EXHIBIT 4.1
COLLATERAL AGREEMENT
COLLATERAL AMOUNT $1,837,500
INTEREST RATE 8% per annum
ISSUANCE DATE September 19, 2005
FOR THE COLLATERAL POSTED to Network Installation Corp., a Nevada
corporation (the "Company"), (OTC BB: NWKI) hereby acknowledges DUTCHESS PRIVATE
EQUITIES FUND, II, L.P. (the "Guarantor") has posted the Collateral Amount of
One Million Eight Hundred and Thirty-Seven Thousand Five Hundred Dollars
($1,837,500) U.S., upon the Closing of the acquisition between ▇▇▇▇▇▇
Communication Company, Inc. and the Company, specifically for the Nevada First
Bank and Bank of America Loans currently outstanding. (this "Agreement").
ARTICLE 1 Interest
The Company shall pay eight percent (8%) annual coupon on the Collateral
Amount of this Agreement at such times and in such amounts as outlined in this
section. The Company will make payments, in advance, on the interest ("Interest
Payment"), with the minimum Interest Payments for each month the Collateral
Amount remains posted, pro-rata for partial posted periods, and herein
incorporated by reference in the amount of twelve thousand one hundred and
twenty dollars ($12,120.00) per month The first Interest Payment is due on the
19th day of each month (a "Closing:").
ARTICLE 2 Method of Payment
Interest Payments made by the Company in satisfaction of the Interest
outlined in Section 1 (each a "Payment," and collectively, the "Payments") shall
be made in the form of a Convertible Debenture (an "Interest Debenture"). The
Interest Debenture shall have the same rights and provisions as outlined in
Article 4 ("Default and Remedies") for the Convertible Debenture. First
Payment will be due on the 19th day of the month. ("Payment Date" or "Payment
Dates") and all subsequent Payments will be made at the on the 19th day of each
month until the Collateral Amount is paid returned in full to the Guarantor
ARTICLE 3 Reserved
ARTICLE 4 Defaults and Remedies
Section 4.1 Events of Default. An "Event of Default" or "Default" occurs if
(a) the Company does not make the Interest Payment on the Collateral Amount
of this Agreement within two (2) business days of the applicable Payment Date;
(b) the Company, pursuant to or within the meaning of any Bankruptcy Law (as
hereinafter defined): (i) commences a voluntary case; (ii) consents to the
entry of an order for relief against it in an involuntary case; (iii) consents
to the appointment of a Custodian (as hereinafter defined) of it or for all or
substantially all of its property; (iv) makes a general assignment for the
benefit of its creditors; or (v) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that: (A) is for relief against the
Company in an involuntary case; (B) appoints a Custodian of the Company or for
all or substantially all of its property; or (C) orders the liquidation of the
Company, and the order or decree remains unstayed and in effect for sixty (60)
calendar days; (c) the Company's $0.001 par value common stock (the "Common
Stock") is suspended or is no longer listed on any recognized exchange,
including an electronic over-the-counter bulletin board, for in excess of two
(2) consecutive trading days; or (d) any portion or the entire Collateral Amount
is garnished by the institution that is using it as security ("Collateral
Reduction Amount") (e) the Company fails to comply with any of the Articles of
this Agreement as outlined. As used in this Section 4.1, the term "Bankruptcy
Law" means Title 11 of the United States Code or any similar federal or state
law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
In the Event of Default, the Guarantor may elect to secure a portion of the
Company's assets not to exceed 200% of the Collateral Amount of the Agreement,
including, but not limited to: accounts receivable, cash, marketable securities,
equipment, building, land or inventory. The Guarantor may also elect to
garnishee Revenue from the Company in an amount that will repay the Guarantor on
the schedules outlined in this Agreement.
For each Event of Default, as outlined in this Agreement, the Guarantor can
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exercise its right to increase the Collateral Amount of the Debenture by ten
percent (10%) as an initial penalty. In addition, the Guarantor may elect to
increase the Collateral Amount by two and one-half percent (2.5%) per month paid
as a penalty for Liquidated Damages. The Liquated Damages will be compounded
daily. It is the intention and acknowledgement of both parties that the
Liquidated Damages not be deemed as interest.
In the event of a Default hereunder, the Guarantor shall have the right,
but not the obligation, to 1) switch the Collateral Reduction Amount to a
three-year ("Convertible Maturity Date"), ten percent (10%) interest bearing
convertible debenture at the terms described in Section 4.2 (the "Convertible
Debenture"). At such time of Default, the Convertible Debenture shall be
considered closed ("Convertible Closing Date"). If the Guarantor chooses to
convert the Collateral Reduction Amount to a Convertible Debenture, the Company
shall have twenty (20) business days after notice of the same (the "Notice of
Convertible Debenture") to file a registration statement covering an amount of
shares equal to three hundred percent (300%) of the Collateral Reduction Amount
("Filing Date"). Such registration statement shall be declared effective under
the Securities Act of 1933, as amended (the "Securities Act"), by the Securities
and Exchange Commission (the "Commission") within forty (40) business days of
the date the Company files such Registration Statement. In the event the
Company does not file such registration statement within twenty (20) business
days of the Guarantor's request, or such registration statement is not declared
by the Commission to be effective under the Securities Act within the time
period described above , the Residual Amount shall increase by five thousand
dollars ($5,000) per day. In the event the Company is given the option for
accelerated effectiveness of the registration statement, it agrees that it shall
cause such registration statement to be declared effective as soon as reasonably
practicable. In the event that the Company is given the option for accelerated
effectiveness of the registration statement, but chooses not to cause such
registration statement to be declared effective on such accelerated basis, the
Collateral Reduction Amount shall increase by five thousand dollars ($5,000) per
day commencing on the earliest date as of which such registration statement
would have been declared to be effective if subject to accelerated
effectiveness; or 2) the Guarantor may increase the Payment Amount described
under Article 1 to fulfill the repayment of the Residual Amount. The Company
shall provide full cooperation to the Guarantor in directing funds owed to the
Guarantorr. In the event the Company is not diligently fulfilling its
obligation to direct funds owed to the Guarantor, as reasonably determined by
the Guarantor, the Guarantor may, after giving the Company two (2) business
days' advance notice to cure the same, elect to increase the Collateral Amount
of the Agreement by 2.5% each day, compounded daily.
Section 4.2 Conversion Privilege
(a) The Guarantor shall have the right to convert the Convertible Debenture
into shares of Common Stock at any time following the Convertible Closing Date
and which is before the close of business on the Convertible Maturity Date. The
number of shares of Common Stock issuable upon the conversion of the
Convertible Debenture shall be determined pursuant to Section 4.3, but the
number of shares issuable shall be rounded up or down, as the case may be, to
the nearest whole share.
(b) The Convertible Debenture may be converted, whether in whole or in part,
at any time and from time to time.
(c) In the event all or any portion of the Convertible Debenture remains
outstanding on the Convertible Maturity Date (the "Debenture Residual Amount"),
the unconverted portion of such Convertible Debenture will automatically be
converted into shares of Common Stock on such date in the manner set forth in
Section 4.3.
Section 4.3 Conversion Procedure.
The Residual Amount may be converted, in whole or in part any time and from
time to time, following the Convertible Closing Date. Such conversion shall be
effectuated by surrendering to the Company, or its attorney, the Convertible
Debenture to be converted together with a facsimile or original of the signed
notice of conversion (the "Notice of Conversion"). The date on which the
Notice of Conversion is effective ("Conversion Date") shall be deemed to be the
date on which the Guarantor has delivered to the Company a facsimile or original
of the signed Notice of Conversion, as long as the original Convertible
Debenture(s) to be converted are received by the Company within five (5)
business days thereafter. At such time that the original Convertible Debenture
has been received by the Company, the Guarantor can elect to whether a
reissuance of the Convertible Debenture is warranted, or whether the Company can
retain the Convertible Debenture as to a continual conversion by the Guarantor.
Notwithstanding the above, any Notice of Conversion received by 4:00 P.M. EST
shall be deemed to have been received the following business day (receipt being
via a confirmation of the time such facsimile to the Company is received).
(a) Common Stock to be Issued. Upon the conversion of any Convertible
Debentures and upon receipt by the Company or its attorney of a facsimile or
original of the Guarantor's signed Notice of Conversion, the Company shall
instruct its transfer agent to issue stock certificates without restrictive
legends or stop transfer instructions, if at that time the aforementioned
registration statement described in Section 4.1 has been declared effective (or
with proper restrictive legends if the registration statement has not as yet
been declared effective), in such denominations to be specified at conversion
representing the number of shares of Common Stock issuable upon such conversion,
as applicable. In the event that the Debenture is aged one year and
deemed sellable under Rule 144, the Company shall, upon a Notice of Conversion,
instruct the transfer agent to issue free trading certificates without
restrictive legends, subject to other applicable securities laws. The Company
is responsible to provide all costs associated with the issuance of the shares,
including but not limited to the opinion letter, FedEx of the certificates and
any other costs that arise. The Company shall act as registrar and shall
maintain an appropriate ledger containing the necessary information with respect
to each Convertible Debenture. The Company warrants that no instructions, other
than these instructions, have been given or will be given to the transfer agent
and that the Common Stock shall otherwise be freely resold, except as may be set
forth herein or subject to applicable law.
(b) Conversion Rate. Guarantor is entitled to convert the Collateral
Reduction Amount , plus accrued interest, anytime following the Convertible
Maturity Date, at the lesser of (i) seventy-five percent (75%) of the lowest
closing bid price during the fifteen (15) trading immediately preceding a
Conversion (ii) 100% of the lowest bid price for the twenty (20) trading days
immediately preceding the Filing Date ("Fixed Conversion Price"). No
fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded up or down, as
the case may be, to the nearest whole share.
(c) Nothing contained in the Convertible Debenture shall be deemed to
establish or require the payment of interest to the Guarantor at a rate in
excess of the maximum rate permitted by governing law. In the event that the
rate of interest required to be paid exceeds the maximum rate permitted by
governing law, the rate of interest required to be paid thereunder shall be
automatically reduced to the maximum rate permitted under the governing law and
such excess shall be returned with reasonable promptness by the Guarantor to the
Company.
(d) It shall be the Company's responsibility to take all necessary actions
and to bear all such costs to issue the Common Stock as provided herein,
including the responsibility and cost for delivery of an opinion letter to the
transfer agent, if so required. Guarantor shall be treated as a shareholder of
record on the date Common Stock is issued to the Guarantor. If the Guarantor
shall designate another person as the entity in the name of which the stock
certificates issuable upon conversion of the Convertible Debenture are to be
issued prior to the issuance of such certificates, the Guarantor shall provide
to the Company evidence that either no tax shall be due and payable as a result
of such transfer or that the applicable tax has been paid by the Guarantor or
such person. Upon surrender of any Convertible Debentures that are to be
converted in part, the Company shall issue to the Guarantor a new Convertible
Debenture equal to the unconverted amount, if so requested in writing by the
Guarantor.
(e) Within five (5) business days after receipt of the documentation
referred to above in Section 4.2, the Company shall deliver a certificate, for
the number of shares of Common Stock issuable upon the conversion. In the event
the Company does not make delivery of the Common Stock as instructed by
Guarantor within five (5) business days after the Conversion Date, then in such
event the Company shall pay to the Guarantor one percent (1%) in cash of the
dollar value of the Debenture Residual Amount remaining after said conversion,
compounded daily, per each day after the fifth (5th) business day following the
Conversion Date that the Common Stock is not delivered to the Purchaser.
The Company acknowledges that its failure to deliver the Common Stock
within five (5) business days after the Conversion Date will cause the Guarantor
to suffer damages in an amount that will be difficult to ascertain.
Accordingly, the parties agree that it is appropriate to include in this
Agreement a provision for liquidated damages The parties acknowledge and agree
that the liquidated damages provision set forth in this section represents the
parties' good faith effort to quantify such damages and, as such, agree that the
form and amount of such liquidated damages are reasonable and will not
constitute a penalty. The payment of liquidated damages shall not relieve the
Company from its obligations to deliver the Common Stock pursuant to the terms
of this Convertible Debenture.
(f) The Company shall at all times reserve (or make alternative written
arrangements for reservation or contribution of shares) and have available all
Common Stock necessary to meet conversion of the Convertible Debentures by the
Guarantor of the entire amount of Convertible Debentures then outstanding. If,
at any time the Guarantor submits a Notice of Conversion and the Company does
not have sufficient authorized but unissued shares of Common Stock (or
alternative shares of Common Stock as may be contributed by stockGuarantors of
the Company) available to effect, in full, a conversion of the Convertible
Debentures (a "Conversion Default," the date of such default being referred to
herein as the "Conversion Default Date"), the Company shall issue to the
Guarantor all of the shares of Common Stock which are available, and the Notice
of Conversion as to any Convertible Debentures requested to be converted but not
converted (the "Unconverted Convertible Debentures"), may be deemed null
and void upon written notice sent by the Guarantor to the Company. The Company
shall provide notice of such Conversion Default ("Notice of Conversion Default")
to the Guarantor, by facsimile within three (3) business days of such default
(with the original delivered by overnight mail or two day courier), and the
Guarantor shall give notice to the Company by facsimile within five (5) business
days of receipt of the original Notice of Conversion Default (with the original
delivered by overnight mail or two day courier) of its election to either
nullify or confirm the Notice of Conversion.
The Company agrees to pay the Guarantor payments for a Conversion Default
("Conversion Default Payments") in the amount of (N/365) multiplied by .24
multiplied by the initial issuance price of the outstanding or tendered but not
converted Convertible Debentures held by the Guarantor where N = the number of
days from the Conversion Default Date to the date (the "Authorization Date")
that the Company authorizes a sufficient number of shares of Common Stock to
effect conversion of all remaining Convertible Debentures. The Company shall
send notice ("Authorization Notice") to the Guarantor that additional shares of
Common Stock have been authorized, the Authorization Date, and the amount of
Guarantor's accrued Conversion Default Payments. The accrued Conversion Default
shall be paid in cash or shall be convertible into Common Stock at the
conversion rate set forth in the first sentence of this paragraph, upon written
notice sent by the Guarantor to the Company, which Conversion Default shall be
payable as follows: (i) in the event the Guarantor elects to take such payment
in cash, cash payments shall be made to the Guarantor by the fifth (5th) day of
the following calendar month, or (ii) in the event Guarantor elects to take such
payment in stock, the Guarantor may convert such payment amount into Common
Stock at the conversion rate set forth in the first sentence of this paragraph
at any time after the fifth (5th) day of the calendar month following the month
in which the Authorization Notice was received, until the expiration of the
mandatory three (3) year conversion period.
The Company acknowledges that its failure to maintain a sufficient number
of authorized but unissued shares of Common Stock to effect in full a conversion
of the Convertible Debentures will cause the Guarantor to suffer damages in an
amount that will be difficult to ascertain. Accordingly, the parties agree that
it is appropriate to include in this Agreement a provision for liquidated
damages. The parties acknowledge and agree that the liquidated damages
provision set forth in this section represents the parties' good faith effort to
quantify such damages and, as such, agree that the form and amount of such
liquidated damages are reasonable and will not constitute a penalty. The
payment of liquidated damages shall not relieve the Company from its obligations
to deliver the Common Stock pursuant to the terms of this Convertible Debenture.
(g) If, by the third (3rd) business day after the Conversion Date of any
portion of the Convertible Debentures to be converted (the "Delivery Date"), the
transfer agent fails for any reason to deliver the Common Stock upon
conversion by the Guarantor and after such Delivery Date, the Guarantor
purchases, in an open market transaction or otherwise, shares of Common Stock
(the "Covering Shares") solely in order to make delivery in satisfaction of a
sale of Common Stock by the Guarantor (the "Sold Shares"), which delivery such
Guarantor anticipated to make using the Common Stock issuable upon conversion (a
"Buy-In"), the Company shall pay to the Guarantor, in addition to any other
amounts due to Guarantor pursuant to this Convertible Debenture, and not in lieu
thereof, the Buy-In Adjustment Amount (as defined below). The "Buy In
Adjustment Amount" is the amount equal to the excess, if any, of (x) the
Guarantor's total purchase price (including brokerage commissions, if any) for
the Covering Shares over (y) the net proceeds (after brokerage commissions, if
any) received by the Guarantor from the sale of the Sold Shares. The Company
shall pay the Buy-In Adjustment Amount to the Guarantor in immediately available
funds within five (5) business days of written demand by the Guarantor. By way
of illustration and not in limitation of the foregoing, if the Guarantor
purchases shares of Common Stock having a total purchase price (including
brokerage commissions) of $11,000 to cover a Buy-In with respect to shares of
Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment Amount
which the Company will be required to pay to the Guarantor will be $1,000.
(h) The Company shall defend, protect, indemnify and hold harmless the
Guarantor and all of its shareholders, officers, directors, employees, counsel,
and direct or indirect investors and any of the foregoing person's agents or
other representatives (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement) (collectively,
the "Section 4.3(h) Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Section 4.3(h) Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys' fees and disbursements
(the "Section 4.3(h) Indemnified Liabilities"), incurred by any Section 4.3(h)
Indemnitee as a result of, or arising out of, or relating to (i) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (ii) any breach of any covenant,
agreement, or obligation of the Company contained in the Transaction Documents
or any other certificate, instrument, or document contemplated hereby or
thereby, (iii) any cause of action, suit, or claim brought or made against such
Section 4.3(h) Indemnitee by a third party and arising out of or resulting from
the execution, delivery, performance, or enforcement of the Transaction
Documents or any other certificate, instrument, or document contemplated hereby
or thereby, (iv) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Common Stock
underlying the Convertible Debenture ("Securities"), or (v) the status of the
Guarantor or Guarantor of the Securities as an investor in the Company, except
insofar as any such misrepresentation, breach or any untrue statement, alleged
untrue statement, omission, or alleged omission is made in reliance upon and in
conformity with written information furnished to the Company by the Guarantor or
the Investor which is specifically intended by the Guarantor or the Investor to
be relied upon by the Company, including for use in the preparation of any such
registration statement, preliminary prospectus, or prospectus, or is based on
illegal trading of the Common Stock by the Guarantor or the Investor. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities that is permissible under
applicable law. The indemnity provisions contained herein shall be in addition
to any cause of action or similar rights the Guarantor may have, and any
liabilities the Guarantor may be subject to.
Article 5 Additional Financing and Registration Statements
The Company will not enter into any additional financing agreements, debt
or equity, without prior expressed written consent from the Guarantor, which
shall not be unreasonably withheld. Failure to do so will result in an Event of
Default and the Guarantor may elect to take the action outlined in Article 4.
The Company agrees that it shall not file any registration statement which
includes any of its Common Stock, including those on Form S-8, until such time
as the Agreement is paid off in full ("Lock-Up Period") or without the prior
written consent of the Guarantor. The Guarantor shall also reserve the right to
switch to the terms of the new financing ("Most Favored Nations").
The Company agrees that any and all its officers, insiders, affiliates or
other related parties shall refrain from selling any Stock, during the Lock-Up
Period.
Article 6 Notice.
Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided a confirmation
of transmission is mechanically or electronically generated and kept on file by
the sending party); or (iii) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CEO
Network Installations Corp
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to the Guarantor:
Dutchess Private Equities Fund, II, LP
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Each party shall provide five (5) business days prior notice to the other
party of any change in address, phone number or facsimile number.
Article 7 Time
Where this Agreement authorizes or requires the payment of money or the
performance of a condition or obligation on a Saturday or Sunday or a holiday in
which the United States Stock Markets ("US Markets") are closed ("Holiday"), or
authorizes or requires the payment of money or the performance of a condition or
obligation within, before or after a period of time computed from a certain
date, and such period of time ends on a Saturday or a Sunday or a Holiday, such
payment may be made or condition or obligation performed on the next succeeding
business day, and if the period ends at a specified hour, such payment may be
made or condition performed, at or before the same hour of such next succeeding
business day, with the same force and effect as if made or performed in
accordance with the terms of this Agreement. A "business day" shall mean a day
on which the US Markets are open for a full day or half day of trading.
Article 8 No Assignment
This Agreement shall not be assigned.
Article 9 Rules of Construction.
In this Agreement, unless the context otherwise requires, words in the
singular number include the plural, and in the plural include the singular, and
words of the masculine gender include the feminine and the neuter, and when the
tense so indicates, words of the neuter gender may refer to any gender. The
numbers and titles of sections contained in the Agreement are inserted for
convenience of reference only, and they neither form a part of this Agreement
nor are they to be used in the construction or interpretation hereof. Wherever,
in this Agreement, a determination of the Company is required or allowed, such
determination shall be made by a majority of the Board of Directors of the
Company and, if it is made in good faith, it shall be conclusive and binding
upon the Company and the Guarantor.
Article 10 Governing Law
The validity, terms, performance and enforcement of this Agreement shall be
governed and construed by the provisions hereof and in accordance with the laws
of the Commonwealth of Massachusetts applicable to agreements that are
negotiated, executed, delivered and performed solely in the Commonwealth of
Massachusetts.
Article 11 Litigation
The parties to this agreement will submit all disputes arising under this
agreement to arbitration in Boston, Massachusetts before a single arbitrator of
the American Arbitration Association ("AAA"). The arbitrator shall be selected
by application of the rules of the AAA, or by mutual agreement of the parties,
except that such arbitrator shall be an attorney admitted to practice law in the
Commonwealth of Massachusetts. No party to this agreement will challenge the
jurisdiction or venue provisions as provided in this section.
Article 12 Indemnification
In consideration of the Guarantor's execution and delivery of this
Agreement and the acquisition and funding by the Guarantor of the Agreement
hereunder and in addition to all of the Company's other obligations under the
documents contemplated hereby, the Company shall defend, protect, indemnify and
hold harmless the Guarantor and all of its shareholders, officers, directors,
employees, counsel, and direct or indirect investors and any of the foregoing
person's agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnities") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"Indemnified Liabilities" ), incurred by any Indemnitee as a result of, or
arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by the Company in the Agreement, or any other
certificate, instrument or document contemplated hereby or thereby (ii) any
breach of any covenant, agreement or obligation of the Company contained in the
Agreement or any other certificate, instrument or document contemplated hereby
or thereby, except insofar as any such misrepresentation, breach or any untrue
statement, alleged untrue statement, omission or alleged omission is made in
reliance upon and in conformity with written information furnished to the
Company by, or on behalf of, the Guarantor or is based on illegal trading of the
Common Stock by the Guarantor. To the extent that the foregoing undertaking by
the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under applicable law. The indemnity provisions
contained herein shall be in addition to any cause of action or similar rights
the Guarantor may have, and any liabilities the Guarantor may be subject to.
Article 13 Use of Proceeds
For security against ▇▇▇▇▇▇ Technologies current debt with Bank of America
and Nevada First Bank
Article 14 Rules of Construction.
In this Agreement, unless the context otherwise requires, words in the
singular number include the plural, and in the plural include the singular, and
words of the masculine gender include the feminine and the neuter, and when the
tense so indicates, words of the neuter gender may refer to any gender. The
numbers and titles of sections contained in the Agreement are inserted for
convenience of reference only, and they neither form a part of this Agreement
nor are they to be used in the construction or interpretation hereof. Wherever,
in this Agreement, a determination of the Company is required or allowed, such
determination shall he made by a majority of the Board of Directors of the
Company and if it in made in good faith, it shall be conclusive and binding upon
the Company and the Guarantor of this Agreement.
Article 15 Waiver
The Guarantor's delay or failure at any time or times hereafter to require
strict performance by Company of any undertakings, agreements or covenants shall
not waiver, affect, or diminish any right of the Guarantor under this Agreement
to demand strict compliance and performance herewith. Any waiver by the
Guarantor of any Event of Default shall not waive or affect any other Event of
Default, whether such Event of Default is prior or subsequent thereto and
whether of the same or a different type. None of the undertakings, agreements
and covenants of the Company contained in this Agreement, and no Event of
Default, shall be deemed to have been waived by the Guarantor, nor may this
Agreement be amended, changed or modified, unless such waiver, amendment, change
or modification is evidenced by an instrument in writing specifying such waiver,
amendment, change or modification and signed by the Guarantor.
Article 16 Waiver of Jury Trial
AS A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION.
***
Any misrepresentations shall be considered a breach of contract and an
Event of Default under this Agreement and the Guarantor may seek to take actions
as described under Article 4 of this Agreement.
IN WITNESS WHEREOF, the Company has duly executed this Agreement as of the
date first written above.
NETWORK INSTALLATION, INC.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer & Chairman
DUTCHESS PRIVATE EQUITIES FUND, II, L.P.
BY ITS GENERAL PARTNER DUTCHESS
CAPITAL MANAGEMENT, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: A Managing Member