SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 25, 2000
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 7
(Exact name of registrant as specified in its charter)
California 333-76435 33-0761517
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3158 Redhill Avenue, Suite 120, Costa Mesa, California 92626
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 662-5565
N/A
Former name or former address, if changed since last report)
022.edg
<PAGE>
Item 2. Acquisition or Disposition of Assets
WNC Housing Tax Credit Fund VI, L.P., Series 7 ("Series 7") has
acquired an interest in 2nd Fairhaven, LLC, a Maryland limited liability company
(the "local limited partnership" or "FAIRHAVEN"). FAIRHAVEN owns the Fairhaven
Manor II Apartments in Caroline County, Maryland.
The following table contains information concerning the apartment
complex and the local limited partnership identified herein:
<TABLE>
ACTUAL OR
ESTIMATED ESTIMATED PERMANENT
LOCAL PROJECT CONSTRUC- DEVELOP- MORTGAGE ANTICIPATED
LIMITED NAME AND TION MENT COST NUMBER OF BASIC LOAN AAGGREGATE
PARTNER- NUMBER LOCATION COMPLETION (INCLUDING APARTMENT MONTHLY PRINCIPAL TAX CREDITS
SHIP OF BUILDINGS OF PROPERTY DATE LAND COST) UNITS RENTS AMOUNT (1)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ------------- ------------ ------------ -------------- ------------- ------------- ------------ ------------
- ----------- ------------- ------------ ------------ -------------- ------------- ------------- ------------ ------------
FAIRHAVEN Fairhaven Federalsburg April 1999 $1,329,000 18 1BR $460 $1,000,000 $490,320
Manor (Caroline units RD (4)
II County),
Apartments Maryland RAP on all
units (3)
5 buildings
(2)
- ---------------- ------------- ------------ ----------- ----------- ----------- ---------------- ------------ ------------
<FN>
(1) Low income housing tax credits are available over a 10-year period. In the
first credit year, Series 7 will receive only that percentage of the annual
credit which corresponds to the number of months during which Series 7 was a
limited partner of the local limited partnership, and during which the apartment
complex was completed and in service.
(2) The apartment complex is designed for senior citizens.
(3) The United States Department of Agriculture, Rural Development provides rent
subsidies known as Rental Assistance Payments (RAP) to certain projects. Funds
from such payments are applied to cover any difference between rents required to
be paid by tenants and the basic rent established for the applicable project.
(4) The United States Department of Agriculture, Rural Development will provide
the mortgage loan for a term of 30 years at a market rate of interest prior to
reduction of the interest rate by a mortgage interest subsidy to an annual rate
of 1%. Principal and interest will be payable monthly based on a 50-year
amortization schedule. Outstanding principal and interest will be due on
maturity of the loan.
</FN>
</TABLE>
Federalsburg (Fairhaven): Federalsburg is in Caroline County, Maryland at
the intersection of State Highways 307, 315 and 318. It is approximately 60
miles southeast of Annapolis. The population is approximately 30,000. The major
employers for Federalsburg residents are Solo Cup Company, Maryland Plastics
and Pillsbury.
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<PAGE>
<TABLE>
- ---------------- --------------- ---------------- --------------- ---------------- --------------- ----------------
SHARING
RATIOS:
ALLOCATIONS
LOCAL LOCAL LOCAL GENERAL SHARING RATIOS: (4) SERIES 7's
LIMITED GENERAL PROPERTY PARTNER CASH FLOW (3) AND SALE OR CAPITAL
PARTNERSHIP PARTNER(S) MANAGER (1) DEVELOPMENT REFINANCING CONTRIBUTION
FEE (2) PROCEEDS (5)
<S> <C> <C> <C> <C> <C> <C>
- ---------------- --------------- ---------------- --------------- ---------------- --------------- ----------------
- ---------------- --------------- ---------------- --------------- ---------------- --------------- ----------------
FAIRHAVEN Larry C. Cabell $164,800 WNC: $750 99.98/.01/.01 $356,860
Porter Corporation LGP: $2,422 40/60
The balance:
Carter 30/70
Chinnis
- ---------------- --------------- ---------------- --------------- ---------------- --------------- ----------------
<FN>
(1) The local limited partnership will employ either its local general
partners or an affiliate of its local general partners, or a third party, as a
property manager for leasing and management of the apartment complex. The
maximum fee payable is determined pursuant to lender regulations.
(2) The local limited partnership will pay its local general partners or an
affiliate of its local general partners a development fee in the amount set
forth, for services incident to the development and construction of the
apartment complex. Services include: negotiating the financing commitments for
the apartment complex, securing necessary approvals and permits for the
development and construction of the apartment complex, and obtaining allocations
of low income housing tax credits.
(3) Reflects the amount of the net cash flow from operations, if any, to be
distributed to Series 7 (WNC) and the local general partners (LGP) of the
local limited partnership for each year of operations. Net cash flow generally
is equal to the excess of revenues over expenses, including the property
manager's fee.
(4) Subject to certain special allocations, reflects the respective percentage
interests in profits, losses and low income housing tax credits of (i) Series 7,
(ii) WNC Housing, L.P., an affiliate of WNC & Associates, Inc. which is the
special limited partner, and (iii) the local general partners.
(5) Reflects the percentage interests in any net cash proceeds from sale or
refinancing of the apartment complex of (i) Series 7, and (ii) the local general
partners. Net cash proceeds from sale or refinancing of the apartment complex is
equal to the sale proceeds less payment of the mortgage loan and other local
limited partnership obligations.
</FN>
</TABLE>
3
<PAGE>
Item 7. Financial Statements and Exhibits
a. Financial Statements of Businesses Acquired*
b. Proforma Financial Information*
c. Exhibits
10.1 Amended and Restated Operating Agreement of 2nd Fairhaven, LLC
----------
*To be filed upon availability.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 7
Date: February 9, 2000 By: WNC & Associates, Inc.,
General Partner
By: /s/ MICHAEL L. DICKENSON
Michael L. Dickenson,
Vice President - Chief Financial
Officer
5
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
10.1 Amended and Restated Operating Agreement of 2nd Fairhaven, LLC
AMENDED AND RESTATED OPERATING AGREEMENT
OF 2nd FAIRHAVEN, LLC
As of this 25th day of January 2000, the parties, having previously
formed a limited liability company under the Maryland Limited Liability Company
Act (the "Act") have agreed to amend and restate the Operating Agreement as
follows:
RECITALS
WHEREAS, 2nd Fairhaven, LLC (the "Company") was formed as a Maryland
limited liability company pursuant to an Operating Agreement dated June 4, 1997
(the "Original Agreement") by and between Larry C. Porter and Carter C. Chinnis,
as the managing members (collectively the "Managing Members"), and an Articles
of Organization (the "Articles") was filed with the Maryland Secretary of State
on June 4, 1997.
WHEREAS, the Parties desire to amend and restate the Original Agreement
to provide for (i) the admission of WNC Housing Tax Credit Fund VI, L.P., Series
7, a California limited partnership, as the investor member and WNC Housing,
L.P. as the special investor member (collectively the "Investor Member"), and
(ii) the rights and obligations of the Members. The Managing Member and Investor
Member may collectively be referred to as the Members or may individually be
referred to as a Members.
NOW THEREFORE, in consideration of the mutual agreements set forth
herein, it is agreed and certified that the Original Agreement is hereby amended
and restated in its entirety as follows:
1. Name. The name of the Company is 2nd Fairhaven, LLC (the "Company").
2. Business. The Company has been organized for the following purposes:
(a) To acquire the land and develop eighteen (18) family housing units
located in Federalsburg, Maryland, and to finance, hold, own, maintain, improve,
lease, operate and if appropriate, sell or dispose of such (the "Project");
<PAGE>
(b) To perform any act necessary or convenient to accomplish, or in
connection with, the foregoing purpose; and
(c) To engage in any lawful act or activity for which a limited
liability may be organized under the laws of the State of Maryland.
3. Principal Place of Business. The Company's principal place of business
is at: 410 Market Street, Denton, Maryland 21629.
4. Admission of Investor Member. WNC Housing Tax Credit Fund VI, L.P.,
Series 7, a California limited partnership is hereby admitted as the
investor member, and WNC Housing, L.P. is hereby admitted as the special
investor member (collectively the "Investor Member" of the Company.
5. Name, Address and Company Interest of Each Member: The names, addresses
and Company's interests of the Managing Member and Investor Member of the
Company (collectively the "Members") are as set forth on Exhibit "A" attached
hereto.
6. Term. The term of the Company shall be from the date hereof, until
dissolution, which shall be the earliest to occur of:
(a) December 31, 2035; or
(b) Upon the written consent or affirmative vote of the Investor
Member to dissolve and terminate the Company; or
(c) Upon the disposition of all interests in all Company assets;
or
(d) Upon the dissolution, bankruptcy, or insolvency of the
Managing Member or substitute Managing Member.
7. Capital Contributions. The Members have contributed or agreed to
contribute the amounts described on Exhibit "A" to the capital of the Company.
8. Limitation on Liability of Investor Member. The liability of the
Investor Member shall be limited to its capital contribution stated on
Exhibit "A". The Investor Member shall have no other liability to contribute
money to, or in respect of the liabilities or obligations of the Company, nor
shall the Investor Member be personally liable for any obligations of the
Company. The Investor Member shall not be obligated to make any loans to the
Company.
2
<PAGE>
9. Capital Account Maintenance. For all purposes of this Amended
Operating Agreement and throughout the entire term of the Company, (i)
capital account balances shall be maintained in accordance with the rules of
Section 1.704-1(b)(2)(iv) of the Treasury Regulations, (ii) liquidating
distributions shall be made in accordance with the requirements of Section
1.804-1(b)(2)(ii)(b)(2) of the Treasury Regulations and (iii) the Company shall
comply with the qualified income offset requirements of Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations.
10. Profits, Losses and Distributions. Company profits and losses shall be
allocated and Company distributions shall be made to the Members in accordance
with their Company interests as set forth on Exhibit "A".
11. Power and Authority of the Managing Member. The Managing Member of the
Company shall have complete and exclusive control over the day-to-day management
of the Company's business and affairs, and the Investor Member shall have no
right to participate in the management or conduct of the Company's business or
affairs nor any power or authority to act for or on behalf of the Company in any
respect whatsoever.
12. Limitation on the Managing Member's Power and Authority. The Managing
Member shall not do any of the following:
(a) Act in contravention of this Agreement or the Act;
(b) Act in any manner which would make it impossible to carry on
the ordinary business of the Company;
(c) Confess a judgment against the Company;
(d) Possess Company property, or assign rights in specific
Company property, for other than the exclusive benefit of the Company, or
commingle the funds of the Company with the funds of any other person or entity;
(e) Admit a person or entity as a managing member or as an
investor member of the Company without the prior written consent of the
Investor Member;
3
<PAGE>
(f) Except in connection with the winding up of the Company, sell,
transfer, encumber, or exchange in a single transaction or a series of
transactions substantially all of the assets acquired by the Company without the
prior written consent of the Investor Member; or
(g) Obligate the Company to any extraordinary or to any transaction
not in normal course of the day-to-day management and operation of the Company's
business as set forth in Section 2 hereof without the prior written consent of
the Investor Member.
13. Obligation of the Managing Member. The Managing Member shall be obligated to
provide to the Investor Member on or before March 15, 2000, all due diligence
materials with respect to the Project and the Company reasonably required by the
Investor Member and its investors and satisfactory in form and substance to the
Investor Member in its sole discretion.
14. Removal of Investor Member. The Interest of the Investor Member shall be
liquidated upon the Managing Member's payment to the Investor Member of an
amount equal to the capital contribution stated on Exhibit "A" if, on or before
February 15, 2000, the Investor Member has not (i) executed a Second Amended and
Restated Operating Agreement (the "Amended Agreement") in a form reasonably
satisfactory to the Investor Member, and (ii) paid to the Company an initial
Capital Contribution in such amount as shall be agreed to by the Managing Member
and the Investor Member. Notwithstanding the foregoing, the Managing Member
shall not have the right to purchase the Investor Member's Interest if the delay
in executing the Second Amended Agreement and making a Capital Contribution was
caused by the Managing Member's failure to deliver the due diligence documents
required by the Investor Member by March 15, 2000.
15. Amendments. This Agreement may be amended at any time by the written
consent or affirmative vote of the Managing Member and the Investor Member.
16. Time of Admission. For all purposes of this Agreement, including but not
limited to Section 8, a Managing Member shall be deemed to have been admitted to
the Company as of the first day of the month in which it becomes a Managing
Member; provided, however, that an amendment to the Internal Revenue Code of
1986, as amended (the "Code") is adopted or if Treasury Regulations are issued
which would require, in the opinion of the tax counsel to the Company, that a
Managing Member be deemed admitted on a date other than as of the first day of
such month, then the Managing Member shall select a permitted admission date
which is most favorable to a majority-in interest of the Investor Member.
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<PAGE>
17. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original copy and all of which
together shall constitute one agreement binding on all parties hereto,
notwithstanding that all parties shall not have signed the same counterpart.
IN WITNESS WHEREOF, this Amended Operating Agreement has been duly
executed by the parties hereto as of the date and year written above.
MANAGING MEMBER
/s/LARRY C. PORTER
Larry C. Porter
/s/CARTER C. CHINNIS
Carter C. Chinnis
INVESTOR MEMBER
WNC Housing Tax Credit Fund VI, L.P., Series 7,
a California limited partnership
By: WNC & Associates, Inc.,
General Partner
By: /s/DAVID N. SHAFER
David N. Shafer,
Executive Vice President
SPECIAL INVESTOR MEMBER
WNC Housing, L.P.
By: WNC & Associates, Inc.,
General Partner
By: /s/DAVID N. SHAFER
David N. Shafer,
Executive Vice President
5
<PAGE>
A
EXHIBIT "A"
TO THE AMENDED AND RESTATED OPERATING AGREEMENT
OF 2nd FAIRHAVEN, LLC
Company Capital
Managing Member Interest Contribution
- --------------- -------- ------------
Larry C. Porter .005% $ 100.00
410 Market Street
Denton, Maryland 21629
Carter C. Chinnis .005% $ 100.00
P.O. Box 499
Denton, Maryland 21629
Investor Member
- ---------------
WNC Housing Tax Credit 99.98% $359,815.00
Fund VI, L.P., Series 7
3158 Redhill Avenue
Suite 120
Costa Mesa, California 92626
Special Investor Member
- -----------------------
WNC Housing, L.P. .01% $ 36.00
3158 Redhill Avenue
Suite 120
Costa Mesa, California 92626
A
