UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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):
July 12, 2002
Acterna Corporation
(Exact name of registrant as specified in its charter)
Delaware 000-07438 04-2258582
(State or other jurisdiction (Commission File No.) (IRS Employee
of incorporation) Identification No.)
20410 Observation Drive
Germantown, Maryland 20876
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (301) 353-1550
Item 5. Other Events.
On July 12, 2002, Acterna Corporation ("Acterna") reached agreement
with its lender group to amend (the "Amendment") the Credit Agreement, dated as
of May 23, 2000 (as amended, supplemented or otherwise modified, the "Credit
Agreement"), among Acterna LLC, a Delaware limited liability company and a
wholly-owned subsidiary of Acterna ("Acterna LLC"), certain other subsidiaries
of the Acterna, JPMorgan Chase Bank, as Administrative Agent, and certain other
parties thereto.
The Amendment will provide, among other things, for the following
changes to the Credit Agreement:
The limitation on optionally repurchasing Acterna LLC's 9 3/4% Senior
Subordinated Notes due 2008 (the "Senior Subordinated Notes") will be amended to
permit, subject to certain restrictions and conditions, the purchase for up $24
million in aggregate purchase price of the Senior Subordinated Notes pursuant to
tender offers commenced by Acterna LLC and CD&R VI (Barbados), Ltd., a Barbados
company the capital stock of which is owned by Clayton, Dubilier & Rice Fund VI
Limited Partnership, an affiliate of Acterna ("CD&R Barbados"), on June 24,
2002. The restrictions on asset sales will be amended to permit, subject to
certain restrictions and conditions, the sale of Acterna's Airshow business to
Rockwell Collins, Inc. ("Rockwell Collins") pursuant to a previously announced
agreement with Rockwell Collins, so long as the net proceeds of such sales are
used to prepay the loans under the Credit Agreement. In addition, the
restrictions on indebtedness contained in the Credit Agreement will be amended
to allow Acterna LLC to incur additional secured indebtedness as a result of the
issuance of new senior secured convertible notes to CD&R Barbados, which is
expected to agree with the Administrative Agent to invest all future cash
interest received, on an after tax basis, on all of the Senior Subordinated
Notes held by it in such new senior secured convertible notes (the "CD&R
Barbados Investment").
Under the Amendment, if the Airshow sale is consummated, the minimum
EBITDA amounts Acterna must comply with will be adjusted to be negative $40
million, negative $17 million and $0 for the six, nine and twelve month periods
ended September 30, 2002, December 31, 2002 and March 31, 2003, respectively. In
addition, if Acterna prepays at least $100 million of the term loans under the
Credit Agreement (other than with the proceeds of the Airshow sale), (i)
Acterna's maximum leverage coverage ratio and minimum interest coverage ratio
will be waived until (but not including) June 30, 2004 and (ii) Acterna will
need to comply with the following minimum EBITDA requirements for each of the
following twelve month periods: $20 million for a period ending June 30, 2003,
$30 million for a period ending September 30, 2003, $40 million for a period
ending December 31, 2003 and $50 million for a period ending March 31, 2004. The
amendment also increases the interest rates on the loans under the Credit
Agreement by 0.25%.
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The effectiveness of the Amendment is subject to a number of
conditions, including approval by the Administrative Agent of the CD&R Barbados
Investment and satisfaction of customary closing conditions.
Item 7. Financial Statements and Exhibits.
Exhibit 99.1: Press Release, dated June 24, 2002, entitled, "Acterna
Corporation Receives Approval From its Lender Group for Amendment to its Senior
Secured Credit Facility", which release is furnished but not filed as part of
Item 9 of this report.
Item 9. Regulation FD Disclosure.
Attached hereto as Exhibit 99.1 and furnished but not filed is a press
release entitled "Acterna Corporation Receives Approval From its Lender Group
for Amendment to its Senior Secured Credit Facility".
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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.
ACTERNA CORPORATION
Date: July 17, 2002
By: /s/ John D. Ratliff
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Name: John D. Ratliff
Title: Senior Vice President and Chief
Financial Officer
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