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EXHIBIT 10.7
SUBLEASE
THIS SUBLEASE (this "Sublease") is made and entered as of the 24th day
of May, 1999, by and between Neural Applications Corporation, a Delaware
corporation having an office at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxx 00000
("Sublessor"), and Systems Alternatives International LLC, a Delaware limited
liability company having an office at 0000 Xxxxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxx 00000 ("Sublessee").
BACKGROUND INFORMATION
A. Pursuant to the terms and conditions of a certain land lease dated
November 2, 1993, between University of Iowa Research Park Corporation
("University') and Liberty Growth, L.C., an Iowa limited liability company
("Liberty") (the "Land Lease", the terms of which, as limited and modified
herein, are hereby made a part hereof and a copy of which is attached hereto as
Exhibit A), Liberty has leased from the University that certain premises and
related fixtures and equipment more particularly described in the Land Lease,
which premises the University has leased from the Iowa State Board of Regents
pursuant to a ground lease dated March 1, 1989 (the "Ground Lease"), and
B. Pursuant to the terms and conditions of a certain lease dated
October 7, 1993 between Liberty and Sublessor (the "Prime Lease," the terms of
which, as limited and modified herein, are hereby made a part hereof and a copy
of which is attached hereto as Exhibit B), Sublessor has leased from Liberty
that certain premises and related fixtures and equipment more particularly
described in the Prime Lease (the "Prime Lease Premises"), and
C. Sublessee wishes to sublease from Sublessor and Sublessor desires
to sublet to Sublessee, a portion of the Prime Lease Premises described as
approximately _________ square feet on the first floor of the building located
at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxx as depicted on Exhibit C attached
hereto and incorporated herein upon the terms and conditions set forth herein
(the "Subleased Premises").
D. In addition to the Subleased Premises, Sublessor desires to sublet
to Sublessee, the personal property listed on Schedule 1 attached hereto and
incorporated herein (the "Subleased Personal Property').
STATEMENT OF AGREEMENT
In consideration of the foregoing and of the promises and agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sublessor and Sublessee do hereby
agree as follows:
1. Demise. Sublessor does hereby demise and sublease to Sublessee,
and Sublessee does hereby sublease and hire from Sublessor, upon the terms,
covenants and conditions set forth herein, the Subleased Premises and the
Subleased Personal Property, subject to the Prime Lease and the Land Lease.
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2. Term. The term of this Sublease (the "Term") shall be for a term
of eighteen (18) months commencing on the date hereof (the "Commencement Date")
and terminating at 11:59 p.m. on October 31, 2000.
3. Early Termination. At any time after October 25, 1999, Sublessee
may terminate this Sublease upon thirty (30) days prior written notice to
Sublessor.
4. Gross Rent. Commencing on the Commencement Date and during the
Term, Sublessee shall pay to Sublessor at the address above or at such other
address as Sublessor may, from time to time, designate in writing the gross rent
in the amount of Seven Thousand Two Hundred and no/100 Dollars ($7,200.00) on or
before the fist (1st) day of each month (collectively, "Rent").
5. Use; Laws. Sublessee shall use and occupy the Subleased Premises
in compliance with the use restrictions contained in Article 3 of the Land Lease
and Sublessee agrees to be bound by all of the terms, conditions, covenants,
provisions and agreements of the Prime Lease and the Land Lease, including the
University of Iowa Oakdale Research Park Covenants, Conditions and Restrictions
which contain the Design Guidelines. Sublessee shall not violate any applicable
governmental laws, codes, ordinances, rules or regulations in connection with
its use and occupancy of the Subleased Premises.
6. Maintenance. Sublessor shall keep the Subleased Premises clean and
orderly and shall perform all repairs to the .Subleased Premises which is
required of Sublessor under the Prime Lease; Sublessor shall maintain the
Subleased Premises in accordance with the same high standards of janitorial
maintenance and cleanliness as Sublessor maintains in connection with the
remaining portion of the Prime Lease Premises.
7. Indemnification. To the extent the following are caused by the
negligence or willful misconduct of Sublessee, its agents, employees and
invitees, Sublessee shall pay all costs, losses or damages resulting from or
arising out of (i) any breach of this Sublease, (ii) the use and occupancy of
the Subleased Premises and any property of Sublessor or Liberty, or (iii) the
injury to any persons. Sublessee shall indemnify, protect and save Sublessor
harmless, and defend with counsel satisfactory to Sublessor, from and against
any and all losses, damages or liabilities thereby or therefor and from and
against any and all expenses, costs, attorneys' fees and costs of suit incurred
in connection therewith.
To the extent the following are caused by the negligence or willful
misconduct of Sublessor, its agents, employees and invitees, Sublessor shall pay
all costs, losses or damages resulting from or arising out of: (i) any breach of
this Sublease, (ii) the use and occupancy of the Subleased Premises and any
property of Sublessee or Liberty, or (iii) the injury to any persons. Sublessor
shall indemnify, protect and save Sublessee harmless, and defend with counsel
satisfactory to Sublessee, from and against any and all losses, damages or
liabilities thereby or therefor and from and against any and all expenses,
costs, attorneys' fees and costs of suit incurred in connection therewith.
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8. Alterations and Signs. Sublessee may, with Sublessor's prior
written approval, which approval shall not be unreasonably withheld or delayed,
make minor alterations and/or erect or display signs on the Premises as
permitted under the University of Iowa Research Park regulations, the Land Lease
and the Prime Lease.
9. Utilities and Other Services. Sublessor shall secure and pay for
all utilities and other services used in, on or about the Subleased Premises. To
the extent that utilities and services are not provided by Liberty, Sublessor
shall contract directly with the applicable utility company or service provider.
10. Real Estate Taxes. All real estate taxes levied or assessed
against the Subleased Premises shall be timely paid by Sublessor.
11. Compliance with Prime Lease and Land Lease. The obligations of
Sublessee and Sublessor hereunder are contingent upon Liberty's written consent
hereto and the consent of the University. If Liberty and/or the University have
not consented to this Sublease on or before June 30, 1999, this Sublease shall
terminate and Sublessor and Sublessee shall be released from all obligations
hereunder.
12. Access to Subleased Premises. Sublessor has the right of access to
certain portions of the Subleased Premises as indicated on the floor plan
attached hereto as Exhibit C. In order to maintain Sublessee's security and
privacy, Sublessor shall, at its expense; expand its current key-card security
system to include an electronic lock and secured card key swipe system at the
location marked as Area " 3.2" on Exhibit C.
13. Default. If Sublessee shall fail to pay Rent within ten (10) days
after Sublessor has delivered written notice to Sublessee that the same is due
and payable, or if Sublessee shall fail to perform any other term, covenant or
condition of this Sublease and such failure shall continue for a period of ten
(10) days after Sublessor delivers written notice of such failure to Sublessee,
then, in any such event Sublessor shall have the right to pursue the remedies
against Sublessee which Liberty has against Sublessor for a breach of the Prime
Lease. If Sublessor shall be in default in the performance of any of its
obligations under this Sublease or under the Prime Lease, including, but not
limited to, its obligations to repair and maintain the Subleased Premises and
its obligation to pay rent, Sublessee may (but shall not be required to) (i)
cure such default on behalf of Sublessor, and the amount of the reasonable cost
to Sublessee of curing any such default shall be paid by Sublessor to Sublessee
on demand, or deducted by Sublessee from its rent obligations under this
Sublease, together with interest thereon at the rate of 12% per annum or (ii)
terminate this Sublease.
14. Assignment and Subletting. Sublessee shall not assign, mortgage,
hypothecate or otherwise transfer all or any part of its interest in this
Sublease, nor sublet the Subleased Premises or any part thereof without first
procuring the written consent of Sublessor, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the provisions of this Section
14 to the contrary, Sublessee may assign this Lease or sublet all or any part of
the Subleased Premises to an affiliate, subsidiary or company under the common
control of
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Sublessee without Sublessor's consent, provided that the use of the Subleased
Premises does not materially change.
15. Sublessee's Insurance. During the Term, Sublessee shall carry and
maintain with responsible insurers licensed to transact insurance business in
the State of Iowa, for the benefit of Sublessee, the following insurance:
(a) Public Liability Insurance. Sublessee shall, at Sublessee's
sole expense, keep in full force and effect a policy of general comprehensive
public liability insurance with minimum limits of $2,000,000 on account of
bodily injuries to or death of one or more persons as the result of any one
accident or disaster and $500,000 on account of damage to property.
(b) Personal Property Insurance. Sublessee shall maintain
insurance on its furniture, furnishings, trade fixtures, inventory, equipment
and other items of personal property located on the Subleased Premises in the
amount of the full replacement value thereof.
16. Sublessor's Insurance. During the Term, Sublessor shall carry and
maintain fire, extended coverage and all risks insurance on the improvements
located on the Subleased Premises and the Prime Lease Premises in the amount
required under the Prime Lease and any other type or types of insurance required
of Sublessor under the Prime Lease.
17. Damage to Subleased Premises. If the Subleased Premises is
destroyed by fire or other casualty; either in whole or in part, Sublessee may
terminate this Sublease upon ten (10) days written notice to Sublessor. If
Sublessee does not elect to terminate this Sublease, then Sublessor shall repair
such damage within fifteen (15) days of its occurrence (unless such repairs are
prevented by causes beyond Sublessor's control), and Sublessee's rent shall be
abated proportionately.
18. Waiver of Subrogation. Sublessor and Sublessee agree that in the
event the Subleased Premises, or any part thereof or the fixtures or equipment
therein is damaged or destroyed by fire or casualty and the Subleased Premises,
or part thereof or fixtures or equipment therein, or injury to a person is
covered by the insurance, or would be covered by the insurance required under
this Sublease, Sublessor or Sublessee, or the sublessees, assignees or
transferees of Sublessor or Sublessee regardless of cause or origin (including
negligence), then, in such event, the rights, if any, of any party against the
other, or against the employees, agents or licensees of any party, with respect
to such damage or destruction and with respect to any loss resulting therefrom
(including the interruption of the business of any of the parties) are hereby
waived to the extent of said insurance. All policies of insurance required under
this Sublease shall contain a waiver of subrogation substantially equivalent to
the terms of this Section.
19. Eminent Domain. If all or part of the Subleased Premises are taken
under the power of eminent domain by any public authority, or deeded to such
public authority in lieu thereof, and such taking, in Sublessee's discretion,
interferes with Sublessee's use of the Subleased Premises, this Lease shall
terminate and expire as of the date possession is taken by the public authority
and the payment of Rents shall be prorated as of the termination date. Sublessee
shall have the right to receive compensation or damages to which it is entitled
at law.
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20. Quiet Enjoyment. So long as Sublessee shall perform and observe
all of the terms, covenants and conditions contained herein, Sublessee shall
peaceably and quietly have and hold the Subleased Premises during the Term
without hindrance by Sublessor or any person lawfully claiming through
Sublessor, subject to the terms of this Sublease and the Prime Lease.
21. Surrender of Subleased Premises. Upon the termination of this
Sublease, Sublessee shall surrender possession of the Subleased Premises in good
and clean condition, ordinary wear and tear, casualty, and damage caused by fire
or the elements excepted. Sublessee may remove any equipment or fixtures which
Sublessee has installed in the Subleased Premises provided Sublessee repairs any
and all damage caused by such removal.
22. Sublessor's Representation and Warranties. Sublessor represents
and warrants to Sublessee that (i) the Prime Lease is in full force and effect
and in good standing with the Liberty; (ii) there is no default thereunder in
existence; (iii) Sublessor has fully paid all rent due thereunder and met all of
its obligations owing to Liberty thereunder; (iv) Sublessor will maintain the
Prime Lease in such condition during the Term; and (v) subject to Liberty's
consent, has authority under the Prime Lease to enter into this Sublease.
23. Successors and Assigns. This Sublease shall inure to the benefit
of and be binding upon the parties hereto and their respective permitted
successors and assigns.
24. Applicable Law. This Sublease shall be construed in accordance
with the laws of the State of Iowa.
25. Brokers. Each party shall defend and indemnify the other party
from any commissions or finders fees as a result of this Sublease which may be
due to any person claiming through the indemnifying party.
26. Notices. Any notice required to be given under this Sublease shall
be hand delivered or sent by U.S. certified mail, return receipt requested,
postage prepaid, and shall be deemed delivered on actual receipt or refusal of
such notice with all such notices sent to the address specified on page 1
hereof, unless otherwise specified in writing by either party.
27. Sublessor Default. In the event that Sublessor is in default under
the terms of the Prime Lease, Liberty agrees that it shall not exercise its
remedies thereunder or terminate the Prime Lease until Liberty has given
Sublessor and Sublessee notice of such default as set forth in the Prime Lease.
If Sublessee performs Sublessor's obligations under the Prime Lease, Liberty
agrees to accept performance by Sublessee. Liberty shall not terminate the Prime
Lease so long as Sublessee and/or Sublessor performs the obligations of
Sublessor under the Prime Lease. All amounts expended by Sublessee under this
paragraph to cure a default of Sublessor under the Prime Lease shall be
reimbursed by Sublessor within ten (10) days after written notice from Sublessee
to Sublessor, and any amount not paid within such ten (10) day period may be
deducted by Sublessee from the amounts due to Sublessor under this Sublease.
26. Telecopy Counterpart. This Sublease may be executed and
delivered by telecopy and a telecopy counterpart of this Sublease executed by
any party shall constitute, for all
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purposes, an original document; any party executing this Sublease by telecopy
agrees promptly to deliver an executed counterpart of this Sublease but the
failure of such party to deliver or of any other party to account for or
produce such counterpart shall not affect the binding and enforceable nature of
the telecopy counterpart and the telecopy counterpart shall continue to be an
original, binding agreement.
[signature pages to follow]
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IN WITNESS WHEREOF, Sublessor and Sublessee have caused this Sublease
to be executed by their duly authorized representatives as of the day and year
first written above.
Signed and Acknowledged in the Presence of: SUBLESSOR:
NEURAL APPLICATIONS CORPORATION
/s/ [illegible] By: /s/ Xxxxxx X. Xxxxxxx
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(Signature Witness #1) Xxxxxx X. Xxxxxxx, President
/s/ [illegible]
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(Print Name Witness #1)
/s/ [illegible]
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(Signature Witness #2)
/s/ Xxxxxx X. Xxxxxxx
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(Print Name Witness #2)
Signed and Acknowledged in the Presence of: SUBLESSEE:
SYSTEMS ALTERNATIVES
INTERNATIONAL LLC
/s/ [illegible] By: /s/ Xxxx X. Xxxxxxxxx
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(Signature Witness #1) Xxxx X. Xxxxxxxxx, President
/s/ [illegible]
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(Print Name Witness #1)
/s/ [illegible]
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(Signature Witness #2)
/s/ Xxxxxx X. Xxxxxxx
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(Print Name Witness #2)
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STATE OF OHIO
SS:
COUNTY OF FRANKLIN
The foregoing instrument was acknowledged before me this ______ day of
May, 1999, by XXXXXX X. XXXXXXX, the PRESIDENT of Neural Applications
Corporation, a Delaware corporation, on behalf of the corporation.
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Notary Public
STATE OF OHIO
SS:
COUNTY OF FRANKLIN
The foregoing instrument was acknowledged before me this ______ day of
May, 1999, by XXXX X. XXXXXXXXX, the PRESIDENT of Systems Alternatives
International LLC, a Delaware limited liability company, on behalf of the
limited liability company.
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Notary Public
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CONSENT OF LANDLORD UNDER PRIME LEASE
Liberty Growth, L.C., an Iowa limited liability company, as owner and
"Landlord" under the Prime Lease, hereby consents to the Sublease attached
hereto between Neural Applications Corporation, a Delaware corporation, as
"Sublessor", and Systems Alternatives International LLC, a Delaware limited
liability company, as "Sublessee", of even date herewith. Except as specifically
set forth in the Sublease, the consent to the Sublease shall not be deemed
Liberty's consent to any future sublease of the Premises by Sublessor or
Sublessee or the assignment of the Prime Lease or the Sublease to any other
person and in no event shall Sublessee or Sublessor sublease the Subleased
Premises or assign the Prime Lease or the Sublease without seeking Liberty's
consent as set forth in the Prime Lease.
In the event that the Prime Lease terminates for any reason, this
Sublease shall not terminate and shall thereafter be a direct lease for a term
of sixty (60) days upon the terms and conditions set forth in this Sublease and
the Prime Lease, as the context requires. At the expiration of such 60-day
period, this Sublease and all Sublessee's rights in and to the Subleased
Premises shall terminate between Liberty and Sublessee with respect to the
Subleased Premises.
IN WITNESS WHEREOF, Liberty has caused this Consent to be executed as
of the day of May 21,1999.
Signed and Acknowledged in the Presence of: LANDLORD:
LIBERTY GROWTH, L.C., an Iowa limited
liability company
By:
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(Signature Witness #1) Xxxxx X. Xxxxxxxx (Print Name)
Xxxxxxx X. Xxx Title: Member
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(Print Name Witness #1)
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(Signature Witness #2)
Xxxxx X. Xxxxxx
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(Print Name Witness #2)
STATE OF IOWA
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SS:
COUNTY OF XXXXXXX
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The foregoing instrument was acknowledged before me this 21st day of
May, 1999, by Xxxxx X. Xxxxxxxx, the Member of Liberty Growth L.C., an Iowa
limited liability company, on behalf of the company.
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Notary Public, Xxxxxx X. Xxxxxx
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CONSENT OE LANDLORD UNDER LAND LEASE
University of Iowa Reseaxch Park Corporation, an Iowa non-profit
corporation, as owner and "Lessor" under its Land Lease dated November 2, 1993
with Liberty Growth, L.C., ("Lessee" under said Land Lease and "Landlord" under
the Prime Lease) hereby consents to tile Sublease attached hereto between Neural
Applications Corporation, a Delaware corporation, as "Sublessor", and Systems
Alternatives International LLC, a Delaware limited liability company, as
"Sublessee". Except as specifically set forth in the Sublease, the consent to
the Sublease shall not be deemed University of Iowa Research Park Corporation's
consent to any future sublease of the Premises by Sublessor or Sublessee or the
assignment of the Land Lease, Prime Lease or the Sublease to any other person
and in no event shall Sublessee or Sublessor sublease the Subleased Premises or
assign the Land Lease, Prime Lease or the Sublease without seeking University of
Iowa Research Park Corporation's consent as set forth in the Land Lease.
IN WITNESS WHEREOF, the University of Iowa. Research Park Corporation
has caused this Consent to be executed as of the 21 day of May 1999.
Signed and Acknowledged in the Presence of: University of Iowa Research Park Corporation
By:
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(Signature Witness #1) W. Xxxxx Xxxxxxx (Print Name)
Xxxxx X. Xxxxxxx Title: Director, UI Oakdale Research Park
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(Print Name Witness #1)
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(Signature Witness #2)
Xxxxx X. Xxxxxxx
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(Print Name Witness #2)
STATE OF IOWA
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SS:
COUNTY OF XXXXXXX
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The foregoing instrument was acknowledged before me this 21st day of
May, 1999, by Xxxxx Xxxxxxx, the Director of University of Iowa Research Park
Corporation, an Iowa non-profit corporation, on behalf of the corporation.
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Notary Public
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