**CONSULTING AGREEMENT**

 

 

                AGREEMENT made asof this 3rd day of July 2001, between Tekgraf Inc. (“TKGF”) with officeslocated at 980 Corporate Woods Parkway Vernon Hills, Illinois 60061 andPiedmont Consulting, Inc. with offices at 3131 Piedmont Road, Suite #205,Atlanta, Georgia 30305 (the “Consultant”).

 

                WHEREAS, TKGF is apublicly held corporation, and

 

                WHEREAS, TKGFdesires to retain Consultant to provide public and investor relations servicesfor TKGF.

 

                NOW, THEREFORE, inconsideration of the premises and the mutual covenants hereinafter set forth,Consultant and TKGF hereby agrees as follows:

 

1.             **TERM;TERMINATION**. This Agreement shall commence on the date hereofand shall extend thereafter for a period of 1 year.  Thereafter, the parties hereto may renew this Agreement by mutualconsent.

 

2.             **CONSULTINGSERVICES**.  During theterm of this Agreement, Consultant shall provide public and investor relationsservices (collectively, the “Services”) to TKGF, which Services shall be gearedto result in improved stock trading volume, higher stock price multiples, abroader following by analysts and institutions and new investmentrecommendations and providing directly, or managing the delivery of, a widerange of services, including, but not limited to:

(a)   Proactive marketing of TKGF’s common stockdirectly to influential security analysts, stockbrokers and portfolio managersand investors selected from Consultant’s proprietary database of investmentleaders across the country and abroad.

(b)   Arranging meetings between TKGF’s managementand current and/or potential investors, either in small groups or on aone-to-one basis, to establish ongoing relationships; and periodicallysupplementing these meetings with presentations at investment industrysponsored forums, through quarterly conference calls, and by quarterly mailingsof our corporate profile.

(c)   Assisting the companies in gaining mediacoverage both locally where the companies have operations nationally.  Consultant will also target certainInternet, advisory services as well as monitor various other Internetactivities.

(d)   Establishing a VIP list of analysts, brokers,portfolio managers, and investors that receive facsimiles and email addressesof news releases, facsimile notification of conference calls and mailings ofTKGF’s 10K’s and 10Q’s plus annual and any corporate updates. 

(e)   Establishing a broader news distribution listfor direct facsimile and email addresses of TKGF.

(f)    Assisting and/or advising in the authoringof press releases, including monitoring wire service coverage of TKGF foraccuracy and pickup.

(g)   Preparing presentations relating to TKGF formeetings with analysts, stock brokers, portfolio managers, and any largeinvestors, as well as any sponsored forums.

(h)   Assisting in preparing information kits aboutTKGF in response to press and/or investor inquiries.

(i)    Advising with TKGF’s management concerningmarketing ideas, investor profile information, methods of expanding TKGF’sinvestor support and increasing investor awareness of TKGF and their productsand/or services.

(j)    Creating literature (including layout,printing and distribution to Consultant’s list of investors and stockbrokers)describing TKGF’s business, products, marketing plans and financial potential.

(k)   Providing such other Services and assistanceas Consultant and TKGF shall deem necessary or appropriate to enhance TKGF’sbusiness.

3.             **APPROVAL OF INFORMATION**.  All information disseminated by Consultantregarding TKGF shall be derived from information provided by TKGF to Consultant(the “Information”).  Consultant willobtain TKGF’s prior approval to distribution or dissemination of allInformation.

4.             **COMPENSATION**.  Subject to Consultant’s compliance with the terms and conditionsherein set forth, and in full consideration of the Services provided byConsultant hereunder, TKGF shall pay to Consultant, as its consulting fee (the“Fee”), and Consultant shall accept as full payment thereof, a fee consistingof:

(a)   TKGF agrees to pay Piedmont Consulting, Inc.a $6,000 monthly consulting fee to cover expenses.

(b)   TKGF agrees to issue 60,000 Class A CommonShares of TKGF (“TKGF Common Shares”) resalable pursuant to Rule 144 toPiedmont Consulting, Inc. as follows:

1.    Within the term of the Agreement, 30,000shares will be issued upon the stock trading at $1.00 or higher for 10 tradingdays and the remaining 30,000 will be issued upon the stock trading at $1.50 orhigher for 10 trading days. 

 

2.     If the stock does not trade above $1.00 asdescribed above (or maintain NASD listing) Piedmont would not receive theseshares unless term of Agreement extended by TKGF.

 

3.     If issued, TKGF will grant standardpiggyback registration rights.

 

4.     All TKGF Common Shares shall be re-saleablepursuant to Rule 144 (after the lapse of the applicable holding period).

 

 

(c)   TKGF agrees to issue warrants, exercisable at$1.15 per TKGF Common Share, for the purchase of 60,000 TKGF Common Shares,subject to the following:

(i)            The warrants shall carry a two (2)year term;

(ii)           The TKGF Common Shares subject to thewarrants shall be resalable pursuant to Rule 144

(iii)          All shares issued shall containstandard piggyback registration rights.

(d)   TKGF agreesto pay Piedmont Consulting, Inc. a “finders fee” equal to 2% of any successfulfinancing or successful acquisition directly referred by Piedmont Consulting,Inc.

5.             **PERSONNEL**.  Consultant is, and shall be, an independentcontractor, and no personnel utilized by Consultant in providing Serviceshereunder (the “Personnel”) shall be deemed to be an employee or agent of TKGF.

Moreover, neitherconsultant nor any such Personnel shall be empowered hereunder to act on behalfof TKGF.  Consultant shall have sole andexclusive responsibility and liability for, and to, such Personnel, and Consultantalone shall be responsible to make, and shall make, all necessary orappropriate employee contributions, withholdings and payments for all taxes,insurance premiums, and social security contributions to be collected,withheld, filed and paid with respect to all such Personnel; whether pursuantto any social security, unemployment insurance, worker’s compensation law orother federal, state, or local law now in force and effect, or hereinafterenacted.

6.             **NON-ASSIGNABILITY**.  The rights, obligations and benefitsestablished by this Agreement shall not be assignable by either partyhereto.  This Agreement shall, however,be binding upon and shall inure to the benefits of the parties and theirsuccessors. 

7.             **CONFIDENTIALITY**.  Neither Consultant nor any of the Personnel,its consultants, other employees, or officers or directors shall disclose anyknowledge or information it has, or they have obtained in the course ofperforming the Services provided for herein, which knowledge or informationconcerns the confidential affairs of TKGF with respect to TKGF’s business orfinances.

8.             **COMPLIANCEAND GOVERNING LAW**. Consultant, together with its agents, employees and associates, shalltake all necessary, appropriate and reasonable steps to provide the Services inaccordance with both the securities laws of the United States and the severalStates, and pursuant to the rules and regulations promulgated thereunder, aswell as in accordance with the rules and regulations of the NationalAssociation of Securities Dealers, and Consultant agrees to indemnify and holdharmless TKGF for any violation of the foregoing.  The terms and provisions of this Agreement will be enforced inaccordance with the laws of the State of Georgia, without regard to itsconflicts of law principles.

9.             **NOTICE**.  Notice hereunder shall be in writing andshall be deemed to have been given (a) at a time when deposited for mailing ina receptacle under the control of the United States Postal Service, byregistered or certified mail, prepaid, return receipt requested, or (b) on thebusiness day following deposit with a reputable overnight courier for overnightdelivery; each addressed to the respective party at the address as such partymay fix by notice given pursuant to this paragraph.

10.           **NO OTHER AGREEMENTS**.  This Agreement supersedes all priorunderstandings, written or orally given including without limitation theagreement dated April 30, 2001, which is hereby terminated and constitutes theentire Agreement between the parties hereto with respect to the subject matterhereof.  No waiver, modification ortermination of this Agreement shall be valid unless in writing signed by eachof the parties hereto.

                **IN WITNESSTHEREOF**, the parties have hereunto set their hands and seal the dayand year first above written.

 

 

 
| **PIEDMONT  CONSULTING, INC.** | **TEKGRAF  INC.**       |
|--------------------------------|-------------------------|
|                           |                    |
|                           |                    |   |
| By:                            | /s/ Keith Fetter        |   | By: | /s/ Tom Mason |
|                           | Keith Fetter, President | Tom Mason, CFO |
|                                |                         |  |  |  |