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 Xxx (Xxxxxx) Xxxxx ("Xxxxx") (collectively, the "Creditors") and
Network Installation Corp., a Nevada corporation ("NIC") and Xxxxxx
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
---------------------
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.
------------------------------------
2.1 Notice of Default. Upon the occurrence of any default or
-------------------
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
----------------------------------------------
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.
-------------------------------------------------------------
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
-----------
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 seq. The arbitrator and the parties shall
schedule a hearing promptly and the arbitrators shall render a decision no more
than 21 days after such arbitrator's selection. Any decision of the arbitrator
shall be final, binding and conclusive upon the parties. Costs of the
arbitration shall be shared by the parties. All other aspects of this binding
arbitration shall be governed by the Arizona Uniform Arbitration Act and, to the
extent consistent with such Act, the rules of the American Arbitration
Association unless the parties agree otherwise at the time. These arbitration
procedures require that unless the Creditors agree otherwise, the parties use
them exclusively rather than litigation as a means of resolving their disputes
hereunder or to determine the consequences of a default and the implementation
of the remedies therefore. Notwithstanding any other provision of this section
to the contrary, if a party wishes to seek interim relief, whether affirmative
or prohibitive, in the form of a temporary restraining order or preliminary
injunction or other interim equitable relief concerning a dispute including
without limitation declaratory relief, provisional remedies, special action
relief, stay proceedings in connection with special action relief and any
similar relief of an interim nature, either before beginning or at any point in
the arbitration procedures, such party may initiate the appropriate litigation
to obtain such relief ("Equitable Litigation"). Nothing herein shall be
construed to suspend or terminate the obligation of the Creditors to promptly to
proceed with the arbitration procedures concerning the dispute that is the
subject of such Equitable litigation while such Equitable Litigation and any
appeal therefrom is pending. Notwithstanding any contrary provisions of the
Arizona Rules of Civil Procedure or the Federal Rules of Civil Procedure, the
parties agree there shall be no consolidation of any hearing for preliminary
injunction in the Equitable Litigation with a trial of an action for permanent
injunction on the same matter. Regardless of whether such interim relief is
granted or denied or such Equitable Litigation is pending or any appeal is taken
from the grant or denial of such relief, at all times the parties shall
diligently proceed to complete the arbitration procedures. Any interim or
appellate relief granted in such Equitable Litigation shall remain in effect
until, and only until, the arbitration procedures concerning the dispute that is
the subject of such Equitable Litigation result in a settlement agreement or the
issuance of an arbitration decision which shall be binding and final and shall
supercede and nullify any decision in the Equitable Litigation.
3. Borrower's Other Obligations. This Agreement shall not be deemed or
----------------------------
construed to determine any rights or priorities of the Creditors with respect to
any obligations of Borrower to either of them except obligations under the Loan
Documents.
4. Review of Loan Documents. The Creditors acknowledge that each has
--------------------------
received and reviewed (and had an opportunity to have its counsel to review)
copies of the Loan Documents.
5. Notice of Assignment. In the event any party assigns any or all of
---------------------
his rights under the Loan Documents to any other person or entity, such
assignment shall be conditioned upon such entity or person assuming the
obligations of the assigning party hereunder. Within ten (10) business days
immediately following any such assignment, the assigning party shall deliver to
the other party(s) copies of the documents evidencing such assignment and
assumption.
6. Benefit of This Agreement. The terms, covenants and agreements
----------------------------
contained herein are solely for the benefit of the Creditors and their
respective successors and assigns, and are not for the benefit of, and do not
confer any rights or remedies on, Borrower or any other third party, and shall
not, as against Borrower, in any way affect or limit the rights or remedies of
any of the Creditors under the Loan Documents with respect to Borrower, or any
collateral for any Loan.
7. Notices. All notices, demands, requests or other communications to
-------
be sent by one party to the other hereunder or required by law shall be in
writing and shall be deemed to have been validly given or served by (a) personal
delivery (including by any messenger or courier service) (b) by electronic
facsimile transmission or (c) by certified or registered U.S. mail, postage
prepaid, with return receipt requested, as follows:
Nottingham Mayport, LLC:Attn: Xxxxx X. Click, Jr., Manager
0000 Xxxx Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxx XxXxxx, Esq.
Xxxxx and Xxxx LLP
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxx: Xxxxxx Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Dutchess: Attn: Xxxxxxx Xxxxxxxx
Dutchess Capital Management LLC
00 Xxxxxxxxxxxx Xxx., Xxxxx 0
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Borrower: Attn: Xxxxxxx Xxxxxx
Xxxxxx Communication Company, Inc.
0000 Xxxxx Xxxxxxx Xx., Xxxxx X
Xxx Xxxxx. XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxxxxx
Network Installation Corp.
00000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Notice given by personal delivery shall be deemed given and received upon
delivery to the appropriate address, if the delivery is made during normal
business hours on a Business Day (and on the first Business Day following the
day of delivery if the delivery is made other than during normal business hours
on a Business Day). Notices shall be deemed given and received (i) if sent by
electronic facsimile transfer, upon confirmed transmission, (ii) if sent by U.S.
mail, upon two (2) business days after deposit in the U.S. mail, and (iii) if by
personal delivery, upon receipt. Each party may from time to time designate, by
a notice given as provided herein, a different notice address. The inability to
deliver because of a changed address of which no notice was given, or rejection
or other refusal to accept any notice shall be deemed to be the receipt of the
notice as of the date of such inability to deliver or rejection or refusal to
accept. Any notice to be given by any party hereto may be given by the attorney
for such party.
8. Reliance. The Creditors each hereby acknowledge that it is relying
--------
on the agreements made herein in connection with its determination to make the
Loan to Borrower.
9. Binding Agreement. This Agreement shall be binding upon and inure
------------------
to the benefit of the parties hereto and their respective successors and
assigns.
10. Counterparts. This Agreement may be executed concurrently in one
------------
or more counterparts by the parties, which counterparts together when executed
by all of the parties shall for all purposes be deemed an original, but all of
which together shall constitute one and the same instrument. Signatures
produced by electronic facsimile transmission shall be accepted as originals.
11. Entire Agreement. This Agreement constitutes and incorporates the
-----------------
entire agreement between the Creditors concerning the subject matter of this
Agreement, and supersedes and cancels any prior understandings and agreements
between the Creditors concerning the subject matter hereof.
12. Use of Terms. As used herein, words in any gender shall be deemed to
--------------
include the other genders, and the singular shall be deemed to include the
plural, and vice versa.
13. Severability. If any provision in this Agreement shall be held
------------
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions of this Agreement shall not be
impaired thereby, nor shall the validity, legality or enforceability of any such
defective provision be in any way affected or impaired in any other
jurisdiction.
14. Modification, Waiver, Consent. Any modification or waiver of any
-------------------------------
provision of this Agreement shall not be effective unless the same is in writing
and signed by the party against whom enforcement is sought, and then such
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose given.
15. Time of the Essence. Time is of the essence in this Agreement.
----------------------
16. Governing Law. The provisions of this Agreement shall be governed
--------------
by and construed in accordance with the law of the State of Nevada applicable to
contracts made in such State. Any action or proceeding seeking to enforce any
provision of, or based on any right or obligation arising out of, or to resolve
any legal or factual disputes concerning, or other wise relating to this
Agreement will be exclusively resolved by arbitration between the parties before
a single arbitrator in Phoenix, Arizona under the American Arbitration
Association rules. If the parties are unable to agree on an arbitrator, one
will be appointed by the AAA. Any decision or award of the arbitrator will be
final and binding on the parties, and judgment may be entered in any court
having jurisdiction over the party against which the decision and award run.
17. Counsel. This Agreement has been drafted by Xxxxx and Xxxx LLP on
-------
behalf of NML. The Creditors have been advised to seek their own counsel in
connection with this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Intercreditor
Agreement as of the date first above written.
NOTTINGHAM MAYPORT, LLC ("NML"), an Arizona Limited Liability Company
/s/ Xxxxx X. Click, Jr.
---------------------------
By: Xxxxx X. Click, Jr., Its Manager
XXXXXX XXXXX
/s/ Xxxxxx Xxxxx
------------------
DUTCHESS CAPITAL MANAGEMENT LLC, GENERAL PARTNER TO; DUTCHESS PRIVATE EQUITIES
FUND LP AND DUTCHESS PRIVATE EQUITIES FUND II LP ("Dutchess")
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------
By: Xxxxxxx X. Xxxxxxxx, Managing Member
BORROWER
XXXXXX COMMUNICATION COMPANY, INC.
/s/ Xxxxx Xxxxxxx Xxxxxx
---------------------------
By Xxxxx Xxxxxxx Xxxxxx, President
----------------------------------
NETWORK INSTALLATION CORP.
/s/ Xxxxxxx X. Xxxxxxx
-------------------------
By Xxxxxxx X. Xxxxxxx, President
--------------------
