[Code of Federal Regulations]
[Title 17, Volume 2]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR229.901]

[Page 441-443]
 
              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. 229.901  (Item 901) Definitions.

    Source: 56 FR 57247, Nov. 8, 1991, unless otherwise noted.


    For the purposes of this subpart 229.900:
    (a) General partner means the person or persons responsible under 
state law for managing or directing the management of the business and 
affairs of a partnership that is the subject of a roll-up transaction 
including, but not limited to, the general partner(s), board of 
directors, board of trustees, or other person(s) having a fiduciary duty 
to such partnership.
    (b)(1) Partnership means any:
    (i) Finite-life limited partnership; or
    (ii) Other finite-life entity.
    (2)(i) Except as provided in paragraph (b)(2)(ii) of this Item 
(Sec. 229.901(b)(2)(ii)), a limited partnership or other entity is 
``finite-life'' if:
    (A) It operates as a conduit vehicle for investors to participate in 
the ownership of assets for a limited period of time; and
    (B) It has as a policy or purpose distributing to investors proceeds 
from the sale, financing or refinancing of assets or cash from 
operations, rather than reinvesting such proceeds or cash in the 
business (whether for the term of the entity or after an initial period 
of time following commencement of operations).
    (ii) A real estate investment trust as defined in I.R.C. section 856 
is not finite-life solely because of the distribution to investors of 
net income as provided by the I.R.C. if its policies or purposes do not 
include the distribution to

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investors of proceeds from the sale, financing or refinancing of assets, 
rather than the reinvestment of such proceeds in the business.
    (3) Partnership does not include any entity registered under the 
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or any Business 
Development Company as defined in section 2(a)(48) of that Act (15 
U.S.C. 80a-2(a)(48)).
    (c)(1) Except as provided in paragraph (c)(2) or (c)(3) of this 
Item, (Sec. 229.901(c)(2) or (c)(3)) roll-up transaction means a 
transaction involving the combination or reorganization of one or more 
partnerships, directly or indirectly, in which some or all of the 
investors in any of such partnerships will receive new securities, or 
securities in another entity.
    (2) Notwithstanding paragraph (c)(1) of this Item, 
(Sec. 229.901(c)(1)) roll-up transaction shall not include:
    (i) A transaction wherein the interests of all of the investors in 
each of the partnerships are repurchased, recalled, or exchanged in 
accordance with the terms of the preexisting partnership agreement for 
securities in an operating company specifically identified at the time 
of the formation of the original partnership;
    (ii) A transaction in which the securities to be issued or exchanged 
are not required to be and are not registered under the Securities Act 
of 1933 (15 U.S.C. 77a et seq.);
    (iii) A transaction that involves only issuers that are not required 
to register or report under Section 12 of the Securities Exchange Act of 
1934 (15 U.S.C. 78l), both before and after the transaction;
    (iv) A transaction that involves the combination or reorganization 
of one or more partnerships in which a non-affiliated party succeeds to 
the interests of a general partner or sponsor, if:
    (A) Such action is approved by not less than 66\2/3\% of the 
outstanding units of each of the participating partnerships; and
    (B) As a result of the transaction, the existing general partners 
will receive only compensation to which they are entitled as expressly 
provided for in the preexisting partnership agreements;
    (v) A transaction in which the securities offered to investors are 
securities of another entity that are reported under a transaction 
reporting plan declared effective before December 17, 1993 by the 
Commission under Section 11A of the Securities Exchange Act of 1934 (15 
U.S.C. 78k-1), if:
    (A) Such other entity was formed, and such class of securities was 
reported and regularly traded, not less than 12 months before the date 
on which soliciting material is mailed to investors; and
    (B) The securities of that entity issued to investors in the 
transaction do not exceed 20% of the total outstanding securities of the 
entity, exclusive of any securities of such class held by or for the 
account of the entity or a subsidiary of the entity; and
    (C) For purposes of paragraph (c)(2)(v) of this Item 
(Sec. 229.901(c)(2)(v)), a regularly traded security means any security 
with a minimum closing price of $2.00 or more for a majority of the 
business days during the preceding three-month period and a six-month 
minimum average daily trading volume of 1,000 shares;
    (vi) A transaction in which all of the investors' partnership 
securities are reported under a transaction reporting plan declared 
effective before December 17, 1993 by the Commission under Section 11A 
of the Securities Exchange Act of 1934 (15 U.S.C. 78k-1) and such 
investors receive new securities or securities in another entity that 
are reported under a transaction reporting plan declared effective 
before December 17, 1993 by the Commission under Section 11A of the 
Securities Exchange Act of 1934 (15 U.S.C. 78k-1), except that, for 
purposes of this paragraph, securities that are reported under a 
transaction reporting plan declared effective before December 17, 1993 
by the Commission under Section 11A of the Securities Exchange Act of 
1934 shall not include securities listed on the American Stock 
Exchange's Emerging Company Marketplace;
    (vii) A transaction in which the investors in any of the 
partnerships involved in the transaction are not subject to a 
significant adverse change with respect to voting rights, the

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terms of existence of the entity, management compensation or investment 
objectives; or
    (viii) A transaction in which all investors are provided an option 
to receive or retain a security under substantially the same terms and 
conditions as the original issue.
    (3) The Commission, upon written request or upon its own motion, may 
exempt by rule or order any security or class of securities, any 
transaction or class of transactions, or any person or class of persons, 
in whole or in part, conditionally or unconditionally, from the 
definition of roll-up transaction or the requirements imposed on roll-up 
transactions by Items 902-915 of Regulation S-K (Secs. 229.902-229.915), 
if it finds such action to be consistent with the public interest and 
the protection of investors.
    (d) Sponsor means the person proposing the roll-up transaction.
    (e) Successor means the surviving entity after completion of the 
roll-up transaction or the entity whose securities are being offered or 
sold to, or acquired by, limited partners of the partnerships or the 
limited partnerships to be combined or reorganized.

Instruction to Item 901. If a transaction is a roll-up transaction as 
defined in Item 901(c) of this subpart (Sec. 229.901(c)), the 
requirements of this subpart apply to each entity proposed to be 
included in the roll-up transaction, whether or not the entity is a 
``partnership'' as defined in Item 901(b) of this subpart 
(Sec. 229.901(b)).

[56 FR 57247, Nov. 8, 1991, as amended at 59 FR 63682, Dec. 8, 1994]