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S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/01/1999
Entire Document
 
<PAGE>   663
                          FALCON COMMUNICATIONS, L.P.
                   (SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(2) the acquisition or disposition of assets under certain circumstances; (3)
any sale or disposition of assets that would result in the allocation of taxable
income or gain to TCI; (4) incurring indebtedness if, after giving effect to
such indebtedness, FCLP's Operating Cash Flow Ratio, as defined, would exceed
8.0:1 through April 15, 2000 and 7.5:1 thereafter; (5) the issuance or
redemption of any partnership interest or convertible interest, with certain
permitted exceptions; (6) any transaction with FHGLP or any affiliate of FHGLP,
with certain permitted exceptions; (7) the adoption or amendment of any
management incentive plan; (8) the incurring of Net Overhead Expenses, as
defined, that exceed 4.5% of the gross revenues of FCLP and its subsidiaries in
any fiscal year; or (9) the liquidation or dissolution of FCLP, except in
accordance with the provisions of the FCLP Partnership Agreement.
 
     TCI may elect to purchase all of FHGLP's interests in the Partnership in
certain circumstances if a court finds that FHGLP has engaged in conduct while
acting as Managing General Partner that has resulted in material harm to the
Partnership or TCI.
 
     Prior to the closing of the TCI Transaction, the FHGLP Partnership
Agreement gave certain partners of FHGLP certain rights and priorities with
respect to other partners. Among these rights were stated obligations of the
Partnership to redeem certain partners' partnership interests at fair value or,
in some cases, at stated value. These rights and priorities were eliminated upon
the closing of the TCI Transaction. At the closing of the TCI Transaction, a
portion of the partnership interests held by certain FHGLP limited partners,
having an agreed value of $154.7 million, were redeemed for cash.
 
     Under the amended FHGLP partnership agreement, the non-management limited
partners of FHGLP may elect at certain times either to require the incorporation
of FHGLP or to require that FHGLP elect to incorporate FCLP. Neither of these
elections may be made prior to March 30, 2006. If the non-management limited
partners of FHGLP make either of these elections, then, at any time more than
six months after the election and prior to the date on which the incorporation
is completed, the non-management limited partners of FHGLP may elect to require
that FCLP (or, if FHGLP has purchased all of TCI's interest in FCLP, FHGLP)
purchase all of the non-management partners' partnership interests in FHGLP.
Under certain circumstances, a non-management limited partner of FHGLP may elect
to exclude its partnership interest in FHGLP from the purchase and sale and,
upon such election, all put and call rights with respect to such partner's
partnership interest in FHGLP will terminate.
 
     The put and call rights with respect to the partnership interests of the
non-management partners will terminate automatically if either FHGLP or FCLP is
incorporated, if the corporation that succeeds to the assets of FHGLP or FCLP
concurrently effects an initial public offering, and if the aggregate price to
the public (before underwriting discounts or commissions, registration fees, and
other expenses) of all stock sold in the public offering (including stock sold
by any selling shareholders, but excluding stock of a different class from that
acquired by the non-management partners in the incorporation) is at least $150
million.
 
     At any time on or after April 1, 2006, FCLP (or, if FHGLP has purchased all
of TCI's interest in FCLP, FHGLP) may require that each of the non-management
limited partners of FHGLP sell its entire interest in FHGLP to FCLP or FHGLP, as
applicable. In the case of either a put or a call of the non-management limited
partners' interests in FHGLP, the purchase price will equal the amount that
would be distributed to each partner in dissolution and liquidation of FHGLP,
assuming the sale of FCLP's assets at fair market value, as determined by three
appraisers.
 
                                      F-416