EXHIBIT 10.1
INTERCREDITOR AGREEMENT
This
Intercreditor
Agreement ("Agreement") is entered into effective
September 22, 2005, between Nottingham Mayport, LLC
("NML"), Dutchess Private
Equities Fund LP and Dutchess Private Equities Fund II LP (collectively,
"Dutchess") and Bob (Robert) Unger
("Unger") (collectively, the "Creditors") and
Network Installation Corp., a Nevada corporation ("NIC") and Kelley
Communication Company, Inc., a Nevada corporation ("KCCI") (collectively,
"Borrower").
RECITALS:
A. Creditors
wish to advance credit
(the "Loan") to the Borrower to be
evidenced by one or more promissory notes (the
"Note"). Additionally,
since
October 2003, NIC has secured financing
("Financing") with Dutchess through the
issuance of its convertible debentures
("Debentures") and may from time continue
to issue its Debentures to Dutchess ("Future
Financing"). Payment of the Note
and Debentures will be secured by a Security
Agreement granting to Creditors a
security interest in certain assets of Borrower (the
"Collateral") on a pari
passu and pro rata basis. The Note, Debentures and all other
documents and
instruments evidencing, securing or relating to the Loan, Financing
or Future
Financing are hereinafter sometimes collectively referred to as the "Loan
Documents."
B. The Creditors desire to set forth their mutual understanding,
acknowledgment and agreement with respect to their respective rights and
priorities under the Loan Documents.
NOW,
THEREFORE, in
consideration of the recitals and agreements herein and
other valuable consideration, the receipt and sufficiency of
which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENTS:
1. Priority
of Lenders. Neither of the Creditors shall
have priority
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over any of the other Creditors with respect to rights
against the Borrower
under the Loan Documents, provided that the
Creditors intend that their relative
burdens and benefits from enforcement of the Loan Documents shall be
proportionate to the amounts owed to each Lender
under the Loan Documents. The
Creditors will share a security interest in
the Collateral on a pari passu basis
in proportion to the amounts owed to each Lender under the Loan
Documents.
2. Default
Under the Loan Documents.
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2.1
Notice of Default. Upon the occurrence of any default or
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event of default ("Default") under any of the Loan Documents,
the party with
knowledge of such Default shall provide written
notice to any other party who
lacks such knowledge within five (5) days of learning of such
Default. The
parties agree that a Default under any of
the Loan Documents shall be a Default
under the other Loan Documents, and vice versa.
2.2 Enforcement
Action and Sharing of
Recoveries. Prior to
exercising
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any rights or remedies under the Loan Documents, the parties
shall reach an
agreement on the enforcement action to be
taken, if any, and the timing of such
action, taking into account any rights of
senior lenders and senior lienholders.
Unless agreed to otherwise in writing,
enforcement action taken under the Loan
Documents shall be taken in such a way that the rights and remedies
of he
Creditors are in proportion to the amount owed to each Creditor
by Borrower
under the Loan Documents. If the Creditors are unable to reach
an agreement
regarding enforcement of the respective loan
documents within ten business days
of written notice by either to the other,
then, notwithstanding the procedures
for settling the disagreement under Section 2.5, the Creditors shall be
obligated (and shall be deemed to have agreed to
and authorized) to pursue any
and all remedies at law and in equity, as may be selected by
Agent of the
Creditors (as defined in Section 2.3),
including without limitation suit on the
Notes, Debentures or foreclosure of the Collateral, to the maximum extent
allowed by law, without any requirement to
make an exclusive election but with
authority vested in Agent to make any such election or to elect to
take no
action in light of rights of senior lenders
or senior lienholders.
All monies
collected in connection with enforcement action
(excluding payment voluntarily
made in the absence of a default) from
any source whatsoever, shall be first be
applied to the costs and expenses, including attorneys' fees, incurred in
pursuing the enforcement action and obtaining the recovery. The remaining
monies shall be distributed to the parties on a
pari passu basis in proportion
to the amounts owed to each Lender under
the Loan Documents (including principal
and interest under the Notes and Debentures).
2.3
Control of
Enforcement
Action; No Liability or Warranties.
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Dutchess is authorized to act as agent of the
Creditors ("Agent") for purposes
of enforcement of rights of the Creditors under the Loan Documents.
Once
agreement has been reached among Creditors
under Section 2.2, the Agent shall be
authorized to take all actions and execute all documents as he may deem
appropriate to effectuate such agreement.
If the Creditors are
unable to reach
agreement and are therefore deemed to have
reached agreement under Section 2.2,
the Agent may determine in its sole discretion whether and
when to commence
enforcement action and shall act as agent for the Creditors,
exercising sole
control over all matters relating to the enforcement action
on behalf of the
parties, and in that regard the Agent shall be permitted to take into
consideration any required consent of senior creditors or
senior lienholders.
The Agent will provide information regarding the
status of enforcement action
taken and the costs associated therewith on a
regular basis, but no less than
monthly.
2.4 Arbitration.
If there is any dispute among the parties
regarding this
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Agreement, the parties may seek resolution
of such dispute by arbitration, which
shall be the
exclusive means of resolving such dispute. If the parties are
unable to reach agreement on the enforcement
action to be taken and the timing
thereof, the Agent shall be authorized to act as
provided in Section 2.2, but
the parties may simultaneously seek resolution of any such dispute by
arbitration, which shall be the exclusive means of resolving such
dispute.
Arbitration may be initiated by either party by making a written
demand for
arbitration on the other party. The demand shall contain a
statement setting
forth the nature of the dispute, the resolution sought. Within five (5)
business days of that demand, the parties shall
select one arbitrator.
If for
any reason, the parties are unable to agree
upon the selection of the arbitrator
within seven (7) calendar days after a
notice of arbitration is given, then the
arbitrator shall be selected in the manner provided
for by the Arizona Uniform
Arbitration Act, A.R.S. 12-1501, et
