ITEM 1 BUSINESS.
The National Collegiate Trust 1996-S2 (the "Issuer") is a Delaware business trust established for the sole purpose of acquiring, owning, holding and pledging a portfolio of student loans (the "Student Loans") and issuing and selling two classes of bonds collateralized by the Student Loans, designated as 7.30% Class A Collateralized Student Loan Bonds, Series 1996-S2, with an aggregate initial principal amount of $4,500,000 and fixed interest rate per annum of 7.30%, and 8.15% Class B Collateralized Student Loan Bonds, Series 1996-S2, with an aggregate initial principal amount of $2,325,000 and fixed interest rate per annum of 8.15% (as of the date of issuance, November 26, 1996).
ITEM 2

ITEM 2 PROPERTIES.
See Item 14 below.
ITEM 3

ITEM 3 LEGAL PROCEEDINGS.
There were no legal proceedings involving the Student Loans, the Issuer, the Custodian, the Servicer, the Indenture Trustee or the Depositor with respect to the Student Loans.
ITEM 4

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders during the fiscal year ended December 31, 1996.
PART II
ITEM 5

ITEM 5 MARKET FOR ISSUER'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) There is no established trading market for the Bonds.
(b) As of January 13, 1997, there were three holders of record of the Issuer's Bonds: two holders of the Class A Bonds and one holder of the Class B Bonds.
ITEM 6

ITEM 6 SELECTED FINANCIAL DATA.
Not applicable.
ITEM 7

ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.
Not applicable.
ITEM 8

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Not applicable.
ITEM 9

ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable since there was no change of accountants or disagreements on any matter of accounting principles or practices of financial disclosure.
PART III
ITEM 10

ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE ISSUER.
Not applicable.
ITEM 11

ITEM 11 EXECUTIVE COMPENSATION.
Not applicable.
ITEM 12

ITEM 12 SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT.
The following table provides information, as of January 13, 1997 with respect to the ownership by each person or group of persons, known by the Issuer to be a record owner of 5% or more of the Class A Bonds or Class B Bonds. This does not reflect the persons who hold their certificates in nominee or "street" name.
Except as set forth in the following table, the Issuer is not aware of any record owner of more than 5% of the Class A Bonds or Class B Bonds as of the close of business on January 13, 1997.
ITEM 13

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. ----------------------------------------------
Not applicable since there were no transactions nor are there any proposed transactions between the Issuer and any Bondholder or between the Issuer and any immediate family member of any Bondholder.
ITEM 14

ITEM 14 EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K.
(a) (1) and (2) Not applicable.
(3) (i) Annual Statement of Compliance of the Servicer for the year ended December 31, 1996.
(ii) Annual Audit Report of the Servicer for the year ended December 31, 1996, as prepared by Ernst & Young LLP.
(iii)Servicer Report of the Servicer for the year ended December 31, 1996.
(b) Reports on Form 8-K.
A Current Report on Form 8-K, was filed on December 9, 1996. That Form 8-K reported under Item 2 thereof the formation of the Issuer, the acquisition of the Student Loans and the issuance of the Bonds.
A Form 8-K was also filed on December 18, 1996, which filed under Item 7 thereof, the Monthly Servicer Report, dated November 30, 1996, prepared by the Servicer.
(c) The response to this portion of Item 14 is submitted as a separate section of this report.
(d) Not applicable.
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
No annual report, proxy statement, form of proxy or other soliciting material has been sent to Bondholders, and the Issuer does not contemplate sending any such materials subsequent to the filing of this report.
SIGNATURES
Subject to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE NATIONAL COLLEGIATE TRUST 1996-S2 (Issuer)
By: DELAWARE TRUST CAPITAL MANAGEMENT, INC., not in its individual capacity but as Owner Trustee
By: /s/ Richard N. Smith ------------------------ Name: Richard N. Smith Title: Vice President
Dated: March 26, 1997


Item 1. BUSINESS --------
General Development of Business - ------------------------------- Super 8 Economy Lodging IV, Ltd. (the "Partnership") is a limited partnership which was organized under the Uniform Limited Partnership Act of the State of California on February 5, 1982.
The Managing General Partner of the Partnership is Grotewohl Management Services, Inc., a California corporation organized and wholly-owned by Philip B. Grotewohl. The Associate General Partner is Robert J. Dana. The Associate General Partner does not have general responsibility in connection with the management of the business and affairs of the Partnership. The Managing General Partner and the Associate General Partner are sometimes referred to collectively as the "General Partners."
Through two public offerings of units of limited partnership interest in the Partnership ("Units"), the Partnership sold 10,000 Units at a price of $1,000 each.
The net proceeds of the offerings were expended for the acquisition and development of properties located in Pleasanton, California and Santa Ana, California. Motel operations commenced on October 4, 1983 at the Pleasanton property and on February 19, 1985 at the Santa Ana property. The Partnership's Pleasanton motel is operated pursuant to a franchise acquired from Super 8 Motels, Inc. under the name "Super 8 Motel." On April 30, 1992 the Partnership sold the Santa Ana motel.
There is hereby incorporated by reference herein the information regarding the Partnership's Pleasanton property contained in Part I, Item 2

Item 2. PROPERTIES ----------
On October 4, 1982, the Partnership acquired from Hopyard Associates, a general partnership, a parcel of 2.037 acres of unimproved real property located in Pleasanton, California.
The property is located immediately adjacent to Interstate Highway 580, on the southeast quadrant of the Hopyard Road overpass approximately one mile east of Interstate Highway 680 and approximately 40 miles east of San Francisco.
Construction of the 102 room motel commenced on October 18, 1982 and was completed on October 4, 1983, at which point motel operations commenced.
Item 3.

Item 3. LEGAL PROCEEDINGS -----------------
Inapplicable.
Item 4.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ---------------------------------------------------
Inapplicable.
- 5 -
PART II
Item 5.

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ---------------------------------------------------------------------
Market Information - ------------------ The Units are not freely transferable and no public market for the Units has developed or is expected to develop.
Holders - ------- As of December 13, 1996 a total of 1,988 investors ("Limited Partners") held Units in the Partnership.
Distributions - ------------- Cash Available for Distribution is defined as the cash funds provided from operations without deduction for depreciation, but after deducting cash funds used to pay or provide for payment of debt service, capital improvements and replacements and the operating expenses of the property, also less adequate cash reserves for obligations of the Partnership for which there is no provision.
Cash Available for Distribution shall be distributed quarterly in the following manner:
(1) 90% to the Limited Partners (2) 9% to the General Partners as a fee for managing the Partnership (3) 1% to the General Partners on account of their Partnership interest.
Notwithstanding the foregoing, the General Partners shall receive no distributions of Cash Available for Distribution until the Limited Partners have received a cumulative 10% per annum return on their "Adjusted Capital Contributions" (i.e., their original capital contributions, adjusted for previous returns of capital or sale or refinancing proceeds). Inasmuch as the Limited Partners have not received a cumulative 10% per annum return, the General Partners have not received any share of the Cash Available for Distribution since inception of the Partnership.
The proceeds from the sale or refinancing of properties not reinvested are to be distributed first to the Limited Partners until they have received cumulative payments from all distribution sources equal to 100% of their original capital contribution and a cumulative 10% per annum return on their Adjusted Capital Contributions. When the foregoing requirement has been satisfied, any remaining funds from the sale or refinancing of properties will be distributed 15% to the General Partners and 85% to the Limited Partners.
- 6 -
The following distributions (all from Cash Available for Distribution) were made during the two most recent fiscal years:
Amount Amount Distributed Distributed Date Per Unit to General Partners -------- ----------- ------------------- 11/15/94 $13.65 - 0 - 02/15/95 $13.65 - 0 - 05/15/95 $13.65 - 0 - 08/15/95 $13.65 - 0 - 11/15/95 $13.65 - 0 - 02/15/96 $13.65 - 0 - 05/15/96 $16.00 - 0 - 08/15/96 $16.00 - 0 -
Item 6.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND --------------------------------------------------------------- RESULTS OF OPERATIONS - ---------------------
Liquidity - --------- The Partnership's current assets of $972,829 exceed its current liabilities of $111,444 by $861,385. This amount exceeds the General Partners' cash reserve target of $455,000. In the opinion of the General Partners, the Partnership's Pleasanton motel provides adequate liquidity to satisfy the Partnership's financial obligations.
The Partnership's primary source of liquidity is its gross revenues from operations. As noted below, the Partnership has had a positive cash flow from motel operations in each of the last three fiscal years. In addition, the Partnership's equity in its Pleasanton motel, which is presently unencumbered, would provide a potential source of liquidity through financing in the event the Partnership's liquidity were impaired. There can be no assurance, however, that the Partnership could borrow against such equity on favorable terms should additional liquidity be required.
Capital Resources - ----------------- The Partnership owns and operates one motel property, a 102-room lodging facility located in Pleasanton, California.
The Partnership currently has no material commitments for capital expenditures. Its motel property is in full operation, and no further property acquisitions or extraordinary capital improvements are contemplated. Except as described below, the General Partners are aware of no material trends or changes with respect to the mix or relative cost of the Partnership's capital resources. Working capital is expected to be generated by revenues from operations. 	 During the fiscal year covered by this report, the Partnership spent $56,278 ($33,120 of which was capitalized) on the refurbishment of its motel and its furnishings. The capitalized items included $16,241 for replacement guest room carpet, $11,148 for central office computers, $3,653 for a replacement ice machine and $2,077 for furniture for the manager's apartment. Included in the $23,158 amount not capitalized were expenditures for tub repair, replacement guest room lamps and bed sets and televisions and air-conditioning units, landscaping upgrades and parking lots repairs. The Managing General Partner anticipates the expenditure of an amount approximately equal to the 3% target during the next fiscal year on further refurbishment of the Partnership's motel, such amount to be paid from operating cash flow or, if operating cash flow is inadequate, from reserves. 		 New Accounting Standards - ------------------------ SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, requires the Partnership to disclose information about potential impairment to the value of long-lived assets. The Partnership is not required to adopt and does not currently plan to adopt SFAS No. 121 until its fiscal year ending September 30, 1997. The Partnership does not expect to make any disclosures about impairment of long-lived assets under SFAS No. 121. - 9 -
Results of Operation - --------------------
Partnership's Combined Financial Results - ---------------------------------------- The following is a comparison of combined results for the twelve-month periods ending September 30, 1994, 1995 and 1996. Comparative revenue and expense data is included in the financial statements found in Item 8.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA -------------------------------------------
See Financial Statements and Notes to Financial Statements at pages through.
- 12 -
ANNUAL REPORT ON FORM 10-K
ITEM 8
FINANCIAL STATEMENTS
SUPER 8 ECONOMY LODGING IV, LTD.
SACRAMENTO, CALIFORNIA
SEPTEMBER 30, 1996
Item 8: Financial Statements --------------------
SUPER 8 ECONOMY LODGING IV, LTD.
INDEX OF FINANCIAL STATEMENTS
Pages -----
Financial Statements: Independent Auditors' Report
Balance Sheets, September 30, 1996 and 1995
Statements of Operations for the years ended September 30, 1996, 1995 and 1994
Statements of Partners' Equity for the years ended September 30, 1996, 1995 and 1994
Statements of Cash Flows for the years ended to September 30, 1996, 1995 and 1994
Notes to Financial Statements to
Note: All schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedule or because the information required is included in the financial statements or notes thereto.
INDEPENDENT AUDITORS' REPORT
To the Partners Super 8 Economy Lodging IV, Ltd.
We have audited the accompanying balance sheets of Super 8 Economy Lodging IV, Ltd., a California limited partnership, as of September 30, 1996 and 1995 and the related statements of operations, partners' equity and cash flows for each of the three years in the period ended September 30, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Super 8 Economy Lodging IV, Ltd. as of September 30, 1996 and 1995 and the results of its operations and its cash flows for each of the three years in the period ended September 30, 1996, in conformity with generally accepted accounting principles.
VOCKER KRISTOFFERSON AND CO.
December 3, 1996 San Mateo, California
SUPER 8 ECONOMY LODGING IV, LTD. (A California Limited Partnership) BALANCE SHEETS September 30, 1996 and 1995
ASSETS
1996 1995 ---------- ---------- Current Assets: Cash and temporary investments (Notes 1 and 3) $ 938,477 $ 794,899 Accounts receivable 21,563 22,343 Prepaid expenses 12,789 11,934 ---------- ---------- Total Current Assets 972,829 829,176 ---------- ---------- Property and Equipment (Notes 2 and 6): Land 799,311 799,311 Buildings 2,246,419 2,246,419 Furniture and equipment 530,321 528,479 ---------- ---------- 3,576,051 3,574,209 Accumulated depreciation (1,755,449) (1,672,013) ---------- ---------- Property and Equipment, Net 1,820,602 1,902,196 ---------- ---------- Other Assets (Note 2): Deposit of federal income taxes 48,141 38,097 ---------- ----------
Total Assets $2,841,572 $2,769,469 ========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities: Accounts payable and accrued liabilities $ 106,979 $ 109,975 Due to related parties (Note 4) 4,465 1,466 ---------- ---------- Total Liabilities 111,444 111,441
Partners' Equity: General Partners (10,707) (17,358) Limited Partners 2,740,835 2,675,386 ---------- ---------- Total Partners' Equity 2,730,128 2,658,028 ---------- ----------
Total Liabilities and Partners' Equity $2,841,572 $2,769,469 ========== ==========
SUPER 8 ECONOMY LODGING IV, LTD. (A California Limited Partnership) STATEMENTS OF OPERATIONS
Years Ended September 30: ---------------------------------- 1996 1995 1994 ---------- ---------- ---------- Income: Motel room $1,613,817 $1,448,486 $1,354,227 Telephone and vending 41,244 36,519 37,699 Interest 28,879 22,379 19,181 Other 2,798 3,418 4,201 ---------- ---------- ---------- Total Income 1,686,738 1,510,802 1,415,308 ---------- ---------- ---------- Expenses: Motel operations (exclusive of depreciation shown separately below) (Notes 4 and 5) 789,729 777,015 787,553 General and administrative (exclusive of depreciation shown separately below (Note 4) 34,302 36,760 33,331 Depreciation and amortization (Note 2) 114,714 109,175 105,784 Property management fees (Note 4) 82,893 74,416 69,631 ---------- ---------- ---------- Total Expenses 1,021,638 997,366 996,299 ---------- ---------- ----------
Net Income $ 665,100 $ 513,436 $ 419,009 ========== ========== ==========
Net Income Allocable to General Partners $ 6,651 $ 5,134 $ 4,190 ========== ========== ==========
Net Income Allocable to Limited Partners $ 658,449 $ 508,302 $ 414,819 ========== ========== ==========
Net Income Per Partnership Unit (Note 1) $ 65.84 $ 50.83 $ 41.48 ========== ========== ==========
Distributions to Limited Partners Per Partnership Unit (Note 1) $ 59.30 $ 54.60 $ 48.65 ========== ========== ==========
SUPER 8 ECONOMY LODGING IV, LTD. (A California Limited Partnership) STATEMENTS OF PARTNERS' EQUITY
Years Ended September 30: ---------------------------------- 1996 1995 1994 ---------- ---------- ----------
General Partners: Balance at beginning of year $ (17,358) $ (22,492) $ (26,682) Net income 6,651 5,134 4,190 ---------- ---------- ---------- Balance at End of Year (10,707) (17,358) (22,492) ---------- ---------- ---------- Limited Partners: Balance at beginning of year 2,675,386 2,713,084 2,784,765 Net income 658,449 508,302 414,819 Distributions to Limited Partners (593,000) (546,000) (486,500) ---------- ---------- ---------- Balance at End of Year 2,740,835 2,675,386 2,713,084 ---------- ---------- ----------
Total Partners' Equity $2,730,128 $2,658,028 $2,690,592 ========== ========== ==========
SUPER 8 ECONOMY LODGING IV, LTD. (A California Limited Partnership) STATEMENTS OF CASH FLOWS
Years Ended September 30: ---------------------------------- 1996 1995 1994 ---------- ---------- ---------- Cash Flows From Operating Activities: Received from motel operations $1,658,578 $1,492,593 $1,407,648 Expended for motel operations and general and administrative expenses (917,820) (877,067) (934,917) Interest received 28,940 20,953 18,719 ---------- ---------- ---------- Net Cash Provided by Operating Activities 769,698 636,479 491,450 ---------- ---------- ---------- Cash Flows From Investing Activities: Purchases of property and equipment (33,120) (60,317) (3,311) Proceeds from sale of equipment - 1,250 - ---------- ---------- ---------- Net Cash Used by Investing Activities (33,120) (59,067) (3,311) ---------- ---------- ---------- Cash Flows From Financing Activities: Distributions paid to limited partners (593,000) (546,000) (486,500) ---------- ---------- ---------- Net Cash Used by Financing Activities (593,000) (546,000) (486,500) ---------- ---------- ---------- Net Increase in Cash and Temporary Investments 143,578 31,412 1,639
Cash and Temporary Investments: Beginning of year 794,899 763,487 761,848 ---------- ---------- ----------
End of Year $ 938,477 $ 794,899 $ 763,487 ========== ========== ==========
SUPER 8 ECONOMY LODGING IV, LTD. (A California Limited Partnership) STATEMENTS OF CASH FLOWS (Continued)
Years Ended September 30: ---------------------------------- 1996 1995 1994 ---------- ---------- ---------- Reconciliation of Net Income to Net Cash Provided by Operating Activities: Net income $665,100 $513,436 $419,009 ---------- ---------- ---------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 114,714 109,175 105,784 Loss on disposition of property and equipment - 1,430 - (Increase) decrease in accounts receivable 780 2,745 11,059 Increase in prepaid expenses (855) (475) (1,630) Increase in other assets (10,044) (5,006) (33,091) Increase (decrease) in accounts payable and accrued liabilities (2,996) 15,174 (9,952) Increase in due to related parties 2,999 - 271 ---------- ---------- ----------
Total Adjustments 104,598 123,043 72,441 ---------- ---------- ---------- Net Cash Provided by Operating Activities $769,698 $636,479 $491,450 ========== ========== ==========
SUPER 8 ECONOMY LODGING IV, LTD. (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS
NOTE 1 - THE PARTNERSHIP - ------------------------ Super 8 Economy Lodging IV, Ltd., is a limited partnership organized under California law on February 5, 1982, to acquire and operate motel properties in Pleasanton and Santa Ana, California. The Pleasanton motel was opened in October, 1983, and the Santa Ana motel was opened in February, 1985. The Partnership grants credit to customers, substantially all of which are local businesses in Pleasanton. The Santa Ana property was sold in April, 1992.
The Managing General Partner of the Partnership is Grotewohl Management Services, Inc., the sole shareholder and officer of which is Philip B. Grotewohl. The Associate General Partner of the Partnership is Robert J. Dana.
The net income or net loss of the Partnership is allocated 1% to the General Partners and 99% to the Limited Partners. Net income (loss) and distributions per partnership unit are based upon 10,000 units outstanding. All partnership units are owned by the Limited Partners.
The Partnership agreement requires that the Partnership maintain reserves for normal repairs, replacements, working capital and contingencies in an amount of at least 5% of adjusted capital contributions. As of September 30, 1996, the Partnership had a combined balance in cash and temporary investments of $938,477, which was $483,477 in excess of the $455,000 required amount.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - --------------------------------------------------- Items of Partnership income are passed through to the individual partners for income tax purposes, along with any income tax credits. Therefore, no federal or California income taxes are provided for in the financial statements of the Partnership, except for a deposit of federal income taxes which is required of partnerships with fiscal year ends other than a calendar year. The amount of the deposit is based upon the taxable income of the partnership in the prior year.
Property and equipment are recorded at cost. Depreciation and amortization are computed using the following estimated useful lives and methods:
Description Methods Useful Lives ---------------------- ---------------------- ------------ Buildings 150% declining balance and straight-line 10-25 years
Furniture and equipment 200% and 150% declining balance and straight-line 3-7 years
Costs incurred in connection with maintenance and repair are charged to expense. Major renewals and betterments that materially prolong the life of assets are capitalized.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
SUPER 8 ECONOMY LODGING IV, LTD. (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS(cONTINUED)
NOTE 3 - CASH AND TEMPORARY INVESTMENTS - --------------------------------------- Cash and temporary investments as of September 30, 1996 and 1995 consist of the following: 1996 1995 --------- --------- Cash in bank, non-interest bearing $ 26,184 $ 26,949 Money market accounts 512,293 567,950 Certificates of deposit 400,000 200,000 --------- --------- Total Cash and Temporary Investments $938,477 $794,899 ========= =========
Temporary investments are recorded at cost, which approximates market value. The Partnership considers temporary investments and all highly liquid marketable securities with original maturities of six months or less to be cash equivalents for purposes of the statement of cash flows.
NOTE 4 - RELATED PARTY TRANSACTIONS - ----------------------------------- FRANCHISE FEES Super 8 Motels, Inc., now a wholly-owned subsidiary of Hospitality Franchise Systems, Inc., is franchisor of all Super 8 Motels. The Partnership pays to the franchisor monthly fees equal to 4% of the gross room revenues of the motel and contributes an additional 1% of the gross room revenues to an advertising fund administered by the franchisor. In return, the franchisor provides the right to use the name "Super 8," a national institutional advertising program, an advance room reservation system, and inspection services. These costs ($80,691 in 1996, $72,424 in 1995 and $67,631 in 1994) are included in motel operations expense in the accompanying statements of operations. The Partnership operates its motel property as a franchisee of Super 8 Motels, Inc. through a sub-franchise agreement with Brown & Grotewohl, a California general partnership, of which Grotewohl Management Services, Inc., (see Note 1) is a 50% owner. Under the sub-franchise agreement, Brown & Grotewohl earned 40% of the above franchise fees, which amounted to $32,276, $28,970, and $27,052 in 1996, 1995 and 1994, respectively.
PROPERTY MANAGEMENT FEES The General Partner, or its affiliates, handles the management of the motel property of the Partnership. The fee for this service is 5% of the gross revenues from Partnership operations as defined in the Partnership agreement, and amounted to $82,893, $74,416, and $69,631 in 1996, 1995 and 1994, respectively.
SUBORDINATED PARTNERSHIP MANAGEMENT FEES During the Partnership's operational stage, the General Partners are to receive 9% of cash available for distribution for Partnership management services, along with an additional 1% of cash available for distribution on account of their interest in the profit and losses, subordinated, however, to receipt by the Limited Partners of a 10% per annum cumulative pre-tax return on their adjusted capital contributions. At September 30, 1996 the Limited Partners had not received the 10% cumulative return, and as no Partnership management fees are presently payable they are not reflected in these financial statements. Management believes it is not likely that these fees will become payable in the
SUPER 8 ECONOMY LODGING IV, LTD. (A California Limited Partnership) NOTES TO FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS (Continued) - ----------------------------------------------- future. This fee is payable only from cash funds provided from operations of the Partnership, and may not be paid from the proceeds of sales or a refinancing. As of September 30, 1996 the cumulative amount of these fees was $431,993.
SUBORDINATED INCENTIVE DISTRIBUTIONS Under the terms of the Partnership agreement, the General Partners are to receive 15% of distributions of net proceeds from the sale or refinancing of Partnership property remaining after distribution to the Limited Partners of any portion thereof required to cause distributions to the Limited Partners from all sources to be equal to their capital contributions plus a cumulative 10% per annum pre-tax return on their adjusted capital contributions.
EXPENSES SHARED BY THE PARTNERSHIP AND ITS AFFILIATES There are certain expenses which are allocated between the Partnership and affiliated Super 8 partnerships. These expenses, which are allocated based on usage, are telephone, data processing, rent of the administrative office, administrative salaries and duplication expenses. The expenses allocated to the Partnership were approximately $113,000 in 1996, $110,000 in 1995 and $104,000 in 1994 and are included in motel and restaurant operations and general and administrative expenses in the accompanying statements of operations. Included in administrative salaries are allocated amounts paid to three employees who are related to Philip B. Grotewohl, the sole shareholder of Grotewohl Management Services, Inc., a General Partner of the Partnership.
NOTE 5 - MOTEL OPERATING EXPENSES - --------------------------------- The following table summarizes the major components of motel operating expenses for the years ended September 30, 1996, 1995 and 1994:
1996 1995 1994 ---------- ---------- ---------- Salaries and related costs $308,314 $282,994 $298,050 Franchise and advertising fees 80,691 72,424 67,631 Utilities 66,664 70,349 70,875 Allocated costs, mainly indirect salaries 92,355 89,327 85,609 Repairs and minor renovations 23,158 38,047 40,432 Other operating expenses 218,547 223,874 224,956 ---------- ---------- ---------- Total Motel Operating Expenses $789,729 $777,015 $787,553 ========== ========== ========== NOTE 6 - PROPERTY AND EQUIPMENT - ------------------------------- The following is a summary of the accumulated depreciation of property and equipment: 1996 1995 ---------- ---------- Buildings $1,288,266 $1,206,339 Furniture and equipment 467,183 465,674 ---------- ---------- Accumulated depreciation $1,755,449 $1,672,013 ========== ==========
Item 9.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND --------------------------------------------------------------- FINANCIAL DISCLOSURE - --------------------
Inapplicable.
PART III
Item 10.

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT --------------------------------------------------
The original Managing General Partners of the Partnership were Dennis A. Brown and Grotewohl Management Services, Inc., whose sole shareholder is Philip B. Grotewohl. The original Associate General Partners were BWC Incorporated and Robert J. Dana.
Upon Mr. Brown's death on February 25, 1988, Mr. Grotewohl, as president of Grotewohl Management Services, Inc. and Mr. Dana elected to continue the Partnership. BWC Incorporated was dissolved in 1989.
Grotewohl Management Services, Inc. was organized in 1981 to serve as a general partner of limited partnerships to be formed for the purpose of investing in Super 8 Motels.
Mr. Grotewohl, age 78, was an attorney-at-law and was engaged in the private practice of law in San Mateo County, California, between 1967 and 1978. Since 1978, Mr. Grotewohl's principal occupation has been as a promoter and general partner of Super 8 Motel limited partnerships.
Mr. Dana, age 68, was a registered representative of Brown, Brosche Securities, Inc. between 1982 and his retirement in 1988. Between 1976 and 1982 he served as a registered representative of several other stock and investment brokers. Mr. Dana has also served as marketing consultant for various real estate limited partnerships and other direct participation investment programs.
	 Item 11.

Item 11. EXECUTIVE COMPENSATION ----------------------
The following discussion contains certain information regarding aggregate direct or indirect compensation paid or accrued by the Partnership during the fiscal year ended September 30, 1996 to the General Partners and the Estate of Dennis A. Brown, and/or their affiliates. Although Mr. Brown ceased to be a general partner of the Partnership upon his death, his estate shares in certain compensation otherwise payable to the General Partners and their affiliates.
Property Management Fees - ------------------------ The Manager, a California general partnership which is owned equally by the Estate of Dennis A. Brown and the Managing General Partner, is managing the Partnership's motel. The fee for this service is 5% of the gross proceeds from the operation of the motel. This compensation is in addition to the cost of compensating the Partnership's employees and the cost of goods and services acquired for the Partnership from independent contractors.
- 13 -
During the fiscal year covered by this report the Partnership accrued such fees in the amount of $82,893, all of which were paid.
Franchise Fees and Advertising Fees - ----------------------------------- The Partnership operates its motel as a franchisee of Super 8 Motels, Inc., through a sub-franchise obtained from Super 8 Management Corporation, a corporation of which the Estate of Dennis A. Brown and Philip B. Grotewohl are the sole shareholders. In March 1988 the shareholders of Super 8 Management Corporation transferred their interests in the sub-franchise agreement to the Manager. The Partnership, as franchisee, pays to the franchisor monthly franchise fees equal to 4% of its gross room revenue and contributes 1% of its gross room revenue to an advertising fund administered by the franchisor to finance institutional advertising. The Manager is entitled to one-half of the 4% franchise fee.
The total of franchise fees accrued during the fiscal year covered by this report was $64,553, of which $32,276 accrued to the Manager. All of the above sums have been paid.
General Partners' Interest in Cash Available for Distribution - ------------------------------------------------------------- At quarterly intervals, the total amount of the Partnership's Cash Available for Distribution is determined at the discretion of the General Partners. (See Item 5 above.) Distributions therefrom are made as follows: (1) 90% of such distributions are paid to the Limited Partners; (2) 9% thereof is paid to the General Partners as Partnership management fees; and (3) 1% thereof is paid to the General Partners in accordance with their interest in the income and losses of the Partnership.
Notwithstanding the foregoing, however, distributions of Cash Available for Distribution to the General Partners which would otherwise be paid to the General Partners are deferred and paid only after payment to the Limited Partners of distributions of Cash Available for Distribution in an amount equal to 10% per annum cumulative on their Adjusted Capital Contributions. During the fiscal year covered by this report, $593,000 in distributions of Cash Available for Distribution were paid to the Limited Partners. A total of $431,993, representing the General Partners' Interest in Cash Available for Distribution, has been deferred and remains unpaid since commencement of the Partnership. The Limited Partners must receive $8,998,355 (calculated through September 30, 1996) and $910,000 each year thereafter in additional distributions before any of the accrued amounts will be paid to the General Partners. Accordingly, the General Partners consider the payment of these deferred amounts to be unlikely.
General Partner's Interest in Sale or Refinancing Proceeds - ---------------------------------------------------------- The proceeds from the sale or refinancing of properties not reinvested are to be distributed first to the Limited Partners until they have received cumulative payments from all distribution sources equal to 100% of their original capital contribution and a cumulative 10% per annum return on their Adjusted Capital Contributions. When the foregoing requirement has been satisfied, any remaining funds from the sale or refinancing of properties will be distributed 15% to the General Partners and 85% to the Limited Partners.
No such distributions were paid or accrued for the account of the General Partners during the fiscal year covered by this report. - 14 -
Allocation of General Partners' Interest - ---------------------------------------- Compensation to the General Partners and their affiliates in the form of franchise fees and property management fees is allocated 1/3 each to the Estate of Dennis A. Brown, the Managing General Partner and the Associate General Partner.
Item 12.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT --------------------------------------------------------------
Security Ownership of Certain Beneficial Owners - ----------------------------------------------- No person is known by the Partnership to be the beneficial owner of more than 5% of the Units.
Security Ownership of Management - -------------------------------- The General Partners do not beneficially own any Units.
Changes in Control - ------------------ With the consent of all other General Partners and Limited Partners holding more than 50% of the Units, a General Partner may designate a successor or additional general partner, in each case with such participation in such General Partner's interest as such General Partner and successor or additional general partner may agree upon, provided that the interests of the Limited Partners are not affected thereby.
A General Partner may withdraw from the Partnership at any time upon 60 days' prior written notice to the Limited Partners and any other General Partners, or may transfer his interest to an entity controlled by him; provided, however, that in either such event, if it is determined that the Partnership business is to be continued rather than dissolved and liquidated upon the happening thereof, the withdrawal or transfer will be effective only after receipt by the Partnership of an opinion of counsel to the effect that such withdrawal or transfer will not cause the Partnership to be classified as an association taxable as a corporation rather than as a partnership for federal income tax purposes.
The Limited Partners shall take no part in the management of the Partnership's business; however, a majority in interest of the Limited Partners, without the concurrence of the General Partners, shall have the right to amend the Partnership Agreement, dissolve the Partnership, remove a General Partner or any successor general partner, elect a new general partner or general partners upon the removal, retirement, death, insanity, insolvency or bankruptcy of a General Partner, and approve or disapprove the sale, exchange or pledge in a single transaction of all or substantially all of the properties acquired by the Partnership.
- 15 -
Item 13.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ----------------------------------------------
Administrative Expenses Shared by the Partnership and its Affiliates - -------------------------------------------------------------------- There are certain administrative expenses allocated between the Partnership and affiliated Super 8 partnerships. These expenses, which are allocated based on usage, are telephone, data processing, rent of administrative offices and administrative salaries. The administrative expenses allocated to the Partnership were approximately $113,000 in the fiscal year ended September 30, 1996 and are included in general and administrative expenses and motel and restaurant operations expenses in the Partnership's financial statements. Included in administrative salaries are allocated amounts paid to three employee who are related to Philip B. Grotewohl, the sole shareholder of the Managing General Partner.
- 16 -
PART IV
Item 14.

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K ---------------------------------------------------------------
(a) Documents filed as part of this report: 1. Financial Statements Included in Part II of this Report Independent Auditors' Report Balance Sheets, September 30, 1996 and 1995 Statement of Operations for the Years Ended September 30, 1996, 1995 and 1994 Statements of Partners' Equity for the Years Ended September 30, 1996, 1995 and 1994 Statements of Cash Flows for the Years Ended September 30, 1996, 1995 and 1994 Notes to Financial Statements
2. Financial Statement Schedules Included in Part IV of the Report None
3. Exhibits 3. and 4. The Partnership Agreement is incorporated herein as an exhibit from the annual report on Form 10-K for the fiscal year ended September 30, 1994
(b) Reports on Form 8-K: Inapplicable
- 17 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) SUPER 8 ECONOMY LODGING IV, LTD. --------------------------------
By (Signature and Title) /s/ Philip B. Grotewohl ------------------------ Philip B. Grotewohl, President of Grotewohl Management Services, Inc., Managing General Partner
Date: December 20, 1996 -----------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) /s/ Philip B. Grotewohl ------------------------ Philip B. Grotewohl, Chief executive officer, chief financial officer, chief accounting officer and sole director of Grotewohl Management Services, Inc., Managing General Partner
Date: December 20, 1996 -----------------
- 18 -