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                                                                   EXHIBIT 10.12

                    REIMBURSEMENT AND SUBORDINATION AGREEMENT

         This Reimbursement and Subordination Agreement (the "Agreement") is
made as of August 1, 1997, by and between Robert B. Staib, an individual
resident of Iowa ("Staib"), and Neural Applications Corporation, a Delaware
corporation (the "Company").

         WHEREAS, the Company proposes to issue up to $6,000,000 principal
amount of Senior Secured Debentures, subject to increase by not more than
$3,000,000 principal amount (the "Debentures"), which are to be secured by an
irrevocable standby letter of credit (the "Letter of Credit") from The Northern
Trust Company ("Northern Trust") in an amount equal to one hundred seven percent
(107%) of the initial principal amount of Debentures. (Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them in the
Letter of Credit.)

         WHEREAS, Northern Trust has requested that Staib guarantee the Letter
of Credit by means of a pledge agreement with Northern Trust (the "Pledge
Agreement"), which will require Staib to maintain a collateral account
containing marketable securities or other collateral to secure the obligation of
Northern Trust under the Letter of Credit.

         WHEREAS, to induce Staib to enter into the Pledge Agreement, the
Company has agreed to (a) issue Staib warrants to purchase 500,000 shares of the
Company's Common Stock, $.01 par value (the "Common Stock"), (b) make a one-time
cash payment of $50,000 and (c) undertake to reimburse Staib to the extent that
Northern Trust exercises its remedy under the Pledge Agreement to sell or
liquidate all or a part of the Collateral pledged by Staib.

         NOW THEREFORE, in consideration of the premises, the respective
covenants and commitments set forth in this Agreement, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and Staib hereby agree as follows:

         SECTION 1. AGREEMENT TO ENTER INTO PLEDGE AGREEMENT.  Staib agrees to
enter into the Pledge Agreement.

         SECTION 2. CONSIDERATION FOR ENTERING INTO PLEDGE AGREEMENT.  The
Company agrees that:

                  (a) upon execution of the Pledge Agreement it shall promptly
         thereafter make a one-time cash payment of $50,000 to Staib; and

                  (b) at the Initial Closing it shall grant to Staib warrants to
         purchase an aggregate of 500,000 shares of the Common Stock, which
         warrants shall (i) have an exercise price of $8.00 per share, (ii) be
         immediately exercisable, (iii) expire on September 30, 2002 and (iv) in
         all other material respects have the same terms

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         as the warrants granted by the Company to Staib in connection with past
         transactions.

         SECTION 3. AGREEMENT TO REIMBURSE. The Company further agrees that, in
the event that Northern Trust honors a draft on the Letter of Credit by the
Trustee, which draft is not reimbursed by the Company to Northern Trust in
accordance with the Reimbursement Agreement such that an Event of Default occurs
and is continuing under the Reimbursement Agreement, and Northern Trust
exercises its remedy under the Pledge Agreement to sell or liquidate all or a
part of the Collateral pledged by Staib in order to pay or satisfy the
Obligations of the Company under the Reimbursement Agreement, then the Company
shall reimburse Staib for Northern Trust's realization of such Collateral in an
amount equal to the amount of the sale proceeds realized by Northern Trust from
the sale of such Collateral; provided, however, that in the event the proceeds
of the sale or liquidation of all or any part of the Collateral continues to be
held by Northern Trust in a cash collateral account that is subject to the
Pledge Agreement to secure the Company's Obligations under the Reimbursement
Agreement, then the Company shall only be obligated to reimburse Staib hereunder
after such time as Northern Trust realizes on such cash collateral and then only
in the amount of the cash collateral so realized.

         SECTION 4. SUBORDINATION; LIQUIDATION OF COMPANY. Staib acknowledges
and agrees that his rights to reimbursement under Section 3 shall in all events
be subordinated to the rights of the holders of the Debentures to receive
payments of principal and interest on the Debentures and shall also, in the
event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, be subordinated to the rights of the holders of the
Company's Convertible Series A Voting Preferred Stock (the "Series A Stock"),
Convertible Series B Voting Preferred Stock (the "Series B Stock") and
Convertible Series C Voting Preferred Stock (the "Series C Stock") to receive
any and all amounts due to such holders under the terms of each such series of
stock upon such liquidation, dissolution or winding up of the Company.

         SECTION 5. AMENDMENTS; NO WAIVER. No amendment or modification of this
Agreement shall be deemed effective unless made in writing and signed by all the
parties hereto. No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel to enforce any provisions of this
Agreement, except by a statement in writing signed by the party against whom
enforcement of the waiver or estoppel is sought. Any written waiver shall not be
deemed a continuing waiver unless specifically stated, shall operate only as to
the specific term or condition waived and shall not constitute a waiver of such
term or condition for the future or as to any act other than that specifically
waived.

         SECTION 6. BINDING EFFECT; THIRD PARTY BENEFICIARIES. This Agreement
shall constitute a valid and binding Agreement between the parties hereto, and
the rights and obligations of the parties hereunder shall inure to benefit of,
and be binding upon,

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their respective successors, assigns and legal representatives. The holders of
the Debentures, the Series A Stock, the Series B Stock and the Series C Stock
are intended to be third party beneficiaries of Section 4 of this Agreement and
shall be entitled to enforce their rights under Section 4 by an action at law or
in equity.

         SECTION 7. COMPLETE AGREEMENT. This Agreement contains the complete
agreement between the parties and supersede any prior understandings, agreements
or representations by or between the parties, written or oral, which may have
related to the subject matter hereof in any way.

         SECTION 8. CAPTIONS AND HEADINGS. The captions and paragraph headings
used in this Agreement are for convenience of reference only, and shall not
affect the construction or interpretation of this Agreement or any of the
provisions hereof.

         SECTION 9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same instrument.

         SECTION 10. GOVERNING LAW. All questions concerning this Agreement
shall be governed by and interpreted in accordance with the internal law, not
including the law of conflicts, of the State of Iowa.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth in the first paragraph.

                                                  /s/  Robert B. Staib
                                                 -------------------------------
                                                 Robert B. Staib

                                                 Neural Applications Corporation

                                                 By:  /s/  Robert A. Squires
                                                    ----------------------------
                                                    Name:
                                                         -----------------------
                                                    Title:
                                                          ----------------------

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                                                                   EXHIBIT 10.13

                   INDEMNIFICATION AND HOLD HARMLESS AGREEMENT

         This Indemnification and Hold Harmless Agreement is entered into on the
27 day of February, 1996, by and between Neural Applications Corporation, a
Delaware corporation with offices located at 2600 Crosspark Road, Coralville,
Iowa (hereinafter "Neural") and Robert B. Staib of Coralville, Iowa (hereinafter
"Guarantor").

                                    RECITALS

         1.   On or about February 27, 1996, Neural will be granted a $2,000,000
Line of Credit from The Northern Trust of Chicago, Illinois, through an
agreement arranged by Iowa State Bank & Trust Company of Iowa City, Iowa ("Line
of Credit").

         2.   The Line of Credit to be granted to Neural will be unsecured by
Neural but will be given in consideration of Guarantor's personal guarantee
("Guarantee") and Guarantor's pledge of personal assets to secure the Line of
Credit.

         3.   Neural, in consideration of and as an inducement to Guarantor to
guarantee and secure Neural's obligations under the Line of Credit to The
Northern Trust, has agreed to:

                  A     Give to Guarantor an Indemnification and Hold Harmless
for any principal, interest, damages, costs, attorney fees, or other expenses
that Guarantor may pay or incur as a result of Neural's failure to pay any
obligation under the Line of Credit to The Northern Trust.

                  B.    Pledge business assets to Guarantor, subject to certain
previously existing security agreements, as security for Neural's obligation to
indemnify and hold Guarantor harmless.

                  C.    Grant to Guarantor a Warrant for 400,000 shares of
common stock in Neural.

         4.   Neural and Guarantor wish to specify the terms and conditions of
Neural's agreement to indemnify and hold Guarantor harmless.

                              TERMS AND CONDITIONS

         In consideration of the foregoing recitals, of the following terms and
conditions, and other good and valuable consideration it is agreed as follows:

         1.   Guarantor shall personally guarantee and pledge collateral to
secure Neural's obligations under the Line of Credit from The Northern Trust.

         2.   Neural agrees to indemnify and hold Guarantor harmless from any
and all amounts that Guarantor may pay to The Northern Trust under the terms and
conditions of Guarantor's Guarantee of Neural's $2,000,000 Line of Credit.
Neural's obligation to indemnify and hold Guarantor harmless includes, but is
not limited to, all principal, interest, costs, expenses, attorney fees, court
costs, damages or any other amounts paid by Guarantor or realized from any
collateral pledged by Guarantor to secure the Guarantee. Guarantor shall have no
obligation whatsoever to defend or to resist any request, demand or claim of The
Northern Trust to make payment arising from Neural's default or failure to pay
and Guarantor may rely upon the representations of The Northern Trust as to any
and all amounts claimed to be due under the guarantee as a result of Neural's
default of and/or failure to pay its obligations under the Line of Credit.

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         3.   Neural shall at all times comply with all of the terms and
conditions of the Line of Credit and shall pay all principal, interest and other
obligations to The Northern Trust when due and before default.

         4.   Neural shall pay all obligations due under The Northern Trust Line
of Credit upon the earlier to occur of April 1, 1997 or the completion by Neural
of its next public financing of equity.

         5.   This Indemnification and Hold Harmless is secured by Neural's
assets as set forth in the Security Agreement of even date herewith. Iowa State
Bank & Trust Company, the Iowa Department of Economic Development and Kirkwood
Community College have claimed senior security interest in the assets of the
company. In the event of default and foreclosure, the secured debt owed to such
prior secured parties by Neural shall be paid from the collateral or otherwise
before payment is made to Guarantor under this Indemnification and Hold Harmless
Agreement or the Security Agreement.

         6.   Neural represents and Guarantor acknowledges that Neural currently
has the following outstanding debts:

                  A.    Iowa State Bank & Trust Company as evidenced by notes
dated October 26, 1995 and December 29, 1995 in the aggregate principal amount
of $3,500,000. Upon the obtaining of the Line of Credit, $500,000 of this debt
is to be repaid.

                  B.    Iowa Department of Economic Development and the City of
Coralville, Iowa, as evidenced by promissory notes dated May 20, 1993 in the
aggregate principal amount of $250,000.

                  C.    Kirkwood Community College under the Industrial New Job
Training Agreement dated June 30, 1994 in the aggregate principal amount not to
exceed $200,000.

Guarantor acknowledges that he will receive payments from Neural under this
Indemnification and Hold Harmless Agreement only to the extent that Neural is
current on the described obligations to Iowa State Bank & Trust Company, Iowa
Department of Economic Development and the City of Coralville, and Kirkwood
Community College. Provided, however, that this priority of payment shall not
otherwise limit or impair Neural's obligations to Guarantor hereunder or
Guarantor's security interests in Neural's business assets.

         7.   Guarantor and John Pappajohn have previously guaranteed certain of
the outstanding debts and obligations of Neural. The relative priority of the
Guarantor and such other guarantor in receiving payments from Neural and the
priority of their security interests in Neural's assets shall be established by
an Intercreditor Agreement between Guarantor and such other guarantor.

         8.   No act or omission or commission of the Guarantor, including
specifically any failure to exercise any right, remedy or recourse, shall be
deemed a waiver or release of the same, such waiver or release to be effective
only as set forth in a written document executed by the Guarantor and only to
the extent specifically recited therein. A waiver or release with reference to
one event shall not be construed as continuing as a bar to or a waiver or
release of any subsequent right, remedy or recourse as to any subsequent event.

         9.   Any and all amounts due to Guarantor from Neural under this
Indemnification and Hold Harmless Agreement shall become immediately due and
payable upon Guarantor's written demand to Neural specifying the amounts paid or
incurred under Guarantor's guarantee of Neural's indebtedness to The Northern
Trust. If any amount due under this Indemnification and Hold Harmless Agreement
is not paid when due, or is collected or attempted to be collected by the
initiation or prosecution of any suit

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before any Bankruptcy Court or any other judicial proceeding, or is placed in
the hands of an attorney for collection, then the Guarantor shall be entitled to
collect, in addition to all other amounts owing him hereunder, all court costs
and reasonable attorney fees incurred by the Guarantor. Neural further agrees to
pay Guarantor interest at the rate of 18% per annum on all amounts, damages,
expenses or costs paid or incurred by Guarantor as a result of Neural's default
of and/or failure to pay its obligations under the Line of Credit.

         10.  Neural hereby waives demand, presentment for payment, notice of
non-payment, protest and all other notice, filing of suit and diligence in
collecting under this Indemnification and Hold Harmless Agreement other than the
written demand for payment specified in paragraph 9. Neural consents to any
extension, rearrangement, renewal or postponement of the time for payment under
this Indemnification and Hold Harmless and to any other indulgence with respect
thereto without notice, consent or consideration to any of them.

         11.  This Indemnification and Hold Harmless Agreement shall be binding
upon the successors and assigns of the parties.

         12.  This Indemnification and Hold Harmless Agreement shall be governed
by and construed in all respects according to the laws of the state of Iowa.

         IN WITNESS WHEREOF each party, intending to be legally bound hereby,
does duly execute this Indemnification and Hold Harmless.

NEURAL APPLICATIONS CORPORATION

By /s/  Robert A. Squires
  --------------------------------

Its    President

GUARANTOR

/s/  Robert B. Staib
----------------------------------
Robert B. Staib

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