GTN.A Gray Television Inc

On November 9, 2021, Gray Escrow II, Inc. (the “Escrow Issuer”), a special purpose wholly owned subsidiary of Gray Television, Inc. (“Gray”, “we” or the “Company”) issued $1,300,000,000 in aggregate principal amount of its 5.375% Senior Notes due 2031 (the “Notes”) pursuant to an indenture, dated as of November 9, 2021, between the Escrow Issuer, Gray and U.S. Bank National Association, as trustee (the “Indenture”). The Notes were issued at 100.000% of par. The Notes were offered and sold pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the “Securities Act”).

The Notes were issued to finance, together with cash on hand and anticipated borrowings under Gray’s senior credit facility, Gray’s pending merger with Meredith Corporation (“Meredith”), pursuant to which Gray will acquire Meredith’s local media group, immediately after and subject to Meredith’s spin-off of its national media group to the Meredith shareholders (the “Meredith Acquisition”). If the Meredith Acquisition is consummated and certain other conditions are satisfied, the net proceeds from this issuance of Notes will be released from escrow to fund the Meredith Acquisition, the Escrow Issuer will merge with and into the Company and the Company will become the primary obligor under the Notes (such event, the “Escrow Release”). If the Escrow Release does not occur before the outside date specified in the Indenture, the Escrow Issuer will redeem the Notes with the proceeds from this issuance of Notes held in escrow (the “Special Mandatory Redemption”). If a Special Mandatory Redemption occurs, we have agreed to guarantee the Escrow Issuer’s obligation to pay accrued interest on the Notes from November 9, 2021 to the date of the Special Mandatory Redemption, in an amount not to exceed $51,000,000.

The terms of the Notes are governed by the Indenture. The Indenture contains covenants that, upon the Escrow Release, limit the ability of the Company and any guarantors to, among other things, (i) incur additional indebtedness; (ii) pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments; (iii) enter into certain transactions with affiliates of the Company; (iv) enter into certain transactions that restrict distributions from restricted subsidiaries; (v) sell or otherwise dispose of assets; (vi) create or incur liens; merge, consolidate or sell all or substantially all of the Company’s assets; (vii) place restrictions on the ability of subsidiaries to pay dividends or make other payments to the Company; and (viii) designate the Company’s subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important exceptions and qualifications.

The Indenture contains customary events of default, including, among other things, (i) failure to make required payments; (ii) failure to comply with certain agreements or covenants; (iii) failure to pay certain other indebtedness; (iv) certain events of bankruptcy and insolvency; (v) failure to pay certain judgments and (vi) failure by the Company to pay any amounts due in the event of a Special Mandatory Redemption. An event of default under the Indenture will allow either the Trustee or the holders of at least 25% in aggregate principal amount of the then-outstanding series of notes, as applicable, issued under such Indenture to accelerate, or in certain cases, will automatically cause the acceleration of, the amounts due under the applicable series of notes.

The Notes mature on November 15, 2031. Interest accrues on the Notes from November 9, 2021, and is payable semiannually, on May 15 and November 15 of each year, beginning on May 15, 2022. We may redeem some or all of the Notes at any time after November 15, 2026 at redemption prices specified in the Indenture. We may also redeem up to 40% of the aggregate principal amount of the Notes at 105.375% before November 15, 2024 using the net cash proceeds from certain equity offerings. In addition, we may redeem some or all of the Notes at any time prior to November 15, 2026 at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus a make whole premium set forth in the Indenture. If we sell certain of our assets or experience specific kinds of changes of control, we must offer to repurchase the Notes.

A copy of the Indenture is attached to this Current Report on Form 8-K (this “Report”) as Exhibit 4.1 and is incorporated by reference herein. The Form of Notes, attached to the Indenture as Exhibit A, is attached to this Report as Exhibit 4.2 and is incorporated by reference herein. The foregoing description of the Notes and the Indenture is qualified in its entirety by reference to the complete text of the Indenture.

Upon the Escrow Release, the Notes will be jointly and severally and fully and unconditionally guaranteed on a senior unsecured basis by each of the Company’s then-existing and future restricted subsidiaries, other than any restricted subsidiary of the Company that does not guarantee the Company’s then-existing senior secured credit facilities or any permitted refinancing thereof (the “Guarantors”). Upon the Escrow Release, the Notes and related guarantees will be Gray’s and the Guarantors’ senior unsecured obligations. Upon the Escrow Release, the Notes and guarantees will rank: