Exhibit 10.12

                                                                                        Exhibit
    10.12

     

    SUBORDINATION
      AGREEMENT

     

    This
      Subordination Agreement (this "Subordination Agreement") is entered into as
      of
      the 30th day of March, 2007, by and among Mark Mroczkowski and Nick VandenBrekel
      (Mark Mroczkowski and Nick VandenBrekel are collectively referred to herein
      as
      the “Subordinated Lenders” and each, a "Subordinated Lender"), and Biometrics
      Investors, L.L.C., a Delaware limited liability company (the "Senior Lender").
      Unless otherwise defined herein, capitalized terms used herein shall have the
      meaning provided such terms in the Agreement referred to below.

    


     

    BACKGROUND

     

    WHEREAS the
      Senior Lender is
      the
      holder of a note which was made by Sequiam Corporation (the "Company") and
      which
      has an outstanding balance as of the date of this Pledge Agreement, including
      principal and accrued interest, of $ 3,965,119 (the "Prior Note"). Subject
      to
      the terms and conditions of that certain Agreement dated as of the date hereof
      among the Senior Lender, as lender, and the Company, as borrower (the
      "Agreement"), the Senior Lender has agreed to extend a term loan to the Company
      in the amount of $2,500,000 ("Term Loan A") which loan would be consolidated
      with the indebtedness evidenced by the Prior Note and evidenced by a new note
      in
      the face amount of $6,500,000 ("Term Note A"). 

     

    WHEREAS,
      subject to the terms and conditions of the Agreement, the Senior Lender has
      agreed to extend a separate term loan to the Company in the amount of $5,000,000
      ("Term Loan B" and collectively with Term Loan A, the “Loans”) evidenced by a
      note in such amount ("Term Note B"). 

     

    WHEREAS,
      each of the subsidiaries of the Company (the "Subsidiaries"), pursuant to the
      terms of that certain Subsidiary Guaranty dated as of the date hereof in favor
      of the Senior Lender, have unconditionally guaranteed the prompt payment in
      full
      of the Loans and all other liabilities due and owing from the Company to the
      Senior Lender. 

     

    WHEREAS,
      in connection with the Prior Note, the Subordinated Lender had executed that
      certain Subordination Agreement in favor of Lee Harrison Corbin, Attorney
      in-Fact for the Trust Under the Will of John Svenningsen (the "Trust”) dated as
      of May 18, 2005 (the “Prior Subordination Agreement”) 

     

    WHEREAS,
      the Trust has assigned all of its rights under the Prior Subordination Agreement
      to the Lender such that the Lender now stands in place of the Trust thereunder.
      

     

    WHEREAS,
      the Subordinated Lenders are senior officers of the Company and (x) the Company
      has incurred a loan from Mark Mroczkowski, which loan has an aggregate principal
      amount outstanding of $50,000.00 as of the date hereof, plus accrued and unpaid
      interest of $8,750.00 as of the date hereof and (y) the Company has incurred
      a
      loan from Nick VandenBrekel, which loan has an aggregate principal amount of
      $361,000.00 as of the date hereof, plus accrued and unpaid interest of
      $35,577.00 as of the date hereof (such amounts set forth in this clause,
      together with the principal, interest and other fees attributable to any other
      indebtedness owed by the Company to either Mark Mroczkowski or Nick
      VandenBrekel, whether incurred prior to, on or after the date hereof, shall
      be
      referred to as the “Outstanding Indebtedness”).

     

    NOW,
      THEREFORE, each Subordinated Lender and the Senior Lender agree as
      follows:

     

    TERMS

     

    1. All
      obligations of the Company and the Subsidiaries to the Senior Lender, howsoever
      created, arising or evidenced, whether direct or indirect, absolute or
      contingent or now or hereafter existing, or due or to become due are referred
      to
      as "Senior Liabilities". The Accrued Salary Amount and the Outstanding
      Indebtedness, together with all obligations of the Company or any of its
      Subsidiaries to any Subordinated Lender to pay the Accrued Salary Amount or
      any
      Outstanding Indebtedness (in each case, including any interest, fees or
      penalties related thereto), howsoever created, arising or evidenced, whether
      direct or indirect, absolute or contingent or now or hereafter existing, or
      due
      or to become due are referred to as "Junior Liabilities". It is expressly
      understood and agreed that the term "Senior Liabilities", as used in This
      Subordination Agreement, shall include, without limitation, any and all
      interest, fees and penalties accruing on any of the Senior Liabilities after
      the
      commencement of any proceedings referred to in paragraph 4 of This Subordination
      Agreement, notwithstanding any provision or rule of law which might restrict
      the
      rights of the Senior Lender, as against any Subordinated Lender or anyone else,
      to collect such interest, fees or penalties, as the case may be.

     

    2. Except
      as
      expressly otherwise provided in This Subordination Agreement or as the Senior
      Lender may otherwise expressly consent in writing, the payment of the Junior
      Liabilities shall be postponed and subordinated to the payment in full of all
      Senior Liabilities. Furthermore, no payments or other distributions whatsoever
      in respect of any Junior Liabilities shall be made, nor shall any property
      or
      assets of any Subordinated Lender be applied to the purchase or other
      acquisition or retirement of any Junior Liability.

     

    3. Each
      Subordinated Lender hereby subordinates all security interests that have been,
      or may be, created by any Subordinated Lender in respect of the Junior
      Liabilities, to the security interests granted by each Subordinated Lender
      to
      the Senior Lender in respect of the Senior Liabilities. 

    


    4. In
      the
      event of any dissolution, winding up, liquidation, readjustment, reorganization
      or other similar proceedings relating to the Company or its Subsidiaries or
      to
      their creditors, as such, or to their property (whether voluntary or
      involuntary, partial or complete, and whether in bankruptcy, insolvency or
      receivership, or upon an assignment for the benefit of creditors, or any other
      marshalling of the assets and liabilities of any Subordinated Lender, or any
      sale of all or substantially all of the assets of any Subordinated Lender,
      or
      otherwise), the Senior Liabilities shall first be paid in full before any
      Subordinate Lender shall be entitled to receive and to retain any payment or
      distribution in respect of any Junior Liability.

     

    5. Each
      Subordinated Lender will mark his books and records so as to clearly indicate
      that their respective Junior Liabilities are subordinated in accordance with
      the
      terms of this Subordination Agreement. Each Subordinated Lender will execute
      such further documents or instruments and take such further action as the Senior
      Lender may reasonably request from time to time request to carry out the intent
      of this Subordination Agreement.

     

    6. Each
      Subordinated Lender hereby waives all diligence in collection or protection
      of
      or realization upon the Senior Liabilities or any security for the Senior
      Liabilities.

     

    7. No
      Subordinated Lender will without the prior written consent of the Senior Lender:
      (a) attempt to enforce or collect any Junior Liability or any rights in respect
      of any Junior Liability; or (b) commence, or join with any other creditor
      in commencing, any bankruptcy, reorganization or insolvency proceedings with
      respect to the Company or any Subsidiary.

     

    8. The
      Senior Lender may, from time to time, at its sole discretion and without notice
      to any Subordinated Lender, take any or all of the following actions: (a) retain
      or obtain a security interest in any property to secure any of the Senior
      Liabilities; (b) retain or obtain the primary or secondary obligation of any
      other obligor or obligors with respect to any of the Senior Liabilities; (c)
      extend or renew for one or more periods (whether or not longer than the original
      period), alter or exchange any of the Senior Liabilities, or release or
      compromise any obligation of any nature of any obligor with respect to any
      of
      the Senior Liabilities; and (d) release their security interest in, or
      surrender, release or permit any substitution or exchange for, all or any part
      of any property securing any of the Senior Liabilities, or extend or renew
      for
      one or more periods (whether or not longer than the original period) or release,
      compromise, alter or exchange any obligations of any nature of any obligor
      with
      respect to any such property.

     

    9. The
      Senior Lender may, from time to time, whether before or after any discontinuance
      of this Subordination Agreement, without notice to any Subordinated Lender,
      assign or transfer any or all of the Senior Liabilities or any interest in
      the
      Senior Liabilities; and, notwithstanding any such assignment or transfer or
      any
      subsequent assignment or transfer of the Senior Liabilities, such Senior
      Liabilities shall be and remain Senior Liabilities for the purposes of this
      Subordination Agreement, and every immediate and successive assignee or
      transferee of any of the Senior Liabilities or of any interest in the Senior
      Liabilities shall, to the extent of the interest of such assignee or transferee
      in the Senior Liabilities, be entitled to the benefits of this Subordination
      Agreement to the same extent as if such assignee or transferee were the Senior
      Lender, as applicable; provided, however, that, unless the Senior Lender shall
      otherwise consent in writing, the Senior Lender shall have an unimpaired right,
      prior and superior to that of any such assignee or transferee, to enforce This
      Subordination Agreement, for the benefit of the Senior Lender, as to those
      of
      the Senior Liabilities which the Senior Lender has not assigned or
      transferred.

     

    10. The
      Senior Lender shall not be prejudiced in its rights under this Subordination
      Agreement by any act or failure to act of any Subordinated Lender, or any
      noncompliance of any Subordinated Lender with any agreement or obligation,
      regardless of any knowledge thereof which the Senior Lender may have or with
      which the Senior Lender may be charged; and no action of the Senior Lender
      permitted under this Subordination Agreement shall in any way affect or impair
      the rights of the Senior Lender and the obligations of any Subordinated Lender
      under this Subordination Agreement.

     

    11. No
      delay
      on the part of the Senior Lender in the exercise of any right or remedy shall
      operate as a waiver of such right or remedy, and no single or partial exercise
      by the Senior Lender of any right or remedy shall preclude other or further
      exercise of such right or remedy or the exercise of any other right or remedy;
      nor shall any modification or waiver of any of the provisions of this
      Subordination Agreement be binding upon the Senior Lender except as expressly
      set forth in a writing duly signed and delivered on behalf of the Senior Lender.
      For the purposes of this Subordination Agreement, Senior Liabilities shall
      have
      the meaning set forth in Section 1 above, notwithstanding any right or power
      of
      any Subordinated Lender or anyone else to assert any claim or defense as to
      the
      invalidity or unenforceability of any such obligation, and no such claim or
      defense shall affect or impair the agreements and obligations of any
      Subordinated Lender under this Subordination Agreement.

     

    12. The
      Subordinated Lender represents and warrants that the the Prior Subordination
      Agreement is in full force and effect and, as of the date hereof, the
      enforcement of the Prior Subordination Agreement against the Subordinated Lender
      is subject to no defenses of any kind.

     

    13. This
      Subordination Agreement shall be binding upon each Subordinated Lender and
      upon
      the heirs, legal representatives, successors and assigns of each Subordinated
      Lender and the successors and assigns of any Subordinated Lender.

     

    14. This
      Subordination Agreement shall be construed in accordance with and governed
      by
      the laws of Illinois without regard to conflict of laws provisions. Wherever
      possible each provision of this Subordination Agreement shall be interpreted
      in
      such manner as to be effective and valid under applicable law, but if any
      provision of this Subordination Agreement shall be prohibited by or invalid
      under such law, such provision shall be ineffective to the extent of such
      prohibition or invalidity, without invalidating the remainder of such provision
      or the remaining provisions of this Subordination Agreement.

     

    15. This
      Subordination Agreement may be executed in any number of counterparts, each
      of
      which when so executed shall be deemed to be an original and, all of which
      taken
      together shall constitute one and the same Subordination Agreement. In the
      event
      that any signature is delivered by facsimile transmission, such signature shall
      create a valid binding obligation of the party executing (or on whose behalf
      such signature is executed) the same with the same force and effect as if such
      facsimile signature were the original thereof.

     

    


     

    [signature
      page follows]


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    IN
      WITNESS WHEREOF, this Subordination Agreement has been made and delivered this
      30th day of March, 2007.

     

    


    By:_______________________________ 

    Name: Mark
      Mroczkowski   

    Title: CFO

    


    


    


    By:________________________________ 

        Name: Nick
      VandenBrekel    

        Title: CEO

    


    


    BIOMETRICS
      INVESTORS L.L.C.

    


    


    By:
            

    Name:  Roger
      Brown   

    Title:  Manager         

    


    


    Acknowledged
      and Agreed to by:

     

    SEQUIAM
      CORPORATION

     

    By:     

    Name:
      Nicholas VandenBrekel 

    Title: CEO