[Code of Federal Regulations]
[Title 17, Volume 2]
[Revised as of April 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR229.911]

[Page 436-438]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER II--SECURITIES AND EXCHANGE COMMISSION
 
 PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND CONSERVATION ACT OF 1975--REGULATION S-K--Table of Contents
 
                  Subpart 229.900--Roll-Up Transactions
 
Sec. 229.911  (Item 911) Reports, opinions and appraisals.

    (a)(1) All material reports, opinions or appraisals. State whether 
or not the general partner or sponsor has received any report, opinion 
(other than an opinion of counsel) or appraisal from an outside party 
which is materially related to the roll-up transaction including, but 
not limited to, any such report, opinion or appraisal relating to the 
consideration or the fairness of the consideration to be offered to 
investors in connection with the roll-up transaction or the fairness of 
such transaction to the general partner or investors.
    (2) With respect to any report, opinion or appraisal described in 
paragraph (a)(1) of this Item (Sec. 229.911);
    (i) Identify such outside party;
    (ii) Briefly describe the qualifications of such outside party;
    (iii) Describe the method of selection of such outside party;
    (iv) Describe any material relationship between:
    (A) The outside party or its affiliates; and
    (B) The general partner, sponsor, the successor or any of their 
affiliates,

which existed during the past two years or is mutually understood to be 
contemplated and any compensation received or to be received as a result 
of such relationship;

[[Page 437]]

    (v) If such report, opinion or appraisal relates to the fairness of 
the consideration, state whether the general partner, sponsor or 
affiliate determined the amount of consideration to be paid or whether 
the outside party recommended the amount of consideration to be paid.
    (vi) Furnish a summary concerning such report, opinion or appraisal 
which shall include, but not be limited to, the procedures followed; the 
findings and recommendations; the bases for and methods of arriving at 
such findings and recommendations; instructions received from the 
general partner, sponsor or its affiliates; and any limitation imposed 
by the general partner, sponsor or affiliate on the scope of the 
investigation. If any limitation was imposed by the general partner, 
sponsor or affiliate on the scope of the investigation, including, but 
not limited to, access to its personnel, premises, and relevant books 
and records, state the reasons therefor.
    (vii) State whether any compensation paid to such outside party is 
contingent on the approval or completion of the roll-up transaction and, 
if so, the reasons for compensating such parties on a contingent basis.
    (3) Furnish a statement to the effect that upon written request by 
an investor or his representative who has been so designated in writing, 
a copy of any such report, opinion or appraisal shall be transmitted 
promptly, without charge, by the general partner or sponsor. The 
statement also must include the name and address of the person to whom 
investors or their representatives should make their request.
    (4) All reports, opinions or appraisals referred to in paragraph 
(a)(1) of this Item (Sec. 229.911) shall be filed as exhibits to the 
registration statement.
    (5)(i) Describe any contacts in connection with the roll-up 
transaction between the sponsor or the general partner and any outside 
party with respect to the preparation by such party of an opinion 
concerning the fairness of the roll-up transaction, a valuation of a 
partnership or its assets, or any other report with respect to the roll-
up transaction. No description is required, however, of contacts with 
respect to reports, opinions or appraisals filed as exhibits pursuant to 
paragraph (a)(4) of this Item (Sec. 229.911).
    (ii) The description of contacts with any outside party required by 
paragraph (a)(5)(i) of this Item (Sec. 229.911) shall include the 
following:
    (A) The identity of each such party;
    (B) The nature of the contact;
    (C) The actions taken by such party;
    (D) Any views, preliminary or final, expressed on the proposed 
subject matter of the report, opinion or appraisal; and
    (E) Any reasons such party did not provide a report, opinion or 
appraisal.
    (b) Fairness opinions: (1) If any report, opinion or appraisal 
relates to the fairness of the roll-up transaction to investors in the 
partnerships, state whether or not the report, opinion or appraisal 
addresses the fairness of:
    (i) The roll-up transaction as a whole and to investors in each 
partnership; and
    (ii) All possible combinations of partnerships in the roll-up 
transaction (including portions of partnerships if the transaction is 
structured to permit portions of partnerships to participate). If all 
possible combinations are not addressed:
    (A) Identify the combinations that are addressed;
    (B) Identify the person(s) that determined which combinations would 
be addressed and state the reasons for the selection of the 
combinations; and
    (C) State that if the roll-up transaction is completed with a 
combination of partnerships not addressed, no report, opinion or 
appraisal concerning the fairness of the roll-up transaction will have 
been obtained.
    (2) If the sponsor or the general partner has not obtained any 
opinion on the fairness of the proposed roll-up transaction to investors 
in each of the affected partnerships, state the sponsor's or general 
partner's reasons for concluding that such an opinion is not necessary 
in order to permit the limited partners or shareholders to make an 
informed decision on the proposed transaction.
    (c) Appraisals. If the report, opinion or appraisal consists of an 
appraisal of the assets of the partnerships:
    (1) Describe the purpose(s) for which the appraisals were obtained 
and their

[[Page 438]]

use in connection with the roll-up transaction;
    (2) Describe which assets are covered by the appraisals and state 
the aggregate appraised value of the assets covered by the appraisals 
(including such value net of associated indebtedness). Provide a 
description of, and valuation of, any assets subject to any material 
qualifications by the appraiser and a summary of such qualifications;
    (3) Identify the date as of which the appraisals were prepared. 
State whether and in what circumstances the appraisals will be updated. 
State whether any events have occurred or conditions have changed since 
the date of the appraisals that may have caused a material change in the 
value of the assets;
    (4) Include as an appendix to the prospectus one or more tables 
setting forth the following information:
    (i) The appraised value of any separately appraised asset that is 
significant to the partnership holding such asset;
    (ii) If the appraiser considered different valuation approaches in 
preparing the appraisals of the assets identified in response to 
paragraph (c)(4)(i) of this Item (Sec. 229.911(c)(4)(i)), the value of 
each such asset under each valuation approach considered by the 
appraiser, identifying the valuation approach used by the appraiser in 
determining the appraised value and the reason such approach was chosen; 
and
    (iii) All material assumptions used by the appraiser in appraising 
the assets identified in response to paragraph (c)(4)(i) of this Item 
(Sec. 229.911(c)(4)(i)), and, if the appraiser used different 
assumptions for any of such assets, the reasons the different 
assumptions were chosen.
    (5) For purposes of this Item and Item 902 of this subpart 
(Sec. 229.902), an asset is ``significant'' to a partnership if it 
represents more than 10% of the value of the partnership's assets as of 
the end of the most recently-completed fiscal year or recently-completed 
interim period or if 10% or more of the partnership's cash flow or net 
income for the most recently-completed fiscal year or most recently-
completed subsequent interim period was derived from such asset.

Instructions to Item 911: (1) The reports, opinions and appraisals 
required to be identified in response to paragraph (a) of this Item 
(Sec. 229.911) include any reports, opinions and appraisals which 
materially relate to the roll-up transaction whether or not relied upon, 
such as reports or opinions regarding alternatives to the roll-up 
transaction whether or not the alternatives were rejected.
    (2) The information called for by paragraph (a)(2) of this Item 
(Sec. 229.911) should be given with respect to the firm which provides 
the report, opinion or appraisal rather than the employees of such firm 
who prepared it.
    (3) With respect to appraisals, a summary prepared by the appraisers 
should not be included in lieu of the description of the appraisals 
required by paragraph (c) of this Item (Sec. 229.911). A clear and 
concise summary description of the appraisals is required.

[56 FR 57247, Nov. 8, 1991, as amended at 59 FR 63683, Dec. 8, 1994]