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(a) Debts to Third Parties. To payment of the debts and liabilities of the <br /> Partnership(other than those to Partners)in the order of priority provided by law(including <br /> the right of any lender to participate to any extent therein); provided, however, that the <br /> Liquidating Partner shall first pay, to the extent permitted by law,liabilities with respect to <br /> which any Partner is or may be personally liable; and provided further, however, that the <br /> Partnership shall not be required to repay any indebtedness which has a remaining term in <br /> excess of one year and which the Partners are willing to take their distributions subject to, <br /> or which the Partners may assume; <br /> (b) Expenses of Liquidation. To payment of the expenses of liquidation of the <br /> Partnership in the order of priority provided by law;provided,however,that the Liquidating <br /> Partner shall first pay, to the extent permitted by law, expenses with respect to which any <br /> Partner is or may be personally liable; <br /> (c) Reserves. To the setting up of such reserves as the Liquidating Partner may <br /> deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the <br /> Partnership arising out of or in connection with the Partnership business;provided,however, <br /> that any such reserves will be held by the Liquidating Partner for the purposes of disbursing <br /> such reserves in payment of any of such contingencies and, at the expiration of such period <br /> as the Liquidating Partner shall deem advisable,to distribute the balance thereafter remaining <br /> in the manner provided below; <br /> (d) Debts to Partners. To the payment of debts and liabilities of the Partnership <br /> to Partners,to the extent of any debt or liability of the Partnership to a Partner other than in <br /> its capacity as a Partner; <br /> (e) Capital Accounts. To the Partners having positive Capital Account balances <br /> in the amount thereof and pro rata to the relative Capital Account balances. <br /> (f) Sharing Ratios. Finally, to the Partners in accordance with their respective <br /> Sharing Ratios. <br /> Distributions to return the positive Capital Accounts balances as contemplated herein shall be <br /> determined after taking into account all Capital Account adjustments for the Partnership's taxable <br /> year during which it ceases to carry on business, and such distributions shall be made by the end of <br /> such taxable year(or, if later,within 90 days after the date on which the Partnership ceases to carry <br /> on business). No Partner shall be obligated to restore a deficit in his/her Capital Account balance. <br /> The Liquidating Partner shall determine whether to sell any assets of the Partnership in connection <br /> with such termination,or to distribute any portion thereof in kind. Any property distributed in kind <br /> in the liquidation shall be treated as provided in Section 5.3. <br /> 10.3 Final Accounting. Each of the Partners shall be furnished with a statement prepared <br /> by the Liquidating Partner setting forth the assets and liabilities of the Partnership on the date of <br /> 462364.9 1/2/02 23 <br /> j, <br />