange Commission on March 30, 1995.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------
COMMNET CELLULAR INC.
(Exact name of registrant as specified in its charter)
Colorado 4811 84-0924904
(State or other juris- (Primary Standard Industrial (I.R.S. Employer
diction of incorporation Classification Code Number) Identification No.)
or organization)
5990 Greenwood Plaza Boulevard
Englewood, Colorado 80111
(303) 694-3234
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Amy M. Shapiro, Esq.
Vice-President and General Counsel
CommNet Cellular Inc.
5990 Greenwood Plaza Boulevard
Englewood, Colorado 80111
(303) 694-3234
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this registration statement
depending upon market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of each Amount maximum maximum Amount of
class of securities to be offering price aggregate registration
to be registered registered per unit(1) offering price(1) fee
------------------- ---------- -------------- ----------------- ------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.001 per share 330,000 $24.125 $7,961,250 $2,745.78
Preferred Stock Purchase
Rights (2) 100.00
---------
Total $2,845.78
---------
<FN>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Prior to the occurrence of certain events, the Preferred Stock Purchase Rights
are attached to and trade with the Common Stock of the Company. Value attribu-
table to the Preferred Stock Purchase Rights, if any, is reflected in the market
price of the Common Stock. The fee paid with respect to the Preferred Stock
Purchase Rights represents the minimum statutory fee pursuant to Section 6(b)
of the Securities Act of 1933.
</TABLE>
------------------------------------------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 30, 1995
330,000 Shares
COMMNET CELLULAR INC.
Common Stock
--------------------------------
This Prospectus covers the resale by certain holders (the "Selling
Securityholders") of up to 330,000 shares of common stock, par value $.001 per
share (the "Common Stock"), of CommNet Cellular Inc., a Colorado corporation
(the "Company") which were or are to be issued by the Company to the Selling
Securityholders upon conversion of up to $4,950,000 in aggregate principal
amount of the Company's 8.75% Convertible Subordinated Notes due 2001.
The Common Stock is listed on the NASDAQ National Market under the trading
symbol "CELS." On March 28, 1995, the last reported sale price of the Common
Stock was $24.125.
The Company will not receive any of the proceeds from the sale of the
shares by the Selling Securityholders. Expenses of preparing and filing the
registration statement to which this Prospectus relates and all post-effective
amendments will be borne by the Company.
See "Risk Factors" for a discussion of certain factors which prospective
investors should consider prior to an investment in the Common Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ___________________________, 1995.
<PAGE>
No person is authorized to give any information or to make any
representation other than those contained or incorporated by reference in this
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or any Selling
Securityholder. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that there has
been no change in the information contained herein since the date hereof. This
Prospectus does not constitute an offer to sell or a solicitation of an offer
to buy by anyone in any jurisdiction in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make such offer
or solicitation in such jurisdiction.
----------------------------------------------
TABLE OF CONTENTS
Page
----
Available Information..................................................... 2
Incorporation by Reference................................................ 2-3
The Company............................................................... 4
Risk Factors.............................................................. 4-6
Use of Proceeds........................................................... 7
Selling Securityholders................................................... 7-8
Plan of Distribution...................................................... 8-9
Legal Matters............................................................. 9
Experts................................................................... 9
----------------------------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Information as of particular dates concerning
its directors and officers and any material interest of such persons in
transactions with the Company is disclosed in proxy statements distributed to
shareholders and filed with the Commission. Such reports, proxy statements and
other information can be inspected and copied at the offices of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549 and at its regional offices
located at Suite 1400, Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661-2511 and Room 1400, 75 Park Place, New York, New York
10007. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the shares offered hereby. This Prospectus
does not contain all of the
2
<PAGE>
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange
Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1994, as amended by the Form 10-K/A dated
January 11, 1995.
2. The Company's Quarterly Report Form 10-Q for the fiscal quarter
ended December 31, 1994.
3. All other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the
offering of the shares to which this Prospectus relates.
4. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed under the
Exchange Act.
5. The description of the Company's Preferred Stock Purchase Rights
contained in the Company's Registration Statement on Form 8-A filed
under the Exchange Act.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the request of such person, a copy of any or
all documents which are incorporated by reference herein, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference into such documents). Such requests should be directed to Stockholder
Relations, CommNet Cellular Inc., 5990 Greenwood Plaza Blvd., Suite 300,
Englewood, Colorado 80111.
THE COMPANY
The Company is engaged in the operation, management and financing of
cellular telephone systems in which its affiliates hold an ownership interest.
The Company was incorporated in Colorado in October 1983 and maintains its
registered office and executive offices at Suite 300, 5990 Greenwood Plaza
Boulevard, Englewood, Colorado 80111. Its telephone number is (303) 694-3234.
References to the Company herein shall
3
<PAGE>
be deemed to refer to the Company and its consolidated subsidiaries, unless the
context requires otherwise.
RISK FACTORS
In addition to the other information in this Prospectus and otherwise
incorporated by reference herein, the following factors should be carefully
considered in evaluating the Company and its business before purchasing the
Notes and Conversion shares offered hereby.
HIGHLY LEVERAGED FINANCIAL POSITION; DEBT SERVICE REQUIREMENTS. The Company
is highly leveraged and has substantial debt service requirements. Interest
expense was $21,339,000 for fiscal year 1994, $9,731,000 of which was payable on
a cash basis. Based on current interest rates and projected average borrowing
levels, the Company expects that interest expense for fiscal year 1995 will be
approximately $29,565,000, of which $15,900,000 will be payable on a current
basis in cash. The credit agreements (collectively, the "Credit Agreements")
between Cellular, Inc. Financial Corporation ("CIFC"), the Company's wholly-
owned financing subsidiary, and CoBank, ACB ("CoBank") provide for the
reborrowing of any loan repayments made to CoBank until the revolving
commitments under the Credit Agreements terminate in December 1995. Upon such
termination, amounts due under the Credit Agreements are converted into
term loans requiring quarterly cash amortization payments through December 31,
2000. The Company's ability to meet its debt service requirements will require
significant and sustained growth in cash flow by the Company and its affiliates.
Historically, the Company has been able to make required interest payments on
its indebtedness from borrowings under bank loans and from equity and debt
financings. The Company will require continued access to such financing sources
until such time as the Company generates sufficient positive cash flow from
operations to service its debt and, to the extent that the Company's leverage
increases, the Company's access to such financing sources may be curtailed or
made more expensive. There can be no assurance that the Company will experience
the necessary growth in cash flow or will be able to access the financing
sources described above.
OPERATING LOSSES AND NET LOSSES. The Company has experienced operating
losses and net losses from inception. The Company anticipates that losses
will continue over the next several years. Operating losses in fiscal years
1994, 1993 and 1992 were $5,669,000, $15,431,000 and $18,344,000, respectively
(including depreciation, amortization and write-down of $15,767,000, $19,951,000
and $14,115,000, respectively), and net losses for the same periods were
$16,751,000, $22,666,000 and $17,042,000. Operating losses for the three months
ended December 31, 1994 and 1993 were $1,821,000 and $1,721,000, respectively
(including depreciation and amortization of $3,974,000 and $3,027,000,
respectively), and net losses for the same periods were $6,438,000 and
$4,713,000. There is no assurance that future operations will be profitable
or generate positive operating income.
HOLDING COMPANY STRUCTURE; CREDIT AGREEMENT RESTRICTIONS. A substantial
portion of the Company's assets and operations are located in its subsidiaries
and affiliates and, to that extent, the Company is effectively a holding
company. The Company must rely on dividends, loan repayments and other
intercompany cash flows from its subsidiaries and affiliates to generate the
funds necessary to meet the Company's debt service obligations, including
payment of principal and interest on the Notes. Claims of other creditors of
the Company's subsidiaries and affiliates, including CoBank, tax authorities,
trade creditors and creditors of those affiliates which have financing sources
in addition
4
<PAGE>
to the Company, will generally have priority as to the assets of such
subsidiaries and affiliates over the claims of the Company and the holders
of certain indebtedness of the Company, including holders of the Notes.
Pursuant to the terms of the Credit Agreements, any affiliate of the
Company which borrows from CIFC is restricted from paying dividends or making
loans or cash distributions to the Company until all loans from CIFC have been
repaid by the affiliate. The Company has guaranteed the obligations of CIFC to
CoBank and has granted CoBank a first security interest in all of the assets of
the Company as security for such guaranty. The assets of affiliates which
borrow funds from CIFC are pledged to CIFC which in turn assigns such pledges to
CoBank. These pledged assets represent 4,464,000 pops of which 3,161,000 are
included in net Company pops and 1,303,000 represent the ownership interest in
affiliates attributable to parties other than the Company. The Credit Agreements
require the Company to comply with financial ratios and working capital
requirements as well as other covenants that may significantly restrict the
Company's operational flexibility. At December 31, 1994, approximately
$64,675,000 of borrowings were outstanding under the Credit Agreements.
NATURE OF COMPANY'S OWNERSHIP OF LICENSES. Most of the Company's interests
in cellular systems are owned through affiliates that are partners in limited
partnerships which are the licensees for their respective systems. In those
partnerships in which the Company's affiliate is a limited partner or is one of
several general partners, certain decisions, such as the timing and amount of
cash distributions and sale or liquidation of the partnership, may not be
subject to a vote of the limited partners or may require a greater percentage
vote than that owned by the Company's affiliate. In those partnerships that
are not managed by the Company, the Company is dependent on the managing partner
to meet the licensee's obligations under the FCC's rules and regulations. There
can be no assurance that any partnership in which the Company holds an interest
will make decisions on such matters which will be in the Company's best interest
or that other partners' conduct and character will not adversely affect the
continuing qualification of licensees in which the Company holds an interest.
LIMITED OPERATING HISTORY; NEW INDUSTRY. Cellular operations within the
network began in 1988 and, accordingly, the Company's operating history is
limited. Moreover, its operations to date have concentrated on the acquisition
of interests in cellular systems licenses and licensees and the construction and
initial operation of cellular systems. A substantial majority of the cellular
telephone systems in which the Company holds an interest have been operational
for less than four years. While there are a substantial number of cellular
telephone systems operating in the United States and in other countries,
cellular telecommunications is a relatively new industry with a limited
history. Moreover, most of the cellular systems in which the Company holds an
interest are rural service area ("RSA") markets, which have an even more limited
operating history than the larger Metropolitan Statistical Area ("MSA") markets.
The future of the industry and the potential demand for cellular service by the
public is uncertain, especially in RSA markets. Based on demographic factors,
including population size and density, traffic patterns and other relevant
market characteristics, the Company believes that successful commercial
exploitation of the RSA and MSA markets in which the Company holds interests can
be achieved. However, there can be no assurance that this will be the case.
COMPETITION. A second cellular carrier now competes directly to attract and
retain cellular customers and independent sales agents in each of the markets in
which
5
<PAGE>
the Company holds an interest. Competition for customers between the two
licensees in each market is principally on the basis of quality, service and
price. Furthermore, competition may arise from other communications
technologies that now exist, such as conventional mobile telephone service,
enhanced specialized mobile radio systems ("ESMR"), personal communications
services ("PCS") and paging services, and also may arise from other technologies
being developed or to be developed in the future. There is no assurance that
cellular technology will not become obsolete in the future.
VALUE OF CELLULAR LICENSES DEPENDENT UPON SUCCESS OF OPERATIONS AND
INDUSTRY. A substantial portion of the Company's assets consists of interests
in entities holding cellular licenses, the value of which will depend
significantly upon the success of the operations of such licensees and the
growth of the industry generally. Although an active market for interests in
cellular licenses currently exists and the Company believes that such a market
will continue, there can be no assurance that this will be the case. Even if an
active market does continue in the future, the values obtainable for interests
in cellular licenses in such a market may be significantly lower than current
values.
REGULATORY CONSIDERATIONS. The licensing, construction, operation, sale and
acquisition of cellular systems are regulated by the FCC. In addition, certain
aspects of cellular operations, including but not limited to rates and resale of
cellular services, may be subject to public utility regulation in the state in
which the service is provided. The ongoing operations of the Company may
require permits, licenses and other authorization from regulatory authorities
(including but not limited to the FCC) not now held by the Company. In addition,
licensing proceedings and applications for granting and transferring
construction permits and operating licenses have been subject to substantial
delays by the FCC. While the Company expects that it will receive requisite
authorizations and approvals in the ordinary course of business, no assurance
can be given that the applicable regulatory authority will grant such approvals
in a timely manner, if at all. Moreover, changes in regulation, such as
increased price regulation or deregulation of interconnection arrangements,
could adversely affect the Company's financial condition and operating results.
Under the FCC rules, licenses for cellular systems are generally issued for ten-
year terms. Although a licensee may apply for renewal and, under certain
circumstances, may be entitled to a renewal expectancy, renewal is not
automatic. The Company's renewal applications may be subject to petitions to
deny or competing applications. Therefore, no assurance can be given that any
license will be renewed.
HAND-HELD CELLULAR TELEPHONE HEALTH RISK ALLEGATIONS. There is now
pending a legal proceeding (not involving the Company) in which a plaintiff
claims that the use of a hand-held cellular telephone resulted in cancer.
The suit alleges that the cancer is the result of near-field exposure to the
radio frequency (RF) radiation inherent in the operation of most hand-held
cellular telephones. Manufacturers of portable cellular telephones maintain
that the normal use of their products does not expose users to health risks from
RF radiation. However, only a few studies have been conducted concerning the
health risks associated with RF radiation in the frequency range utilized by
cellular equipment, and none of those studies concerned near-field exposure.
There can be no assurance that claims relating to these matters will not be made
against the Company or that adverse findings concerning the use of hand-held
telephones will not adversely effect the Company's business.
6
<PAGE>
USE OF PROCEEDS
The Selling Securityholders will receive all of the net proceeds from the
sale of the shares offered hereby. The Company will not receive any of the
proceeds from the sale of such shares.
SELLING SECURITYHOLDERS
The shares covered by this Prospectus are being offered by the Selling
Securityholders identified in the table below. The following table sets forth
certain information as of March 27, 1995, with respect to the Selling
Securityholders and the shares offered hereby:
<TABLE>
<CAPTION>
Number
of Shares Number of Shares
Name of Selling Securityholder Owned (1) Offered (1)
--------------------------------------- --------- ----------------
<S> <C> <C>
First Interstate Bank of Oregon, as Agent
for Oregon Equity Fund 150,000 150,000
State of Delaware Retirement Plan 33,333 33,333
The Northern Trust as Trustee for Nalco
Chemical Company Retirement Trust 16,666 16,666
Joan B. Spears 1,666 1,666
Rockefeller Brothers Fund 13,333 13,333
Clement C. Moore II 1,666 1,666
Saidye Rosner Bronfman Ava Trust 1,666 1,666
The Turbo Trust 1,666 1,666
Joshua Associates 1,666 1,666
Crocodile Associates 1,666 1,666
Margaret D. Norris Trust 6,666 6,666
Diana Ross IRA 1,666 1,666
SBSF Convertible Securities Fund 40,000 40,000
Louis R. Benzak 1,666 1,666
River Branch Foundation 6,666 6,666
Cape Branch Foundation 5,000 5,000
Hilary Hale Trust 1,666 1,666
Linda Hoag Hale Trust - Pch 1,666 1,666
Zellerbach Family Fund 5,000 5,000
Henry Babson Special Investments 6,666 6,666
Parkland Equity Capital Fund I, L.P. Spe 10,000 10,000
Riverbank Associates 6,666 6,666
Estate of Richard B. Salomon 13,333 13,333
<FN>
---------------
(1) All shares are issuable upon conversion of the Company's 8.75% Convertible
Senior Subordinated Notes due 2001 (the "Notes").
</TABLE>
The preceding table has been prepared based upon information furnished to
the Company by or on behalf of the Selling Securityholders.
Other than as a result of the ownership of the Notes or shares issuable
upon conversion thereof, none of the Selling Securityholders listed above has
had any material relationship with the Company within the past three years.
7
<PAGE>
Because the Selling Securityholders may offer all or some of the shares
pursuant to the offering contemplated by this Prospectus, and because there are
currently no agreements, arrangements or understandings with respect to the sale
of any of the shares that will be held by the Selling Securityholders after
completion of this offering, no estimate can be given as to the number of shares
that will be held by the Selling Securityholders after completion of this
offering. See "Plan of Distribution."
PLAN OF DISTRIBUTION
The Company will receive no proceeds from this offering. The shares
offered hereby may be sold from time to time to purchasers directly by any of
the Selling Securityholders acting as principals for their own account in one or
more transactions at a fixed price, which may be changed, or at varying prices
determined at the time of sale, or at negotiated prices. Such prices will be
determined by the Selling Securityholders. Alternatively, any of the Selling
Securityholders may from time to time offer the shares through underwriters,
dealers or agents who may receive compensation in the form of underwriting
discounts, commissions or concessions from the Selling Securityholders and/or
the purchasers of the shares for whom they may act as agent. Each Selling
Securityholder will be responsible for payment of any and all commissions to
brokers which will be negotiated on an individual basis. To the extent
required, the number of shares to be sold, the names of the Selling
Securityholders, the purchase price, the name of any such agent, dealer or
underwriter and any applicable commissions with respect to a particular offer
will be set forth in an accompanying Prospectus Supplement. The aggregate
proceeds to the Selling Securityholders from the sale of the shares offered by
the Selling Securityholders hereby will be the purchase price of such shares
less any broker's commissions.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Selling Securityholders and any broker-dealers, agents or underwriters
that participate with the Selling Securityholders in the distribution of the
shares may be deemed to be "underwriters" within the meaning of the Securities
Act, in which event any commissions received by such broker-dealers, agents or
underwriters and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares offered hereby may not simultaneously
engage in market making activities with respect to the shares for a period of
two business days prior to the commencement of such distribution. In addition,
and without limiting the foregoing, each Selling Securityholder will be subject
to applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Rules 10b-2, 10b-5, 10b-6 and 10b-7,
which provisions may limit the timing of purchases and sales of shares by the
Selling Securityholders.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than
8
<PAGE>
pursuant to this Prospectus. There is no assurance that any Selling
Securityholder will sell any or all of the shares described herein and may
transfer, devise or gift such securities by other means not described herein.
The Company and the Selling Securityholders are obligated to indemnify each
other against certain liabilities arising under the Securities Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Amy M. Shapiro, Vice President, Secretary and General Counsel for the
Company. As of March 27, 1995, Ms. Shapiro was the beneficial owner (for
purposes of the Exchange Act) of 22,917 shares of the Company's Common Stock.
EXPERTS
The consolidated financial statements of the Company at September 30, 1994
and 1993 and for each of the three years in the period ended September 30, 1994,
incorporated by reference in CommNet Cellular Inc.'s Annual Report (Form 10-K)
as amended by Form 10-K/A No. 1 filed on January 11, 1995, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Company in connection with
the distribution of the securities being registered are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Fee . . . . . . . . . . . . . . $ 2,845.78
*Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . 4,500.00
*Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . --
*Printing Expenses . . . . . . . . . . . . . . . . . . . . . . . . 500.00
*Miscellaneous Expenses . . . . . . . . . . . . . . . . . . . . . 2,154.22
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,000.00
----------
----------
<FN>
------------------
*Estimated
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IX of the Company's Articles of Incorporation provides in part:
B. The Corporation shall, to the fullest extent permitted by
applicable law, (i) indemnify, and (ii) advance litigation expenses prior to the
final disposition of an action, to any person made or threatened to be made a
party to an action or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he or she is or was a director or
officer of the Corporation or served any other enterprise as a director or
officer at the request of the Corporation and such rights of indemnification and
to advancement of litigation expenses shall also be applicable to the heirs,
executors, administrators and legal representatives of such director or officer.
C. The foregoing provisions of Article IX shall be deemed to be a
contract between the Corporation and each director and officer who serves in
such capacity at any time while this Article IX is in effect, and any repeal or
modification hereof shall not affect the rights or obligations then or therefore
existing or any action, suit or proceeding theretofore or thereafter brought
based in whole or in part upon any such stated facts.
D. The foregoing rights to indemnification and to advancement of
litigation expenses shall not be deemed exclusive of any other rights to which a
director or officer or his or her legal representatives may be entitled apart
from the provisions of this Article IX.
ITEM 16. EXHIBITS.
The following is a complete list of exhibits filed as a part of this
Registration Statement and which are incorporated herein.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.
-----------
<S> <C>
4.1 Specimen certificate representing Common Stock.
Incorporated herein by reference to Exhibit 4.1 to the Company's
registration statement on Form S-18, SEC File No. 33-2700.
*5.1 Opinion of Amy M. Shapiro regarding legality of the securities
covered by this Registration Statement.
23.1 Consent of Amy M. Shapiro, general counsel for the Company (included
in Exhibit 5.1)
*23.2 Consent of Ernst & Young LLP, independent auditors.
<FN>
--------------------
* Filed herewith
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement.
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-2
<PAGE>
(3) To remove from registration by means of a post-effective amendment to
the Registration Statement of any of the securities being registered which
remain unsold at the termination of this offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions referred to in Item 14 of this Part
II, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liability (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Englewood, State of Colorado, on March 29, 1995.
COMMNET CELLULAR INC.
By: /s/ ARNOLD C. POHS
------------------------------------
Arnold C. Pohs, President
POWER OF ATTORNEY
The undersigned directors and/or officers of the Registrant, by virtue of
their signatures to this Registration Statement appearing below, hereby
constitute and appoint Daniel P. Dwyer and Amy M. Shapiro or either of them,
with full power of substitution, as attorneys-in-fact in their names, places and
steads to execute any and all amendments to this Registration statement in the
capacities set forth opposite their names and hereby ratify all that said
attorneys-in-fact may do by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933 this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
---------------------- ------------------------------------ --------------
<S> <C> <C>
/s/ ARNOLD C. POHS Chairman of the Board, President
---------------------- and Chief Executive Officer March 29, 1995
Arnold C. Pohs (Principal Executive Officer)
/s/ DANIEL P. DWYER Executive Vice President, Treasurer, March 29, 1995
---------------------- Chief Financial Officer and Director
Daniel P. Dwyer (Principal Financial Officer)
/s/ ANDREW J. GARDNER Senior Vice President and Controller March 29, 1995
---------------------- (Principal Accounting Officer)
Andrew J. Gardner
/s/ JOHN E. HAYES, JR. Director March 29, 1995
----------------------
John E. Hayes, Jr.
/s/ DAVID E. SIMMONS Director March 29, 1995
----------------------
David E. Simmons
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Page No.
----------- --------
<C> <S> <C>
4.1 Specimen certificate representing Common Stock.
Incorporated herein by reference to Exhibit 4.1 to the
Company's registration statement on Form S-18,
SEC File No. 33-2700.
*5.1 Opinion of Amy M. Shapiro regarding legality of the
securities covered by this Registration Statement.
23.1 Consent of Amy M. Shapiro, general counsel for the
Company (included in Exhibit 5.1)
*23.2 Consent of Ernst & Young LLP, independent auditors.
</TABLE>
<PAGE>
Exhibit 5.1
March 29, 1995
CommNet Cellular Inc.
5990 Greenwood Plaza Blvd., Suite 300
Englewood, CO 80111
RE: Registration Statement on Form S-3 (SEC File No. 33- ) covering
secondary offering of 330,000 shares of Common Stock of CommNet Cellular
Inc.
Ladies and Gentlemen:
I am General Counsel for CommNet Cellular Inc., a Colorado company (the
"Company") and in such capacity have examined the Company's Registration
Statement on Form S-3 (the "Registration Statement"), being filed with the
Securities and Exchange Commission in connection with the registration under the
Securities Act of 1933, as amended, of the secondary offering by certain Selling
Security holders named therein of a maximum aggregate of 330,000 shares (the
"Shares") of the Company's Common Stock, to be issued to the Selling Security
holders upon conversion of up to $4,950,000 in aggregate principal amount of the
Company's 8.75% Convertible Subordinated Notes due 2001 (the "Notes"). I am
familiar with the proceedings undertaken by the Company in connection with the
authorization of the Notes and the authorization, issuance and sale of the
Shares. Additionally, I have examined such questions of law and fact as I have
considered necessary or appropriate for purposes of this opinion.
Based upon the foregoing, I am of the opinion that the Shares have been
duly authorized and, upon issuance, delivery and payment therefor as
contemplated by the Notes, will be validly issued, fully paid and nonassessable.
I hereby consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference under "Legal Matters" contained in
the prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ AMY M. SHAPIRO
----------------------------------------
Amy M. Shapiro
General Counsel
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of CommNet Cellular
Inc. for the registration of 330,000 shares of its common stock and to the
incorporation by reference therein of our report dated December 2, 1994, with
respect to the consolidated financial statements and schedules of CommNet
Cellular Inc. included in its Annual Report (Form 10-K) for the year ended
September 30, 1994, filed with the Securities and Exchange Commission.
Ernst & Young LLP
March 29, 1995
