Acterna Completes Reorganization; Exits Chapter 11 in Stronger Position to Build on Global Communications Test Leadership; Company Introduces New Board of Directors.

Business Editors/High-Tech Writers

GERMANTOWN, Md.--(BUSINESS WIRE)--Oct. 15, 2003

Only five months after initiating its case, Acterna today emerged from chapter 11 protection ready to build on its global communications test leadership with a stronger balance sheet. As previously announced, Acterna's Plan of Reorganization received overwhelming support from all classes of creditors and was confirmed by the U.S. Bankruptcy Court for the Southern District of New York on September 25. Acterna subsidiary, da Vinci, the leading manufacturer of color image enhancement and automatic film and video restoration technology, has also emerged from chapter 11 protection.

"Acterna has continued to serve its customers and deliver new innovations throughout the debt restructuring process," said John Peeler, president and chief executive officer. "We emerge today with a bright future and as a stronger company more committed than ever to the employees, customers, suppliers and other business partners that have been so instrumental to our continued success."

Undaunted Focus on Product Innovation and Reliably Serving Customers

Acterna's strategic focus is to deliver communications test solutions that help its customers deploy new communications services, reduce operating expenses and improve quality. Its customers include leading communications service providers -- such as Alltel, AT&T, Bell South, BT, Comcast, Deutsche Telekom, France Telecom, Telefonica, SBC, Time Warner Cable and Verizon - as well as equipment manufacturers including Alcatel, Cisco, Lucent, Nortel and others. During the last five months, Acterna has introduced more than 10 new products and enhancements. The company will launch 12 more new products and major enhancements before the end of the year.

"Acterna's sales and support team has truly exhibited the extra-mile effort to support our network engineering and operations staff," said Bill Wyatt of Alltel, a communications service provider with 12 million customers and nearly $8 billion in annual revenue. "As Alltel continues to evolve its network technologies and service offerings, we look to Acterna as a partner in our future success."

"Acterna has a long, proven track record as one of the leading providers of communications test solutions for optical, access and cable networks," said Dana Cooperson, group and program director for RHK, Inc., a global telecom research and advisory services firm. "The company's health has improved through their recent reorganization, and they are aligning their business to meet the growing need among communications service providers to launch new services and lower network expenses through improvements in business processes."

New Board of Directors

Acterna also announced a new, five -member Board of Directors, effective today. The new Board is made up of the following members:

-- Todd Arden, director, Angelo, Gordon & Co., an investment

management firm with approximately $10 billion under

management. Previously served as portfolio manager and senior

analyst within AIG/SunAmerica's High Yield Group.

-- Alain Couder, president and CEO of Confluent Software. Former

chief operating officer of Agilent Technologies and former

chairman and CEO of Packard Bell NEC.

-- James Gaffney, director for several companies -- including

Hexcel Inc., Imperial Sugar Company (chairman), SCP Pool

Inc.-with strong turnaround expertise. Former CEO of General

Aquatics/KDI Corporation, International Tropic-Cal,

Ayers/Chairmakers, Inc., Brown Jordan Company and Washington

Industries.

-- Edward Horowitz, founder and chairman of EdsLink LLC, a

financial and technology consulting service, and former

chairman of e-Citi, a Citigroup unit created to pioneer

Citigroup's e-commerce initiatives. Previously served as

senior vice president, technology and operations, for Viacom

Inc.

-- John Peeler, president and CEO, Acterna. More than 25 years of

communications industry experience, including 23 years with

Acterna, and a depth of expertise in engineering and

operations.

"Acterna has assembled a world-class Board of Directors made up of strong leaders with a depth of business and technology expertise," said Peeler. "Our management team looks forward to working with these incoming directors as Acterna builds momentum and embarks on a successful new era."

Plan of Reorganization Terms

Under the terms of Acterna's Plan of Reorganization, which becomes effective today, Acterna's senior secured debt holders receive 100 percent of the company's equity through a debt-for-equity swap. Acterna emerges as a privately held company with long-term debt of approximately $190 million and quarterly cash interest expense of less than $2 million. Holders of Acterna's current convertible and subordinated notes will receive warrants having diminimus value. Unsecured creditors receive a cash distribution of approximately 10 percent of their claims. Current equity holders will receive no distribution under the terms of the plan.

About Acterna

Acterna is the world's largest provider of communications test solutions for telecommunications and cable network operators. A trusted communications test partner for more than eight decades, Acterna offers an unmatched portfolio of award-winning instruments, systems, software and services that help its customers reduce network costs while improving performance and reliability. Headquartered in Germantown, Maryland, USA - with European and Asia-Pacific operations based in Eningen, Germany and Hong Kong - Acterna serves nearly every major communications service provider and equipment manufacturer around the world through a skilled sales and support organization in 31 countries.