Adam Jay Azzi has pleaded not guilty to murdering Lloyd Kennedy on November 6, 2016, and to intimidating his friend Nathan Vercoe with a knife.

Mr Vercoe on Thursday told the Wagga Supreme Court he "didn't want to believe" what was happening outside the Webb Street home.

"I grabbed him and held him in my arms," he said.

"I didn't know what would happen."

Mr Vercoe said he had held his thumb over a hole while waiting for an ambulance to arrive.

"His whole singlet was absorbing blood that was pumping out of him," he said.

Prosecutor Paul Kerr asked if Mr Kennedy had said anything.

"He didn't speak a word to me, he was just gasping," Mr Vercoe said.

He spoke to Mr Kennedy, including about his boys, before a woman arrived.

"I said I need help, me mate's been stabbed," he said.

IN OTHER NEWS:

Mr Vercoe spoke to a triple zero operator.

People wept in court as the recording was played, with Mr Vercoe heard calling for paramedics to attend Webb Street.

"Please hurry ... my mate's been stabbed," he said.

Mr Vercoe told the female operator Lloyd Kennedy had been stabbed in the chest, and was not alert.

"He's not breathing any more, he's just gasping," he said.

Mr Vercoe said Mr Kennedy was laying on the ground, on his back, and urged him to stay with him.

"I was a bit hysterical at the time," he told the court.

Mr Vercoe also spoke of the alleged altercation between himself, Mr Kennedy and Azzi.

He said the pair had gone to collect $200 from Lisa Restall from the Webb Street home and Azzi, who he only knew as "Abo", answered.

"He started getting agitated," Mr Vercoe said.

The court heard Azzi was "fiery" and Vercoe asked what the issue was.

He said Azzi replied "It's not you, it's your mate over there".

He said the pair left but Azzi ran out of the home with a table leg with a three inch screw in it and a knife.

Mr Vercoe said he instinctively put himself between Azzi and Mr Kennedy, grabbed a piece of timber and swung at Azzi as he lunged at him with the knife multiple times.

He said Azzi and Mr Kennedy clashed, Azzi ran off, and he turned around expecting to see Mr Kennedy behind him.

He instead saw him lying on the curb.

Jurors were shown a video, filmed by police the day after the alleged murder.

Vercoe could be seen re-enacting his version of events outside the home.

A passerby who stopped to help during the incident later realised a man on the ground was a friend she had known for years.

Juanita Richards sobbed as she recalled leaving Webb Street and telling Mr Kennedy's partner, Sianne Mather, what happened.

"She come outside," Mr Richards said before a long pause.

"And I told her that Lloyd had been stabbed around the corner and she dropped to the ground crying."

Ms Richards said she at first didn't realise it was Mr Kennedy lying on the road.

She said she had been driving from her Nan's house on Moore Street, heading back to her sister's home, and travelled along Webb Street.

Ms Richards said she had shone a light into the man's face.

"I realised that it was Lloyd," she said while crying.

Ms Richards said she asked Nathan Vercoe what occurred, and he allegedly replied "that c--- in there, Abo, stabbed him".

Another passerby, Debbie-Lyn Barnes, also broke down in court.

Ms Barnes said she had passed the scene and noticed a man standing on the road, and returned.

She spoke on the phone to a triple zero operator and performed CPR on Mr Vercoe until paramedics arrived.

Troy Morey, who lived across from 535 Webb Street, said he heard arguing about 8.15pm, which stopped for a minute or two, and started again with a bang.

He went out, saw a person in the gutter across the road and his wife called triple zero, with an ambulance arriving in about five minutes.

Mr Vercoe was asked if he or Mr Kennedy went into the yard or home at 535 Webb Street, and if either man had a knife, and said no.

The trial will continue on Friday.