EXHIBIT10.38**LOAN RESTRUCTURE AGREEMENT**          This LOAN RESTRUCTURE AGREEMENT (this “Agreement”) is made and entered into this 1st day ofAugust, 2006 by and between Network Installation Corp., a Nevada corporation (“NWKI”), and itssubsidiary, Kelley Communication Company, Inc., a Nevada corporation (“Kelley”) (together the“Company”), and Dutchess Private Equities Fund LP, Dutchess Private Equities Fund LP II, andDutchess Advisors Ltd. (collectively “Dutchess”).**RECITALS**          A. The Company and Dutchess have entered into numerous loan, collateral, debenture, warrant,and other agreements, a partial list of which is attached hereto as Exhibit A. The Company andDutchess intend that this Agreement govern all agreements listed in Exhibit A except in the eventof default under this Agreement or the New Note as defined below. The agreements listed in ExhibitA are hereinafter collectively referred to as the “Loan Documents.” Nothing in this Agreement willimpact the existing Intercreditor and Security Agreements as set forth herein.          B. Pursuant to the Loan Documents, from and after 2003, the Company has borrowed from Dutchessapproximately $6,254,960 with an aggregate face amount of $7,300,000 and, as of June 30, 2006,accrued interest of approximately $500,000. The Loan Documents provide for certain prepaymentpremiums and other penalties, some of which have heretofore accrued.          C. Pursuant to a Security Agreement (the “Security Agreement”) dated September 22, 2005 (whichis listed among the Loan Documents), the Company granted to Dutchess a security interest in certaincollateral described therein in order to secure the debts of the Company to Dutchess. Nothingherein shall be read to remove or limit Dutchess’s security interest and collateral under theSecurity Agreement and Intercreditor Agreement.          D. Certain of the Loan Documents provide that Dutchess is entitled to convert some or all ofthe debt owed to it by the Company into common stock of NWKI. In addition, pursuant to the LoanDocuments, Dutchess currently holds warrants to acquire 5,729,000, shares of common stock of NWKI(“Loan Warrants”), which are listed in Exhibit A.          E. Pursuant to that certain Common Stock For Warrant Exchange Agreement dated March 10, 2006Dutchess currently holds warrants to acquire 2,879,645 shares of common stock of NWKI at $.01 pershare, issued to Dutchess in exchange for common stock of NWKI (the “Exchange Warrants”).          F. Dutchess currently holds approximately 1,722,224 shares of common stock of NWKI (the“Dutchess Stock”).          G. As of June 30, 2006, the Company is also indebted to Bank of America and Bank of Nevada(formerly Nevada First Bank) in the amounts shown on Exhibits C and D (the
 

 
“Bank Debts”). The Bank Debts are secured by deposits of Dutchess (the “Deposits”) with theholders of the Bank Debt, which deposits are proportionately released to Dutchess as the Bank Debtsare paid by the Company.          H. As of June 30, 2006, the Company is also indebted to Robert “Bob” Unger (“Unger”) andNottingham Mayport, LLC (“NML”). The Company, NML, Unger and Dutchess have entered into anIntercreditor Agreement dated as of September 22, 2005 whereby the Company NML, Unger and Dutchesshave agreed that NML, Unger and Dutchess shall share on a pari passu basis all Collateral as thatterm is defined in the Intercreditor Agreement.          I. The Company and Dutchess wish to restructure the Company’s obligations to Dutchess underthe Loan Documents upon the terms and conditions contained herein. Except in the event of defaultunder Section 12 below or with respect to the Exchange Warrants, Dutchess forgives its right to theLoan Warrants or of any requirement of the Company to issue additional stock of NWKI to Dutchess orany other entity.          J. The Company and Dutchess intend that the restructuring provided for in this Agreement shallbe effective as of June 30, 2006. Dutchess takes no position with respect to the Company’s tax andaccounting treatment of the restructuring under this Agreement.**COVENANTS**     1. New Promissory Note. At or before the execution of this Agreement, the Companyshall execute and deliver to Dutchess a signed promissory note (the “New Note”), in the formattached hereto as Exhibit B, in the face amount of $6,254,960, payable as provided therein withinterest at the rate of 7% per annum. The New Note shall not provide for any prepayment penalty orpremium. The New Note shall supercede all prior evidences of indebtedness of the Company toDutchess, including all of the convertible debentures listed in the Loan Documents, except in theevent of default as set forth in section 12, below, or as set forth in section 2, below. TheCompany’s satisfaction of the terms of the New Note, shall constitute a full and complete accordand satisfaction of all of the debts of the Company to Dutchess, other than any obligations owed toDutchess in connection with the Bank Debts.     2. Payment by the Company of the Bank Debts. The New Note is not intended to releasethe Company’s obligation to retire the Bank Debt in order to release the deposits of Dutchesssecuring the Bank Debt. Therefore, the Company shall pay the Bank Debts in accordance with theterms and conditions of the agreements with the holders of the Bank Debts that evidence and/orprovide for the securing and payment of the Bank Debts, and the Company will continue to use itsbest efforts to assist Dutchess to secure the proportionate release of the Deposits on a quarterlybasis with each bank.     3. Cancellation of Warrants and Convertible Debentures. All warrants, convertibledebentures and any other agreements between the Company and Dutchess pursuant to which Dutchess maybe entitled to acquire stock of NWKI, are hereby cancelled and shall be surrendered to the Company.Notwithstanding the foregoing, Dutchess shall retain the Dutchess Stock, the Exchange Warrants andits security interests.
 

 
     4. Future Recapitalization. The Company shall not grant a lien against or securityinterest in any of the assets of the Company that are subject to any lien or security interest ofDutchess without Dutchess’s prior written consent, provided however that such consent shall not beunreasonably withheld and shall be withheld only to the extent reasonably necessary to protectDutchess’s collateral position. Additionally, the Company shall not borrow money or sell stock ofthe Company, which borrowing or sale either alone or aggregated during any 6-month period exceeds$250,000, without Dutchess’s prior written consent, provided that such consent shall not beunreasonably withheld and shall be withheld only to the extent reasonably necessary to assure thefull and timely payment of the New Note.     5. Prepayment from Future Recapitalization. If, prior to the Company’s full paymentand satisfaction of the New Note, the Company borrows funds from a lender(s) other than Dutchess orraises capital from the sale of stock of NWKI from a person(s) or entity(s) other than Dutchess,either in one event or multiple events, and once the net aggregate proceeds of all such futureloan(s) or future investment(s) (after the payment of all fees and expenses associated with suchloan(s) or investment(s)) exceeds three-million five hundred thousand dollars ($3,500,000) (the“Threshold Amount”), within 10 days after receipt of such proceeds the Company shall pay toDutchess a minimum of 50% of the excess of all such net proceeds over the Threshold Amount up tothe unpaid balance of the New Note, as a principal prepayment of the New Note. The Company shallperiodically report to Dutchess regarding the status of any efforts of the Company to secure suchloan or investment and shall promptly notify Dutchess of any significant developments with respectto its efforts to secure such loan or investment.     6. Prepayment From Excess Earnings. If, at any time during which the New Note remainsunpaid, the Company’s earnings on a consolidated basis during any calendar year exceed one-milliondollars ($1,000,000) (i) before interest, taxes, depreciation and amortization, but (ii) afterdeduction of all principal and interest payments on outstanding debts, other than prepayments toDutchess mandated by paragraphs 6 and 8 hereof (the “Excess Earnings”), the Company will pay toDutchess 33% of the Excess Earnings, up to the unpaid balance of the New Note, as a principalprepayment on the New Note. The determination of Excess Earnings shall be calculated in accordancewith Generally Accepted Accounting Principles applied in accordance with the historical practicesof the Company. Any payment of Excess Earnings shall be due and payable within ten business daysafter the filing of the Company’s Annual Report on Form 10-KSB.     7. Sale of the Company’s Assets. The Company shall not sell any assets of the Company(“Asset Sale”), other than sales of inventory or sales in the ordinary course of its business(including sales as part of the replacement of equipment), without the prior written consent ofDutchess, which consent shall not be unreasonably withheld and shall be withheld only to the extentreasonably necessary to assure the full and timely payment of the New Note. In the event of anAsset Sale, the Company shall pay to Dutchess 33% of the proceeds of the Asset Sale (after the feesand expenses associated with the Asset Sale), up to the unpaid balance of the New Note, as aprepayment on the New Note. Any payment of the proceeds of an Asset Sale shall be due and payablewithin ten business days after the receipt by the Company of any proceeds in the form of cash orcash equivalents.
 

 
     8. Dutchess Waivers. Dutchess hereby waives: 8.1 Any default under the Loan Documents and/or the IntercreditorAgreement that occurred prior to the date of this Agreement.  8.2 Any penalty or premium that has accrued under the LoanDocuments and/or the Intercreditor Agreement prior to the date of thisAgreement.  8.3 Any obligation to register any securities of the Companyimposed under the Loan Documents and/or the Intercreditor Agreement that aroseprior to the date of this Agreement.     9. Effect of Agreement on Related Documents. To the extent any provision of theSecurity Agreement and/or the Intercreditor Agreement (to the extent it incorporates or is effectedby the Loan Documents) conflicts with any provision of this Agreement or imposes obligations orrestrictions on any act permitted by this Agreement, this Agreement shall control. In particular,with respect to the Security Agreement and any provisions of the Intercreditor Agreement in favorof Dutchess: 9.1 All penalties, premiums or other additional expensesattributable to any prepayment or redemption are hereby forgiven by Dutchess.  9.2 All penalties, premiums, liquidated damages or other additionalexpenses attributable to any obligation to register any securities of theCompany are hereby forgiven by Dutchess.  9.3 All provisions restricting the Company’s right to file aregistration statement with respect to any stock or warrants for stock of theCompany are hereby forgiven by Dutchess.  9.4 All payments to Dutchess shall be in the form of cash or cashequivalents and the Company shall not be obligated to issue to Dutchess commonstock or warrants for the stock of the Company in satisfaction of debt orotherwise.  9.5 Any prohibition of the issuance of the stock of NWKI is herebyforgiven by Dutchess.Nothing herein shall be read to remove or limit Dutchess’s security interest and collateral underthe Security Agreement and Intercreditor Agreement.     10. Enforceability of Loan Documents. Except as modified or supplanted by thisAgreement, the Loan Documents and the Intercreditor Agreement shall remain in force and effect.     11. Execution by Unger and NML. Unger and NML execute this Agreement solely for thepurpose of evidencing their consent to the amendment of the Intercreditor Agreement (to the extentit incorporates or is effected by the Loan Documents).
 

 
     12. Default. In the event of the occurrence of a default or of an event of default,under this Agreement or the New Note, Dutchess has the right to (1) declare the full unpaid balanceof the New Note to be immediately due and payable, and (2) enforce each of its remedies and rightsof collection under the Loan Documents, including conversion, without regard to provisions in thisAgreement and the New Note which would otherwise limit Dutchess’s rights under the Loan Documents.All other rights, representations and warranties shall survive and be governed as agreed pursuantto the Loan Documents. In the event of a default, the Company shall be obligated to issue toDutchess stock and warrants for stock of the Company pursuant to the terms and conditions of theLoan Documents without regard to any provisions in this Agreement or the New Note which wouldotherwise limit Dutchess’s rights. After notice of default, the Company shall have a period to curethe default consisting of the later of (i) 10 business days, or (ii) the cure period prescribed inthe New Note and the Loan Documents     13. Confidentiality.          13.1 Dutchess understands that, pursuant to Section 6 of this Agreement, the Company may berequired to furnish Dutchess with certain non-public information concerning the business andfinancial condition and prospects of the Company (the “Information”). Dutchess agrees that theInformation will be kept strictly confidential by it so long as it remains non-public; provided,however, that the Information may be disclosed (1) to Dutchess’ legal counsel, independentaccountants, financial advisors, financial partners and their representatives who need to knowsuch Information (provided that any such person shall, prior to disclosure to such person of anyInformation, agree with the Company in writing to be bound by this agreement) and (2) as requiredby law or regulation.          13.2 The term “Information” does not include information which (i) becomes generallyavailable to the public other than as a result of a disclosure by Dutchess or its representatives,(ii) was available to Dutchess on a non-confidential basis prior to its disclosure to Dutchess bythe Company or its representatives, or (iii) becomes available to Dutchess on a non-confidentialbasis from a source other than the Company or its representatives, provided that such source isnot known by Dutchess to be bound by a confidentiality agreement with the Company or itsrepresentatives.          13.3 In the event Dutchess or anyone to whom Dutchess transmits the Information becomelegally compelled to disclose any of the Information, Dutchess shall provide the Company withprompt notice so that the Company may seek a protective order or other appropriate remedy and/orwaive compliance with the provisions of this Agreement. In the event that such protective orderor other remedy is not obtained, or the Company waives compliance with the provisions of thisAgreement, Dutchess shall furnish only that portion of the Information which it is advised bycounsel is legally required and shall cooperate with the Company in any reasonable attempt it maymake to obtain reliable assurance that confidential treatment will be accorded the Information.          13.4 Dutchess acknowledges that it is aware that the United States securities laws prohibitany person who has received from an issuer any material, non-public information concerning theissuer from purchasing or selling securities of such issuer or from
 

 
communicating such information to any other person under the circumstances in which it isreasonably foreseeable that such person is likely to purchase or sell such securities.     14. Notices. All communications required or permitted under this Agreement shall bein writing and any communication or delivery hereunder shall be deemed to have been duly made ifand when actually delivered, or if mailed by registered or certified mail, postage prepaid,addressed as set forth below, shall be deemed to have been duly made on the date mailed. Eitherparty may, by written notice so delivered to the other, change the address to which delivery shallthereafter be made. (a) Notices to the Company:Jeffrey HultmanNetwork Installation Corp.5625 S. Arville, Suite ELas Vegas, Nevada 89118-2280Telephone: (702) 899-8777Facsimile: (702) 899-8237          With copy to:Ross Plourde, Esq.McAfee & Taft A Professional Corporation10th Floor, Two Leadership SquareOklahoma City, OK 73102Telephone: (405) 235-9621Facsimile: (405)235-0439 (b) Notices to Dutchess:Douglas LeightonDutchess Capital Management LLC50 Commonwealth Ave., Suite 2Boston, MA 02116Telephone: (617)301-4701Facsimile: (617) 249-0947          With copy to:Alan D. Rose, Jr.Rose, Chintz & Rose29 Commonwealth AvenueBoston, Massachusetts 02116Telephone: (617) 536-0040