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REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________
PRONET INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 75-1832168
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
600 DATA DRIVE, SUITE 100
PLANO, TEXAS 75075
(214) 965-9400
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
MARK A. SOLLS Copies of all communications,
VICE PRESIDENT AND GENERAL COUNSEL including all communications to the
600 DATA DRIVE, SUITE 100 agent for service, should be sent to:
PLANO, TEXAS 75075
(214) 964-9500 JEFFREY A. CHAPMAN
MARK EARLY
(Name, address, including zip code, VINSON & ELKINS L.L.P.
and telephone number, including area 3700 TRAMMELL CROW CENTER
code, of agent for service) 2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 220-7700
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined
in light of market conditions and other factors.
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/
______________
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF AMOUNT PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE REGISTRATION
REGISTERED REGISTERED PRICE PER SHARE (1) OFFERING PRICE (1) FEE
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<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per
share(2) 2,000,000 $21.94 $43,880,000 $15,131.03
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<FN>
(1) Estimated solely for the purpose of calculating the registration fee in accordance with
Rule 457(c), using the average of the high and low prices reported on The Nasdaq Stock
Market for the Registrant's Common Stock on July 20, 1995.
(2) This Registration Statement also pertains to rights to purchase shares of Series A Junior
Participating Preferred Stock of the Registrant. One right is attached to and trades with
each share of Common Stock of the Registrant. Until the occurrence of certain events, the
rights are not exercisable and will not be evidenced or transferred apart from the Common
Stock.
</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 JULY 25, 1995
PROSPECTUS
PRONET INC.
2,000,000 SHARES OF COMMON STOCK, $.01 PAR VALUE
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.
____________________
This Prospectus relates to the offering by the Selling Stockholders (the
"Selling Stockholders") of up to an aggregate of 2,000,000 shares of Common
Stock, par value $.01 per share ("Common Stock"), of ProNet Inc., a Delaware
corporation ("ProNet" or the "Company"). The shares of Common Stock offered
hereby (the "Offered Securities") were privately offered by the Company
pursuant to acquisitions of paging businesses in a series of unrelated
transactions that have occurred since June 30, 1994. See "Resales and Plan of
Distribution" for information relating to such resales.
SEE "RISK FACTORS" ON PAGE 9 FOR CERTAIN FACTORS RELEVANT TO AN INVESTMENT
IN THE COMMON STOCK.
The Offered Securities may be sold from time to time pursuant to this
Prospectus by the Selling Stockholders. The Offered Securities may be sold
by the Selling Stockholders in ordinary brokerage transactions, in
transactions in which brokers solicit purchases, in negotiated transactions,
or in a combination of such methods of sale, at market prices prevailing at
the time of sale, at prices relating to such prevailing market prices or at
negotiated prices. See "Plan of Distribution." The distribution of the
Offered Securities is not subject to any underwriting agreement. The Company
will receive no part of the proceeds of sales from the offering by the
Selling Stockholders. All expenses of registration incurred in connection
with this offering are being borne by the Company, but all selling and other
expenses incurred by the Selling Stockholders will be borne by such Selling
Stockholders. None of the securities offered pursuant to this Prospectus
have been registered prior to the filing of the Registration Statement of
which this Prospectus is a part.
The Common Stock is quoted on The Nasdaq Stock Market. The last reported
sale price of the Common Stock on July 24, 1995 was $23.25.
____________________
The date of this Prospectus is August , 1995
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
<PAGE>
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM PRONET INC., 600 DATA DRIVE, SUITE 100, PLANO, TEXAS 75075,
ATTENTION: GENERAL COUNSEL (TELEPHONE (214) 964-9500). IN ORDER TO INSURE
TIMELY DELIVERY OF THE DOCUMENTS, POTENTIAL INVESTORS SHOULD ALLOW FIVE
BUSINESS DAYS FOR DELIVERY. SEE "INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE."
AVAILABLE INFORMATION
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus. If given or made, such representations must not be relied
upon as having been authorized by the Company or any Selling Stockholder.
This Prospectus shall not constitute an offer to sell or the solicitation of
an offer to buy nor shall there be any sale of these securities in any State
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities law of any such State.
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, proxy and information statements and
other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's Regional Offices at Seven World Trade Center,
13th Floor, New York, New York 10048 and CitiCorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can
be obtained by mail from the Public Reference Branch of the Commission at 450
West 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 securities offered hereby. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which were omitted in accordance with
the rules and regulations of the Commission. For further information,
reference is hereby made to the Registration Statement. Any statements
contained herein concerning the provisions of any document filed as an exhibit
to the Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of
such document so filed. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(i) Annual Report on Form 10-K for the fiscal year ended December 31,
1994;
(ii) Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1994;
(iii) Annual Report on Form 10-K/A-2 for the fiscal year ended
December 31, 1994;
(iv) Current Report on Form 8-K filed March 16, 1995;
(v) Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1995;
(vi) Current Report on Form 8-K filed April 17, 1995;
(vii) Current Report on Form 8-K filed April 17, 1995;
(viii) Current Report on Form 8-K/A filed May 12, 1995;
(ix) Current Report on Form 8-K filed May 18, 1995;
(x) Current Report on Form 8-K filed May 19, 1995;
(xi) Current Report on Form 8-K/A filed June 2, 1995;
(xii) Current Report on Form 8-K filed June 2, 1995;
(xiii) Current Report on Form 8-K filed July 5, 1995;
(xiv) Current Report on Form 8-K filed July 7, 1995;
(xv) The description of the Company's Common Stock contained in Item 1
of the Registration Statement on Form 8-A dated July 15, 1987, as
amended by Form 8-A/A dated April 19, 1995; and
(xvi) The description of the Company's Series A Junior Participating
Preferred Stock contained in Item 1 of the Registration Statement
on Form 8-A dated April 7, 1995.
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All documents filed by the Company pursuant to Section 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 securities offered hereby
shall be deemed to be incorporated by reference into this Prospectus and to be
a part hereof from the date of filing of such documents. Any statement
contained 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 other
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 written or oral request of such person,
a copy of any or all of the documents which are incorporated by reference
herein, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should
be directed to Mark A. Solls, Vice President, General Counsel and Secretary,
at the Company's principal executive offices.
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<PAGE>
THE COMPANY
ProNet is one of the fastest growing wireless messaging providers in the
United States. The Company focuses its activities in five geographic regions
or communication "SuperCenters" centered around major metropolitan markets and
population corridors, which generally have the demographics, market size,
travel patterns and types of businesses that indicate significant potential
demand for the Company's products and services. The Company is a leading
provider of paging services in 12 major metropolitan markets in the United
States, including New York, Chicago, Dallas/Fort Worth, Houston, Charlotte and
Los Angeles.
The Company was founded in 1982 with the purpose of providing paging
services to hospitals, doctors and other healthcare providers. The Company is
a solutions-oriented organization dedicated to customer service which has
concentrated on identifying market opportunities in the wireless
communications market where it can provide users with enhanced wireless
services. By utilizing proprietary technologies to manage the under-served
market of both the in-house and wide-area paging requirements of hospitals,
the Company quickly became the premier provider of customized, enhanced
wireless services to healthcare institutions in all of its major metropolitan
markets. In 1988, the Company began to apply advanced wireless technology to
the security business by marketing radio-activated electronic tracking systems
to financial institutions.
In 1993, ProNet management recognized that the Company's operating
expertise combined with its presence in major metropolitan markets presented
an opportunity to capitalize on the growing demand for pagers among both
business users and the population at large. The Company believes that much of
the future growth in pagers in service will occur in large population centers
where demand from both business and individual subscribers will be primarily
for metropolitan and/or regional coverage. In 1994, the Company began to
market to these constituents through both direct and reseller distribution
channels and began to pursue acquisitions that complemented its existing
market presence.
The Company's strategy is to achieve rapid growth of its subscriber base
and expand service offerings while maintaining its low cost operating
structure. The Company believes that by further developing its SuperCenters,
it will continue to realize the benefits of operational consolidation while
maintaining the flexibility to react to regional market developments. Key
elements of the Company's operating strategy include:
GEOGRAPHIC CONCENTRATION. ProNet management believes that
focusing the Company's planned growth strategy around its SuperCenters
allows the Company to receive the greatest benefit for each dollar
invested and will most effectively address anticipated demand by new
paging subscribers for metropolitan and/or regional coverage. ProNet
ultimately intends to offer coverage to 60% of the United States
population through its SuperCenters encompassing the Northeast (anchored
by New York City), Midwest (anchored by Chicago), Southeast (anchored by
Charlotte), South Central (anchored by Houston) and West (anchored by
Los Angeles).
SELECTIVE ACQUISITIONS. The Company believes that a substantial
portion of its growth will be achieved through acquisitions of
commercial paging companies in its SuperCenter regions. ProNet
carefully screens and evaluates acquisition candidates according to
their technical and operational characteristics, spectrum resources,
geographic coverage, distribution capabilities and synergistic qualities
within the SuperCenter strategy. Through technical, operational and
financial field teams, each new acquisition is quickly and thoroughly
integrated into the existing SuperCenter operations to maximize cost
savings and operating efficiencies. Since January 1, 1994, the Company
has completed nine acquisitions and signed definitive agreements or
letters of intent with respect to seven additional acquisitions that are
expected to close in 1995 or early 1996.
INCREASE MARKET PENETRATION. ProNet intends to become a market
leader in both its current and future markets by utilizing a variety of
existing distribution channels and by continually exploring new
channels. The Company uses its highly trained direct sales force to
target businesses, medical institutions and individual customers. The
Company also sells paging services through resellers or agents and
through local and regional retailers. Emphasis on any one channel in a
particular region is dictated by market characteristics and business
opportunities. ProNet's emphasis on customer service and system
reliability is intended to enable the Company to continue to have one of
the lowest disconnect ("churn") rates in the industry and thereby
further strengthen its market share within its SuperCenters.
COST EFFICIENT PROVIDER. The Company operates efficiently through
consolidation of key operating functions in one location per SuperCenter
and through the elimination of redundant operations in acquired
companies. The Company believes that subscriber volume, automation and
shared overhead will allow each SuperCenter to be one of the most cost
efficient providers in its marketplace.
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ENHANCED WIRELESS SERVICES AND PRODUCTS. ProNet currently offers
a number of enhanced wireless products and services. The Company's
proprietary Intelligent Processing Terminal ("ipt") system for large
corporate accounts is a multi-tasking wide-area communications system
capable of managing a company's in-house and wide-area paging
requirements within a single system. The Company also offers value-
added paging services such as voice-mail, simultaneous group paging,
news and sports highlights, stock quotes, remote alpha entry and other
specialized marketing applications. ProNet's security systems,
consisting of TracPacs and tracking receivers, provide a wireless
solution to the specialized asset recovery needs of various governmental
agencies and business customers. The Company expects to offer
additional enhanced services and technologies as they become available.
Wireless messaging is a high growth industry, Industry sources estimate
that there are currently 25 million pagers in service in the United States, a
penetration rate of 10% of the population. The number of pagers in service in
the United States has grown at an annual rate of 15-20% since the early 1980s.
Industry reports continue to project rapid growth for one-way pagers and other
wireless messaging services. Factors contributing to this level of growth
include (a) increasing mobility of the population, (b) movement toward a
service-based economy, (c) growing consumer awareness of the benefits of
mobile communications, (d) technical advances in equipment and services
offered, and (e) continuing price efficiencies in equipment and services
offered.
The Company was incorporated under Delaware law in 1982. The Company's
principal executive office is located at 600 Data Drive, Suite 100, Plano,
Texas 75075 and its telephone number is (214) 964-9500.
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SUMMARY FINANCIAL AND OPERATING INFORMATION
The following table presents summary financial data for the Company as
of the dates and for the periods indicated. The financial data for the years
ended December 31, 1990, 1991, 1992, 1993 and 1994 were derived from the
audited consolidated financial statements of the Company. The financial data
for the three months ended March 31, 1994 and 1995 have been derived from the
Company's unaudited consolidated financial statements. The following
information should be read in conjunction with the Company's pro forma
condensed consolidated financial statements and the consolidated financial
statements and related notes thereto incorporated by reference herein.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------------------------------------ -------------------------
PRO PRO
FORMA FORMA
1990 1991 1992 1993 1994 1994 (1) 1994 1995 1995 (2)
---- ---- ---- ---- ---- -------- ---- ---- --------
(IN THOUSANDS, EXCEPT PERCENTAGE, RATIO, UNIT AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Recurring revenues (3).... $13,028 $15,084 $16,845 $19,234 $33,079 $64,888 $5,962 $10,488 $16,747
Product sales (4)......... 1,581 1,466 1,855 2,040 6,639 13,632 601 2,196 3,277
------- ------- ------- ------- ------- ------- ------ ------- -------
Total revenues............ 14,609 16,550 18,700 21,274 39,718 78,520 6,563 12,684 20,024
Net revenues (5).......... 13,694 15,591 17,615 20,318 33,074 65,064 6,093 10,618 17,061
Depreciation and
amortization expense..... 3,308 3,748 4,077 4,656 8,574 19,021 1,497 2,745 4,516
Operating income.......... 556 1,223 1,834 2,732 3,189 4,202 598 769 2,073
Interest expense.......... 528 425 310 292 1,774 12,907 171 386 3,345
Income (loss) before
extraordinary item....... 215 794 1,754 1,574 693 (6,322) 197 66 (1,068)
Net income (loss)......... 395 1,312 1,754 1,574 693 (6,322) 197 66 (1,068)
Net income (loss) per share:
Before extraordinary item .05 .20 .43 .40 .16 (1.44) .05 .01 (.16)
Net income (loss)........ .10 .33 .43 .40 .16 (1.44) .05 .01 (.16)
OTHER DATA:
Pagers in service at
end of period............ 88,759 103,157 114,356 130,000 353,830 715,530 225,477 404,713 736,400
TracPacs in service at
end of period............ 11,544 13,846 19,210 25,841 27,595 27,595 26,374 27,106 27,106
Pagers in service per
employee (6)............. 490 570 880 1,000 1,325 1,758 1,174 1,289 1,779
ARPU-Paging (7)........... $ 11.51 $ 10.64 $ 10.48 $ 10.23 $ 8.31 $ 7.04 $ 9.64 $ 8.38 $ 6.97
ARPU-TracPac (8).......... 14.25 15.00 14.75 15.90 16.52 16.52 15.78 15.68 15.68
Operating, general and
administrative costs
per paging
subscriber (9)........... 4.76 4.80 5.13 5.33 3.30 3.11 4.11 3.63 3.59
EBITDA (10)............... 3,864 4,971 5,911 7,388 11,763 23,223 2,095 3,514 6,589
EBITDA margin (11)........ 28% 32% 34% 36% 36% 36% 34% 33% 39%
Capital expenditures (12). $ 4,708 $ 4,193 $ 5,523 $ 5,497 $ 5,777 $ 7,827 $ 796 $ 1,478 $ 1,703
Ratio of total debt to
EBITDA (13).............. 1.2x 1.0x 0.6x 0.5x 0.9x 5.2x 2.8x 2.1x 4.6x
Ratio of EBITDA to
interest expense....... 7.3 11.7 19.1 25.3 6.6 1.8 12.3 9.1 2.0
</TABLE>
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<TABLE>
<CAPTION>
AS OF MARCH 31, 1995
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ACTUAL PRO FORMA (14)
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(IN THOUSANDS)
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BALANCE SHEET DATA:
Cash and cash equivalents.................... $ 5,369 $ 25,821
Working capital.............................. 7,385 29,554
Total assets................................. 86,972 182,268
Long-term debt, including current maturities
and deferred payments....................... 27,232 121,292
Total liabilities............................ 36,560 131,856
Total shareholders' equity................... 50,412 50,412
<FN>
(1) Gives effect to (a) the acquisition of Contact Communications, Inc.
("Contact") and Metropolitan Houston Paging Services, Inc. ("Metropolitan"),
and the acquisition of the paging assets of Radio Call Company, Inc. ("Radio
Call"), the RCC division of Chicago Communication Service, Inc. ("ChiComm"),
High Tech Communications Corp. ("High Tech"), Carrier Paging Systems, Inc.
("Carrier"), Signet Paging of Charlotte, Inc. ("Signet,"), All City
Communication Company, Inc. ("All City"), and Americom Paging Corporation
("Americom" and, together with Contact, Metropolitan, Radio Call, ChiComm,
High Tech, Carrier, Signet and All City, the "Completed Acquisitions") and
(b) the acquisition of the paging assets of Gold Coast Paging, Inc. ("Gold
Coast"), Denton Enterprises, Inc. ("Denton"), MetroTones, Inc.
("MetroTones"), Lewis Paging, Inc. ("Lewis"), and the acquisition of Page
East, Inc. ("Page East" and, together with Gold Coast, Denton, MetroTones and
Lewis, the "Pending Acquisitions") as if they had occurred at the beginning
of the period presented and assumes that they were funded with a portion of
the proceeds of the Company's recently completed offering of $100,000,000 in
principal amount of Senior Subordinated Notes due 2005 (the "Subordinated
Notes"). The Completed Acquisitions and the Pending Acquisitions are
collectively referred to as the "Acquisitions."
(2) Gives effect to the acquisitions of Carrier, Signet, Metropolitan, All
City, Americom and the Pending Acquisitions as if they had occurred at the
beginning of the period presented, and assumes that they were funded with the
proceeds of this offering.
(3) Recurring revenues consist of fixed monthly, quarterly, annual and
bi-annual service and leasing fees.
(4) Product sales include pager and paging equipment sales and other
security systems' income.
(5) Net revenues are total revenues less cost of products sold.
(6) Calculated by dividing pagers in service by number of employees at the
end of the period presented. This calculation excludes employees directly
related to the security systems business.
(7) ARPU-Paging (average revenue per paging unit) is calculated by dividing
paging systems' recurring revenues for the last month in the period by the
number of pagers in service at the beginning of such month.
(8) ARPU-TracPac (average revenue per TracPac unit) is calculated by
dividing security systems' recurring revenues for the last month in the
period by the number of TracPacs in service at the beginning of such month.
(9) Calculated by dividing the sum of the cost of pager lease and access
fees and general and administrative expenses for the last month in the period
by the number of pagers in service at the beginning of such month.
(10) EBITDA is earnings before other income (expense), income taxes,
depreciation and amortization expense. Other income (expense) consists
primarily of interest expense. EBITDA does not represent cash flows as
defined by generally accepted accounting principles and does not necessarily
indicate that cash flows are sufficient to fund all of the Company's cash
needs. EBITDA should not be considered in isolation or as a substitute for
net income, cash from operating activities or other measures of liquidity
determined in accordance with generally accepted accounting principles.
(11) Calculated by dividing EBITDA by net revenues for the period presented.
(12) Excludes acquisition costs.
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<PAGE>
(13) Calculated by dividing total debt at the end of the period by EBITDA for
the 12 months ended on the last day of the period except the pro forma ratio
for the three months ended March 31, 1995 is based on annualized EBITDA.
(14) Gives effect to the acquisitions of Carrier, Metropolitan, All City,
Americom and the Pending Acquisitions as if they occurred on March 31, 1995,
as adjusted to reflect the sale of $100,000,000 in principal amount of
Subordinated Notes and the application of the net proceeds therefrom.
</TABLE>
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<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, THE FOLLOWING
FACTORS SHOULD BE CONSIDERED CAREFULLY BY EACH PROSPECTIVE PURCHASER OF COMMON
STOCK.
ACQUISITION AND GROWTH STRATEGY
The Company intends to continue to pursue an aggressive acquisition
strategy. Since January 1, 1994, the Company has purchased nine paging
operations and signed definitive agreements or letters of intent to purchase
seven more companies, representing approximately 596,200 pagers in service in
the aggregate. No assurances can be given that the Pending Acquisitions will
be consummated, that further suitable acquisition candidates can be found or
purchased on favorable terms, or that the Pending Acquisitions, if completed,
will be successful. Moreover, there can be no assurance that the Company will
be able to integrate the paging operations of each of the acquired companies
successfully. If the Company is not successful in integrating such paging
operations, the business of the Company may be adversely affected. In
addition, integration of new acquisitions may, at least in the short term,
have an adverse impact upon the Company's operations.
Prior to 1994, the Company delivered paging services solely to members
of the healthcare industry. However, most of the Company's growth since
January 1994 has resulted from, and much of the Company's future growth is
expected to result from, the addition of non-healthcare subscribers, such as
small businesses and individual consumers, many of whom will purchase and
maintain their own pagers rather than lease their pagers from the Company.
This may tend to reduce the Company's average revenue per unit ("ARPU")
because such subscribers will not generate leasing revenues. Marketing and
providing paging services to such businesses and consumers can vary
significantly from marketing and providing such services to healthcare
subscribers. No assurances can be given that the Company will be successful in
the general marketplace.
HIGH DEGREE OF LEVERAGE; RESTRICTIONS IMPOSED BY LENDERS
The Company is highly leveraged. At March 31, 1995, after giving pro
forma effect to the acquisitions of Carrier, Metropolitan, All City, Americom
and the Pending Acquisitions and the offering of the Subordinated Notes and
the application of the net proceeds therefrom, the Company would have had
approximately $121.3 million of debt outstanding and the Company's long-term
debt as a percentage of total capitalization would have been 71%.
The Company's high degree of leverage will have important consequences
to the Company, including the following: (i) the ability of the Company to
obtain additional financing in the future for acquisitions, working capital,
capital expenditures or other purposes, should it need to do so, may be
impaired; (ii) a substantial portion of the Company's cash flow from
operations will be required to be dedicated to the payment of the Company's
interest expense, which will reduce the funds available to the Company for its
operations and future business opportunities; (iii) the Company may be more
highly leveraged than some of its competitors, which may place it at a
competitive disadvantage; and (iv) the Company's high degree of leverage may
make it more vulnerable to a downturn in its business or the economy
generally.
The Company's credit facility (the "Credit Facility") and the indenture
governing the Subordinated Notes (the "Indenture") contain financial and
operating covenants including, among other things, requirements that the
Company maintain certain financial ratios and satisfy certain financial tests
and limitations on the Company's ability to incur other indebtedness, pay
dividends, engage in transactions with affiliates, sell assets and engage in
mergers and consolidations and other acquisitions. If the Company fails to
comply with these covenants, the lenders will be able to accelerate the
maturity of the applicable indebtedness.
FUTURE PROFITABILITY
The Company has been profitable in each of the last five years. However,
the Company anticipates incurring significantly greater depreciation,
amortization and interest expenses in future periods as a result of the
Company's recent and planned acquisitions of commercial paging companies and
the offering of the Subordinated Notes. Such increased expenses will reduce
net income and may contribute to the Company's incurrence of losses in future
periods. In any event, no assurances can be given that the Company will
continue to achieve profitability.
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<PAGE>
SUBSCRIBER TURNOVER
The results of operations of paging service providers such as the
Company may be significantly affected by subscriber cancellations. In order to
realize net growth in pagers in service, disconnected users must be replaced
and additional users must be added. However, the sales and marketing costs
associated with attracting new subscribers are substantial relative to the
costs of providing service to existing customers. Although the Company's
current disconnect rate is below the industry average, the Company anticipates
that it will experience a higher disconnect rate in the future among small
businesses, individual consumers and other non-healthcare subscribers than it
has experienced historically. A significant increase in the Company's
subscriber cancellation rate may adversely affect the Company's operating
results.
COMPETITION AND TECHNOLOGICAL CHANGE
The Company faces direct competition in all of its paging markets. Some
of the Company's competitors, which include certain national and regional
paging companies and Regional Bell Operating Companies, possess greater
financial and other resources than the Company. There can be no assurance that
additional competitors will not enter markets served by the Company or that
the Company will be able to continue to compete successfully. In addition, the
telecommunications industry is characterized by rapid technological change.
Future technological advances in the industry may result in the availability
of new services or products that could compete directly with the services and
products being provided or developed by the Company. Recent and proposed
regulatory changes by the Federal Communications Commission (the "FCC") are
aimed at encouraging such new services and products. Moreover, changes in
technology could lower the cost of competitive services and products to a
level at which the Company's services and products would become less
competitive or the Company would be required to reduce the prices of its
services and products. There can be no assurance that the Company will be able
to develop or introduce new services and products to remain competitive or
that the Company will not be adversely affected in the event of such
technological developments.
GOVERNMENT REGULATION
The paging industry is subject to regulation by the FCC and, depending
on the jurisdiction, may be regulated by state regulatory agencies. There can
be no assurance that either the FCC or those state agencies having
jurisdiction over the Company's business will not adopt regulations or take
other actions that would adversely affect the business of the Company.
RELIANCE ON SELECT GROUP OF EXECUTIVES
The Company believes that its success will depend to a significant
extent on the efforts and abilities of a relatively small group of executive
personnel. The loss of services of one or more of these key executives could
adversely affect the Company. The Company does not maintain "key man" life
insurance policies on its executives. However, the Company has entered into
three-year employment agreements with Jackie R. Kimzey, the Company's Chairman
and Chief Executive Officer, and David J. Vucina, the Company's President and
Chief Operating Officer.
-10-
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder and
relationship, if any, with the Company and (i) the number of shares of Common
Stock owned by each Selling Stockholder as of August __, 1995, (ii) the
maximum number of shares of Common Stock which may be offered for the account
of such Selling Stockholder under this Prospectus, and (iii) the amount and
percentage of Common Stock to be owned by the Selling Stockholder after the
completion of the Offering assuming the sale of all the Common Stock which may
be offered hereunder.
<TABLE>
<CAPTION>
AMOUNT AND PERCENTAGE OF
MAXIMUM NUMBER OF COMMON STOCK OWNED
NAME OF SELLING HOLDER AND RELATIONSHIP TO SHARES OWNED PRIOR TO SHARES WHICH MAY BE AFTER THE OFFERING(2)
COMPANY OFFERING (1) SOLD HEREUNDER AMOUNT - %
- ------------------------------------------ --------------------- ------------------- --------------------------
<S> <C> <C> <C>
Chicago Communication Service, Inc.
<FN>
- --------------------
(1) Beneficial ownership as of _______________, 1995, based upon information provided by the respective
Selling Stockholder.
(2) Assumes the sale of all shares of Common Stock registered hereunder, although none of the Selling
Stockholders are under any obligation known to the Company to sell any shares of Common Stock.
</TABLE>
The Company will pay the expenses of registering the shares of Common
Stock being sold hereunder which are estimated to be $_____________.
-11-
<PAGE>
PLAN OF DISTRIBUTION
The Offered Securities were issued to the Selling Stockholders in
connection with the acquisition by the Company of the various paging
businesses of the Selling Stockholders in a series of separate transactions.
The Offered Securities may be sold from time to time by the Selling
Stockholders. The Selling Stockholders may from time to time sell all or a
portion of the Offered Securities in transactions on The Nasdaq Stock Market,
in the over-the-counter market, in negotiated transactions, or a combination
of such methods of sale, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices;
provided, that such transactions will not include an underwritten public
offering. The Offered Securities may be sold directly or through
broker-dealers. If shares of Common Stock are sold through broker-dealers,
the Selling Stockholders may pay brokerage commissions and charges. The
methods by which the Offered Securities may be sold include (a) a block trade
(which may involve crosses) in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer as principal and resale by such broker or dealer for its own
account pursuant to this Prospectus; (c) exchange distributions and/or
secondary distributions in accordance with the rules of The Nasdaq Stock
Market; (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and (e) privately negotiated transactions.
Pursuant to the provisions of various Registration Rights Agreements
entered into by and between the Company and each of the Selling Stockholders,
the Selling Stockholders will pay their costs and expenses of selling the
shares of Common Stock offered hereunder, including commissions and discounts
of brokers, dealers, or agents, and the Company has agreed to pay the costs
and expenses incident to its registration and qualification of the Common
Stock offered hereby, including registration and filing fees. In addition,
the Company has agreed to indemnify the Selling Stockholders against certain
liabilities, including liabilities arising under the Securities Act.
The Selling Stockholders and any broker-dealer participating in the
distribution of the Offered Securities may be deemed to be "underwriters"
within the meaning of the Securities Act, and any profit and any commissions
paid or any discounts or concessions allowed to any such broker-dealer may be
deemed to be underwriting discounts and commissions under the Securities Act.
The Selling Stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of shares of Common Stock against certain
liabilities, including liabilities under the Securities Act.
There can be no assurances that the Selling Stockholders will sell any
or all of the shares of Common Stock offered by them hereunder.
VALIDITY OF SECURITIES
The validity of the shares of Common Stock will be passed upon by Vinson
& Elkins L.L.P., Dallas, Texas.
EXPERTS
The consolidated financial statements of ProNet Inc. for the three years
ended December 31, 1994, appearing in ProNet Inc.'s Annual Report on Form
10-K have been audited by Ernst & Young LLP, independent auditors, as
indicated in their report incorporated by reference herein in reliance upon
such report given upon the authority of such firm as experts in accounting
and auditing.
The combined financial statements of Contact Communications, Inc.
appearing in one of the documents incorporated herein by reference to the
extent and for the periods indicated in their report have been audited by
Hiltzik, Schneider, Ehrlich & Wengrover, independent public accountants, as
indicated in their report incorporated by reference herein in reliance upon
such report given upon the authority of such firm as experts in accounting
and auditing.
The combined financial statements of Radio Call Company, Inc. appearing
in one of the documents incorporated herein by reference have been audited by
Cummings & Carroll, P.C., independent public accountants, as indicated in
their report incorporated by reference herein in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The financial statements of the RCC Division of Chicago Communication
Service, Inc. appearing in one of the documents incorporated herein by
reference to the extent and for the periods indicated in their report have
been audited by Natarelli & Associates, independent public accountants, as
indicated in their report incorporated by reference herein in reliance upon
such report given upon the authority of such firm as experts in accounting
and auditing.
-12-
<PAGE>
The financial statements of All City Communication Company, Inc.
appearing in one of the documents incorporated herein by reference to the
extent and for the periods indicated in their report have been audited by
Winter, Kloman, Moter & Repp S.C., independent public accountants, as
indicated in their report incorporated by reference herein in reliance upon
such report given upon the authority of such firm as experts in accounting
and auditing.
The financial statements of Signet Paging of Charlotte, Inc. appearing
in one of the documents incorporated herein by reference have been audited by
Greer & Walker, L.L.P., independent public accountants, as indicated in their
report incorporated by reference herein in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
The financial statements of Metropolitan Houston Paging Services, Inc.
appearing in one of the documents incorporated herein by reference to the
extent and for the periods indicated in their report have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report incorporated by reference herein in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
The financial statements of Americom Paging Corporation as of December 31,
1994, and for each of the years in the two-year period ended December 31,
1994, have been incorporated by reference in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in
accounting and auditing. The report of KPMG Peat Marwick LLP covering the
December 31, 1994 financial statements contains an explanatory paragraph that
states that the Company's recurring losses from operations and net capital
deficiency raise substantial doubt about the entity's ability to continue as
a going concern. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
The financial statements of Page East, Inc. appearing in one of the
documents incorporated herein by reference to the extent and for the periods
indicated in their report have been audited by Ernst & Young LLP, independent
auditors, as indicated in their report incorporated by reference herein in
reliance upon such report given upon the authority of such firm as experts
in accounting and auditing.
-13-
<PAGE>
===================================
No dealer, salesman or other
person has been authorized to give
any information or to make any
representations other than those
contained in this Prospectus in
connection with the offer made by
this Prospectus and, if given or
made, such information or
representations must not be relied
upon as having been authorized by
the Company, by any selling
stockholder or underwriter. Neither
the delivery of this Prospectus nor
any sale made hereunder shall under
any circumstances create an
implication that there has been no
change in the affairs of the Company
since the date hereof. This
Prospectus does not constitute an
offer or solicitation by anyone in
any state 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 to anyone to whom it is
unlawful to make such offer or
solicitation
_____________________
TABLE OF CONTENTS
PAGE
----
Available Information. . . 2
Incorporation of Certain
Information by Reference. 2
The Company. . . . . . . . 4
Risk Factors . . . . . . . 9
Selling Stockholders . . . 11
Plan of Distribution . . . 12
Validity of Securities . . 12
Experts. . . . . . . . . . 12
===============================
===============================
PRONET INC.
2,000,000 Shares
of Common Stock
____________
Prospectus
____________
August , 1995
===============================
<PAGE>
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Six of the Restated Certificate of Incorporation of the
Registrant provides that the Registrant shall indemnify its directors and
officers to the maximum extent allowed by the Delaware General Corporation
Law. Pursuant to Section 145 of the Delaware General Corporation Law, the
Registrant generally has the power to indemnify its present and former
directors and officers against expenses and liabilities incurred by them in
connection with any suit to which they are, or are threatened to be made, a
party by reason of their serving in those positions so long as they acted in
good faith and in a manner they reasonably believed to be in, or not opposed
to, the best interests of the Registrant, and with respect to any criminal
action, so long as they had no reasonable cause to believe their conduct was
unlawful. With respect to suits by or in the right of the Registrant,
however, indemnification is generally limited to attorneys' fees and other
expenses and is not available if the person is adjudged to be liable to the
Registrant, unless the court determines that indemnification is appropriate.
The statute expressly provides that the power to indemnify authorized thereby
is not exclusive of any rights granted under any bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise. The Registrant also
has the power to purchase and maintain insurance for its directors and
officers and has recently obtained such insurance.
The preceding discussion of the Registrant's Restated Certificate of
Incorporation and Section 145 of the Delaware General Corporation Law is not
intended to be exhaustive and is qualified in its entirety by the Restated
Certificate of Incorporation and Section 145 of the Delaware General
Corporation Law.
The Registrant has entered into indemnity agreements with the
Registrant's directors and officers. Pursuant to such agreements, the
Registrant will, to the extent permitted by applicable law, indemnify such
persons against all expenses, judgments, fines and penalties incurred in
connection with the defense or settlement of any actions brought against them
by reason of the fact that they were directors or officers of the Registrant
or assumed certain responsibilities at the direction of the Registrant.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
3.1 - Restated Certificate of Incorporation dated July 31, 1987 (filed
as an Exhibit to the Registrant's Registration Statement on
Form S-4 (file no. 33-60925) filed with the Commission July 7, 1995
and incorporated herein by reference).
3.2 - Certificate of Designation of Series A Junior Participating
Preferred Stock dated April 11, 1995 (filed as part of the
Registrant's Registration Statement on Form 8-A dated April 7,
1995, and incorporated herein by reference).
3.3 - Certificate of Amendment to Restated Certificate of
Incorporation dated June 12, 1995 (filed as an Exhibit to the
Registrant's Current Report on Form 8-K, dated July 5, 1995,
and incorporated herein by reference).
3.4 - Restated Bylaws of the Registrant (filed as an Exhibit to
the Registrant's Current Report on Form 8-K filed with the
Commission April 17, 1995, and incorporated herein by
reference).
4.1 - Indenture, dated as of June 15, 1995, between the Registrant
and First Interstate Bank of Texas, N.A., as Trustee (filed
as an Exhibit to the Registrant's Current Report on Form 8-K,
dated July 5, 1995, and incorporated herein by reference).
4.2 - Registration Rights Agreement, dated as of June 15, 1995,
between the Registrant, Lehman Brothers, Inc., Alex. Brown &
Sons Incorporated and PaineWebber Incorporated (filed as an
Exhibit to the Registrant's Registration Statement on Form S-4
(file no. 33-60925) filed with the Commission July 7, 1995).
4.3 - Rights Agreement, dated as of April 5, 1995, between the
Registrant and Chemical Shareholder Services Group, Inc., as
Rights Agent, specifying the terms of the rights to purchase
the Registrant's Series A Junior Participating Preferred
Stock, and the exhibits thereto (filed as an Exhibit to the
Registrant's Registration Statement on Form 8-A dated April 7,
1995, and incorporated herein by reference).
5.1 - Opinion of Vinson & Elkins L.L.P.
10.1 - Agreement dated June 15, 1988, between the Registrant and
Texas Instruments Incorporated for the acquisition of assets
including the use of patents, technology and software related
to ProNet Tracking Systems (filed as an Exhibit to the
Registrant's Current Report on Form 8-K, dated July 21, 1988,
and incorporated herein by reference).
II-1
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
10.2 - Office/Showroom/Warehouse Lease Agreement dated January 2,
1990, between the Registrant and Dal-Mac Westridge I, Ltd.,
as amended (filed as an Exhibit to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1990, and
incorporated herein by reference).
10.3 - Stock Purchase Agreement dated September 24, 1993, by and
between the Registrant and Contact Communications, Inc.
(filed as an Exhibit to the Registrant's Current Report on
Form 8-K, dated March 1, 1994, and incorporated herein by
reference).
10.4 - Amendment Letter No. One to Stock Purchase Agreement dated
October 20, 1993, by and between the Registrant and Contact
Communications, Inc. (filed as an Exhibit to the Registrant's
Current Report on Form 8-K, dated March 1, 1994, and
incorporated herein by reference).
10.5 - Amendment Letter No. Two to Stock Purchase Agreement dated
January 4, 1994, by and between the Registrant and Contact
Communications, Inc. (filed as an Exhibit to the Registrant's
Current Report on Form 8-K, dated March 1, 1994, and
incorporated herein by reference).
10.6 - Amendment Letter No. Three to Stock Purchase Agreement dated
March 1, 1994, by and between the Registrant and Contact
Communications, Inc. (filed as an Exhibit to the Registrant's
Current Report on Form 8-K, dated March 1, 1994, and
incorporated herein by reference).
10.7 - Asset Purchase Agreement dated March 22, 1994, by and among
the Registrant, Radio Call Company, Inc., a New York
corporation, MRN Communications, Inc., a New York
corporation, Radio Call Co. of N.J., Inc., a New Jersey
corporation, and Marvin R. Neuwirth (filed as an Exhibit to
the Registrant's Current Report on Form 8-K, dated August 5,
1994, and incorporated herein by reference).
10.8 - Asset Purchase Agreement dated May 5, 1994, by and among the
Registrant, Chicago Communication Service, Inc., an Illinois
corporation, Gerald C. Bear, Gerald C. Bear, Trustee of the
Lewis Bear Trust, Leo Magiera and Gerald Manikowski (filed as
an Exhibit to the Registrant's Current Report on Form 8-K,
dated August 5, 1994, and incorporated herein by reference).
10.9 - Asset Purchase Agreement dated June 30, 1994, by and among
the Registrant, All City Communication Company, Inc., Robert
J. von Bereghy, Maurice S. Meyers, Martin T. Franke, Virginia
Franke, Personal Representative of the estate of Martin K.
Franke and Cove Communications of Wisconsin, Inc. (filed as
an Exhibit to the Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1994, and incorporated
herein by reference).
10.10 - Amendment Agreement dated July 29, 1994, by and among the
Registrant, Radio Call Company, Inc., a New York corporation,
MRN Communications, Inc., a New York corporation, Radio Call
Co. of N.J., Inc., a New Jersey corporation and Marvin R.
Neuwirth (filed as an Exhibit to the Registrant's Current
Report on Form 8-K, dated August 5, 1994, and incorporated
herein by reference).
10.11 - Amendment Agreement dated August 1, 1994, by and among the
Registrant, All City Communication Company, Inc., Robert J.
von Bereghy, Maurice S. Meyers, Martin T. Franke, Virginia
Franke, Personal Representative of the estate of Martin K.
Franke and Cove Communications of Wisconsin, Inc. (filed as
an Exhibit to the Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1994, and incorporated
herein by reference).
10.12 - Stock Purchase Agreement dated April 20, 1994, regarding the
acquisition of the outstanding capital stock of Metropolitan
Houston Paging Services, Inc., ("Metro Houston") by and among
Contact Communications Inc., a wholly-owned subsidiary of the
Registrant ("CCI"), Metro Houston and the shareholders of Metro
Houston (filed as an Exhibit to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 1995,
and incorporated herein by reference).
10.13 - Form of PS-58 Split Dollar Agreement between the Registrant
and each of its executive officers (filed as an Exhibit to
the Registrant's Registration Statement on Form S-2 (File No.
33-85696) filed with the Commission on October 28, 1994, and
incorporated herein by reference).
II-2
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
10.14 - Asset Purchase Agreement dated November 30, 1994, among
Signet Paging of Charlotte, Inc., Eileen L. Knight, John R.
Knight, Sr., John R. Knight, Jr. and CCI (filed as an Exhibit
to Amendment No. 2 to the Registrant's Registration Statement
on Form S-2 (File No. 33-85696) filed with the Commission on
December 14, 1994, and incorporated herein by reference).
10.15 - Employment Agreement dated May 18, 1994, by and between the
Registrant and Jackie R. Kimzey (filed as an Exhibit to the
Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1994, and incorporated herein by
reference).
10.16 - Employment Agreement dated May 18, 1994, by and between the
Registrant and David J. Vucina (filed as an Exhibit to the
Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1994, and incorporated herein by
reference).
10.17 - Change in Control Agreement dated May 18, 1994, by and
between the Registrant and Bo Bernard (filed as an Exhibit to
the Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1994, and incorporated herein by
reference).
10.18 - Change in Control Agreement dated May 18, 1994, by and
between the Registrant and Jan E. Gaulding (filed as an
Exhibit to the Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1994, and incorporated
herein by reference).
10.19 - Change in Control Agreement dated May 18, 1994, by and
between the Registrant and Jeffery Owens (filed as an Exhibit
to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1994, and incorporated herein
by reference).
10.20 - Change in Control Agreement dated January 17, 1995, by and
between the Registrant and Mark A. Solls (filed as an Exhibit
to the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1994, and incorporated herein by
reference).
10.21 - Asset Purchase Agreement dated May 24, 1995, regarding the
acquisition of substantially all of the paging assets of
Americom Paging Corporation, by and among CCI, Gregory W.
Hadley, Mo Shebaclo and American 900 Paging, Inc. dba Americom
Paging Corporation (filed as an Exhibit to the Registrant's
Current Report on Form 8-K, dated July 7, 1995, and
incorporated herein by reference).
10.22 - Amended and Restated Credit Agreement dated February 9, 1995,
by and among the Registrant, The First National Bank of
Chicago, as Agent, and the Lenders party thereto (filed as an
Exhibit to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1994, and incorporated herein by
reference).
10.23 - Waiver, Consent and Amendment No. 1 dated as of June 12, 1995
by and among the Registrant, The First National Bank of
Chicago, as Agent, and the Lenders party thereto (filed as an
exhibit to the Registrant's Registration Statement on Form S-4
(file no. 33-60925) filed with the Commission July 7, 1995,
and incorporated herein by reference).
10.26 - Letter of Agreement dated March 31, 1995, regarding the
acquisition of substantially all of the paging assets of Lewis
Paging Inc., by and among CCI, Lewis Paging, Inc. and Terry W.
Lewis (filed as an exhibit to the Registrant's Quarterly Report
on Form 10-Q for the fiscal quarter ended March 31, 1995, and
incorporated herein by reference).
10.27 - Letter of Agreement dated March 31, 1995, regarding the
acquisition of the common stock of Page East Inc., by and among
CCI, Page East, Inc. and C.T. Spruill (filed as an exhibit to the
Registrant's Quarterly Report on Form 8-K dated July 5, 1995,
and incorporated herein by reference).
10.28 - Office Lease Agreement by and between the Registrant and
Carter-Crowley Properties, Inc., as Landlord (filed as an
exhibit to the Registrant's Current Report on Form 8-K, dated
July 5, 1995, and incorporated herein by reference).
10.29 - Letter of Agreement dated July 10, 1995, regarding the
acquisition of substantially all of the paging assets of Signet
Paging of Raleigh, Inc., by and among CCI, Signet Paging of
Raleigh, Inc. and W. David Sweatt.
10.30 - Letter of Agreement dated July 10, 1995, regarding the
acquisition of the common stock of Apple Communications, Inc.
and certain assets of Best Page, Inc., by and among CCI, Apple
Communications, Inc., Best Page, Inc., Sam Zarcone and
Jill DiFoggio.
22 - Subsidiaries of the Registrant (filed as an Exhibit to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994, and incorporated herein by reference).
23.1 - Consent of Vinson & Elkins L.L.P. (set forth in Exhibit 5.1).
23.2 - Consent of Ernst & Young LLP, Independent Auditors.
23.3 - Consent of Hiltzik, Schneider, Ehrlich & Wengrover,
Independent Public Accountants.
23.4 - Consent of Cummings & Carroll, P.C., Independent Public
Accountants.
23.5 - Consent of Natarelli & Associates, Independent Public
Accountants.
II-3
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
23.6 - Consent of Winter, Kloman, Moter & Repp S.C., Independent
Public Accountants.
23.7 - Consent of Greer & Walker, L.L.P., Independent Public
Accountants.
23.8 - Consent of Arthur Andersen LLP, Independent Public
Accountants.
23.9 - Consent of KPMG Peat Marwick LLP, Independent Public
Accountants.
24.1 - Powers of Attorney (set forth on signature page).
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(i) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(ii) To include any prospectus required in Section 10(a) (3) of
the Securities Act of 1933, as amended (the "Securities
Act");
(iii) 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;
(iv) 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, as
amended (the "Exchange Act") that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) 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 Exchange Act 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.
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 described under Item 20 above, 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 liabilities (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-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all 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 Plano, State of Texas, on July 21,
1995.
PRONET INC.
By: /s/ Jan E. Gaulding
---------------------------------
Jan E. Gaulding
Senior Vice President and
Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jan E. Gaulding and Mark A. Solls, or either
of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- -----
<S> <C> <C>
/s/ Jackie R. Kimzey Chairman, Chief Executive July 21, 1995
- ------------------------------- Officer and Director
Jackie R. Kimzey (Principal Executive Officer)
/s/ David J. Vucina President, Chief Operating July 21, 1995
- ------------------------------- Officer and Director
David J. Vucina
/s/ Jan E. Gaulding Senior Vice President, Treasurer July 21, 1995
- ------------------------------- and Chief Financial Officer
Jan E. Gaulding (Principal Financial and
Accounting Officer)
/s/ Thomas V. Bruns Director July 7, 1995
- -------------------------------
Thomas V. Bruns
/s/ Harvey B. Cash Director July 21, 1995
- -------------------------------
Harvey B. Cash
/s/ Edward E. Jungerman Director July 21, 1995
- -------------------------------
Edward E. Jungerman
/s/ Mark C. Masur Director July 21, 1995
- -------------------------------
Mark C. Masur
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE NO.
------ ----------------------- --------
3.1 - Restated Certificate of Incorporation dated
July 31, 1987 (filed as an Exhibit to the
Registrant's Registration Statement on Form S-4 (file no.
33-60925) filed with the Commission July 7, 1995, and
incorporated herein by reference).
3.2 - Certificate of Designation of Series A Junior
Participating Preferred Stock dated April 11,
1995 (filed as part of the Registrant's
Registration Statement on Form 8-A dated April 7,
1995, and incorporated herein by reference).
3.3 - Certificate of Amendment to Restated
Certificate of Incorporation dated June 12,
1995 (filed as an Exhibit to the Registrant's
Current Report on Form 8-K, dated July 5, 1995,
and incorporated herein by reference).
3.4 - Restated Bylaws of the Registrant (filed as
an Exhibit to the Registrant's Current Report on
Form 8-K filed July 7, 1995, and incorporated herein
by reference).
4.1 - Indenture, dated as of June 15, 1995, between
the Registrant and First Interstate Bank of
Texas, N.A., as Trustee (filed as an Exhibit to
the Registrant's Current Report on Form 8-K,
dated July 5, 1995, and incorporated herein by
reference).
4.2 - Registration Rights Agreement, dated as of June 15,
1995, between the Registrant, Lehman
Brothers, Inc., Alex. Brown & Sons Incorporated
and PaineWebber Incorporated (filed as an Exhibit to
the Registrant's Registration Statement on Form S-4
(file no. 33-60925) filed with the Commission July 7,
1995).
4.3 - Rights Agreement, dated as of April 5, 1995,
between the Registrant and Chemical Shareholder
Services Group, Inc., as Rights Agent,
specifying the terms of the rights to purchase
the Registrant's Series A Junior Participating
Preferred Stock, and the exhibits thereto
(filed as an Exhibit to the Registrant's
Registration Statement on Form 8-A dated April 7,
1995, and incorporated herein by reference).
5.1 - Opinion of Vinson & Elkins L.L.P.
10.1 - Agreement dated June 15, 1988, between the
Registrant and Texas Instruments Incorporated
for the acquisition of assets including the use
of patents, technology and software related to
ProNet Tracking Systems (filed as an Exhibit to
the Registrant's Current Report on Form 8-K,
dated July 21, 1988, and incorporated herein by
reference).
10.2 - Office/Showroom/Warehouse Lease Agreement dated
January 2, 1990, between the Registrant and
Dal-Mac Westridge I, Ltd., as amended (filed as
an Exhibit to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1990,
and incorporated herein by reference).
10.3 - Stock Purchase Agreement dated September 24,
1993, by and between the Registrant and Contact
Communications, Inc. (filed as an Exhibit to
the Registrant's Current Report on Form 8-K,
dated March 1, 1994, and incorporated herein by
reference).
10.4 - Amendment Letter No. One to Stock Purchase
Agreement dated October 20, 1993, by and
between the Registrant and Contact
Communications, Inc. (filed as an Exhibit to
the Registrant's Current Report on Form 8-K,
dated March 1, 1994, and incorporated herein by
reference).
10.5 - Amendment Letter No. Two to Stock Purchase
Agreement dated January 4, 1994, by and between
the Registrant and Contact Communications, Inc.
(filed as an Exhibit to the Registrant's
Current Report on Form 8-K, dated March 1,
1994, and incorporated herein by reference).
10.6 - Amendment Letter No. Three to Stock Purchase
Agreement dated March 1, 1994, by and between
the Registrant and Contact Communications, Inc.
(filed as an Exhibit to the Registrant's
Current Report on Form 8-K, dated March 1,
1994, and incorporated herein by reference).
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE NO.
------ ----------------------- --------
10.7 - Asset Purchase Agreement dated March 22, 1994,
by and among the Registrant, Radio Call
Company, Inc., a New York corporation, MRN
Communications, Inc., a New York corporation,
Radio Call Co. of N.J., Inc., a New Jersey
corporation, and Marvin R. Neuwirth (filed as an
Exhibit to the Registrant's Current Report on
Form 8-K, dated August 5, 1994, and
incorporated herein by reference).
10.8 - Asset Purchase Agreement dated May 5, 1994, by
and among the Registrant, Chicago Communication
Service, Inc., an Illinois corporation, Gerald
C. Bear, Gerald C. Bear, Trustee of the Lewis
Bear Trust, Leo Magiera and Gerald Manikowski
(filed as an Exhibit to the Registrant's
Current Report on Form 8-K, dated August 5,
1994, and incorporated herein by reference).
10.9 - Asset Purchase Agreement dated June 30, 1994,
by and among the Registrant, All City
Communication Company, Inc., Robert J. von
Bereghy, Maurice S. Meyers, Martin T. Franke,
Virginia Franke, Personal Representative of the
estate of Martin K. Franke and Cove
Communications of Wisconsin, Inc. (filed as an
Exhibit to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended June 30,
1994, and incorporated herein by reference).
10.10 - Amendment Agreement dated July 29, 1994, by and
among the Registrant, Radio Call Company, Inc.,
a New York corporation, MRN Communications,
Inc., a New York corporation, Radio Call Co. of
N.J., Inc., a New Jersey corporation, and Marvin
R. Neuwirth (filed as an Exhibit to the
Registrant's Current Report on Form 8-K, dated
August 5, 1994, and incorporated herein by
reference).
10.11 - Amendment Agreement dated August 1, 1994, by
and among the Registrant, All City
Communication Company, Inc., Robert J. von
Bereghy, Maurice S. Meyers, Martin T. Franke,
Virginia Franke, Personal Representative of the
estate of Martin K. Franke and Cove
Communications of Wisconsin, Inc. (filed as an
Exhibit to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended June 30,
1994, and incorporated herein by reference).
10.12 - Stock Purchase Agreement dated April 20, 1994,
regarding the acquisition of the outstanding
capital stock of Metropolitan Houston Paging
Services, Inc., ("Metro Houston") by and among
Contact Communications Inc., a wholly-owned
subsidiary of the Registrant ("CCI"), Metro Houston
and the shareholders of Metro Houston (filed as an
Exhibit to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31,
1995, and incorporated herein by reference).
10.13 - Form of PS-58 Split Dollar Agreement between
the Registrant and each of its executive
officers (filed as an Exhibit to the
Registrant's Registration Statement on Form S-2
(File No. 33-85696) filed with the Commission
on October 28, 1994, and incorporated herein by
reference).
10.14 - Asset Purchase Agreement dated November 30,
1994, among Signet Paging of Charlotte, Inc.,
Eileen L. Knight, John R. Knight, Sr., John R.
Knight, Jr. and CCI (filed as an Exhibit to
Amendment No. 2 to the Registrant's Registration
Statement on Form S-2 (File No. 33-85696) filed
with the Commission on December 14, 1994, and
incorporated herein by reference).
10.15 - Employment Agreement dated May 18, 1994, by and
between the Registrant and Jackie R. Kimzey
(filed as an Exhibit to the Registrant's
Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1994, and incorporated
herein by reference).
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE NO.
------ ----------------------- --------
10.16 - Employment Agreement dated May 18, 1994, by and
between the Registrant and David J. Vucina
(filed as an Exhibit to the Registrant's
Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1994, and incorporated
herein by reference).
10.17 - Change in Control Agreement dated May 18, 1994,
by and between the Registrant and Bo Bernard
(filed as an Exhibit to the Registrant's
Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1994, and incorporated
herein by reference).
10.18 - Change in Control Agreement dated May 18, 1994,
by and between the Registrant and Jan E.
Gaulding (filed as an Exhibit to the
Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1994, and
incorporated herein by reference).
10.19 - Change in Control Agreement dated May 18, 1994,
by and between the Registrant and Jeffery Owens
(filed as an Exhibit to the Registrant's
Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1994, and incorporated
herein by reference).
10.20 - Change in Control Agreement dated January 17,
1995, by and between the Registrant and Mark A.
Solls (filed as an Exhibit to the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1994, and incorporated herein by
reference).
10.21 - Asset Purchase Agreement dated May 24, 1995,
regarding the acquisition of substantially all
of the paging assets of Americom Paging
Corporation, by and among CCI, Gregory W. Hadley,
Mo Shebaclo and American 900 Paging, Inc. dba
Americom Paging Corporation (filed as an Exhibit
to the Registrant's Current Report on Form 8-K,
dated July 7, 1995, and incorporated herein by
reference).
10.22 - Amended and Restated Credit Agreement dated
February 9, 1995, by and among the Registrant,
The First National Bank of Chicago, as Agent,
and the Lenders party thereto (filed as an
Exhibit to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994,
and incorporated herein by reference).
10.23 - Waiver, Consent and Amendment No. 1 dated as of
June 12, 1995 by and among the Registrant, The
First National Bank of Chicago, as Agent, and
the Lenders party thereto (filed as an exhibit
to the Registrant's Registration Statement on
Form S-4 (file no. 33-60925) filed with the
Commission July 7, 1995, and incorporated
herein by reference).
10.26 - Letter of Agreement dated March 31, 1995,
regarding the acquisition of substantially all
of the paging assets of Lewis Paging Inc., by
and among CCI, Lewis Paging, Inc. and Terry W.
Lewis (filed as an exhibit to the Registrant's
Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1995, and incorporated
herein by reference).
10.27 - Letter of Agreement dated March 31, 1995,
regarding the acquisition of the common stock of
Page East Inc., by and among CCI, Page East, Inc.
and C.T. Spruill (filed as an exhibit to the
Registrant's Quarterly Report on Form 8-K dated
July 5, 1995, and incorporated herein by reference).
10.28 - Office Lease Agreement by and between the
Registrant and Carter-Crowley Properties, Inc.,
as Landlord (filed as an exhibit to the
Registrant's Current Report on Form 8-K, dated
July 5, 1995, and incorporated herein by
reference).
10.29 - Letter of Agreement dated July 10, 1995, regarding
the acquisition of substantially all of the paging
assets of Signet Paging of Raleigh, Inc., by and
among CCI Signet Paging of Raleigh, Inc. and W. David
Sweatt.
10.30 - Letter of Agreement dated July 10, 1995, regarding
the acquisition of the common stock of Apple
Communications, Inc. and certain assets of Best Page,
Inc., by and among CCI, Apple Communications, Inc., Best
Page, Inc., Sam Zarcone and Jill DiFoggio.
22 - Subsidiaries of the Registrant (filed as an
Exhibit to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994,
and incorporated herein by reference).
23.1 - Consent of Vinson & Elkins L.L.P. (set forth in
Exhibit 5.1).
23.2 - Consent of Ernst & Young LLP, Independent
Auditors.
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE NO.
------ ----------------------- --------
23.3 - Consent of Hiltzik, Schneider, Ehrlich &
Wengrover, Independent Public Accountants.
23.4 - Consent of Cummings & Carroll, P.C.,
Independent Public Accountants.
23.5 - Consent of Natarelli & Associates, Independent
Public Accountants.
23.6 - Consent of Winter, Kloman, Moter & Repp S.C.,
Independent Public Accountants.
23.7 - Consent of Greer & Walker, L.L.P., Independent
Public Accountants.
23.8 - Consent of Arthur Andersen LLP, Independent
Public Accountants.
23.9 - Consent of KPMG Peat Marwick LLP, Independent
Public Accountants.
24.1 - Powers of Attorney (set forth on signature
page).
<PAGE>
EXHIBIT 5.1
LETTERHEAD
July 25, 1995
ProNet Inc.
600 Data Drive, Suite 100
Plano, Texas 75075
Re: ProNet Inc.
Common Stock, par value $.01 per share
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel for ProNet Inc., a Delaware corporation (the
"Company"), in connection with the registration under the Securities Act of
1933, as amended (the "Securities Act"), of the offer and sale of 2,000,000
shares of its common stock, par value $.01 per share (the "Common Stock"), by
certain selling stockholders (the "Selling Stockholders") on the Company's
Registration Statement on Form S-3 (the "Registration Statement") to be filed
with the Securities and Exchange Commission (the "Commission") on or about
July 25, 1995.
In reaching the opinions set forth herein, we have reviewed those
agreements, certificates of public officials, officers of the Company and
other persons, records, documents, and matters of law that we deemed
relevant, including, but not limited to, (a) the Restated Certificate of
Incorporation and By-Laws of the Company and (b) resolutions previously
adopted by the Board of Directors of the Company.
Based on and subject to the foregoing and subject further to the
assumptions, exceptions and qualifications hereinafter stated, we are of the
opinion that the Company Stock, when issued to the Selling Stockholders in
accordance with the acquisition transactions described in the Registration
Statement, will be legally issued, fully paid and nonassessable.
The opinions expressed above are subject in all respects to the
following assumptions, exceptions and qualifications:
<PAGE>
ProNet Inc.
Page 2
July 25, 1995
a. We have assumed that (i) all signatures on all documents reviewed
by us are genuine, (ii) all documents submitted to us as originals are
true and complete, (iii) all documents submitted to us as copies are
true and complete copies of the originals thereof, (iv) all information
submitted to us in the preparation of the Registration Statement is true
and complete as of the date hereof, (v) each natural person signing any
document reviewed by us had the legal capacity to do so, (vi) each
person signing in a representative capacity any document reviewed by us
had authority to sign in that capacity and (vii) the consideration to
be received by the Company for each share of Common Stock will be equal
to or exceed the par value thereof.
b. The opinions expressed above are limited to the General Corpora-
tion Law of the State of Delaware and the federal laws of the United
States of America.
c. The opinions expressed above speak as of the date hereof and are
limited to the matters expressly set forth herein, and no opinion is to
be implied or inferred beyond such matters.
This opinion may be filed as an exhibit to the Registration Statement.
In giving this consent, we do not admit that we come into the category of
persons whose consent is required under Section 7 of the Securities Act or
the rules and regulations of the Commission promulgated thereunder.
This firm disclaims any duty to advise you regarding any changes in, or
otherwise communicate with you with respect to, the matters addressed herein.
Respectfully submitted,
/s/ VINSON & ELKINS L.L.P.
--------------------------------
Vinson & Elkins L.L.P.
<PAGE>
CONTACT COMMUNICATIONS INC.
600 Data Drive, Suite 100
Plano, Texas 75075
(214) 964-9500
July 10, 1995
Mr. W. David Sweatt
President
Signet Paging of Raleigh, Inc.
2411-116E Millbrook Road
Raleigh, N.C. 27604
Dear Mr. Sweatt:
This letter will confirm the understanding that W. David
Sweatt (the "Shareholder"), and Signet Paging of Raleigh, Inc. a
North Carolina corporation, all of the capital stock of which is
owned by the Shareholder (the "Company"), have reached with
Contact Communications Inc., a Delaware corporation ("Buyer"),
and wholly owned subsidiary of ProNet Inc. ("ProNet"), with
respect to the acquisition ("Acquisition") by Buyer from the
Company of those assets described in EXHIBIT A attached hereto
as "Acquired Assets" (the "Acquired Assets").
1. The parties hereto shall immediately proceed with the
further negotiation, preparation and execution of a Definitive
Agreement (herein so called) containing, among other things, the
terms and conditions set forth in EXHIBIT A attached hereto. The
parties intend that the Definitive Agreement be executed no later
than 5:00 p.m., Dallas time, September 15, 1995, unless they
shall otherwise agree in writing.
2. Following the date of execution hereof, the
Shareholder and the Company shall afford to Buyer through its
officers, attorneys, accountants, lenders and authorized
representatives and affiliates free and full access to the
properties, books and records of the Company on reasonable notice
during normal business hours in order to permit Buyer to make
such investigation of the business, properties and operations of
the Company as Buyer may deem necessary. In the event Buyer
determines not to proceed with the Acquisition, any information
furnished to, or obtained by, any party hereto, its officers,
attorneys, accountants, lenders or authorized representatives, as
a result of its investigations or otherwise in connection with
the Acquisition, shall be treated as confidential information
except (a) to the extent such information is otherwise public or
generally available to the public or (b) as required by law. In
the event the Acquisition does not occur, each party shall return
to the other parties all written confidential information
furnished by the other parties to it or him and will not
thereafter use, for any purposes whatsoever, such confidential
information, or permit any such confidential information to be
made publicly available.
<PAGE>
Mr. Sweatt
July 10, 1995
Page 2
3. The Shareholder and the Company represent and warrant
to Buyer that neither Shareholder nor the Company has entered
into any agreement pursuant to which any person or entity has
obtained the right to acquire any portion of the securities or
assets of the Company (whether by purchase of assets or stock, by
merger, or otherwise) and (b) the execution, delivery and
performance of this letter of intent by the Shareholder and the
Company do not and will not breach, violate or conflict with, or
permit the cancellation of, any agreement to which the Company is
a party or by which it or its properties is bound. In order to
induce Buyer to undertake the considerable effort and to incur
the major expenses associated with the Acquisition, the
Shareholder and the Company shall not, and shall use their best
efforts to cause the officers, directors, employees, and agents
of the Company not to, (a) solicit, initiate or encourage the
submission of proposals or offers from any person or entity for,
or enter into any agreement or arrangement relating to, any
acquisition or purchase of any or all of the assets of, or
securities of, or any merger, consolidation, or business
combination with, the Company or any subsidiary thereof or (b)
participate in any negotiations regarding, or, except as required
by legal process, furnish to any other person or entity any
information with respect to, or otherwise cooperate in any way
with, or assist or participate in, facilitate, or encourage, any
effort or attempt by any other person or entity to do or seek any
of the foregoing until 5:00 p.m., Dallas, Texas time, on
September 15, 1995. In addition, until 5:00 p.m., Dallas, Texas
time, on September 15, 1995, the Shareholder and the Company
agree that neither the Shareholder nor the Company will enter
into any agreement or consummate any transaction that would
interfere with the consummation of the Acquisition. The
Shareholder and the Company shall promptly notify Buyer if any
such proposal or offer described in this paragraph, or any
inquiry or contact with any person or entity with respect
thereto, is made. The notification under this paragraph shall
include the identity of the person or entity making such
acquisition, offer or other proposal, the terms thereof, and any
other information with respect thereto as Buyer may reasonably
request and which may be legally provided to Buyer by the Company
and the Shareholder.
4. No public announcement shall be made by Buyer,
ProNet, the Company or either Shareholder with respect to the
transactions contemplated hereby without the approval of the
respective parties, unless otherwise required by law; provided,
however, it is specifically understood that ProNet shall issue
press releases regarding the execution of this letter of intent,
the execution of the Definitive Agreement and the Closing of the
Acquisition, as well as any public filing required by ProNet's
status as a company whose common stock is publicly-traded.
5. This letter is intended merely to be a guide in the
preparation of a Definitive Agreement satisfactory to the parties
hereto and nothing contained herein shall be construed to
preclude other provisions that are inconsistent with the terms of
the Acquisition outlined herein from being included in the
Definitive Agreement, provided such other provisions are
satisfactory to all parties to the Definitive Agreement. While
the parties presently intend to proceed promptly to complete the
Definitive Agreement, it is expressly understood that this is a
letter of intent and
<PAGE>
Mr. Sweatt
July 10, 1995
Page 3
that no liability or obligation of any nature whatsoever is
intended to be created between or among any of the parties
hereto except as set forth in paragraphs 2, 3 and 4 hereof.
If the foregoing sets forth your understanding with respect
to this matter, please execute the enclosed copies of this letter
in the space provided below for your signatures and return one
fully executed copy to the undersigned, whereupon this letter
shall become a binding agreement among the parties hereto and our
respective heirs, successors and assigns as of the date hereof.
CONTACT COMMUNICATIONS INC.
By: Mark A. Solls
--------------------------------
Title: VICE PRESIDENT
Accepted and agreed to in all respects
as of 10th day of July, 1995.
SIGNET PAGING OF RALEIGH, INC.
By: W. DAVID SWEATT
------------------------------------
Title: CHAIRMAN
W. DAVID SWEATT
------------------------------------
W. David Sweatt
<PAGE>
EXHIBIT A
SIGNET PAGING OF RALEIGH, INC.
TERM SHEET
Nature of Transaction Sale of Assets
Purchase Price The Purchase Price shall be
$8,000,000.
The Purchase Price shall be paid as
follows: (a) 60% in cash at
closing, (b) 10% payable in shares
of common stock ("Common Stock") of
ProNet Inc. (valued at the then
current trading price) or cash (the
"Deferred Amount"), in Buyer's sole
discretion, within 12 months after
the closing of the Acquisition, and
(c) the balance (30%) payable in
shares of Common Stock (valued at
the then current trading price).
If the market value of the Common
Stock payable in accordance with
Subsection (c) above falls below
$18.00 per share, the number of
shares to be delivered will be
determined according to the $18.00
per share value (i.e., 2,400,000
DIVIDED BY 18 = 133,333 shares). If
the market value of the Common
Stock payable in accordance with
Subsection (c) above rises above
$22.00 per share, the number of
shares to be delivered will be
determined according to the $22.00
per share value (i.e., 2,400,000
DIVIDED BY 22 = 109,091 shares).
The shares of Common Stock to be
delivered shall be delivered at the
Closing and the Seller and
Shareholder shall be restricted
from selling the shares. The
restriction shall allow the shares
to be sold at the rate of 25% of
the total amount of shares to be
delivered on the sixth month, one
year, eighteen month and two year
anniversaries of the Closing of the
acquisition. The Purchase Price
will be allocated between the
Acquired Assets and the
Shareholder's (and Sam Miles') and
the Company's Noncompetition
Agreements (in amount to be agreed
to by the parties hereto). Buyer
shall pay the Company interest at
the rate of 6 1/2% per annum on any
portion of the Deferred Amount
(calculated from the date of
Closing until paid).
<PAGE>
The shares of common stock to be
delivered in payment of the
Purchase Price shall be the subject
of a Registration Rights Agreement
between the Shareholders and ProNet
pursuant to which ProNet shall
agree that such shares shall be
registered with the Securities and
Exchange Commission (the "SEC")
within 14 days after the delivery
of such shares to the Shareholders.
Purchase Price Adjustment The final Purchase Price may be
subject to adjustment in respect of
the number of pagers in service.
Buyer will pay the Company for the
increase over 13,000 in the number
of pagers in service at the
Closing. The amount of compensation
will be determined as follows:
(a) $65 plus the Company's
pager cost for each leased
pager added
(b) $25 for each reseller pager
added
(c) $65 for each COAM
(nonreseller) pager sold
Acquired Assets (a) The Company's radio
paging systems, including all
affiliated networks for
continuity of such system and
including all pending
applications, as well as any
proposed/pending transactions
to acquire paging systems or
frequencies (collectively, the
"System"), and any frequencies
licensed for radio paging in
such metropolitan areas held
by the Company but not
currently used in the
operation of the System
(b) All of the System's pagers in
the field (provided the number
of pagers in service shall not
be less than 13,000 at the
date of Closing)
(c) All of the tangible assets of
the System including
receivers, transmitters, base
station equipment, inventory
(of an appropriate working
level to supply the System),
furniture, fixtures and
computer equipment
(d) Accounts receivable.
<PAGE>
(e) To the extent assignable, all
outstanding licenses,
authorizations, permits and
certificates issued to the
Company by the Federal
Communications Commission and
other governmental authorities
and all pending applications
with respect to the same used
by the Company in connection
with or necessary for the
operation of the System
Excluded Assets (a) The Company's cash: the
cash and cash equivalents
(excluding accounts
receivable).
(b) Ford Mustang and Ford
Explorer.
Noncompetition Agreement The Company, the Shareholder and
Sam Miles will agree not to compete
with Buyer in the area in which the
Company serves its customers for a
period of five years from the
closing of the Acquisition.
Representation and Warranties The Shareholder shall represent and
warrant that (a) neither he nor the
Company has entered into any
agreement pursuant to which any
person or entity has obtained the
right to acquire any portion of the
securities or all or substantially
all of the assets of the Company
(whether by purchase of assets or
stock, by merger or otherwise), and
(b) except as otherwise disclosed
on the appropriate disclosure
schedule, the execution, delivery
and performance of the Definitive
Agreement by the Shareholder and
the Company do not and will not
breach, violate or conflict with,
or permit the cancellation of, any
agreement to which the Shareholder
or the Company is a party or by
which any of them or their
properties is bound.
License Transfers Within 30 days after the parties
have signed this letter of intent,
Buyer (with Seller's assistance)
shall apply with the Federal
Communications Commission for the
transfer of all licenses currently
issued to the Company (including
any pending applications with
respect to the Company). The
parties will each pay one-half of
the cost of such applications.
<PAGE>
Liabilities The Company will pay or provide for
payment at closing for all of its
liabilities (including all debt and
accounts payable) so that Buyer
will be receiving the Acquired
Assets free and clear of all
liabilities, liens and
encumbrances.
Indemnification/Offset Buyer shall have a right to offset
against the Deferred Amount for any
damages resulting from breaches of
the Definitive Agreement by the
Company or the Shareholder.
ProNet Guarantee ProNet shall guarantee the
obligations of Buyer contained in
the Definitive Agreement.
<PAGE>
CONTACT COMMUNICATIONS INC.
600 Data Drive, Suite 100
Plano, Texas 75075
(214) 964-9500
July 10, 1995
VIA FACSIMILE
Mr. Sam Zarcone
Apple Communications, Inc.
4235 S. Kedzie Ave
Chicago, Illinois 60632
Dear Mr. Zarcone:
This letter will confirm the understanding that Sam Zarcone
and Jill DiFoggio (collectively, Sam Zarcone and Jill DiFoggio
are referred to herein as the "Shareholders") have reached with
Contact Communications Inc., a Delaware corporation ("Buyer"),
and wholly owned subsidiary of ProNet Inc. ("ProNet"), with
respect to the acquisition ("Acquisition") by Buyer of all of the
issued and outstanding shares of common stock (and preferred
stock, if any) of Apple Communications, Inc. dba Apple Beepers,
an Illinois corporation ("Apple") from the Shareholders.
Additionally, Sam Zarcone, the sole shareholder of Best Page,
Inc., an Illinois corporation ("Best Page") has agreed to sell
those assets of Best Page described in EXHIBIT A ("Acquired
Assets") to Buyer. Apple and Best Page are collectively referred
to as the "Companies."
1. The parties hereto shall immediately proceed with the
further negotiation, preparation and execution of a Definitive
Agreement (herein so called) containing, among other things, the
terms and conditions set forth in EXHIBIT A attached hereto. The
parties intend that the Definitive Agreement be executed no later
than 5:00 p.m., Dallas time, September 15, 1995.
2. Following the date of execution hereof, the
Shareholders and the Companies shall afford to Buyer through its
officers, attorneys, accountants, lenders and authorized
representatives and affiliates free and full access to the
properties, books and records of the Companies on reasonable
notice during normal business hours in order to permit Buyer to
make such investigation of the business, properties and
operations of the Companies as Buyer may deem necessary. In the
event Buyer determines not to proceed with the Acquisition, any
information furnished to, or obtained by, any party hereto, its
officers, attorneys, accountants, lenders or authorized
representatives, as a result of its investigations or otherwise
in connection with the Acquisition, shall be treated as
confidential information except (a) to the extent such
information is otherwise public or generally available to the
public or (b) as required by law. In the event the Acquisition
does not occur, each party shall return to the other parties all
written confidential information furnished by the other parties
to it or him and will not thereafter use, for
<PAGE>
Mr. Zarcone
July 10, 1995
Page 2
any purposes whatsoever, such confidential information, or permit
any such confidential information to be made publicly available.
3. The Shareholders and the Companies represent and
warrant to Buyer that neither Shareholders nor the Companies has
entered into any agreement pursuant to which any person or entity
has obtained the right to acquire any portion of the securities
or assets of the Companies (whether by purchase of assets or
stock, by merger, or otherwise) and (b) the execution, delivery
and performance of this letter of intent by the Shareholders and
the Companies do not and will not breach, violate or conflict
with, or permit the cancellation of, any agreement to which the
Companies are a party or by which it or its properties is bound.
In order to induce Buyer to undertake the considerable effort and
to incur the major expenses associated with the Acquisition, the
Shareholders and the Companies shall not, and shall use their
best efforts to cause the officers, directors, employees, and
agents of the Companies not to, (a) solicit, initiate or
encourage the submission of proposals or offers from any person
or entity for, or enter into any agreement or arrangement
relating to, any acquisition or purchase of any or all of the
assets of, or securities of, or any merger, consolidation, or
business combination with, the Companies or any subsidiary
thereof or (b) participate in any negotiations regarding, or,
except as required by legal process, furnish to any other person
or entity any information with respect to, or otherwise cooperate
in any way with, or assist or participate in, facilitate, or
encourage, any effort or attempt by any other person or entity to
do or seek any of the foregoing until 5:00 p.m., Dallas, Texas
time, on September 15, 1995. In addition, until 5:00 p.m.
Dallas, Texas time, on September 15, 1995, the Shareholders and
the Companies agree that neither the Shareholders nor the
Companies will enter into any agreement or consummate any
transaction that would interfere with the consummation of the
Acquisition. The Shareholders and the Companies shall promptly
notify Buyer if any such proposal or offer described in this
paragraph, or any inquiry or contact with any person or entity
with respect thereto, is made. The notification under this
paragraph shall include the identify of the person or entity
making such acquisition, offer or other proposal, the terms
thereof, and any other information with respect thereto as Buyer
may reasonably request and which may be legally provided to Buyer
by the Companies and the Shareholders.
4. No public announcement shall be made by Buyer,
ProNet, the Companies or either Shareholder with respect to the
transactions contemplated hereby without the approval of the
respective parties, unless otherwise required by law; provided,
however, it is specifically understood that ProNet shall issue a
press release regarding the execution of this letter of intent.
5. This letter is intended merely to be a guide in the
preparation of a Definitive Agreement satisfactory to the parties
hereto and nothing contained herein shall be construed to
preclude other provisions that are inconsistent with the terms of
the Acquisition outlined herein from being included in the
Definitive Agreement, provided such other provisions are
satisfactory to all parties to the Definitive Agreement. While
the parties presently intend to proceed promptly to complete the
Definitive Agreement, it is expressly understood that this is a
letter of intent and
<PAGE>
Mr. Zarcone
July 10, 1995
Page 3
that no liability or obligation of any nature whatsoever is
intended to be created between or among any of the parties
hereto except as set forth in paragraphs 2, 3 and 4 hereof.
If the foregoing sets forth your understanding with respect
to this matter, please execute the enclosed copies of this letter
in the space provided below for your signatures and return one
fully executed copy to the undersigned, whereupon this letter
shall become a binding agreement among the parties hereto and our
respective heirs, successors and assigns as of the date hereof.
CONTACT COMMUNICATIONS INC.
By: Mark A. Solls
---------------------------
Title: Vice President
---------------------------
Accepted and agreed to in all respects
as of the date first set forth above:
APPLE COMMUNICATIONS, INC.
By: Sam Zarcone Sam Zarcone
-------------------------- ----------------------------
Sam Zarcone
Title: Pres. Jill DiFoggio
----------------------- ----------------------------
Jill DiFoggio
BEST PAGE, INC.
By: Sam Zarcone
-------------------------
Title: Pres.
----------------------
<PAGE>
EXHIBIT A
TERM SHEET
Nature of Transaction Sale of Stock: Apple Communications, Inc.
Sale of Assets: Best Page, Inc.
Purchase Price The Purchase Price shall be $13,000,000.
The Purchase Price shall be paid at closing as
follows: (a) 50.01% (at Seller's option, such
election to be made prior to the execution of
the Definitive Agreement, 50.01% of (i) the
Purchase Price of $13,000,000, or (ii) the
amount attributable to Apple Communications,
Inc., or (iii) as the parties agree - which
shall in no event exceed 50.01% of the
$13,000,000 Purchase Price) payable in shares
of common stock of ProNet Inc. (valued at the
then current trading price) and (b) the balance
payable in cash after Seller's election as set
forth above. The shares of common stock to be
delivered shall be delivered at the Closing and
the Companies and the Shareholders shall be
restricted from selling the shares. The
restriction shall allow the shares to be sold
at the rate of 25% of the total amount of shares
to be delivered on the sixth month, one year,
eighteen month and two year anniversaries of the
Closing of the acquisition. The Purchase Price
will be allocated as follows (subject to review
and approval by the Buyer's and Seller's
advisors):
Noncompetition Agreements $1,500,000
Best Page, Inc. $2,500,000
Apple Communications, Inc. $9,000,000
The shares of common stock to be delivered in
payment of the Purchase Price, shall be the
subject of a Registration Rights Agreement
between the Shareholders and ProNet pursuant
to which ProNet shall agree that such shares
shall be registered with the Securities and
Exchange Commission (the "SEC") within 14 days
after the delivery of such shares to the
Shareholders.
<PAGE>
Noncompetition Agreement The Companies and the Shareholders
will agree not to compete with
Buyer in the Midwest United States
for a period of five years from the
closing of the Acquisition. The
Noncompetition Agreement shall
relate solely to the business of
the Companies.
License Transfers Within 30 days after the parties
have signed this letter of intent,
Buyer (with Companies'/
Shareholders' assistance) shall
apply with the Federal
Communications Commission for the
transfer of all licenses currently
issued to the Companies in the
Midwestern United States (including
any pending applications with
respect to the Companies).
Liabilities The Companies will pay or provide
for payment at closing for all of
its liabilities so that Buyer will
be receiving the Acquired Assets
and the stock of Apple free and
clear of all liabilities, liens and
encumbrances.
Representations and Warranties The Shareholders shall
represent and warrant that (a)
neither they nor the Companies have
entered into any agreement pursuant
to which any person or entity has
obtained the right to acquire any
portion of the securities or all or
substantially all of the assets of
the Companies (whether by purchase
of assets or stock, by merger or
otherwise), and (b) except as
otherwise disclosed on the
appropriate disclosure schedule,
the execution, delivery and
performance of the Definitive
Agreement by the Shareholders and
the Companies do not and will not
breach, violate or conflict with,
or permit the cancellation of, any
agreement to which the Shareholders
or the Companies are a party or by
which any of them or their
properties are bound.
Other Conditions to Closing (a) All third party consents,
approvals and waivers required
to be obtained by the
Companies or the Buyer to
consummate the transaction
shall have been obtained or
waived.
<PAGE>
(b) No declared but unpaid
dividends.
(c) No loans to officers or
employees outstanding.
(d) Since May 31, 1995, there
shall have been no dividends
or distributions (other than
in the normal course
consistent with past
practice), no material
increase in the compensation
to officers or other key
employees of Apple (other than
in the normal course
consistent with past practice)
and no material commitments
shall be made without the
consent of the Buyer, except
such distributions or
compensation as is mutually
agreed to between the parties.
(e) The cash and cash equivalents
(excluding accounts
receivable) of Apple shall
meet or exceed the amount of
Accounts Payable existing on
the date of the Closing. On
or prior to Closing, the
Shareholders may retain or
dividend cash and cash
equivalents (excluding account
receivable) excluding accounts
receivable in excess of such
Accounts Payable.
(f) Apple's pagers in service
shall not be less than 41,500
at the date of the Closing.
Excluded Assets (a) The Companies' cash: the
cash and cash equivalents
(excluding accounts
receivable) of the Companies
shall meet or exceed the
amount of Accounts Payable
existing on the date of the
Closing. On or prior to
Closing, the Shareholders may
retain or dividend cash and
cash equivalents (excluding
accounts receivable) in excess
of such Accounts Payable.
(b) Unipage Model 80 terminal
- to be shipped at Buyer's
expense within six months
after the Closing to an
address within the continental
United States.
<PAGE>
Acquired Assets
(Best Page) (a) Best Page's radio paging
systems including all
affiliated networks for
continuity of such system in
the Midwestern United States
(specifically excluding
operations in the Southwestern
United States) (collectively,
the "System"), and any
frequencies licensed for radio
paging in such metropolitan
areas held by Best Page but
not currently used in the
operation of the System
(b) All of the System's
subscribers in the field
(provided the number of
"billed units" in service
shall not be less than 41,500
at the date of Closing when
added with Apple's units)
(c) All of the tangible assets of
the System including
receivers, transmitters, base
station equipment, inventory
(of an appropriate working
level to supply the System),
furniture, fixtures and
computer equipment
(d) Accounts receivable
(e) To the extent assignable, all
outstanding licenses,
authorizations, permits and
certificates issued to Best
Page by the Federal
Communications Commission and
other governmental authorities
in the Midwestern United
States and all pending
applications with respect to
the same used by Best Page in
connection with or necessary
for the operation of the
System
Financial Condition of
Apple at Closing (a) Between May 31, 1995
and Closing, there shall have
been no material adverse
change in the financial
condition, assets or business
of Apple, and between May 31,
1995 and Closing, the Business
of Apple shall have been
conducted in the ordinary
course consistent with past
practice.
<PAGE>
(b) Any required government
filings shall have been made
and applicable waiting periods
shall have expired or been
terminated or waived by Buyer.
Hart-Scott-Rodino Filing No later than ten (10) days after
the Definitive Agreement has been
executed, the parties shall make
such filings as required by the
Hart-Scott-Rodino Antitrust
Improvements Act with respect to
this transaction. The parties
shall share equally the
responsibility for any expenses
associated with such filings and
the parties will cooperate in
seeking early termination of the
waiting period under the Act.
Indemnification/Offset Buyer shall have a right to offset
against the Purchase Price for any
damages resulting from breaches of
the Definitive Agreement by the
Companies or the Shareholders. The
parties shall establish an
Indemnification Escrow in the
amount of $500,000 at the Closing.
The escrowed funds will be paid to
the Shareholders at the rate of
$125,000 after each quarter
following the Closing (subject to
applicable offsets during the
quarter).
ProNet Guarantee ProNet shall guarantee the
obligations of Buyer contained in
the Definitive Agreement.
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 33-00000) and related Prospectus of
ProNet Inc. for the registration of 2,000,000 shares of its common stock and
to the incorporation by reference therein of our reports (a) dated March 3,
1995, with respect to the consolidated financial statements and schedule of
ProNet Inc. included in its Annual Report (Form 10-K) for the year ended
December 31, 1994, and (b) dated June 9, 1995, with respect to the combined
financial statements of Page East, Inc. for the year ended December 31, 1994
included in ProNet Inc.'s Current Report on Form 8-K dated July 5, 1995, both
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
------------------------------
Ernst & Young LLP
Dallas, Texas
July 20, 1995
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 33-00000) and related Prospectus of
ProNet Inc. for the registration of 2,000,000 shares of its common stock and
to the incorporation by reference therein of our report dated September 17,
1993, with respect to the consolidated financial statements of Contact
Communications, Inc. and its Affiliated Companies included in ProNet Inc.'s
Current Report on Form 8-K/A dated May 12, 1994, both filed with the
Securities and Exchange Commission.
/s/ SCHNEIDER, EHRLICH & WENGROVER
----------------------------------
Schneider, Ehrlich & Wengrover
(successor firm to Hiltzik, Schneider, Ehrlich & Co.)
July 19, 1995
Great Neck, New York
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 33-00000) and related Prospectus of
ProNet Inc. for the registration of 2,000,000 shares of its common stock and
to the incorporation by reference therein of our report dated September 16,
1994, with respect to the consolidated financial statements of Radio Call
Company, Inc. and Affiliates included in ProNet Inc.'s Current Report on Form
8-K/A dated October 14, 1994, both filed with the Securities and Exchange
Commission.
/s/ CUMMINGS & CARROLL, P.C.
----------------------------
Cummings & Carroll, P.C.
Certified Public Accountants
July 19, 1995
Great Neck, New York
<PAGE>
EXHIBIT 23.5
July 19, 1995
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 33-00000) and related Prospectus of
ProNet Inc. for the registration of 2,000,000 shares of its common stock and
to the incorporation by reference therein of our report dated October 10,
1994, with respect to the consolidated financial statements of RCC Division
of Chicago Communication Service, Inc. included in ProNet Inc.'s Current
Report on Form 8-K/A dated October 14, 1994, both filed with the Securities
and Exchange Commission.
/s/ Charles J. Natarelli
- ---------------------------------
Charles J. Natarelli
NATARELLI & ASSOCIATES
Chicago, Illinois
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 33-00000) and related Prospectus of
ProNet Inc. for the registration of 2,000,000 shares of its common stock and
to the incorporation by reference therein of our report dated April 14, 1995,
with respect to the consolidated financial statements of All City
Communication Company, Inc. included in ProNet Inc.'s Current Report on
Form 8-K dated June 2, 1995, both filed with the Securities and Exchange
Commission.
/s/ WINTER, KLOMAN, MOTER & REPP S.C.
-----------------------------------------
Winter, Kloman, Moter & Repp S.C.
July 19, 1995
Elm Grove, Wisconsin
<PAGE>
EXHIBIT 23.7
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 33-00000) and related Prospectus of
ProNet Inc. for the registration of 2,000,000 shares of its common stock and
to the incorporation by reference therein of our report dated April 13, 1995,
with respect to the financial statements of Signet Paging of Charlotte, Inc.
included in ProNet Inc.'s Current Report on Form 8-K/A dated May 12, 1995,
both filed with the Securities and Exchange Commission.
/s/ GREER & WALKER, LLP
- -----------------------
Greer & Walker, LLP
July 19, 1995
Charlotte, North Carolina
<PAGE>
EXHIBIT 23.8
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our reports dated April 20, 1995
with respect to the financial statements of Metropolitan Houston Paging
Services, Inc. included in ProNet Inc.'s Form 8-K dated May 18, 1995, and to
all references to our firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN L.L.P.
----------------------------------
Arthur Andersen L.L.P.
Little Rock, Arkansas,
July 20, 1995.
<PAGE>
EXHIBIT 23.9
The Board of Directors
Americom Paging Corporation:
We consent to incorporation by reference in the Registration Statement
(No. 33-00000) on Form S-3 of ProNet Inc. and the related Prospectus of
ProNet Inc. for the registration of 2,000,000 shares of its common stock with
respect to the balance sheet of Americom Paging Corporation as of December 31,
1994, and the related statements of operations, changes in shareholders'
deficit, and cash flows for each of the years in the two-year period ended
December 31, 1994, which report appears in the Form 8-K of ProNet Inc. dated
July 7, 1995 and to the reference to our firm under the heading "Experts" in
the Form S-3 of ProNet Inc. and the related Prospectus of ProNet Inc. for the
registration of 2,000,000 shares of its common stock.
Our report dated April 17, 1995, contains an explanatory paragraph that
states that the Americom Paging Corporation has suffered recurring losses
from operations and has a net capital deficiency, which raise substantial
doubt about its ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome
of that uncertainty.
/s/ KPMG PEAT MARWICK LLP
-------------------------
KPMG Peat Marwick LLP
Houston, Texas
July 19, 1995
