4. TRANSACTIONS WITH MANAGING SHAREHOLDER AND AFFILIATES
The Trust operates pursuant to the terms of a management agreement with the Managing Shareholder ("Management Agreement"). Under the terms of the Management Agreement, the Managing Shareholder provides certain management, administrative and advisory services, and provides office space to the Trust. The Trust has historically been obligated to pay the Managing Shareholder an annual management fee of $2,332, an amount equal to 2.5% of the total contributed capital of the Trust, as compensation for the services the Managing Shareholder provides to the Trust. The management fee was to be paid in monthly installments and, to the extent that the Trust did not pay the management fee on a timely basis, the Trust accrued interest at an annual rate of 10% on the unpaid balance. For the years ended December 31, 2012 and 2011, the Trust paid management fees of $0 and $25, respectively and waived the balances of management fees otherwise due. Beginning in 2012, the Managing Shareholder agreed to cease charging management fees under the settlement agreement described in Note 3.
Under the Trust's Declaration of Trust ("Declaration of Trust"), the Managing Shareholder has historically been entitled to receive, concurrently with the shareholders of the Trust, other than the Managing Shareholder, 1% of all distributions from operations made by the Trust in a year until the shareholders received distributions in that year equal to 12% per annum of their equity contribution. Thereafter, the Managing Shareholder was entitled to receive 20% of the distributions for the remainder of the year. The Managing Shareholder was entitled to receive 1% of the proceeds from dispositions of Trust property until the shareholders, other than the Managing Shareholder, received cumulative distributions equal to their original investment ("Payout"). After Payout, the Managing Shareholder was entitled to receive 20% of all remaining distributions of the Trust. The Managing Shareholder did not receive any distributions during 2012 and 2011, and agreed, as part of the settlement agreement described in Note 3, to waive any further distributions it otherwise might be entitled to receive. The Trust has not reached Payout and is not expected to do so.
RRP owns 2.66 Investor Shares of the Trust and its controlling member owns 0.15 Investor Shares. Under the settlement agreement described in Note 3, RRP and its controlling member have waived their rights to receive any future distributions that would otherwise be allocated to the Investor Shares. In addition, the Trust granted the Managing Shareholder a single Management Share representing the Managing Shareholder's management rights.