8-KMaterial AgreementsExhibits & Filings

COMCAST CORP 8-K Report, Material Agreement (Jun 27, 2006)

Filed June 27, 2006For Securities:CMCSACCZ

Summary

Comcast Corporation (CMCSA) filed an 8-K on June 27, 2006, detailing an amendment to its asset purchase agreement with Adelphia Communications Corporation, originally dated April 20, 2005. This amendment, executed on June 21, 2006, modifies the terms of the Comcast Adelphia Acquisition, which involves acquiring certain assets and assuming liabilities of Adelphia, including its majority interest in joint ventures with Comcast. The key change is that the acquisition will now proceed under a modified Chapter 11 bankruptcy plan for the joint ventures and a "363 Sale" for other assets, subject to bankruptcy court approval. This structure aims to streamline the process, potentially removing the need for Adelphia's creditors to approve a full Chapter 11 reorganization plan prior to deal closure. The amendment also introduces provisions for a termination fee of $87.5 million payable by Adelphia to Comcast under specific circumstances, or a purchase price reduction, should the deal not close by September 1, 2006, or if Adelphia terminates the agreement under certain conditions. A "Reversion Notice" mechanism is also included, allowing Adelphia to void certain amendment changes.

Key Highlights

  • 1Amendment No. 2 to the Asset Purchase Agreement between Comcast and Adelphia was entered into on June 21, 2006.
  • 2The Comcast Adelphia Acquisition will now be structured under a modified Chapter 11 plan for joint ventures and a Section 363 Sale of assets, subject to bankruptcy court approval.
  • 3This revised structure may eliminate the need for Adelphia's creditors to approve a Chapter 11 reorganization plan for the acquisition to proceed.
  • 4A termination fee of $87.5 million or a purchase price reduction may be payable by Adelphia to Comcast under specified termination or non-consummation scenarios by September 1, 2006.
  • 5Adelphia retains the right to issue a "Reversion Notice" under certain circumstances, which could void specific changes introduced by the amendment.
  • 6A separate Letter Agreement was entered into concerning the priority of registration rights for Time Warner Cable (TWC) Stock held by Comcast Trust and Adelphia in future offerings.
  • 7Under the Letter Agreement, Comcast Trust's offerings of TWC Stock will have priority over Adelphia's in joint offerings, and Adelphia will also enter into lock-up agreements if Comcast Trust does.

Frequently Asked Questions

This 8-K filing announces a material amendment to Comcast's asset purchase agreement with Adelphia Communications Corporation. The amendment modifies the structure and terms under which Comcast will acquire certain Adelphia assets, including its stake in their joint ventures.

The acquisition will now proceed via a modified Chapter 11 bankruptcy plan for the joint ventures and a Section 363 Sale for other assets, rather than a traditional Chapter 11 reorganization plan for Adelphia's creditors to approve. This requires approval from the U.S. Bankruptcy Court for the Southern District of New York.

Yes, the amendment includes provisions where Adelphia may be required to pay Comcast a termination fee of $87.5 million or reduce the purchase price under specified circumstances if the acquisition is terminated or not consummated by September 1, 2006.

The Letter Agreement, entered into with Adelphia and Time Warner Cable entities, establishes priority for Comcast Trust's offerings of Time Warner Cable stock over Adelphia's in any joint offerings. It also includes provisions for lock-up agreements and conditions for Comcast Trust's first public offering.