Item 1. Business
(a) General Development of Business
Beverly Hills Medical Office Partners, L.P., a Delaware limited partnership (the "Partnership," or the "Registrant") (formerly Shearson Beverly Hills Medical Office Partners, L.P.), was formed on March 16, 1987. The Partnership will continue until December 31, 2037 in accordance with the terms of its Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement"), unless terminated earlier pursuant thereto. The affairs of the Partnership are conducted by its general partner, Medical Office Properties Inc. (the "General Partner") (formerly Shearson Lehman Commercial Properties Inc.), a Delaware corporation. See Item 10 "Directors and Executive Officers of the Partnership."
The Partnership was formed to acquire, upgrade, operate, and ultimately sell the Beverly Sunset Medical Building located in the Hollywood, California (the "Property"). The Partnership acquired the fee interest in the land and improvements constituting the Property on April 23, 1987 with funds from a $55,400,000 public offering (the "Offering") of 5,540,000 limited partnership securities ("Units").
(b) Financial Information About Industry Segments
The Partnership's sole business is the ownership and operation of the Property. All of the Partnership's revenues, operating profits or losses and assets relate solely to such industry segment.
(c) Narrative Description of Business
Objectives
The Partnership's principal objectives were to: (i) provide quarterly cash distributions, a portion of which were anticipated to be non-taxable due to depreciation deductions; (ii) preserve and protect capital; and (iii) achieve long-term appreciation in the value of the Property for distribution upon sale. However, due principally to changes in the health care industry which have weakened the demand for medical office space, objective (i) has not been achieved, and it is unlikely that objectives (ii) and (iii) can be achieved.
Property Management
Property management services are provided by Voit Management Company, L.P. ("Voit") pursuant to a Management Agreement executed on November 1, 1992. In May 1996, the Partnership terminated its exclusive leasing agreement with Ramsey-Shilling Commercial Real Estate Services, Inc. and engaged the services of CB Commercial Real Estate Group, Inc. ("CB Commercial") in June 1996. CB Commercial is one of the largest real estate brokerage firms in the nation and has significant experience in leasing medical office space in the market where the Property is located.
Mortgage Financing
The Property is encumbered by a mortgage in the amount of $13,902,293 at December 31, 1996. Information concerning the note's maturity date, interest rate and repayment is incorporated herein by reference to Note 7 "Secured Note Payable" of the Notes to the Financial Statements of the Partnership's Annual Report to Unitholders for the year ended December 31, 1996, filed as an exhibit under Item 14.
Competition
The Property competes, to varying degrees, with approximately 22 buildings consisting of approximately 1.5 million square feet of space in West Los Angeles. The distinction between "Class A" and "Class B" buildings in the Property's competitive market stems primarily from location and physical appearance. The Property's immediate market includes eight buildings located primarily in the Beverly Hills central business and retail district, known as the "Golden Triangle." The Property's location outside of the "Golden Triangle" and its distance from major hospitals has constrained the rental rates achievable at the Property relative to competitive Class A buildings in the "Golden Triangle." Of the buildings which compete most directly with the Property, 10 are considered to be Class A representing an aggregate of approximately 811,000 square feet. The other 12 buildings are considered Class B space principally because of their location and parking facilities. These Class B buildings represent a total of approximately 688,000 square feet of medical space.
Additional information regarding the Property and its competition is incorporated herein by reference to the section entitled "Message to Investors" in the Partnership's Annual Report to Unitholders for the year ended December 31, 1996, filed as an exhibit under Item 14.
Employees
The Partnership has no employees.
Item 2.

Item 2. Properties
A detailed description of the Property, leases which are considered to be material to the Partnership's operations, and competition with respect to the specific market in which the Property is located are incorporated herein by reference to the section entitled "Message to Investors" in the Partnership's Annual Report to Unitholders for the year ended December 31, 1996 and Note 4 "Property" and Note 6 "Tenant Leases" of the Notes to the Financial Statements in the Partnership's Annual Report to Unitholders for the year ended December 31, 1996, filed as an exhibit under Item 14.
Item 3.

Item 3. Legal Proceedings
The Registrant is not subject to any material pending legal proceedings.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to the Unitholders for a vote during the fourth quarter of the year for which this report is filed.
PART II
Item 5.

Item 5. Market for the Partnership's Limited Partnership Interests and Related Security Holder Matters
(a) Market Information
There is no established trading market for the Units, and it is not anticipated that such a market will develop in the future.
(b) Holders
As of December 31, 1996, there were 4,239 Unitholders.
(c) Distributions of Operating Cash Flow
The Partnership's initial policy was to distribute to Unitholders their allocable portion of Net Cash Flow from Operations (as defined in the Partnership Agreement incorporated herein by reference). Distributions of Net Cash Flow from Operations were paid on a quarterly basis to registered Unitholders on record dates established by the Partnership, which generally were the last day of each quarter. Since the Partnership's inception, Unitholders have received a total of $4.21 in cash distributions per original $10 Unit.
Beginning with the fourth quarter of 1990, cash distributions were suspended. The General Partner determined that it was necessary to replenish the Partnership's cash reserves to cover costs associated with, among other things, future asbestos abatement, sprinklering and leasing of the individual tenant suites. Further information is incorporated herein by reference to Note 4 "Property" of the Notes to the Financial Statements in the Partnership's Annual Report to Unitholders for the year ended December 31, 1996 filed as an exhibit under Item 14.
Item 6.

Item 6. Selected Financial Data
The information set forth below should be read in conjunction with the Partnership's financial statements and notes thereto and Item 7

Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations."
For the Years Ended December 31, (dollars in thousands except per Unit data) 1996 1995 1994 1993 1992 Total Income $ 4,096 $ 4,340 $ 4,088 $ 4,398 $ 4,278 Property Operating Expenses (1,775) (1,824) (1,923) (1,894) (2,000) Depreciation and Amortization (1,897) (1,851) (1,778) (1,721) (1,657) General and Administrative Expenses(2) (237) (229) (232) (279) (264) Net Loss (901) (670) (976) (817) (1,147) Net Loss per Unit (5,540,000 outstanding) (0.16) (0.12) (0.18) (0.15) (0.21) Secured Note Payable 13,902 14,141 14,362 14,566 14,723 Total Assets 39,251 40,403 41,297 42,319 43,648
(2) including Asset Management Fees
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
(a) Liquidity and Capital Resources
At December 31, 1996, the Partnership had cash and cash equivalents of $1,648,513, as compared with $1,026,560 at December 31, 1995. The increase is attributable to net cash provided by operating activities exceeding cash used for real estate additions and mortgage principal payments.
Accounts and other receivables decreased from $363,192 at December 31, 1995 to $105,552 at December 31, 1996. The decrease is primarily due to the receipt of real estate tax abatements for the 1992-93, 1993-94 and 1994-95 tax years in 1996.
At December 31, 1996, other assets totaled $47,620, as compared to $77,695 at December 31, 1995. The decrease is due to the amortization of prepaid interest and intangible assets.
Deferred rent receivable was $388,464 at December 31, 1996, as compared with $479,913 at December 31, 1995. The decrease is attributable to the straight-line amortization of base rent, offset by lease renewals and expansions in 1996.
Accounts payable and accrued expenses were $213,517 at December 31, 1996, as compared to $237,039 at December 31, 1995. The decrease is primarily due to the payment of accrued professional fees and the payment of accrued expenses associated with tenant expansions and improvements.
In order to lease vacant space at the Property, the Partnership must pay leasing commissions and tenant improvement costs associated with new leases. The amount of such costs remains uncertain at this time and will depend upon the extent of leasing activity and tenant improvements. The General Partner intends to fund such costs from net cash flow from operations and the Partnership's cash reserves to the fullest extent possible. If necessary, the General Partner would seek additional borrowings.
One of the retail tenants at the Property, the Hamburger Hamlet restaurant, occupying 10,351 square feet, filed for protection under Chapter 11 of the U.S. Bankruptcy Code in November 1995. Hamburger Hamlet has until April 1997 to inform the Partnership whether the restaurant will assume or reject its lease obligation. Hamburger Hamlet has informally indicated its intention to remain at the Property and continue operating the restaurant, which is its flagship location.
On February 14, 1996, based upon, among other things, the advice of legal counsel, the General Partner adopted a resolution that states, among other things, if a Change of Control (as defined below) occurs, the General Partner may distribute the Partnership's cash balances not required for its ordinary course day-to-day operations. "Change of Control" means any purchase or offer to purchase more than 10% of the Units that is not approved in advance by the General Partner. In determining the amount of the distribution, the General Partner may take into account all material factors. In addition, the Partnership will not be obligated to make any distribution to any partner, and no partner will be entitled to receive any distribution, until the General Partner has declared the distribution and established a record date and distribution date for the distribution.
(b) Results of Operations
1996 versus 1995 For the years ended December 31, 1996 and 1995, Partnership operations resulted in net losses of $900,981 and $669,862, respectively. The increase in net loss was primarily attributable to a decrease in other income in 1996.
Rental income for the years ended December 31, 1996 and 1995 totaled $3,978,679 and $3,922,449 respectively. The increase in rental income was primarily attributable to increases in average occupancy in 1996.
Interest income was $100,343 and $94,943 for the years ended December 31, 1996 and 1995, respectively. The increase was due to higher average cash balances in 1996 compared to 1995.
Other income was $17,140 for the year ended December 31, 1996, compared with $322,632 for the year ended December 31, 1995. The decrease was attributable to refunds of approximately $315,000 recognized in 1995 in connection with the General Partner's successful appeal of the Property's 1992-93, 1993-94 and 1994-95 real estate tax assessments.
For the years ended December 31, 1996 and 1995, property operating expenses totaled $1,774,810 and $1,824,269, respectively. The decrease was primarily due to a decrease in insurance, advertising, utilities and real estate and other taxes, and was partially offset by an increase in miscellaneous expenses and professional fees.
1995 Versus 1994 For the years ended December 31, 1995 and 1994, Partnership operations resulted in net losses of $669,862 and $976,417, respectively. The decrease in net loss was primarily attributable to an increase in other income and a decrease in property operating expenses.
Rental income for the years ended December 31, 1995 and 1994 totaled $3,922,449 and $3,913,869, respectively. The increase in rental income was primarily attributable to increases in average occupancy during 1995 which resulted in an increase in base rents in 1995.
For the year ended December 31, 1995, other income totaled $322,632 as compared to $118,959 for the year ended December 31, 1994. The increase was attributable to refunds of approximately $315,000 recognized in 1995 in connection with the General Partner's successful appeal of the Property's 1992-93, 1993-94 and 1994-95 real estate tax assessments.
Interest income was $94,943 and $55,477, for the years ended December 31, 1995 and 1994, respectively. The increase was due to higher rates of interest earned on higher average cash balances in 1995 as compared to 1994.
For the years ended December 31, 1995 and 1994, property operating expenses totaled $1,824,269 and $1,923,409, respectively. The decrease was primarily due to the successful reduction of 1995 real estate taxes as a result of the successful real estate tax appeal.
Item 8.

Item 8. Financial Statements and Supplementary Data
See Item 14(a) for a listing of the financial statements and supplementary data filed in this report.
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10.

Item 10. Directors and Executive Officers of the Partnership
The Partnership has no Directors or Executive Officers. The affairs of the Partnership are conducted through the General Partner.
Certain officers and directors of the General Partner are now serving (or in the past have served) as officers or directors of entities which act as general partners of a number of limited partnerships which have sought protection under the provisions of the federal Bankruptcy Code. The partnerships which have filed bankruptcy petitions own assets which have been adversely affected by the economic conditions in the markets in which that asset is located and, consequently, the partnerships sought protection of the bankruptcy laws to protect the partnerships' assets from loss through foreclosure.
The following is a list of the officers and directors of the General Partner at December 31, 1996:
Name Office Rocco F. Andriola Director, President and Chief Financial Officer John H. Ng Vice President Tim E. Needham Vice President
Rocco F. Andriola, 38, is a Managing Director of Lehman Brothers Inc. in its Diversified Asset Group and has held such position since October 1996. Since joining Lehman in 1986, Mr. Andriola has been involved in a wide range of restructuring and asset management activities involving real estate and other direct investment transactions. From June 1991 through September 1996, Mr. Andriola held the position of Senior Vice President in Lehman's Diversified Asset Group. From June 1989 through May 1991, Mr. Andriola held the position of First Vice President in Lehman's Capital Preservation and Restructuring Group. From 1986- 89, Mr. Andriola served as a Vice President in the Corporate Transactions Group of Shearson Lehman Brothers' office of the general counsel. Prior to joining Lehman, Mr. Andriola practiced corporate and securities law at Donovan Leisure Newton & Irvine in New York. Mr. Andriola received a B.A. from Fordham University, a J.D. from New York University School of Law, and an LL.M in Corporate Law from New York University's Graduate School of Law.
John H. Ng, 46, is a Vice President of Lehman Brothers Inc. and has been employed by Lehman since November 1977. He is an asset manager in the Diversified Asset Group of Lehman and has held such position since 1985. From 1980 to 1985, Mr. Ng served as Senior Financial Analyst in the Corporate Planning and Development Department, and from 1977 to 1980, he was an analyst in the Controller's Department. Prior to joining Lehman, he served as a teaching assistant at the University of Minnesota. Mr. Ng received an M.B.A. with a concentration in corporate finance from the University of Minnesota in 1977 and a B.A. in Economics from Moorhead State University in 1975.
Timothy E. Needham, 28, is an Associate of Lehman Brothers Inc. and assists in the management of commercial real estate in the Diversified Asset Group. Mr. Needham joined Lehman in September 1995. Prior to joining Lehman, Mr. Needham was a consultant with KPMG Peat Marwick LLP in the Banking and Investment Services Group from 1994-1995. Mr. Needham received his master's degree in international management from the American Graduate School of International Management in December 1993. Previous to entering graduate school, Mr. Needham worked in Tokyo for approximately one year doing market research for a Japanese firm (1991). In addition, Mr. Needham is currently a candidate for the designation of Chartered Financial Analyst, Level III.
Item 11.

Item 11. Executive Compensation
All of the Directors and Executive Officers of the General Partner are employees of Lehman. They do not receive any salaries or other compensation from the Partnership. See Item 13 below with respect to a description of certain transactions of the General Partner or its affiliates with the Partnership.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security ownership of certain beneficial owners
No person (including any "group" as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) is known to the Partnership to be the beneficial owner of more than 5% of the outstanding Units as of December 31, 1996.
(b) Security ownership of management
None of the Directors or Executive Officers of the General Partner owned any units of the Partnership as of December 31, 1996.
(c) Changes in control
None.
Item 13.

Item 13. Certain Relationships and Related Transactions
The General Partner and certain affiliates may be reimbursed by the Partnership for certain costs as described in the Partnership Agreement which is incorporated herein by reference thereto. The General Partner is entitled to an annual asset management fee in the amount of $50,000 per year. Unpaid asset management fees as of December 31, 1996 and 1995 aggregated $335,500 and $285,500, respectively. As provided in the Partnership Agreement, the annual asset management fee was scheduled to increase to $115,000 per annum in 1991. However, the General Partner has voluntarily waived the $65,000 increase each year since 1991.
First Data Investor Services Group, formerly The Shareholder Services Group, provides partnership accounting and investor relations services for the Partnership. The Partnership's transfer agent and certain tax reporting services are provided by Service Data Corporation. Both First Data Investor Services Group and Service Data Corporation are unaffiliated companies. For additional information regarding fees paid and reimbursements to the General Partner or its affiliates during 1996, 1995 and 1994, see Note 5, "Transactions With Related Parties" of the Financial Statements which are incorporated herein by reference to the Partnership's Annual Report to Unitholders for the year ended December 31, 1996, filed as an exhibit under Item 14.

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (1) and (2) Beverly Hills Medical Office Partners, L.P. Index to the Financial Statements Page Number Independent Auditors' Report: KPMG Peat Marwick LLP (1)
Balance Sheets - At December 31, 1996 and 1995 (1)
Statements of Operations for the years ended December 31, 1996, 1995 and 1994 (1)
Statements of Partners' Capital (Deficit) for the years ended December 31, 1996, 1995 and 1994 (1)
Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994 (1)
Notes to the Financial Statements (1)
Schedule III - Real Estate and Accumulated Depreciation
Independent Auditors' Report on Schedule III
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
(1) Incorporated herein by reference to the Partnership's Annual Report to Unitholders for the year ended December 31, 1996, which is filed as an exhibit under Item 14.
(3) See Exhibit Index contained herein.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the fourth quarter of 1996.
(c) Exhibits
Subject to Rule 12b-32 of the Securities Exchange Act of 1934 regarding incorporation by reference, listed below are the exhibits which are filed as part of this report. References to the Registration Statement are to the Registrant's Registration Statement on Form S-11 which was declared effective by the SEC on May 7, 1987.
3.0 Amended and Restated Agreement of Limited Partnership of the Registrant is hereby incorporated by reference to Exhibit 3.0 to Form 10-K for the year ended December 31, 1988.
4.1 Depository Receipt for Depository Units in the Registrant is hereby incorporated by reference to Exhibit 4.1 to Form 10-K for the year ended December 31, 1987.
10.1 Depository Agreement between the Registrant and Shearson Lehman Commercial Properties Depository III Inc., as Assignor Limited Partner is hereby incorporated by reference to Exhibit 10.3 to the Registration Statement.
10.2 Note made by the Registrant in favor of American Savings Bank, FSB dated August 19, 1988 is hereby incorporated by reference to Exhibit 10.5 to Form 10-Q for the quarter ended September 30, 1988.
10.3 Deed of Trust, Assignment of Rents and Security Agreement between the Registrant and American Savings Bank, FSB dated August 19, 1988 is hereby incorporated by reference to Exhibit 10.6 to Form 10-Q for the quarter ended September 30,1988.
10.4 Indemnity Agreement between the Registrant and American Savings Bank, FSB dated August 19, 1988 is hereby incorporated by reference to Exhibit 10.7 to Form 10-Q for the quarter ended September 30, 1988.
10.5 Collateral Assignment of Lease and Rents between the Registrant and American Savings Bank, FSB dated August 19, 1988 is hereby incorporated by reference to Exhibit 10.8 to Form 10-Q for the quarter ended September 30, 1988.
10.6 Financing Statements between the Registrant and American Savings Bank, FSB dated August 19, 1988 is hereby incorporated by reference to Exhibit 10.9 to Form 10-Q for the quarter ended September 30, 1988.
10.7 Management Agreement between the Registrant and Voit Management Company, L.P. is hereby incorporated by reference to Exhibit 10.9 to Form 10-K for the year ended December 31, 1992.
13.0 Annual Report to the Unitholders for the year ended December 31, 1996.
27.0 Financial Data Schedule.
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.
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.
BY: Medical Office Properties Inc. General Partner
Date: March 28, 1997 BY: /s/Rocco F. Andriola Rocco F. Andriola Director, President and Chief Financial Officer
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 in the capacities and on the dates indicated.
MEDICAL OFFICE PROPERTIES INC. General Partner
Date: March 28, 1997 BY: /s/Rocco F. Andriola Rocco F. Andriola Director, President and Chief Financial Officer
Date: March 28, 1997 BY: /s/John H. Ng John Ng Vice President
Date: March 28, 1997 BY: /s/Timothy E. Needham Timothy E. Needham Vice President


ITEM 3 - LEGAL PROCEEDINGS
The Depositor is not aware of any material pending legal proceedings involving either the IMC Home Equity Loan Trust 1996-1 (the "Trust") established pursuant to the Pooling and Servicing Agreement (the "Agreement") dated February 1, 1996, among Chemical Bank Structured Finance Services, as trustee (the "Trustee") ContiSecurities Asset Funding Corp., as depositor (the "Depositor") and Industry Mortgage Company, as servicer (the "Servicer"), the Trustee, the Depositor or the Servicer which relates to the Trust.
ITEM 4

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter has been submitted to a vote of the holders of beneficial interests in the Trust through the solicitation of proxies or otherwise.
PART II
ITEM 5

ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
To the best knowledge of the Depositor, there is no established public trading market for any beneficial interests in the Trust.
All of the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates, Class A-6 Certificates, and Class A-7 Certificates issued by the Trust are held by the Depository Trust Company ("DTC") which in turn maintains records of holders of beneficial interests in such Certificates. Based on information obtained by the Trust from DTC, as of March 10, 1997, there were 4 holders of the Class A-1 Certificates, 3 holders of the Class A-2 Certificates, 7 holders of the Class A-3 Certificates, 1 holder of the Class A-4 Certificates, 5 holders of the Class A-5 Certificates, 11 holders of the Class A-6 Certificates, and 2 holders of the Class A-7 Certificates .
ITEM 6

ITEM 6 - SELECTED FINANCIAL DATA
Not applicable.
ITEM 7

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

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
In addition to the information included in the Annual Compilation of Monthly Trustee's Statements attached as Exhibit 99.3 hereto, the gross servicing compensation paid to the Servicer for the year ended December 31, 1996 was $735,186.16
ITEM 9

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes of accountants or disagreements on accounting or financial disclosures between the Issuer and its accountants.
PART III
ITEM 10

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

ITEM 11 - EXECUTIVE COMPENSATION
Not applicable.
ITEM 12

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth (i) the name and address of each entity owning more than 5% of the outstanding principal amount of each Class of Certificates of the Trust; (ii) the principal amount of the Class of Certificates owned by each and (iii) the percent that the principal amount of the Class of Certificates owned by such entity represents of the outstanding principal amount of such Class of Certificates. The information set forth in the table for the Certificates is based upon information obtained by the Trust from DTC and represents ownership of beneficial interest in the Certificates held by DTC. The Depositor is not aware of any Schedules 13D or 13G filed with the Securities and Exchange Commission in respect of the Certificates.
Amount Owned Name and Address All Dollar Amounts Are in Thousands
Principal Percent Class A-1 Certificates
Bankers Trust Company $20,000 32.74% c/o BT Services Tennessee Inc. Custody Services 648 Grassmere Park Road Nashville, TN 37211
Chase Manhattan Bank/Chemical 33,079 54.16 Auto Settle Department 4 New York Plaza, 4th Floor New York, NY 10004
SSB-Custodian 5,575 9.13 c/o Global Proxy Unit, A5NW P.O. Box 1631 Boston, MA 02105-1631
Class A-2 Certificates
Bank of New York $28,938 96.98% 925 Patterson Plank Rd. Secaucus, NJ 07094
Class A-3 Certificates
Bankers Trust Company $5,570 22.86% c/o BT Services Tennessee, Inc. Custody Services 648 Grassmere Park Road Nashville, TN 37211
Boston Safe Deposit & Trust 4,800 19.70 c/o Mellon Bank N.A. Three Mellon Bank Center Room 153-3015 Pittsburgh, PA 15259
Chase Manhattan 2,400 9.85 Two Chase Manhattan Plaza, 5th Floor New York, NY 10081
Chase Manhattan Bank/Chemical 6,000 24.62 Auto Settle Department 4 New York Plaza, 4th Floor New York, NY 10004
Citicorp Services, Inc. 2,000 8.21 P.O. Box 30576 Tampa, FL 33630-3576
First National Bank of Boston 1,500 6.16 c/o Proxy Services 51 Mercedes Way Edgewood, NY 11717
SSB-Custodian 2,100 8.62 Global Proxy Unit, A5NW P.O. Box 1631 Boston, MA 02105-1631
Class A-4 Certificates
Bankers Trust Company $12,154 100.00% c/o BT Services Tennessee, Inc. Custody Services 648 Grassmere Park Road Nashville, TN 37211
Class A-5 Certificates
Chase Manhattan Bank, Trust $1,200 5.70% Two Chase Manhattan Plaza, 5th Floor New York, NY 10081
First National Bank of Boston 10,000 47.54 c/o ADP Proxy Services 51 Mercedes Way Edgewood, NY 11717
Investors Bank & Trust/M.F. 8,616 40.96 Custody 89 South Street, 6th Floor Corp. Action Dept. Boston, MA 02111
SSB- Custodian 1,090 5.18 Global Proxy Unit, A5NW P.O. Box 1631 Boston, MA 02105-1631
Class A-6 Certificate
Bank of New York $1,400 9.29% 925 Patterson Plank Rd. Secaucus, NJ 07094
Chase Manhattan Bank, Trust 5,000 33.17 Two Chase Manhattan Plaza, 5th Floor New York, NY 10081
First National Bank of Maryland 1,160 7.70 Trust Division-Operations Dept 101-623 25 S. Charles Street Baltimore, MD 21201
Mercantile, Safe Deposit and Trust Co. 3,074 20.39 766 Old Hammonds Ferry Road Proxy Unit #230-20 Linthicum, MD 21090
Wilmington Trust Co. 2,500 16.58 Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001
Class A-7 Certificates
Bank of New York $10,000 87.34% 925 Patterson Plank Rd. Secaucus, NJ 07094
Norwest Bank Minnesota National 1,449 12.66 Assoc. 733 Marquette Avenue Minneapolis, MN 55479-0056
ITEM 13

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
[None]
PART IV
ITEM 14

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements:
Not applicable.
2. Financial Statement Schedules:
Not applicable.
3. Exhibits:
Exhibit No. Description
99.1 Statement of Compliance of the Servicer.
99.2 Annual Report of Independent Accountants with respect to the Servicer's overall servicing operations.
99.3 Annual compilation of Monthly Trustee's Statement.
(b) Reports on Form 8-K.
11 reports on Form 8-K have been filed by the Issuer during the period covered by this report.
Items Reported/Financial Date of Reports on Form 8-K Statements Filed
March 25, 1996 Trustee's Monthly Report for the February Monthly Period.
April 25, 1996 Trustee's Monthly Report for the March Monthly Period.
May 25, 1996 Trustee's Monthly Report for the April Monthly Period.
June 25, 1996 Trustee's Monthly Report for the May Monthly Period.
July 25, 1996 Trustee's Monthly Report for the June Monthly Period.
August 25, 1996 Trustee's Monthly Report for the July Monthly Period.
September 25, 1996 Trustee's Monthly Report for the August Monthly Period.
October 25, 1996 Trustee's Monthly Report for the September Monthly Period.
November 25, 1996 Trustee's Monthly Report for the October Monthly Period.
December 27, 1996 Trustee's Monthly Report for the November Monthly Period.
January 25, 1997 Trustee's Monthly Report for the December Monthly Period.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Depositor has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
By: CONTISECURITIES ASSET FUNDING CORP., AS DEPOSITOR
By: /s/ Jerome M. Perelson Name:Jerome M. Perelson Title: Vice President
By: /s/ Susan E. O'Donovan Name: Susan E. O'Donovan Title: Vice President & Chief Financial Officer
Date: March 27, 1997
INDEX TO EXHIBITS Item 14(C)
Exhibit No. Description 99.1 Statement of Compliance of the Servicer. 99.2 Annual Report of Independent Accountants with respect to the Servicer's overall servicing operations. 99.3 Annual compilation of Monthly Trustee's Statement.


Item 2. Properties
Real Estate Investments
The Trust has direct ownership of seven commercial real estate properties. These real estate investments are diversified geographically with 57% of the portfolio located in the Southeast, 22% in the Southwest and 21% in the Great Lakes Region based on the cost of the properties.
Properties owned by the Trust are leased to tenants either on a managed basis or under net lease arrangements. As the owner of managed property the Trust receives gross rentals and incurs operating expenses, such as property taxes, insurance, repairs, maintenance and common area utilities. Under net lease arrangements, the tenant, rather than the Trust, pays all operating expenses related to the leased premises. At December 31, 1996, six commercial properties were being leased on a managed basis and one property was leased on a net lease basis.
The six managed commercial properties consisted of five shopping centers and one business park. Managed commercial properties comprised 95% of the Trust's investment portfolio in 1996, 1995, and in 1994. Managed commercial properties provided 88% of USP's annual revenue in 1996, compared to 89% in 1995 and 91% in 1994. All managed properties have at least one tenant representing more than 17% of the revenue from that property, and the Kroger Company represents approximately 12% of the total revenue of the Trust under a lease expiring in April 2012.
The net leased property is an office/warehouse which represented approximately 5% of the Trust's investment portfolio in 1996, 1995, and in 1994, and generated 7% of the Trust's annual revenue in 1996, compared to 6% in 1995 and 1994. Trust properties and operations are summarized in the table on the next page.
The Trust's real estate investments are not expected to be substantially affected by current federal, state or local laws and regulations establishing ecological or environmental restrictions on the development and operations of such property. However, the enactment of new provisions or laws may reduce the Trust's ability to fulfill its investment objectives.
The Trust's properties and operations are summarized in the table below.
*L. Luria & Sons vacated their space in March 1995. However, they continued to honor their lease obligations through August 1996. (See "Recent Transactions")
Recent Transactions
L. Luria and Sons (Luria's) had occupied 23,587 square feet at Kingsley Square in Orange Park, Florida until it discontinued operations there in March 1995. Luria's continued to honor its lease obligations, which expire in March 2010; however, after paying the August 1996 rent, they discontinued making further rent payments. Accordingly, the Trust took legal steps to terminate Luria's right to possession of the premises and has since been successful in locating a replacement tenant for the Luria's space. While the Trust pursues legal remedy from Luria's, OfficeMax has signed a fifteen year lease with four, five-year options. In 1997, the Trust anticipates incurring lease commissions and tenant improvements of approximately $750,000 in order to place OfficeMax in this space.
The Trust previously reported that P.W. Enterprises filed a Chapter 11 reorganization plan and closed its 63,146 square foot store at Geneva Square in Lake Geneva, Wisconsin in January 1996. The Trust filed a claim as an unsecured creditor, limited by law to 15% of the rents owed for the unexpired lease term, and agreed to accept a 70% payout in order to gain priority within our creditor class. As a result, the Trust is entitled to receive $255,000 as soon as funds are available to pay the claim. At this time it is not known when payment, if any, will be made. The Lake Geneva real estate market remains relatively soft, creating some difficulty in locating a replacement tenant for this vacant space.
It was reported in the 1995 Annual Report that Staples, Inc. at North Park Plaza in Phoenix, Arizona closed its 18,000 square foot store in February 1996 and moved to a new center in the metro area. Staples assigned their lease, which runs through July 2003, to the developer of the new center. The Trust and the developer have been attempting to secure a new tenant for this space.
At First Tuesday Mall in Carrollton, Georgia, the Trust has a lease with Belk Rhodes Co. for 49,836 square feet, which lease expires in September 1998. Although no formal notice has been received from Belk Rhodes, the Trust does not expect them to renew their lease. It may be very difficult to find a replacement tenant because there is currently very little economic development activity in First Tuesday's location.
The Yamaha Warehouse facility in Cudahy, Wisconsin has a lease with Yamaha Motor Corporation (Yamaha), its sole tenant, which expires in June 1997. Yamaha has options to extend the lease for three additional one-year periods by giving the Trust ninety days written notice. At the time of this report, Yamaha indicated their intent to renew for one year. The Trust expects to receive written confirmation by the end of March 1997.
The portfolio operating results in the forthcoming year will greatly depend upon all tenants continuing to pay their rent and the Trust's ability to renew expiring tenant leases and obtain new leases at competitive rental rates.
As previously reported, the Board of Trustees has been exploring various strategic alternatives with the intent to maximize shareholder value. While a number of possibilities are being considered, there is no assurance any transaction will be consummated.
Item 3.

Item 3. Legal Proceedings
Legal Proceedings
The Trust is not a party to any pending legal proceedings which, in the opinion of management, are material to the Trust's financial position.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders
None.
Part II.
Item 5.

Item 5. Market for Registrant's Common Equity and Related Stockholders Matters
Distribution Information
The Trust is required to distribute at least 95% of its taxable income to continue its qualification as a real estate investment trust. Although the Trust expects to continue making distributions to shareholders, there is no assurance of future distributions, since they are dependent upon earnings, cash flow, the financial condition of the Trust and other factors.
Identification of Market and Price Range
At March 3, 1997, the Trust had 3,880,000 shares of beneficial interest issued and outstanding to 2,107 shareholders of record. The Trust's shares of beneficial interest are traded over-the- counter on the National Association of Securities Dealers Automated Quotation (NASDAQ) System under the symbol USPTS. At March 3, 1997, the Trust's per share bid and asked prices were $4.25 and $4.4375, respectively, as obtained from Wedbush/Morgan Securities, Inc., Newport Beach, California, Stifel Nicolaus, St. Louis, Missouri, Carr Securities, New York, New York, Pennsylvania Merchant Group Ltd., Radnor, Pennsylvania, and Herzog, Heine, Geduld, Inc., New York, New York, the principal market makers for shares of the Trust. These prices reflect quotations between dealers without adjustment for retail mark-up, mark-down or commission and do not necessarily represent actual transactions.
Market Price Range
Over-the-Counter Bid Price
Income Tax Information
The percentages indicated below, multiplied by the amount of distributions received or reinvested during the year, result in the amount to be reported for income tax purposes. A Form 1099 is mailed to shareholders at the end of each year reflecting the distributions paid by the Trust in that year.
Dividend Character
Advisor
AEGON USA Realty Advisors, Inc. Cedar Rapids, Iowa
Property Manager
AEGON USA Realty Management, Inc. Cedar Rapids, Iowa
Stock Transfer and Dividend Reinvestment Agent
USP Real Estate Investment Trust c/o Boston EquiServe, L.P. P.O. Box 8200 Boston, MA 02266-8200 Telephone: 1-800-426-5523
Annual Meeting
The annual meeting of shareholders of USP Real Estate Investment Trust will be held on Monday, April 28, 1997 at 1:30 p.m. at the AEGON Financial Center, 4333 Edgewood Road N.E., Cedar Rapids, Iowa.
10-K Information
The 1996 Form 10-K filed with the Securities and Exchange Commission (exclusive of certain exhibits) is available without charge upon written request to Roger L. Schulz, Controller, USP Real Estate Investment Trust, 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499-5441.
Item 6.

Item 6. Selected Financial Data
*Per share amounts for Earnings from Operations and Net Earnings are based on the weighted average number of shares outstanding for each period. Per share amounts for Distributions to Shareholders are based on the actual number of shares outstanding on the respective record dates.
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The discussion that follows should be read in the general context of the discussion in "Item 1. Business" and "Item 2. Properties."
Results of Operations
The United States had another "above trend" year for job generation in 1996, although the momentum of growth is slowing. Non-agricultural employment advanced at a year-over-year rate of 1.9 million, about the same as 1995 and down from 1994's superb performance. The retail market continues to expand as there has been 316 million square feet of shopping center starts in the last five years. Despite the increased supply of retail properties in the nation, total retail sales (excluding automobiles) were up 5% for the first eight months of 1996 compared to 6% for the comparable timeframe in 1995. The Trust owns shopping centers, an office park and an office warehouse facility in seven U.S. cities. The Trust's properties continue to compete with centers and office buildings of similar size, tenant mix and location. As of December 31, 1996, the combined leased occupancy of the Trust's seven properties was 88%. Operating results in the forthcoming year will be influenced by the ability of current tenants to continue paying rent, and the Trust's ability to renew expiring tenant leases and obtain new leases at competitive rental rates.
1996 compared to 1995 The Trust's net earnings for the year ended December 31, 1996 were $946,230 ($.24 per share) compared to $1,100,149 ($.28 per share) for the year ended December 31, 1995. The decrease in net earnings was due to lower rental income, partially offset by lower property expenses, interest expense and administrative expenses.
Rental income was $4,965,259 in 1996 compared to $5,366,255 in 1995. This decline in rents of $401,000 was primarily due to P.W. Enterprises filing a Chapter 11 reorganization plan and closing its 63,146 square foot store at Geneva Square in Lake Geneva, Wisconsin in January 1996. P.W. Enterprises contributed rents of $37,000 in 1996 compared to $346,000 in 1995. In addition, Luria's a 23,587 square foot tenant at Kingsley Square in Orange Park, Florida discontinued paying their rent in August 1996. As a result, rents contributed from Luria's declined by $47,000 from 1995 to 1996. In addition, expense recoveries (additional rents) from tenants decreased from 1995 to 1996 primarily due to lower real estate taxes at several properties. The decline in rents from these items was partially offset by a $60,000 rent settlement the Trust received from Eaglesons, a former tenant at North Park Plaza in Phoenix, Arizona.
Property expenses before depreciation were $1,609,749 in 1996 compared to $1,755,295 in 1995 which represents 32% of rental income for 1996 and 33% of rental income for 1995. Real estate taxes decreased by $159,000 or 21% from 1996 to 1995 as a result of reduction in assessed values due to appeals and reduction in tax rates. Repairs and maintenance declined by $108,000 or 22% due to tenant remodeling, painting, and other improvements made in 1995. Other property expenses increased by $122,000 primarily due to legal fees related to the bankruptcy of P.W. Enterprises, litigation with former tenants, property appraisals, and various consulting expenses.
Interest expense declined due to the normal amortization of mortgage loans payable.
1995 compared to 1994 Rents and property expenses declined from 1994 to 1995 due to the September 1994 sale of Midway Business Park, in Tucson, Arizona. Rental income was $5,366,255 in 1995 compared to $5,960,114 in 1994, a decrease of 10%. However, rental income from properties owned throughout both years increased 3% from $5,222,406 in 1994 to $5,366,255 in 1995 primarily due to higher overage rents and expense recoveries from tenants. Interest income was $251,759 in 1995 compared to $219,381 in 1994, an increase of 15%, due to higher interest rates on investable cash balances and the receipt of $13,000 in interest on property tax refunds.
First Tuesday Mall in Carrollton, Georgia recorded higher rents primarily due to the lease of a furniture store in mid-1994 which occupies 23,040 square feet. North Park and Presidential Drive Business Park in Atlanta, Georgia both experienced a reduction in base rents from 1994. North Park reserved some delinquent rents in 1995 and Presidential recovered delinquent rents in 1994 which had been considered uncollectible. The largest increase in rents occurred due to $125,000 in expense recoveries, primarily from Kingsley Square, North Park, and First Tuesday. These three properties experienced higher real estate taxes which, pursuant to the terms of tenant leases, resulted in the Trust being able to collect this increase in taxes from the tenants.
Property expenses before depreciation were $1,755,295 in 1995 compared to $1,928,502 in 1994 which represents 33% of rental income for 1995 and 32% of rental income for 1994. The primary reason for the decrease was the sale of Midway. On a same property basis, property expenses increased to $1,755,295 in 1995 from $1,594,949 in 1994. Accounting for this change was the increase in real estate taxes from Kingsley Square, North Park, and First Tuesday. Wages and salaries in 1994 were incurred in connection with the operation of Midway, the sale of which resulted in elimination of this expense. Repairs and maintenance decreased $19,000 due to the sale of Midway, which incurred $78,000 in repair and maintenance in 1994. On a same property basis, repairs and maintenance in 1995 increased $59,000 from 1994 primarily due to remodeling expenditures for an existing tenant at Presidential Drive and improvements made to the exterior of the building. Utilities decreased $35,000 from 1994 to 1995 due to the sale of Midway. Insurance expense declined due to the sale of Midway and lower insurance premiums. Other property expenses were $13,000 lower primarily due to the sale of Midway, which incurred $27,000 in 1994, offset by $15,000 in environmental consulting on all of the properties in 1995.
Depreciation expense declined $139,000 in 1995 due primarily to the sale of Midway. Interest expense decreased $390,000 due to the repayment of the loan on Midway upon sale, and the prepayment of one of the mortgage loans on First Tuesday. The prepayment on First Tuesday, including a 1% fee to the lender, was $1,147,526 which was paid on January 31, 1995. The annual debt service on this mortgage was $229,068, including interest at 10%. Administrative expense decreased $24,000 primarily due to the sale of Midway, which resulted in lower administrative fees of $17,000, and a $7,000 reduction in premium on directors and officers insurance.
Earnings from operations were $1,100,149 in 1995 compared to $934,605 in 1994, which represents an increase of 18% primarily due to the significant decrease in interest expense (more fully described above). Net earnings were $1,100,149 in 1995 compared to $1,723,193 in 1994, the decrease primarily attributed to the $788,588 gain on sale of Midway in 1994.
Cash Flow and Funds from Operations
The Trust has for several years used "funds from operations" as a measurement of operating performance. Funds from operations, as used in this report, is defined as: net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from debt restructuring and sales of property, plus depreciation. The Trust has adopted this definition of "funds from operations" as a more meaningful measurement of the ongoing performance of a real estate entity than either "net cash provided by operating activities," identified in the Statements of Cash Flows, or "earnings from operations," identified in the Statements of Earnings.
Funds from operations takes into consideration the accrual of revenue and expenses, which more appropriately reflects operating performance. Net cash provided by operating activities represents cash receipts and disbursements without regard to when income was earned or expense incurred. Earnings from operations considers the accrual of revenue and expenses, but is limited as a measurement of the ongoing performance of a real estate entity because it includes depreciation, a non-cash expense. The Trust intends to continue using funds from operations as a measure of operating performance.
Liquidity and Capital Resources
The Trust's capital resources consist of its current equity in real estate investments and mortgage loans receivable. The Trust maintains its properties in good condition and provides adequate insurance coverage. Liquidity is represented by cash and cash equivalents ($1,733,640 at December 31, 1996), a $500,000 line of credit and the continued operation of the Trust's real estate portfolio. This liquidity is considered sufficient to meet current obligations.
Net cash provided by operating activities, as shown in the Statements of Cash Flows, was $2,043,926 for the year ended December 31, 1996. Major applications of cash in 1996 included $1,241,600 for distributions to shareholders and $451,906 in principal payments on mortgage loans payable. The Trust's debt service commitments for mortgage loans payable are described in Note 6 to the Financial Statements.
The Publix Supermarkets lease at Kingsley Square was extended effective February 11, 1995 for a five-year term. The lease extension requires the Trust to contribute up to $250,000 toward remodeling costs at the Publix store. Since Publix has not yet remodeled their store, it is unknown when, if at all, this amount will be paid.
Capital expenditures of approximately $945,000 are anticipated for 1997. As of December 31, 1996, there were no other material commitments.
The Board of Trustees continues to monitor occupancies, leasing activity, overall Trust operations, liquidity, and financial condition in determining quarterly distributions to shareholders.
Inflation
Low to moderate levels of inflation during the past few years have favorably impacted the Company's operation by stabilizing operating expenses. At the same time, low inflation has the indirect effect of reducing the Company's ability to increase tenant rents. The Trust's properties have tenants whose leases include expense reimbursements and other provisions to minimize the effect of inflation. These factors, in the long run, are expected to result in more attractive returns from the Trust's real estate portfolio as compared to short-term investment vehicles.
Item 8.

Item 8. Financial Statements and Supplementary Data
Balance Sheets
See the accompanying notes to financial statements.
Statements of Earnings
See the accompanying notes to financial statements.
Statements of Cash Flows
See the accompanying notes to financial statements.
Statements of Shareholders' Equity
See the accompanying notes to financial statements.
Notes to Financial Statements
1. Accounting Policies
The Trust is predominantly in the business of investing in real estate. Investments in real estate are stated at cost. The Trust provides an allowance for valuation of real estate when it is determined that the values have permanently declined below recorded book value.
Statement of Financial Accounting Standards (SFAS) No. 107, Disclosures about Fair Value of Financial Instruments, requires disclosure of fair value information about financial instruments. The methods and assumptions used by the Trust in estimating its fair value disclosures are described in Notes 3, 4, and 6.
In March 1995, the Financial Accounting Standards Board issued Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Statement No. 121 also addresses the accounting for long-lived assets that are expected to be disposed of. The Trust's adoption of Statement No. 121 in 1995 had no impact on the Trust's operations in 1995 or 1996.
Expenditures for repairs and maintenance which do not add to the value or extend the useful life of property are expensed when incurred. Additions to existing properties, including replacements, improvements and expenditures which do add to the value or extend the useful life of property, are capitalized. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets.
The Trust follows the operating method of accounting for leases, whereby scheduled rental income is recognized on a straight-line basis over the lease term. Contingent rental income is recognized in the period in which it arises. Interest on mortgage loans receivable and amortization of discounts are recognized as income over the period the respective loans are outstanding. The Trust provides for possible losses on mortgage loans, rents and other receivables when it is determined that collection of such receivables is doubtful. Rents and other receivables are stated net of an allowance for uncollectible accounts of $213,347 in 1996 and $143,991 in 1995. Cash equivalents include investments with original maturities of three months or less.
Gains on real estate sales are recognized for financial accounting purposes in accordance with Financial Accounting Standard No. 66, Accounting for Sales of Real Estate. Deferred gains are recognized as income using the installment method. Net earnings per share are computed using the weighted average number of shares outstanding during the year.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The actual results of the Trust could differ as a result of those estimates.
2. Real Estate
Investments in real estate consist entirely of managed and net leased commercial property. Information regarding the Trust's investment in each property is presented in the Schedule of Real Estate and Accumulated Depreciation below.
Schedule of Real Estate and Accumulated Depreciation
* Excludes encumbrance of $279,142 on wraparound mortgages receivable.
The activity in real estate and related depreciation for the three years ended December 31, 1996 is summarized in the table below.
*The aggregate cost for federal income tax purposes is $39,816,989.
Wholly-owned managed properties with an aggregate cost of $37,485,342 are leased to tenants pursuant to lease agreements under which the Trust incurs normal real estate operating expenses associated with ownership. Yamaha Warehouse, a wholly- owned property with an aggregate cost of $2,197,937 is leased under a net lease agreement which requires the lessee to pay cash rental, property taxes and other expenses incurred in connection with the operation of the property.
On September 16, 1994, the Trust sold Midway Business Park, a 181,320 square foot office park located in Tucson, Arizona. The sale price was $4,800,000 from which the Trust paid selling expenses of $158,580 and retired mortgage indebtedness on the property of $3,141,973. Gain on the sale was $788,588.
3. Mortgage Loans Receivable
Mortgage loans receivable consist of notes received from financing property sales and are secured by the properties sold, subject to any underlying mortgage loans payable. Mortgage loans are stated net of unamortized discounts and deferred gains. The Trust received mortgage loans receivable of $1,650,000 as part of the consideration for the sales of Hickory Hills and College Square in 1990. Information regarding each mortgage is presented in the Schedule of Mortgage Loans Receivable below.
The estimated fair value of mortgage notes receivable at December 31, 1996 was $1,552,397 compared to the carrying value of $1,520,083. The estimated fair value of mortgage notes receivable at December 31, 1995 was $1,616,938 compared to the carrying value of $1,547,249.
The fair values for mortgage loans receivable are estimated utilizing discounted cash flow analysis, using interest rates reflective of current market conditions and the risk characteristics of the loans. The estimated fair value is greater than the carrying value as a result of the current interest rate applied to discount the cash flows being lower than the stated rate of the notes. The activity in mortgage loans receivable for the three years ended December 31, 1996 is summarized in the table below.
*Represents the aggregate cost for federal income tax purposes.
4. Cash and Cash Equivalents
Cash and cash equivalents consist of cash of $116,280, a money market fund of $617,360, and commercial paper of $1,000,000. Information regarding the investments at December 31, 1996 are presented in the table below. The amount carried on the balance sheet approximates the market value. At December 31, 1995, cash and cash equivalents were $1,370,623 which also approximated the market value at that date.
5. Transactions With Affiliates
The Trust has contracted with AEGON USA Realty Advisors, Inc. ("AEGON Realty Advisors") to provide administrative services for a base fee of 5/8% of the average gross real estate investment plus 1/4% of the monthly balance of mortgage loans receivable and an incentive fee of 20% of annual adjusted cash flow from operations in excess of $.72 per share. If the annual adjusted cash flow from operations is less than $.72 per share, then the payment of so much of the base fee is to be deferred so that revised cash flow from operations will be equal to $.72 per share; provided, however, in no event shall the amount deferred exceed 20% of the previously determined base fee. Any deferred fees may be paid in subsequent years (subject to certain limits). Annual adjusted cash flow from operations, as defined for purposes of the incentive fee, includes the net realized gain (or loss) from the disposition of property, adjusted to exclude accumulated depreciation (otherwise stated as gain in excess of cost without reduction for allowable depreciation). The administrative fee is limited to 1 1/2% of average quarterly net invested assets. The administrative agreement is for a one-year term, automatically renewed annually and cancellable by either party upon 90 days written notice. Amounts paid to AEGON Realty Advisors for administrative services were: $202,378 for 1996, $202,410 for 1995, and $219,982 for 1994. No incentive fees were paid in 1996, 1995 or 1994. Administrative fees of $50,595 in 1996, $50,603 in 1995, and $54,995 in 1994 were deferred, but may become payable in subsequent years. Cumulative deferred administrative fees were $509,104 as of December 31, 1996.
AEGON Realty Advisors also provides real estate acquisition and disposition services for the Trust. A negotiated fee of 2% to 4% of the cost is charged for properties acquired. No separate fee is charged for property dispositions. There were no acquisition fees paid in 1996, 1995 or 1994.
AEGON USA Realty Management, Inc. ("AEGON Realty Management"), a wholly-owned subsidiary of AEGON Realty Advisors, provides property management services to the Trust for a fee of 5% of the gross income of each managed property. The property management agreement is for a one-year term, automatically renewed annually and cancellable upon a 30-day written notice from either party. Amounts paid to AEGON Realty Management for property management services were $230,045 for 1996, $250,601 for 1995, and $277,945 for 1994. Pursuant to the property management agreement, on-site property management wages and salaries incurred by AEGON Realty Management were reimbursed by the Trust as follows: $19,354 for 1994. No wages and salaries were reimbursed by the Trust for 1996 or 1995.
AEGON Realty Advisors provides dividend disbursement, stock certificate preparation, recordkeeping and other shareholder services to the Company for a quarterly fee of $1.25 per shareholder account, $.75 per shareholder account for distributions processed, $.50 per shareholder account for proxy tabulation, and such other compensation for services performed as from time to time agreed to by the parties. The Trust paid AEGON Realty Advisors $21,904, $22,112 and $23,000 in shareholder service fees for 1996, 1995, and 1994, respectively. AEGON Realty Advisors has subcontracted with Boston EquiServe, L.P., a subsidiary of State Street Bank and Trust Company, for delivery of these services.
On December 31, 1993, the mortgage loan on the Trust's Presidential Drive property was acquired from the lender by AUSA Life Insurance Company, Inc., an affiliate of AEGON Realty Advisors, as part of a large transaction involving the transfer of loans and securities. Interest paid on the mortgage was $80,674 in 1996, $83,287 in 1995, and $85,646 in 1994. See Note 6 to the Financial Statements for information on the refinancing in February 1994 of the mortgage on Geneva Square with PFL Life Insurance Company ("PFL"), an affiliate of AEGON Realty Advisors which was extended on March 1, 1996. Interest paid on the mortgage was $236,477 in 1996, $233,351 in 1995, and $208,444 in 1994.
AEGON Realty Advisors is an indirect wholly-owned subsidiary of AEGON USA, Inc. which, through other wholly-owned subsidiaries, beneficially owns approximately 31% of the outstanding shares of the Trust at December 31, 1996.
6. Mortgage Loans Payable
Mortgage loan obligations, secured by the real estate owned, carry annual interest rates ranging from 8.3% to 10.5%.
On January 31, 1995, the Trust prepaid one of the mortgage loans on First Tuesday Mall. The prepayment amount, including a 1% fee to the lender, was $1,147,526. The annual debt service on this mortgage was $229,068, including interest at 10%. The mortgage loan on Geneva Square matured in February 1994 and was refinanced with a mortgage loan of $3,000,000 from PFL. In connection with the loan, a 1% origination fee ($30,000) was paid to PFL. On March 1, 1996 the Trust exercised an option to extend the loan for eight years at 8.30%. The loan may be prepaid without penalty any time prior to March 1, 1998 with yield maintenance required thereafter. The annual debt service is $260,295. Information regarding each mortgage is presented in the Schedule of Mortgage Loans on Real Estate below.
* Percentages are of the principal amount at time of prepayment. ** A wraparound mortgage loan receivable was received as part of the consideration from sale; the Trust continues to service the underlying mortgage payable.
The activity in mortgage loans payable for the three years ended December 31, 1996 is summarized in the table below.
The estimated fair value of mortgage notes payable at December 31, 1996 was $15,590,221 compared to the carrying value of $14,819,479. The estimated fair value of mortgage notes payable at December 31, 1995 was $16,519,743 compared to the carrying value of $15,271,385. The fair values for mortgage loans payable are estimated utilizing discounted cash flow analysis, using interest rates reflective of current market conditions and the risk characteristics of the loans. The estimated fair value exceeds the carrying value as a result of the current interest rate applied to discount the cash flows being lower than the stated rate of the mortgage notes.
Scheduled monthly payments will substantially amortize the principal balances of the mortgage loans over their respective terms with the exception of balloon payments at maturity. Amortized payments on the outstanding balances due in the next five years, including balloon repayments at maturity, are summarized as follows:
7. Leased Assets
The Trust is lessor of various properties as described in Note 2. Certain properties are leased to tenants under long-term, non- cancellable operating lease agreements. Future minimum lease rentals to be received under the terms of these lease agreements are as follows:
Contingent rentals included in income received in connection with operating leases were $101,446, $106,458, and $82,754 for the years ended December 31, 1996, 1995 and 1994, respectively. Such rentals are based principally on tenant sales in excess of stipulated minimums. In 1996, 1995, and in 1994, the Trust derived 10% or more of its revenue from the Kroger Company at Mendenhall Commons. The revenue from this tenant was $646,844 in 1996, $636,898 in 1995, and $647,180 in 1994.
In January 1996, P.W. Enterprises filed a Chapter 11 reorganization plan and closed its 63,146 square foot store at Geneva Square. The Trust filed a claim as an unsecured creditor for rents owned on the unexpired lease, and is entitled to receive approximately $255,000 as soon as funds are available to pay the claim. Due to the uncertainty of when or if anything might eventually be received by the Trust, nothing has been recorded in the accompanying financial statements.
In August 1994, Publix Supermarkets exercised an option to extend their lease for 34,400 square feet at Kingsley Square. The lease extension, effective February 11, 1995, has a term of five years and requires the Trust to contribute up to $250,000 toward remodeling costs at the Publix store. Since Publix has not yet remodeled their store, it is unknown when, if at all, this amount will be paid and nothing concerning this payment has been recorded in the accompanying financial statements.
8. Federal Income Taxes
The Trust conducts its operations so as to qualify as a real estate investment trust under the Internal Revenue Code which requires, among other things, that at least 95% of the Trust's taxable income be distributed to shareholders. The Trust has historically distributed all of its taxable income, and did so in 1996 as well. Distributions made in 1995 plus a portion of the Trust's first distribution in 1996 were used to meet the Internal Revenue Code distribution requirements for 1995. Accordingly, no provision has been made for federal income taxes since the Trust did not have taxable income after the deductions allowed for distributions to shareholders.
Certain property acquisitions have resulted in the basis of those properties being determined differently for financial accounting purposes than for income tax purposes. The differing methods of determination of basis in these transactions has resulted in the tax basis of certain properties being higher or lower than the financial basis. At December 31, 1996 the tax basis of real estate was $133,710 in excess of the financial basis.
9. Legal Proceedings
The Trust is not a party to any pending legal proceedings which, in the opinion of management, are material to the Trust's financial position.
10. Selected Quarterly Financial Data (Unaudited)
Report of Independent Auditors
The Board of Trustees and Shareholders USP Real Estate Investment Trust
We have audited the accompanying balance sheets of USP Real Estate Investment Trust as of December 31, 1996 and 1995, and the related statements of earnings, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Trust'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 audit 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 USP Real Estate Investment Trust at December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles.
Ernst & Young LLP
Des Moines, Iowa February 19, 1997
Item 9.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Part III
Item 10.

Item 10. Directors and Executive Officers of the Registrant
Information About Directors (referred to herein as "Trustees")
Certain information about the nominees for Trustee appears below. (See "Item 13. Certain Relationships and Related Transactions" for a description of the Trust's relationship with AEGON USA Realty Advisors, Inc. and other subsidiaries of AEGON USA, Inc.)
GARY A. DOWNING, age 38, has served as a Trustee of the Trust since 1989. He is Managing Director of Raymond James & Associates, Inc. (investment banking), St. Petersburg, Florida, where he has been employed since 1984. Mr. Downing is a member of the Audit Committee.
PATRICK E. FALCONIO, age 55, has served as Chairman of the Board and a Trustee of the Trust since 1988. He is Executive Vice President and Chief Investment Officer of AEGON USA, Inc. (insurance and financial services), Cedar Rapids, Iowa, where he has been employed since 1987. Mr. Falconio is a Director of AEGON USA Realty Advisors, Inc. and various other subsidiaries of AEGON USA, Inc. He is also Chairman of the Board of Directors of Cedar Income Fund, Ltd. (real estate investment company) and a Director of Firstar Bank Cedar Rapids, N.A. (commercial bank).
EDWIN L. INGRAHAM, age 70, has served as a Trustee of the Trust since 1984, and as Vice Chairman of the Board of Trustees since 1990. He retired in 1988 as Executive Vice President, Treasurer and Chief Investment Officer of AEGON USA, Inc., where he had been employed since 1982. He is a Director of Cedar Income Fund, Ltd. (real estate investment company). Mr. Ingraham is a member of the Audit Committee.
SAMUEL L. KAPLAN, age 60, has served as a Trustee of the Trust since 1983. He has been engaged in the practice of law in Minneapolis, Minnesota as a member of the firm of Kaplan, Strangis and Kaplan, P.A. since 1978. Mr. Kaplan is a member of the Audit Committee.
Information About Executive Officers
Certain information about the executive officers of the Trust who are not also nominees appears below. The term of office of each executive officer will expire at the Annual Meeting of the Board of Trustees which will follow the Annual Meeting of Shareholders. (See "Item 13. Certain Relationships and Related Transactions" for a description of the Trust's relationship with AEGON USA Realty Advisors, Inc. and other subsidiaries of AEGON USA, Inc.)
DAVID L. BLANKENSHIP, age 46, has served as President of the Trust since 1985. He has been employed by AEGON USA, Inc. since 1977 in various administrative and management positions related to real estate investment activities and is Chairman of the Board and President of AEGON USA Realty Advisors, Inc.
MAUREEN DEWALD, age 46, has served as Vice President of the Trust since 1986 and Secretary since 1985. She has been employed by AEGON USA, Inc. since 1983 as an attorney for real estate investment activities and is Senior Vice President, Secretary and General Counsel of AEGON USA Realty Advisors, Inc.
JEFFRY DIXON, age 43, has served as Director of Investor Relations and Assistant Secretary of the Trust since 1994. He has been employed by AEGON USA, Inc. since 1984 in real estate acquisition and mortgage lending activities and is a Portfolio Manager of AEGON USA Realty Advisors, Inc.
ALAN F. FLETCHER, age 47, has served as Treasurer of the Trust since 1986, as Vice President since 1985, as Assistant Secretary since 1982 and as principal financial officer since 1981. He has been employed by AEGON USA, Inc. since 1981 in various financial and administrative positions related to investment activities and is Senior Vice President and Chief Financial Officer of AEGON USA Realty Advisors, Inc.
ROGER L. SCHULZ, age 35, has served as Controller and Assistant Secretary of the Trust since 1995. He has been employed by AEGON USA, Inc. since 1985 in real estate accounting and financial reporting activities and is Manager - Financial Reporting for AEGON USA Realty Advisors, Inc.
Item 11.

Item 11. Executive Compensation
During 1996, each Trustee, with the exception of Mr. Falconio, received an annual fee of $6,000 plus $750 for each regular or special meeting attended, as well as $400 per day for inspecting properties owned by the Trust and $400 for attendance at each committee meeting as a member, unless held in conjunction with a meeting of the Board of Trustees. Mr. Falconio has waived all fees for his services as a Trustee so long as he continues to be affiliated as an officer or director of AEGON USA, Inc. (see "Item 10. Directors and Executive Officers of the Registrant"). Total fees paid to all Trustees as a group were $29,250 for 1996.
The executive officers of the Trust receive no cash or deferred compensation in their capacities as such.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
Security Ownership of Certain Beneficial Owners
The following table sets forth information with respect to each person and group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known by the Trust to be the beneficial owner of more than five percent (5%) of the outstanding shares of the Trust as of March 3, 1997.
Name and Address Amount and Nature Percent of Beneficial Owner of Beneficial Ownership of Class
AEGON USA, Inc. 1,197,260 30.86% 4333 Edgewood Road N.E. Cedar Rapids, Iowa 52499
AEGON USA, Inc. is an indirect, wholly-owned subsidiary of AEGON N.V., a holding company organized under the laws of The Netherlands which is controlled by Vereninging AEGON, an association organized under the laws of The Netherlands. AEGON USA, Inc. has sole voting and investment powers with respect to the above Shares. Security Ownership of Management
The following table sets forth the number of Shares of the Trust beneficially owned as of March 3, 1997 by each Trustee, nominee, and officer and by all Trustees, nominees and officers as a group (9 persons). Except as otherwise indicated by footnote, the individuals have direct ownership of, and sole voting and investment power with respect to, any Shares beneficially owned by them. Under rules adopted by the Securities and Exchange Commission, transactions in Shares of the Trust are reportable by Trustees and officers on specified forms, and the Trust is required to disclose any known delinquent filings. A report on Form 5 was filed late for Mr. Downing, reporting 38 Shares acquired through the Trust's distribution reinvestment plan.
(1) Mr. Downing is the beneficial owner of 505 Shares held in an individual retirement account through the custodian of which he has sole voting and investment powers with respect to such Shares. (2) Mr. Falconio may be deemed to be the beneficial owner of 1,197,260 Shares beneficially owned by AEGON USA, Inc. with respect to which he shares voting and investment powers (see "Item 10. Directors and Executive Officers of the Registrant"). Mr. Falconio disclaims beneficial ownership of such Shares. He may also be deemed to be the beneficial owner of 2,000 Shares owned by his wife. (3) Mr. Kaplan may be deemed to be the beneficial owner of 1,500 Shares held in a profit sharing trust for his account. Such Shares are included in the 10,000 Shares above. (4) Mr. Blankenship may be deemed to be the beneficial owner of 1,818 Shares held in custodial accounts for his children for which he has sole voting and investment powers. (5) Ms. DeWald is the direct owner of 6,697 Shares for which she has sole voting and investment powers and may be deemed to be the beneficial owner of 1,246 Shares held in a custodial account for her daughter for which she has sole voting and investment powers. (6) Mr. Fletcher is the direct owner of 600 Shares for which he has sole voting and investment powers and is the beneficial owner of 1,600 Shares held in an individual retirement account for which he has sole voting and investment powers through the custodian.
*Such holdings represent less than one percent of the outstanding Shares.
Item 13.

Item 13. Certain Relationships and Related Transactions.
The Trust has no employees and has contracted with various subsidiaries of AEGON USA, Inc. to provide administrative, advisory, acquisition, divestiture, property management and shareholder services to the Trust. A description of the relationships between AEGON USA, Inc. and its various subsidiaries and of such subsidiaries' agreements with the Trust follows. The description of the agreements which follows is qualified in its entirety by reference to the terms and provisions of such agreements. (See "Item 12. Security Ownership of Certain Beneficial Owners and Management" for a description of the relationship between AEGON USA, Inc. and AEGON N.V.) Administrative, Advisory and Acquisition Services
AEGON USA Realty Advisors, Inc. ("AEGON Advisors"), is a wholly- owned subsidiary of AEGON USA, Inc. AEGON Advisors provides administrative, advisory, acquisition and divestiture services to the Trust pursuant to an Administrative Agreement. The term of the Administrative Agreement is for one (1) year and is automatically renewable each year for an additional year subject to the right of either party to cancel the Agreement upon 90 days written notice. The performance of AEGON Advisors' duties and obligations under the Administrative Agreement has been guaranteed by AEGON USA, Inc.
Under the Administrative Agreement, AEGON Advisors (a) provides clerical, administrative and data processing services, office space, equipment and other general office services necessary for the Trust's day-to-day operations, (b) provides legal, tax and accounting services to maintain all necessary books and records of the Trust and to ensure Trust compliance with all applicable federal, state and local laws, regulatory reporting requirements and tax codes, (c) arranges financing for the Trust, including but not limited to mortgage financing for property acquisition, (d) obtains property management services for the Trust's properties and supervises the activities of persons performing such services, (e) provides monthly reports summarizing the results of operations and financial conditions of the Trust, (f) prepares and files all reports to shareholders and regulatory authorities on behalf of the Trust, (h) prepares and files all tax returns of the Trust and (i) provides the Trust with property acquisition and divestiture services.
AEGON Advisors receives fees for its administrative and advisory services as follows: (a) a base fee, payable monthly, equal to 5/8% per annum of the average monthly gross real estate investments of the Trust plus 1/4% per annum of the monthly outstanding principal balance of mortgage loans receivable; and (b) an incentive fee, payable annually, equal to 20% of the annual adjusted cash flow from operations in excess of $.72 per share. If the annual adjusted cash flow from operations is less than $.72 per share, then the payment of so much of the base fee is to be deferred so that revised cash flow from operations will be equal to $.72 per share; provided, however, in no event shall the amount deferred exceed 20% of the previously determined base fee. Any deferred fees may be paid in a subsequent year, up to a maximum of 30% of that year's revised cash flow from operations in excess of $.72 per share. Annual adjusted cash flow from operations, as defined for purposes of the incentive fee, includes the net realized gain (or loss) from the disposition of property, adjusted to exclude accumulated depreciation (otherwise stated as gain in excess of cost without reduction for allowable depreciation). Notwithstanding the foregoing, the combined base and incentive fees cannot exceed the amount permitted by the limitation on operating expenses as provided in the Trust's Declaration of Trust, which limitation is essentially 1 1/2% of the Trust's average quarterly invested assets, net of depreciation. In addition, AEGON Advisors is to be paid a separately negotiated fee of not less than 2% nor more than 4% of the cost of each property acquired by the Trust as compensation for acquisition services furnished by it to the Trust. Administrative fees paid to AEGON Advisors for 1996 were $202,378. No acquisition fees were paid in 1996.
Management Services
AEGON USA Realty Management, Inc. ("AEGON Management"), is a wholly-owned subsidiary of AEGON Advisors. AEGON Management provides management services to the Trust pursuant to a Property Management Agreement. The term of the Agreement is for one (1) year and is automatically renewable each year for an additional year subject to the right of either party to cancel the Agreement upon 30 days written notice. Under the Management Agreement, AEGON Management is obligated to (a) procure tenants and execute leases with respect to Trust properties which are not leased under net lease arrangements (the "Managed Properties"), (b) maintain and repair (at the Trust's expense) the Managed Properties, (c) maintain complete and accurate books and records of the operations of the Managed Properties, (d) maintain the Managed Properties in accordance with applicable government rules and regulations, licensing requirements and building codes, (e) collect all rents and (f) carry (at the Trust's expense) general liability, accident, fire and other property damage insurance. For these services, AEGON Management receives 5% of the gross income derived from the operation of the Managed Properties. Management fees paid to AEGON Management for 1996 were $230,045. Shareholder Services
AEGON Advisors provides shareholder services to the Trust pursuant to a Shareholder Services Agreement (the "Agreement"). Under the Agreement, AEGON Advisors is obligated to provide dividend disbursement, stock certificate preparation, recordkeeping and other shareholder services for which AEGON Advisors receives the following fees: a quarterly fee of $1.25 per shareholder account based on the number of shareholder accounts (minimum $1,000 per quarter), a fee of $.75 per shareholder account for each dividend processed, a fee of $.50 per shareholder account for proxy tabulation, and such other compensation as from time to time agreed upon by the Trust and AEGON Advisors. Shareholder service fees paid to AEGON Advisors for 1996 were $21,904. AEGON Advisors has subcontracted for stock transfer and dividend disbursement services with Boston EquiServe, L.P., a subsidiary of State Street Bank and Trust Company.
Other
On December 31, 1993, the mortgage loan on the Trust's Presidential Drive property was acquired from the lender by AUSA Life Insurance Company, Inc., a wholly-owned subsidiary of AEGON USA, Inc., as part of a large transaction involving the transfer of loans and securities. The terms of the mortgage loan remained the same. In February 1994, the Trust refinanced the existing mortgage loan on its Geneva Square property with a new mortgage loan from PFL Life Insurance Company ("PFL"), a wholly-owned subsidiary of AEGON USA, Inc. This $3,000,000 loan was obtained by the Trust on commercially competitive terms at a fixed interest rate of 8% and a 1% origination fee ($30,000) was paid to PFL in connection with the loan. The loan matured on March 1, 1996, and the Trust exercised an option to extend the loan for eight years at 8.30% based on commercially competitive terms offered for comparable loans by PFL. The loan may be prepaid without penalty any time prior to March 1, 1998, yield maintenance is required thereafter.
The aggregate principal amount of the two mortgage loans described above as of December 31, 1996 was $3,624,751. The maximum principal amount of such mortgage indebtedness outstanding during 1996 was $3,678,901. The Trust paid $54,151 in principal and $317,151 in interest on such mortgage indebtedness for 1996.
Part IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) List of Documents
The following financial statements are included in Item 8:
1. Financial Statements.
Balance Sheets, December 31, 1996 and 1995. Statements of Earnings, Years Ended December 31, 1996, 1995, and 1994 Statements of Cash Flows, Years Ended December 31, 1996, 1995, and 1994 Statements of Shareholders' Equity, Years Ended December 31, 1996, 1995, and 1994. Notes to Financial Statements. Report of Independent Auditors.
2. Financial Statement Schedules.
Financial Statement Schedules. (Included in Notes to Financial Statements)
(III) Schedule of Real Estate and Accumulated Depreciation.Note (IV) Schedule of Mortgage Loans on Real Estate. Note 6
All other schedules have been omitted because they are not required, or because the required information, where material, is included in the financial statements or accompanying notes.
Part IV (continued)
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (continued)
(a) List of Documents (continued)
3. Exhibits.
(3) Second Amended and Restated Declaration of Trust currently in effect, dated October 5, 1972, as amended December 18, 1972, March 3, 1975 and April 23, 1984, incorporated herein by reference to Item 14(a)3, Exhibit (3) of Form 10-K for the year ended December 31, 1984.
(3.1) By-Laws currently in effect, dated January 28, 1992, incorporated herein by reference to Item 14(a)3, Exhibit (3.1) of Form 10-K for the year ended December 31, 1991.
(4) Articles II and III of the Second Amended and Restated Declaration of Trust currently in effect, dated October 5, 1972, as amended December 18, 1972, March 3, 1975 and April 23, 1984, incorporated herein by reference to Item 14(a)3, Exhibit (3) of Form 10-K for the year ended December 31, 1984.
(4.1) Article II of the By-Laws currently in effect, dated January 28, 1992, incorporated herein by reference to Item 14(a)3, Exhibit (4.1) of Form 10-K for the year ended December 31, 1991.
(10) Administrative Agreement currently in effect, dated January 1, 1984, incorporated herein by reference to Item 5, Exhibit (28) of Form 8- K dated January 1, 1984.
(10.1) Property Management Agreement currently in effect, dated July 1, 1981, as amended November 4, 1982, incorporated herein by reference to Item 14(a)3, Exhibit (10) of Form 10-K for the year ended December 31, 1982.
(10.2) Shareholder Services Agreement, currently in effect, dated January 1, 1991, as amended January 1, 1992 and assigned January 28, 1992, incorporated herein by reference to Item 14(a)3, Exhibit (10.2) of Form 10-K for the year ended December 31, 1991.
(b) No reports on Form 8-K were filed during the fourth quarter of 1996.
(c) The required exhibits applicable to this section are listed in Item 14(a)3.
(d) There are no required financial statement schedules applicable to this section.
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.
USP REAL ESTATE INVESTMENT TRUST
/s/ Patrick E. Falconio /s/ Alan F. Fletcher Patrick E. Falconio Alan F. Fletcher Chairman of the Board Vice President and Treasurer (principal executive (principal financial officer) officer)
/s/ Roger L. Schulz Roger L. Schulz Controller (principal accounting officer)
March 26, 1997
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 as of the date indicated.
/s/ Gary A. Downing /s/ Edwin L. Ingraham Gary A. Downing Edwin L. Ingraham Trustee Trustee
/s/ Patrick E. Falconio /s/ Samuel L. Kaplan Patrick E. Falconio Samuel L. Kaplan Trustee Trustee
March 26, 1997 EXHIBIT INDEX
Exhibit Item Title or Description
(3) Second Amended and Restated Declaration of Trust currently in effect, dated October 5, 1972, as amended December 18, 1972, March 3, 1975 and April 23, 1984, incorporated herein by reference to Item 14(a)3, Exhibit (3) of Form 10-K for the year ended December 31, 1984.
(3.1) By-Laws currently in effect, dated January 28, 1992, incorporated herein by reference to Item 14(a)3, Exhibit (3.1) of Form 10-K for the year ended December 31, 1991.
(4) Articles II and III of the Second Amended and Restated Declaration of Trust currently in effect, dated October 5, 1972, as amended December 18, 1972, March 3, 1975 and April 23, 1984, incorporated herein by reference to Item 14(a)3, Exhibit (3) of Form 10-K for the year ended December 31, 1984.
(4.1) Article II of the By-Laws currently in effect, dated January 28, 1992, incorporated herein by reference to Item 14(a)3, Exhibit (4.1) of Form 10-K for the year ended December 31, 1991.
(10) Administrative Agreement currently in effect, dated January 1, 1984, incorporated herein by reference to Item 5, Exhibit (28) of Form 8-K dated January 1, 1984.
(10.1) Property Management Agreement currently in effect, dated July 1, 1981, as amended November 4, 1982, incorporated herein by reference to Item 14(a)3, Exhibit (10) of Form 10-K for the year ended December 31, 1982.
(10.2) Shareholder Services Agreement dated January 1, 1991, as amended January 1, 1992 and assigned January 28, 1992, incorporated herein by reference to Item 14(a)3, Exhibit (10.2) of Form 10-K for the year ended December 31, 1991.
All Exhibit Items are omitted from this report, but a copy will be furnished upon payment of $33.00, representing a charge of fifty cents ($.50) per page, accompanying a written request to Roger L. Schulz, Controller, USP Real Estate Investment Trust, 4333 Edgewood Road N.E., Cedar Rapids, IA 52499.