UNITED STATES
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
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| Date of report (Date of earliest event reported) |
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March 31, 2010 (March 31, 2010)
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Gray Television, Inc.
(Exact name of registrant as specified in its charter)
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| Georgia
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001-13796
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58-0285030 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS employer
Identification No.) |
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| 4370 Peachtree Road, Atlanta, Georgia
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30319 |
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| (Address of principal executive offices)
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(Zip Code) |
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| Registrant’s telephone number, including area code |
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(404) 504-9828
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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:
2