UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Date of report (Date of earliest event reported)		March 31, 2010 (March 31, 2010)

Gray Television, Inc.

(Exact name of registrant as specified in its charter)

Georgia		001-13796		58-0285030
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS employer Identification No.)

4370 Peachtree Road, Atlanta, Georgia		30319
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code		(404) 504-9828

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 1.01. Entry into a Material Definitive Agreement.

     Effective as of March 31, 2010, Gray Television, Inc. (the “Company”), certain of its subsidiaries, the Lenders (as defined therein) party thereto, and Wells Fargo Bank, N.A. (as successor by merger to Wachovia Bank, National Association “Wachovia”), as administrative agent, entered into a Second Amendment (the “Amendment”) to that certain Credit Agreement, dated as of March 19, 2007, by and among the Company, certain subsidiaries thereof, the Lenders party thereto; and Wachovia, as administrative agent (the “Credit Agreement”).

     The Amendment provides for, among other things: (i) an increase in the maximum total net leverage ratio covenant under the Credit Agreement through March 30, 2011 and (ii) a potential issuance of capital stock and/or senior or subordinated debt securities, which could include securities with a second lien security interest (the “Replacement Debt”). The Amendment also provides for a reduction in the revolving loan commitment under the senior credit facility from $50.0 million to $40.0 million.

     From March 31, 2010 until the date the Company completes an offering of Replacement Debt resulting in the repayment of not less than $200 million of our term loan outstanding under the Credit Agreement, (i) the Company is required to pay an annual incentive fee equal to 2.0%, which fee will be eliminated upon the consummation of such offering and repayment, (ii) the annual facility fee will remain at 3.0%, which fee will, following such repayment, be reduced to 1.25% per year, with a potential for further reductions in future periods, and (iii) the Company will remain subject to a maximum total net leverage ratio, which will, following such repayment, be replaced by a first lien leverage test, as described in the following paragraph. In addition, from and after such repayment, the Company will be required to comply with a minimum fixed charge coverage ratio of 0.90x to 1.0x.

     Upon the completion of an offering of Replacement Debt that results in the repayment of not less than $200 million of our term loan outstanding under the Credit Agreement, we will, from the date of such repayment, be subject to a maximum first lien leverage ratio covenant, which will replace our current maximum total leverage ratio covenant. The covenant will range from 7.5x to 6.5x, depending upon the amount of any such repayment.

     The use of proceeds from any issuance of Replacement Debt will generally be limited to the repayment of amounts outstanding under the term loan under the Credit Agreement and, in certain circumstances, to the repurchase of outstanding shares of the Company’s Series D Perpetual Preferred Stock. We cannot provide any assurances that such a sale of Replacement Debt, or any repurchase of such preferred stock, will be completed by us, or of the terms or timing thereof.

     Beginning April 30, 2010 and thereafter, all interest and fees accrued under the Credit Agreement will be payable in cash upon their respective due dates, with no portion of such accrued interest and fees being subject to deferral.

     A summary of certain significant terms contained in our Credit Agreement (i) before the Amendment, (ii) as so amended, and (iii) as amended and after giving affect to a potential issuance of Replacement Debt and repayment of at least $200 million of term loans under the Credit Agreement, are summarized in the table below:

						As Amended and
						After Giving Effect
				As Amended and		to a Potential
				Prior to Potential		Issuance of
				Issuance of		Replacement Debt
		Prior to		Replacement Debt		and Related
		Amendment on		and Related		Repayment of Term
Description		March 31, 2010		Repayment of Term Loan		Loan
Annual interest rate on outstanding term loan balance		LIBOR plus 3.5%		Same		Same
		or BASE plus 2.5%
Annual interest rate on outstanding revolving loan balance		LIBOR plus 3.5%		Same		Same
		or BASE plus 2.5%
Annual facility fee rate		3% with a		3% with a		1.25% with a
		potential reduction		potential reduction		potential reduction
		in future periods.		in future periods.		in future periods.
Annual incentive fee rate		0.0%		2.0%		0.0%
Annual commitment fee on undrawn revolving loan balance		0.50%		Same		Same
Revolving loan commitment		$50 million		$40 million		$40 million
Maximum total net leverage ratio at:
March 31, 2010 through June 29, 2010		7.00x		9.00x		Replaced with
June 30, 2010 through September 29, 2010		6.50x		9.50x		first lien leverage
September 30, 2010 through March 30, 2011		6.50x		9.75x		test described
March 31, 2011 and thereafter		6.50x		6.50x		above.
Minimum fixed charge coverage ratio		None		Same		0.90x to 1.0X
Maximum cash balance that can be deducted from total debt to calculate total net debt in the total net leverage ratio (or first lien leverage test, as applicable)		$10.0 million		Same		$15.0 million

     As of December 31, 2009, we had a deferred loan cost balance of $1.6 million. If the Amendment constitutes a significant modification to the Credit Agreement in the three-month period ended March 31, 2010, we may be required to expense all or a portion of our deferred loan cost balance. As of March 31, 2010, after giving effect to the Amendment, we expect to be in compliance with all covenants under the Credit Agreement.

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.

Date: March 31, 2010