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The following is an excerpt from a 10-K SEC Filing, filed by SUPER 8 ECONOMY LODGING IV LTD on 12/23/1998.
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SUPER 8 ECONOMY LODGING IV LTD - 10-K - 19981223 - PART_III

PART III

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., a 50% shareholder of which 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 80, 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 70, was a registered representative of Brown, Brosche Securities, Inc. between 1982 and 1988. Between 1976 and 1982 he served as a registered representative of several stock and investment brokers. Mr. Dana has also served as marketing consultant for various real estate limited partnership and other direct participation investment programs.

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, 1998 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.

During the fiscal year covered by this report the Partnership accrued such fees in the amount of $91,285, all of which were paid.

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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. 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 $71,817, of which $35,909 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 Managing General Partner. (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, $1,000,000 in distributions of Cash Available for Distribution were paid to the Limited Partners. A total of $627,826 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 $9,055,855 (calculated through September 30, 1998) 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.

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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. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

                                                  AMOUNT AND
  TITLE                                           NATURE OF
    OF                                            BENEFICIAL      PERCENT
  CLASS     NAME  OF BENEFICIAL OWNER             OWNERSHIP      OF CLASS
---------- ---------------------------------- ----------------- -----------
  Units     Everest Lodging Investor, LLC           182  Units     1.82%
  Units     Everest Madison Investors, LLC          497  Units     4.97%
                                                --------
                                       TOTAL        679  Units     6.79%
                                                ========

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.

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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 $123,000 in the fiscal year ended September 30, 1998 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 two employees who are related to Philip B. Grotewohl, a 50% shareholder of the Managing General Partner.

BROKERAGE PARTNERS