SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): AUGUST 22, 2002
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ORBITAL SCIENCES CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 1-14279 06-1209561
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
21839 ATLANTIC BOULEVARD, DULLES, VIRGINIA 20166
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(Address of principal executive offices)
Registrant's telephone number, including area code: (703) 406-5000
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
On August 22, 2002, Orbital Sciences Corporation announced that it closed a
private sale of $135 million of units, each comprised of $1,000 aggregate
principal amount of Orbital's 12% second priority secured notes due in 2006 and
a warrant, exercisable at a strike price of $3.86 per share, to purchase 122.23
shares of Orbital's common stock. As noted in the company's press release dated
August 22, 2002, a copy of which is attached hereto as Exhibit 99.1, Orbital
used a portion of the net proceeds to prepay a $25 million term loan and is
required to use the remaining net proceeds to repay its $100 million convertible
bonds due on October 1, 2002.
The following summary of the terms of the notes and warrants is qualified in its
entirety by reference to the principal transaction documents, copies of which
are attached as exhibits to this Current Report:
THE NOTES
Notes Offered................$135,000,000 aggregate principal amount of Second
Priority Secured Notes due 2006.
Maturity.....................August 15, 2006.
Interest.....................Annual Rate: 12%
Payment frequency: semi-annually each February 15
and August 15. First Payment: February 15, 2003.
Interest will be paid in cash.
Guarantees...................The notes will be unconditionally guaranteed on a
senior subordinated basis by certain of Orbital's
subsidiaries.
Optional Redemption..........On or after August 15, 2003, Orbital will have the
right to redeem some or all of the notes at the
following redemption prices (expressed as
percentages of the principal amount), plus accrued
and unpaid interest and liquidated damages, if any,
if redeemed during the 12-month period commencing
August 15 of the years indicated below:
2003................................ 104%
2004................................ 102%
2005 and thereafter................. 100%
At any time prior to August 15, 2003, upon a public
offering of its common stock for cash, Orbital may
elect to use the proceeds from such offering to
redeem up to 35% of the aggregate principal amount
of the notes at any time within 90 days of such
offering at a price of 112% of the principal
amount, plus accrued and unpaid interest and
liquidated damages, if any.
Change of Control............If a change of control occurs, subject to certain
conditions and restrictions, Orbital will be
required to make an offer to the holders of the
notes to repurchase the notes at the following
purchase prices (expressed as percentages of the
principal amount), plus accrued and unpaid
interest and liquidated damages, if any, if such
change of control occurs during the 12-month
period commencing August 15 of the years indicated
below:
2002................................ 106%
2003................................ 104%
2004................................ 102%
2005 and thereafter................. 100%
Certain Covenants............Orbital issued the notes under an indenture that
contains covenants that, with some exceptions,
limit Orbital's ability to, among other things:
- incur more debt, particularly
unsubordinated debt;
- pay dividends, redeem or repurchase
its stock or make other
distributions;
- enter into transactions with
affiliates;
- merge or consolidate with others;
- dispose of assets or use asset sale
proceeds; and
- create liens on Orbital's assets.
THE WARRANTS
Warrants Offered.............135,000 warrants, each warrant entitling the holder
to purchase 122.23 shares of Orbital's common
stock (or an aggregate of approximately 16.5
million shares) at a price per share of $3.86. The
exercise price and the number of warrant shares
issuable upon exercise of the warrants are subject
to adjustment upon the occurrence of certain
events set forth in the warrant agreement.
Exercise of Warrants.........The warrants will be exercisable after a
registration statement relating to the resale of
the warrants and the issuance and/or resale of the
warrant shares is declared effective under the
Securities Act of 1933, and will expire on August
15, 2006. Warrantholders have the option to
exercise the warrants through payment of the
exercise price in cash, through a "cashless"
exercise or by tendering the exercise price of the
warrants by surrendering notes.
With the successful completion of this financing, Orbital expects that its
available cash and remaining borrowing capacity under its $35 million revolving
line of credit will be sufficient to meet its currently anticipated operating
and capital expenditure requirements. However, Orbital's ability to borrow
additional funds is substantially limited by the terms of the indenture and the
credit facility and Orbital does not expect to have access to the capital
markets in the near future. Consequently, Orbital may not have sufficient
financial flexibility to adequately respond to significant unforeseen events
that may adversely affect the Company's liquidity.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits:
4.1 Indenture, dated as of August 22, 2002, by and between Orbital
Sciences Corporation and U.S. Bank, N.A., as trustee.
4.2 Warrant Agreement, dated as of August 22, 2002, by and between
Orbital Sciences Corporation and U.S. Bank, N.A., as warrant
agent.
4.3 Form of 12% Second Priority Secured Note due 2006.
4.4 Form of Common Stock Purchase Warrant.
10.1 Notes Registration Rights Agreement, dated as of August 22, 2002,
by and among Orbital Sciences Corporation, on the one hand, and
Jefferies/Quarterdeck, LLC and Jefferies & Company, Inc., on
the other.
10.2 Warrant Registration Rights Agreement, dated as of August 22,
2002, by and among Orbital Sciences Corporation, on the one hand,
and Jefferies/Quarterdeck, LLC and Jefferies & Company, Inc., on
the other.
10.3 Pledge and Security Agreement, dated as of August 22, 2002, by
and among Orbital Sciences Corporation, Orbital International,
Inc. and U.S. Bank, N.A.
99.1 Press Release, dated August 22, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ORBITAL SCIENCES CORPORATION
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(Registrant)
By: /s/ Garrett E. Pierce
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Garrett E. Pierce
Vice Chairman and Chief Financial Officer
Date: August 27, 2002
Exhibit Index
4.1. Indenture, dated as of August 22, 2002, by and between Orbital
Sciences Corporation and U.S. Bank, N.A., as trustee.
4.2. Warrant Agreement, dated as of August 22, 2002, by and between Orbital
Sciences Corporation and U.S. Bank, N.A., as warrant agent.
4.3. Form of 12% Second Priority Secured Note due 2006.
4.4. Form of Common Stock Purchase Warrant.
10.1. Notes Registration Rights Agreement, dated as of August 22, 2002, by and
among Orbital Sciences Corporation, on the one hand, and
Jefferies/Quarterdeck, LLC and Jefferies & Company, Inc., on the
other.
10.2. Warrant Registration Rights Agreement, dated as of August 22, 2002, by
and among Orbital Sciences Corporation, on the one hand, and
Jefferies/Quarterdeck, LLC and Jefferies & Company, Inc., on the
other.
10.3. Pledge and Security Agreement, dated as of August 22, 2002, by and among
Orbital Sciences Corporation, Orbital International, Inc. and U.S.
Bank, N.A.
99.1. Press Release, dated August 22, 2002.