FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is dated and is effective as of October 12, 2001, among SED
INTERNATIONAL HOLDINGS, INC. and SED INTERNATIONAL, INC., jointly and severally
(collectively, the "Borrowers"), WACHOVIA BANK, N.A., as Agent (the "Agent") and
the Banks party to the "Credit Agreement" defined below (collectively, the
"Banks");

W I T N E S S E T H:

WHEREAS, the Borrowers, the Agent and the Banks executed and delivered that
certain $50,000,000 Second Amended and Restated Credit Agreement, dated as of
August 31, 1999 (as amended by the First Amendment thereto dated as of September
30, 2000, as further amended by that certain letter dated February, 2001, as
further amended by that certain Second Amendment dated as of March 30, 2001, and
as further amended by that certain Third Amendment dated May 2, 2001 to Amended
and Restated Credit Agreement, the "Credit Agreement");

WHEREAS, the Borrowers have requested and the Agent and the Banks have agreed to
make certain amendments to the Credit Agreement, subject to the terms and
conditions hereof;

NOW, THEREFORE, for and in consideration of the above premises and other good
and valuable consideration, the receipt and sufficiency of which hereby is
acknowledged by the parties hereto, the Borrowers, the Agent and the Banks
hereby covenant and agree as follows:

1. Definitions. Unless otherwise specifically defined herein, each term used
herein which is defined in the Credit Agreement has the meaning assigned to such
term in the Credit Agreement. Each reference to "hereof", "hereunder", "herein"
and "hereby" and each other similar reference and each reference to "this
Agreement" and each other similar reference contained in the Credit Agreement
from and after the date hereof refer to the Credit Agreement as amended hereby.

2. Waiver. The Borrowers have advised the Agent and the Banks that the Borrowers
were in Default under Sections 6.21, 6.23(a), 6.23(b), and 6.24 of the Credit
Agreement during the period from June 30, 2001, through and including the date
of this Amendment, which Default constitutes an Event of Default under the
Credit Agreement (the "Financial Covenant Event of Default"). The Borrowers have
requested that the Agent and the Banks waive such Financial Covenant Event of
Default solely for the period from June 30, 2001, through and including the date
of this Amendment (the "Waiver Period"). The Agent and each of the Banks hereby
waive the Financial Covenant Event of Default solely for the Waiver Period. Such
waiver of the Financial Covenant Event of Default granted by the Agent and the
Banks under this letter shall not extend beyond the Waiver Period and shall
thereafter be null and void, and of no force or effect. The waiver of the
Financial Covenant Event of Default contained in this letter shall not extend to
any other existing Default or Event of Default or other provision of the Credit
Agreement or any of the other Loan Documents, whether now existing or hereafter
arising. All other provisions of the Credit Agreement and the other Loan
Documents remain in full force and effect.

3. Amendments to Credit Agreement. The following amendments are made to the
Credit Agreement:

(a) The Aggregate Commitments are reduced from $35,000,000 to $25,000,000.

(b) The following new definitions are hereby added to the Section 1.01:

"Delinquent Trade Payables Reserve" means, at the time of determination, the
aggregate amount payable by Borrowers (after deducting any discounts,
forgiveness, and allowances actually granted, but including, without limitation,
any late fees, charges, and accrued but unpaid interest) under each of the
Borrowers' trade payables which, by the original terms of such trade payables,
are overdue for payment, without considering any extensions to the time of
payment granted by, or on behalf of, the Person to whom such trade payable is
due.

"SED Magna Note" means a promissory note made by SED Magna and payable to
Borrowers in the original face principal amount of $2,000,000, which note shall
(a) evidence all loans made by Borrowers to SED Magna in accordance with Section
6.17; (b) constitute additional collateral security for Borrowers' payment and
performance of the Obligations and, in furtherance thereof, shall be promptly
delivered to Agent's possession upon its execution by SED Magna and delivery to
Borrowers; and (c) be in form and substance satisfactory to Agent.

(c) The definition of "Borrowing Base" is amended and restated in its entirety
as follows:

"Borrowing Base" means the following sum:

(i) (A) an amount equal to 70% (or such greater or lesser percentage which the
Agent shall establish by written notice to the Borrowers in its good faith
discretion) of the face dollar amount of Eligible Accounts as at the date of
determination,

PLUS

(B) an amount equal to the lesser of

(x) 40% (or such greater or lesser percentage which the Agent shall establish by
written notice to the Borrowers in its good faith discretion) of the dollar
amount of the Eligible Inventory, valued at the lower of its FIFO ("first-in,
first-out") cost or market value, as at the date of determination, and

(y) the lesser of

(1) 50% of the Aggregate Commitments, and

(2) the amount of clause (i)(A) of this definition,

MINUS

(ii) (A) the IBM Reserve,

PLUS

(B) the Delinquent Trade Payables Reserve,

PLUS

(C) any additional reserve determined by the Agent, in its sole discretion, as
the Agent deems necessary as security for payment of the Obligations.

(d) The definition of "Termination Date" is amended and restated in its entirety
as follows:

"Termination Date" means whichever is applicable of (i) November 1, 2002, (ii)
the date the Commitments are terminated pursuant to Section 7.01 following the
occurrence of an Event of Default, or (iii) the date the Borrowers terminate the
Commitments entirely pursuant to Section 2.07.

(e) Section 2.04(b) is amended and restated in its entirety as follows:

(b) Notwithstanding the foregoing, the outstanding principal amount of the
Loans, if any, together with all accrued but unpaid interest thereon, if any,
shall be due and payable on the Termination Date; provided, however, the
Termination Date will be automatically extended (subject to the terms of this
Agreement, including, without limitation, Sections 7.01 and 2.07) for additional
periods of 12 months each ending on November 1 of each year, unless the Agent,
on behalf of the Lenders, or the Borrowers, send written notice to other parties
hereto terminating such automatic extension on or before September 1 of the then
current year.

(f) Section 2.05(a) is amended so that it reads, in its entirety, as follows:

(a) "Applicable Margin" means, with respect to Euro-Dollar Loans, 2.75%, and,
with respect to Base Rate Loans, 0.50%.

(g) The reference to "0.375%" contained in Section 2.06(a)(i) is amended to read
"0.50%".

(h) The beginning clause of Section 6.01(f), which currently reads "(f) at the
end of each calendar week," is amended so that it reads, in its entirety, "(f)
on each Domestic Business Day". The remainder of Section 6.01(f) remains
unchanged.

(i) Section 6.17 is amended so that it reads, in its entirety, as follows:

SECTION 6.17. Investments. Neither the Borrowers nor any of the Subsidiaries
shall make any Restricted Investments; provided, however, Borrowers may from
time to time make loans to SED Magna in an aggregate initial principal amount
not to exceed $2,000,000, but only if (i) none of such loans exceeds, by itself,
$500,000; (ii) each of such loans is made on a different Domestic Business Day;
(iii) no Default or Event of Default is in existence at the time any of such
loans is made; (iv) each of such loans is evidenced by the SED Magna Note; (v)
the SED Magna Note, before any such loan is made, has been executed by SED Magna
and delivered to Borrowers, and Borrowers have, in turn, delivered such SED
Magna Note to Agent to perfect Agent's security interest in the SED Magna Note
granted below; (vi) the SED Magna Note is, at the time each loan is made,
subject to a first priority, perfected security interest in favor of Agent; and
(vii) immediately after giving effect to any such loan, (A) no Default or Event
of Default will be in existence, and (B) the Borrowers will have sufficient
availability to borrow at least $7,500,000 in Loans in accordance with the terms
of Section 2.01 of this Agreement. The loans permitted under this Section 6.17
shall be non-revolving, which means that repayments of such loans shall not
allow Borrowers to make additional loans to SED Magna. Borrowers hereby grant
Agent, for itself and the Banks, a security interest in and to the SED Magna
Note as additional collateral security for the Borrowers' payment and
performance of the Obligations.

(j) Section 6.21 is amended so that it reads, in its entirety, as follows:

SECTION 6.21. Fixed Charge Coverage. Commencing on December 31, 2001, and tested
on such date and at the end of each Fiscal Quarter thereafter, the ratio of
EBILTDA to Consolidated Fixed Charges shall not at any time be less than the
following amounts as of the end of each of the following Fiscal Quarters:

Fiscal Quarter Ending

Ratio

December 31, 2001

1.0 to 1.0

March 31, 2001

1.25 to 1.0

June 30, 2002, and each Fiscal Quarter

 

thereafter

1.5 to 1.0

The foregoing ratio shall be calculated on a cumulative basis for the Fiscal
Quarter just ended and the immediately preceding three Fiscal Quarters;
provided, however, for the 3 consecutive Fiscal Quarters ending on or after
December 31, 2001, the foregoing ratio shall be calculated as follows: (i) for
the Fiscal Quarter ending December 31, 2001, times 4, (ii) for the Fiscal
Quarters ending December 31, 2001, and March 31, 2002, on a cumulative basis,
times 2, and (iii) for the first, second and third consecutive Fiscal Quarters
ending on or after December 31, 2001, on a cumulative basis, times 1.3333.

(k) Section 6.23 is amended so that it reads, in its entirety, as follows:

SECTION 6.23. Minimum Profitability. (a) Tested at the end of each Fiscal
Quarter, the Borrowers' EBITDA shall be greater than the minimum levels as set
froth below opposite such Fiscal Quarter ended:

Fiscal Quarter Ending

Minimum Level:

December 31, 2001

$0

March 31, 2001

$500,000

June 30, 2002, and each Fiscal Quarter

 

thereafter

$850,000

(b) Tested at the end of each Fiscal Quarter, the EBITDA of SEDI and SED
E-Store, on a consolidated basis as between them, but otherwise on a
non-consolidated basis as to all other members of the consolidated group to
which they might otherwise belong (and notwithstanding any reference to the term
"consolidated basis" or the like contained in any defined term used in this
clause (b)), shall be greater than the minimum levels as set forth below
opposite such Fiscal Quarter ended:

Fiscal Quarter Ending

Minimum Level:

December 31, 2001

$400,000

March 31, 2002

$850,000

June 30, 2002, and each Fiscal Quarter

 

Thereafter

$1,000,000

(l) Section 6.24 is amended so that it reads, in its entirety, as follows:

SECTION 6.24. Minimum Consolidated Tangible Net Worth. Consolidated Tangible Net
Worth will as of June 30, 2001, be not less than $32,000,000, and at all times
thereafter will not be less than (x) $32,000,000 plus (y) the sum of (i) 75% of
the cumulative Reported Net Income of the Borrowers and the Consolidated
Subsidiaries during any period after March 31, 2001 (taken as one accounting
period), calculated quarterly at the end of each Fiscal Quarter (but excluding
from such calculations of Reported Net Income for purposes of this clause (i),
any Fiscal Quarter in which the Reported Net Income of the Borrowers and the
Consolidated Subsidiaries is negative), and (ii) 100% of the cumulative Net
Proceeds of Capital Stock received during any period after March 31, 2001,
calculated quarterly at the end of each Fiscal Quarter.

4. Landlord Lien Waiver. Within sixty days of the date of this Amendment, the
Borrowers shall deliver to Agent a fully executed Landlord Agreement with
respect to SEDI for its City of Industry, California, location, along with
copies of the executed leases therefor, and each of the Borrowers agrees that
the failure to comply with this Section 4 shall constitute an a breach of
covenant as contemplated in Section 7.01(c) of the Credit Agreement.

5. Exhibits and Schedules. Paragraphs 4, 6, and 7 of the Compliance Certificate
attached to Exhibit H of the Credit Agreement is amended and restated in its
entirety as set forth on Exhibit A to this Amendment.

6. Effect of Amendment. Except as set forth expressly hereinabove, all terms of
the Credit Agreement and the other Loan Documents remain in full force and
effect, and constitute the legal, valid, binding and enforceable obligations of
the Borrowers. The amendments contained herein will be deemed to have
prospective application only, unless otherwise specifically stated herein.

7. Ratification. Each of the Borrowers hereby restates, ratifies and reaffirms
each and every term, covenant and condition set forth in the Credit Agreement
and the other Loan Documents effective as of the date hereof.

8. Counterparts. This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered will be deemed to be an original and all of which
counterparts, taken together, will constitute but one and the same instrument.

9. Section References. Section titles and references used in this Amendment have
no substantive meaning or content of any kind whatsoever and are not a part of
the agreements among the parties hereto evidenced hereby.

10. No Default; Release. To induce the Agent and the Banks to enter into this
Amendment and to continue to make advances pursuant to the Credit Agreement,
each of the Borrowers hereby acknowledges and agrees that, as of the date
hereof, and after giving effect to the terms hereof, (i) there exists no Default
or Event of Default, (ii) there exists no right of offset, defense,
counterclaim, claim or objection in favor of the Borrowers arising out of or
with respect to any of the Loans or other obligations of the Borrowers owed to
the Banks under the Credit Agreement, and (iii) the Agent and each of the Banks
has acted in good faith and has conducted its relationships with each of the
Borrowers in a commercially reasonable manner in connection with the
negotiations, execution and delivery of this Amendment and in all respects in
connection with the Credit Agreement, each of the Borrowers hereby waiving and
releasing any such claims to the contrary. A default or breach of representation
or warranty by the Borrowers under this Amendment shall constitute an Event of
Default under the Credit Agreement.

11. Further Assurances. Each of the Borrowers agrees to take such further
actions as the Agent reasonably requests in connection herewith to evidence the
amendments herein contained.

12. Governing Law. This Amendment is governed by, and construed and interpreted
in accordance with, the laws of the State of Georgia.

13. Conditions Precedent; Amendment Fee. This Amendment becomes effective only
upon the execution and delivery of this Amendment by each of the parties hereto.
The Borrower agrees to pay the Banks a fully earned and non-refundable amendment
fee equal to $20,000 in the aggregate upon the execution and delivery of this
Amendment.

[Signatures on Following page]

 

IN WITNESS WHEREOF, the Borrowers, the Agent and each of the Banks has caused
this Amendment to be duly executed, under seal, by its duly authorized officer
as of the day and year first above written.

SED INTERNATIONAL HOLDINGS, INC.

 

By:_________________________ (SEAL)

Title:

 

SED INTERNATIONAL, INC.

 

By:_________________________ (SEAL)

Title:

 

WACHOVIA BANK, N.A.,

as Agent and as the sole Bank

 

By:_________________________ (SEAL)

Title:

EXHIBIT A

(Amended and restated paragraphs 4, 6, and 7 contained in the

Compliance Certificate set forth on Exhibit H to the Credit Agreement)

 

4. Fixed Charge Coverage (Section 6.21)

Commencing on December 31, 2001, and tested on such date and at the end of each
Fiscal Quarter thereafter, the ratio of EBILTDA to Consolidated Fixed Charges
shall not at any time be less than the following amounts as of the end of each
of the following Fiscal Quarters:

Fiscal Quarter Ending

Ratio

December 31, 2001

1.0 to 1.0

March 31, 2002

1.25 to 1.0

June 30, 2002, and each Fiscal Quarter

 

thereafter

1.5 to 1.0

The foregoing ratio shall be calculated on a cumulative basis for the Fiscal
Quarter just ended and the immediately preceding three Fiscal Quarters;
provided, however, for the 3 consecutive Fiscal Quarters ending on and after
December 31, 2001, the foregoing ratio shall be calculated as follows: (i) for
the Fiscal Quarter ending December 31, 2001, times 4, (ii) for the Fiscal
Quarters ending December 31, 2001, and March 31, 2002, on a cumulative basis,
times 2, and (iii) for the first, second and third consecutive Fiscal Quarters
ending on or after December 31, 2001, on a cumulative basis, times 1.3333.

6. Minimum Profitability (Section 6.23)

(a) Tested at the end of each Fiscal Quarter, the Borrower's EBITDA for such
Fiscal Quarter shall be greater than the minimum levels set forth in Section
6.23 of the Credit Agreement.

(a) EBITDA - Schedule 5 $_____________

(b) Requirement (minimum level) $_____________

(b) Tested at the end of each Fiscal Quarter, the EBITDA for such Fiscal Quarter
of SEDI and SED E-Store, on a consolidated basis as between them, but otherwise
on a non-consolidated basis as to all other members of the consolidated group to
which they might otherwise belong (and notwithstanding any reference to the term
"consolidated basis" or the like contained in any defined term used in this
clause (b)), shall be greater than the minimum level as set forth in Section
6.23 of the Credit Agreement.

(a) EBITDA - Schedule 5(A) $_____________

(b) Requirement (minimum level) $_____________

 

7. Minimum Consolidated Tangible Net Worth (Section 6.24)

Consolidated Tangible Net Worth will as of June 30, 2001, be not less than
$32,000,000, and at all times thereafter will not be less than (x) $32,000,000
plus (y) the sum of (i) 75% of the cumulative Reported Net Income of the
Borrowers and the Consolidated Subsidiaries during any period after March 31,
2001 (taken as one accounting period), calculated monthly at the end of each
month (but excluding from such calculations of Reported Net Income for purposes
of this clause (i), any month in which the Reported Net Income of the Borrowers
and the Consolidated Subsidiaries is negative), and (ii) 100% of the cumulative
Net Proceeds of Capital Stock received during any period after March 31, 2001,
calculated monthly at the end of each month.

(a) $32,000,000

(b) 75% of positive Reported Net Income

after March 31, 2001 $

(c) 100% of cumulative Net Proceeds of Capital

Stock received after March 31, 2001 $

Actual Consolidated Tangible

Net Worth - Schedule 4 $

Required Consolidated Tangible Net

Worth (sum of (a) plus (b) plus (c)) $