b'Chapter 22Cash Distributions & WaterfallsMemberdistributionswillbeclearlyspelledoutintheoffering documents prepared by your corporate securities attorney. Management will evaluate,usuallyquarterlyduringpropertyoperations,whetherthereis distributable cash to disburse to the members.Each phase of operation of the syndicate (cash flow, refinance, or sale) could have a separate distribution schedule, called a distribution waterfall. The waterfall describes the order in which cash is distributed during each phase, until all of it has all been disbursed. Simplewaterfallssell;complicatedwaterfallsdont.Iveseen documents with 10-12 steps in the distribution waterfall, that no-one could understand. When investors dont understand, they simply dont invest.Pari Passu V. Pro Rata Distributions Yourcompanywilltypicallymakedistributionstocash-paying investorsprorataorparipassu.Proratadistributionsmeantheyare allocated in accordance with each investors percentage interests. Pari passu generally means distributions will be made in order of priority.Asanexample,certainclassesmayreceivedistributionsfirst(pari passu), but the distributions will be further allocated amongst those class members according to their percentage interests in that class (pro rata). 204'