subordination agreements with respect to the Subordinated Debt or the Debtor.  Lender agrees that upon any distribution of the assets or readjustment of the indebtedness of Debtor by reason of liquidation, composition, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other similar action or proceeding (individually and collectively, a “Proceeding”), BlueCrest shall be entitled to receive payment in full in cash of all of the BlueCrest Senior Debt prior to the payment of all or any part of the Subordinated Debt.

(f)

All terms used and not otherwise defined herein which are defined in Article 9 of the Illinois Uniform Commercial Code shall have the meanings assigned to them in Article 9 of the Illinois Uniform Commercial Code as in effect on the date of this Agreement.  

2.  

Extent of Subordination, The subordinations and priorities specified herein are applicable irrespective of the time, manner or order of attachment or perfection of any security interests, liens or claims, or the time or order of filing of any financing statements, or the giving or failure to give notice of the acquisition or expected acquisition of any purchase money security interests or other security interests; provided, however, if, for any reason, a security interest, lien or claim of a party to which a security interest, lien or claim of the other party is hereby subordinated is not perfected or is avoidable, then the subordination of such security interest, lien or claim of such other party shall not be effective as to the particular collateral which is the subject of the unperfected or avoidable security interest, lien or claim.

3.

Continuing Agreement. This Agreement shall constitute a continuing agreement of subordination.  Subject to Section 6(b), the subordinations and priorities specified herein shall remain in full force and effect until all BlueCrest Senior Debt is paid in full and all contractual commitments by BlueCrest to extend credit to Debtor have terminated.  Notwithstanding the foregoing, nothing herein shall preclude any party, without notice to the other parties, from lending money, extending credit or providing other financial services to or on behalf of Debtor; provided that any such loans, extensions of credit or other financial services by Lender shall be subordinated to the rights of BlueCrest as provided herein.  This Agreement shall constitute the entire agreement between the parties with respect to the subject matter hereof and shall not be amended except with the written consent of both Lender and BlueCrest.

4.

Payments Held in Trust.  In the event that Lender receives any payment of any Subordinated Debt which at the time paid or received is in violation of or is prohibited under this Agreement, Lender shall:  (a) not credit such payments against the Subordinated Debt, (b) promptly notify BlueCrest in writing thereof, and (c) receive the same in trust for BlueCrest and promptly pay and deliver the same to BlueCrest in precisely the form received, except for any requisite endorsement or assignment, which Lender will make and hereby authorizes BlueCrest or any of its officers or authorized employees to make in the event that Lender does not make the same; provided, however, that BlueCrest consents to the payment by the Debtor of fees and expenses to Lender and its counsel in conjunction with the Term Loan, not to exceed $10,000 in the aggregate.  BlueCrest will apply any such moneys so received by it to the BlueCrest Senior Debt and will hold any property other than money so received by it as Collateral therefor.  

5.  

Waivers.  No delay on the part of Lender or BlueCrest in exercising any right, power or privilege granted hereunder shall operate as a waiver thereof, and no purported waiver of any default, breach or violation of any term or provision contained herein shall be deemed to be a waiver of such term or provision unless the waiver is in writing and signed by the waiving party. No such waiver shall in any event be deemed a waiver of any subsequent or other default, breach or violation. The rights or remedies herein expressly specified are cumulative and not exclusive of any other rights or remedies which the parties would otherwise have.  Lender agrees that BlueCrest may at any time, and from time to time (a) extend the time of payment of or renew the BlueCrest Senior Debt, (b) receive and hold security for the payment of the BlueCrest Senior Debt and enforce, waive, release, fail to perfect, sell or otherwise dispose of any such security, or (c) make any agreement with Debtor or with any other party or person liable on the BlueCrest Senior Debt, for the extension, renewal, payment, compromise, discharge or release thereof (in whole or in part), or for any modification of the terms thereof or of any agreement between BlueCrest and Debtor or any such other party or person, without in any way impairing or affecting this Agreement.

6.  

Termination; Reinstatement.

(a)

This Agreement may be terminated upon at least thirty (30) days prior written notice by one party to the other. Notwithstanding the foregoing, no termination pursuant to Section 6(a) shall impair the rights or priorities created or acquired hereunder by either of the parties prior to the effective date of the termination. The notice of termination and other notices given in connection with this Agreement shall be deemed to have been given when