EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 11th day of
November, 1999 between Barry Diamond (the "Employee") and SED International,
Inc., a Georgia corporation (the "Subsidiary") and wholly-owned subsidiary of
SED International Holdings, Inc., a Georgia corporation (the "Company").

W I T N E S S E T H :

WHEREAS, the Subsidiary desires to enter into this Agreement regarding
Employee's employment by the Subsidiary and Employee desires to accept the terms
of said employment;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, it is hereby agreed as follows:

1. Employment of Employee. This Agreement is effective for a period of three (3)
years commencing as of November 11, 1999, unless this Agreement is sooner
terminated pursuant to the provisions hereof. Employee agrees to such employment
on the terms and conditions herein set forth and agrees to devote his best
efforts to his duties under this Agreement and to perform such duties diligently
and efficiently and in accordance with the directions of the Subsidiary.

During the term of this Agreement, Employee shall be employed as Vice President
-- Cellular Division of the Subsidiary reporting to the President. In Employee's
capacity as Vice President -- Cellular Division of the Subsidiary, Employee
shall be responsible for all management of wireless phone sales, purchasing and
pricing of the Subsidiary and otherwise have the duties and responsibilities
accorded to such position as set forth in the Subsidiary's Bylaws, and such
other and further duties as may from time to time become necessary for the
management of the Subsidiary, as determined by the Board of Directors.

Employee shall devote substantially all of Employee's business time, attention
and energies to the business of the Subsidiary shall act at all times in the
best interests of the Subsidiary and shall not during the term of this Agreement
be engaged in any other significant business activity, whether or not such
business is pursued for gain, profit or other pecuniary advantage, except as
contemplated by this Agreement.

2. Compensation and Benefits.

(a) Employee's annual base salary during the term of this Agreement shall be
$160,000.00.

(b) Employee's base salary shall be paid by the Subsidiary pursuant to its
customary payroll practices.

(c) Commencing on November 11, 2000 and on each November 11 thereafter during
the term of this Agreement, the annual base salary shall be increased (but not
decreased) by an amount equal to five percent (5%) of the then annual base
salary, together with such other increases, if any, as shall be approved by the
Subsidiary's Board of Directors.

(d) The Subsidiary shall provide Employee such medical coverage and other
benefits as are provided to its other employees, subject to Employee meeting any
eligibility or other requirements of such coverages or benefits. The Subsidiary
has the right to change or eliminate any of its benefits plans at any time. The
Employee shall also be entitled during the term of this Agreement to the use of
an automobile, with the premiums for the automobile insurance coverage thereon,
together with the reasonable cost of maintenance and other expenses (including
gasoline) being payable by the Subsidiary or its designee. The Employee shall
have the option to have the use of a new (replacement) automobile on the third
anniversary of this Agreement. The amount of insurance coverage shall be
determined by the Subsidiary or its designee in accordance with the policies of
the Subsidiary, from time to time in effect. As a condition to the use of such
automobile, Employee shall cooperate fully with the Subsidiary or its designee
in connection with obtaining and maintaining in effect any such policy of
insurance.

(e) Employee shall be entitled to four (4) weeks of paid vacation per year.

3. Personnel Policies. Employee shall conduct himself at all times in a
businesslike and professional manner as appropriate for a person in his position
and shall represent the Subsidiary in all respects as complies with good
business and ethical practices. In addition, Employee shall be subject to and
abide by the policies and procedures of the Subsidiary.

4. Business Expenses. Employee shall be reimbursed by the Subsidiary for
ordinary, necessary and reasonable business expenses consistent with the
Subsidiary's policies concerning reimbursement of such expenses; provided that,
Employee shall first document said business expenses in the manner generally
required by the Subsidiary under its policies and procedures, and in any event,
the manner required to meet applicable regulations of the Internal Revenue
Service relating to the deductibility of such expenses.

5. Location of Employment. At no time during the term of this Agreement shall
the Employee be asked or required to transfer his place of employment to a
location that is of a radius more than thirty five (35) miles from the
Subsidiary's current offices located at 4916 North Royal Atlanta Drive, Tucker,
Georgia 30085.

6. Termination.

(a) This Agreement may be terminated for good cause by the Subsidiary upon
written notice to Employee. As used herein, "good cause" means: (i) any act of
fraud or dishonesty; (ii) any act of theft or embezzlement; (iii) the breach of
any material provision of this Agreement by Employee (provided that such breach
is not cured by Employee within 30 days of receiving written notice of such
breach from the Subsidiary); (iv) violation of the policies and procedures of
the Subsidiary; (v) failure to comply with the directions of the Board of
Directors of the Subsidiary; (vi) engaging in any unlawful harassment or
discrimination; (vii) the conviction of Employee of any crime involving moral
turpitude (whether felony or misdemeanor) or involving any felony; (viii) any
act of moral turpitude by Employee that materially adversely affects the
Subsidiary or its business reputation; (ix) violation of state or federal
securities laws; (x) violation of the laws, rules and regulations of any stock
exchange, over-the-counter trading system, including the Nasdaq Stock Market,
Inc., or the National Association of Securities Dealers, Inc.; or (xi) any other
matter constituting "good cause" under the laws (including, inter alia,
statutes, regulations or judicial case law) of the State of Georgia.

(b) This Agreement also shall terminate immediately upon the death of Employee,
or immediately upon written notice to Employee if Employee shall at any time be
unable to perform the essential functions of his job hereunder, by reason of a
physical or mental illness or condition, with or without reasonable
accommodation, for a continuous period of 180 consecutive days, as certified by
a physician or physicians selected by the Board of Directors of the Subsidiary.

(c) In the event of termination under subsections (a) of this Section 6, the
base salary, less applicable withholdings, and other benefits provided herein
shall be paid to Employee up to the effective date of termination of this
Agreement, and not thereafter, subject to any benefit continuation requirements
under applicable laws or regulations.

(d) In the event of termination under subsection (b) of this Section 6, the
Subsidiary shall pay to Employee or Employee's estate or personal
representative, as appropriate, the greater of (i) Employee's base salary, less
applicable withholdings, plus benefits, for the remaining period of the
Agreement or (ii) twelve (12) months of base salary, less applicable
withholdings, plus benefits for such monthly period.

(e) The Subsidiary may terminate this Agreement at any time without "good cause"
upon written notice to Employee. In the event of such termination, the
Subsidiary shall pay to Employee the greater of (i) Employee's base salary, less
applicable withholdings, plus benefits, for the remaining period of the
Agreement or (ii) twelve (12) months of base salary, less applicable
withholdings.

(f) All such payments owing under this Section 6 shall be payable concurrently
at the time of termination. Other than the payments of the base salary and
benefits amounts as specified herein, no further payments of any kind shall be
made to Employee.

7. Products, Notes, Records and Software. All memoranda, notes, records and
other documents and computer software created, developed, compiled or used by
Employee or made available to Employee during the term of this Agreement
concerning or relative to the business of the Subsidiary, including without
limitation, all customer data, marketing and sales information, billing
information, service data and other technical material of the Subsidiary, is the
Subsidiary's property. Employee agrees to deliver all such materials to the
Subsidiary within three (3) business days after the termination of this
Agreement.

8. Nondisclosure. Employee acknowledges and agrees that during the term of this
Agreement, he will have access to and become familiar with information that the
parties acknowledge to be confidential, valuable and uniquely proprietary
information regarding the Subsidiary, its customers and employees. Employee
further acknowledges that the disclosure or unauthorized use of Trade Secrets,
as defined under applicable state law, or confidential information by Employee
would harm the Subsidiary's business. Employee therefore promises and agrees
that, during the term of Employee's employment and for two (2) years thereafter,
Employee shall not use or disclose, directly or indirectly, for any purpose any
such confidential or proprietary information which includes, without limitation,
technical materials of the Subsidiary, sales and marketing information, customer
account records, billing information, training and operations information,
materials and memoranda, personnel records and pricing and financial information
relating to the business, accounts, vendors, suppliers, customers, prospective
customers, employees and affairs of the Subsidiary. Employee further agrees that
Employee will not, at any time during or after the term of Employee's employment
with the Subsidiary, use, reveal or divulge any Trade Secrets.

9. Restrictive Covenants. Employee acknowledges and agrees that, because of his
employment he has access to confidential or proprietary information concerning
vendors, suppliers and customers of the Subsidiary and has established
relationships with such vendors, suppliers and customers. In exchange for
valuable consideration to be given by the Subsidiary to Employee, as provided
herein, Employee agrees to the following provisions:

(a) Employee agrees that during the term of his employment and for a period of
one (1) year thereafter, Employee shall not, directly or indirectly, either
individually, in partnership, jointly, or in conjunction with, or on behalf of,
any person, firm, partnership, corporation, or unincorporated association or
entity of any kind, (i) provide domestic or international sales, purchasing,
human resources, distribution operations, marketing services as an officer or
management level employee to any competitor of the Subsidiary listed on Exhibit
A attached hereto, which purchase, market and sell computer and related products
and/or cellular telephones and related products (collectively, the "Business");
or (ii) otherwise obtain any interest in (except as a stockholder holding less
than two percent (2%) interest in a corporation which is traded on a national
exchange or in an automated quotations system), or perform consulting services
for, or otherwise participate in the ownership, management, or control of, the
companies listed on Exhibit A attached hereto;

(b) Employee agrees that during the term of his employment and for a period of
one (1) year thereafter, Employee shall not, directly or indirectly, either
individually, in partnership, jointly, or in conjunction with, or on behalf of,
any person, firm, partnership, corporation, unincorporated association or other
entity of any kind, solicit or contact, for the purpose of providing products or
services the same as or substantially similar to those provided by the
Subsidiary in connection with the Business, any person or entity that, during
the term of Employee's employment with the Subsidiary, was a vendor, supplier or
customer of the Subsidiary with whom Employee had contact during the last twelve
(12) months of his employment, or was a prospective vendor, supplier or customer
of the Subsidiary with whom Employee had contact during the last twelve (12)
months of his employment; and

(c) Employee agrees that during the term of his employment and for a period of
one (1) year thereafter, Employee shall not, directly or indirectly, either
individually, in partnership, jointly, or in conjunction with, or on behalf of,
any person, firm, partnership, corporation, unincorporated association or other
entity of any kind, hire or solicit, or attempt to hire or solicit, for
employment any person who was employed by the Subsidiary up to 90 days prior to
the date of termination of the Employee's employment or persuade or attempt to
persuade any such person to terminate or modify his or her employment
relationship, whether or not pursuant to a written agreement, with the
Subsidiary.

Employee acknowledges that the time restrictions and scope included in this
Section 9 are as narrow as possible and cannot be reduced and still adequately
protect the Subsidiary's business interests. Employee acknowledges that the
scope of this Section 9 is reasonable and necessary to protect the Subsidiary's
legitimate business interests.

10. Remedy for Breach. Employee agrees that the damage to the Subsidiary
resulting from any actual or threatened breach by Employee of any of the
covenants contained in Sections 7, 8 and 9 of this Agreement would be immediate,
irreparable and difficult to measure, and that money damages would not be an
adequate remedy. Therefore, Employee agrees that the Subsidiary shall be
entitled to specific performance of the covenants in any of such sections or
injunctive relief, by temporary or permanent injunction or other appropriate
judicial remedy, writ or order, or both, in addition to any damages and legal
expenses (including attorneys' fees) which the Subsidiary may be legally
entitled to recover.

11. Survival. The provisions of Sections 7, 8, 9 and 10 shall survive
termination of this Agreement.

12. Change of Control. If a Change of Control occurs while the Employee is
employed by the Subsidiary during the term of this Agreement, or during any
extension thereof, and:

(a) the Employee's employment is terminated involuntarily, or voluntarily by the
Employee based on (i) material changes in the nature or scope of the Employee's
duties or employment, (ii) a reduction in compensation of the Employee made
without the Employee's consent, (iii) a relocation of the Subsidiary's executive
offices outside the Atlanta, Georgia Metropolitan Area or farther than 35 miles
from the present location of the executive offices, or (iv) a good faith
determination made by the Employee, upon consultation with the Board of
Directors of the Subsidiary, that it is necessary or appropriate for the
Employee to relocate from the Atlanta, Georgia Metropolitan Area to enable
Employee to perform his duties hereunder, the Employee may, in his sole
discretion, give written notice within thirty (30) days after the date of
termination of employment to the Secretary or Assistant Secretary of the
Subsidiary that he is exercising his rights hereunder and requests payment of
the amounts provided for under this Section 12; or

(b) the Employee gives written notice of his termination of employment for any
reason concurrently with the time a Change of Control occurs or any time within
thirty (30) days after the date the Change of Control becomes effective to the
Secretary or Assistant Secretary of the Subsidiary, he may exercise his rights
hereunder and request payment of the amounts provided for under this Section 12
(the notice provided pursuant to Subsection 12(a) or Subsection 12(b) is
referred to as the "Notice of Exercise").

If the Employee gives a Notice of Exercise to receive the payments provided for
hereunder, the Subsidiary shall pay to or for the benefit of the Employee,
immediately upon the Subsidiary's receipt of the Notice of Exercise, a single
cash payment for damages suffered by the Employee by reason of the Change in
Control (the "Executive Payment") in an amount equal to 2.99 times the
aggregated of Employee's annual base salary, bonuses and other benefits owing to
Employee, subject to the provisions of Sections 21, 22 and 23.

The Executive Payment shall be in addition to and shall not be offset or reduced
by (i) any other amounts that have been earned or accrued or that have otherwise
become payable or will become payable to the Employee or his beneficiaries, but
have not been paid by the Subsidiary at the time the Employee gives the Notice
of Exercise including, without limitation, salary, bonuses, severance pay,
consulting fees, disability benefits, termination benefits, retirement benefits,
life and health insurance benefits or any other compensation or benefit payment
that is part of any previous, current or future contract, plan or agreement,
written or oral, and (ii) any indemnification payments that may have accrued but
not paid or that may thereafter become payable to the Employee pursuant to the
provisions of the Subsidiary's Articles of Incorporation, Bylaws or similar
policies, plans or agreements relating to the indemnification of Employee under
certain circumstances. The Executive Payment shall not be reduced by any present
value calculations.

In the event the Employee dies after giving the Notice of Exercise but prior to
receipt of the Executive Payment, then the Employee's estate or legal
representative shall be entitled to receive the Executive Payment.

13. Certain Additional Definitions.

"Affiliate"

or "Affiliated" means any person, firm, corporation, partnership, association or
entity, either directly or indirectly, that controls, is controlled by, or is
under common control with a specified person, firm, corporation, partnership,
association or entity.

"Associate"

means (1) any corporation, partnership or other entity of which a specified
person is an officer or partner, or is, directly or indirectly, the beneficial
owner of ten percent (10%) or more of any class of equity securities thereof,
(2) any trust or estate in which the specified person has a substantial
beneficial interest or as to which the specified person serves as trustee or in
a similar fiduciary capacity, (3) any relative or spouse of such specified
person, or any relative of such spouse, who has the same home as such specified
person, and (4) any person who is a trustee, officer or partner of such
specified person or of any corporation, partnership or other entity that is an
Affiliate of such specified person.

"Atlanta, Georgia Metropolitan Area"

means the counties of Clayton, Cobb, DeKalb, Fulton and Gwinnett, Georgia

"Beneficial Owner"

shall be defined by reference to Rule 13d-3 under the Exchange Act as such Rule
may be amended from time to time; provided, however, that any individual,
corporation, partnership, Group, association or other person or entity which,
directly or indirectly, owns or has the right to acquire any of the Company's or
the Subsidiary's outstanding securities entitled to vote generally in the
election of directors at any time in the future, whether such right is
contingent, absolute, direct or indirect, pursuant to any agreement, arrangement
or understanding or upon exercise of conversion rights, warrants or options or
otherwise, shall be deemed the Beneficial Owner of such securities.

"Change of Control"

shall be deemed to have occurred if and when (1) any individual, corporation,
partnership, Group, association or other person or entity, together with his,
its or their Affiliates or Associates (other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company) hereafter
becomes the Beneficial Owner of securities of the Company representing thirty
percent (30%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
(2) the Continuing Directors of the Company shall at any time fail to constitute
a majority of the members of the Board of Directors of the Company; (3) all or
substantially all of the assets of the Company are sold, conveyed, transferred
or otherwise disposed of, whether through one event or a series of related
events, without being Duly Approved by the Continuing Directors of the Company;
(4) any individual, corporation, partnership, Group, association or other person
or entity, together with his, its or their Affiliates or Associates, other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Subsidiary, becomes the Beneficial Owner of securities of the Subsidiary
representing thirty percent (30%) or more of the combined voting power of the
Subsidiary's then outstanding securities entitled to vote generally in the
election of directors; or (5) all or substantially all of the assets of the
Subsidiary are sold, conveyed, transferred or otherwise disposed of, whether
through one event or a series of related events, without being Duly Approved by
the Continuing Directors of the Subsidiary.

"Continuing Director"

means a director who either was a member of the Board of Directors of either the
Company or the Subsidiary, as the case may be, on the date hereof, or who
becomes a member of the Board of Directors of either the Company or the
Subsidiary, as the case may be, subsequent to such date and whose election or
nomination for election by the Board of Directors of that company was Duly
Approved by the Continuing Directors of that company at the time of such
election or nomination, either by a specific vote or by approval of the proxy
statement issued by that company on behalf of the Board of Directors of that
company in which such person is named as a nominee for director.

"Duly Approved by the Continuing Directors"

means an action approved by the vote of at least a majority of the Continuing
Directors then on the Board of Directors of either the Company or the
Subsidiary, as the case may be; provided, however, if the votes of such
Continuing Directors in favor of such action would be insufficient to constitute
an act of the entire Board of Directors of that company as if a vote by all of
its members had been taken, or if the number of persons constituting the
Continuing Directors of that company shall be equal to or less than three, then
the term Duly Approved by the Continuing Directors shall mean an action approved
by the unanimous vote of the Continuing Directors then on the Board of Directors
of that company.

"Exchange Act"

means the Securities Exchange Act of 1934, as amended.

"Group"

means persons who act in concert as described in Section 13(d)(3) of the
Exchange Act as may be amended from time to time.

14. Invalidity of Any Provision. It is the intent of the parties hereto that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies of each state and jurisdiction in which such
enforcement is sought, but that the unenforceability (or the modification to
conform with such laws or public policies) of any provision hereof shall not
render unenforceable or impair the remainder of this Agreement which shall be
deemed amended to delete or modify, as necessary, the invalid or unenforceable
provisions. The parties further agree to alter the balance of this Agreement in
order to render the same valid and enforceable.

15. Applicable Law. This Agreement is being executed in the State of Georgia and
shall be construed and enforced in accordance with the laws of said
jurisdiction.

16. Waiver of Breach. The waiver by the Subsidiary of a breach by Employee of
any provision of this Agreement may only be made in writing and shall not
operate or be construed as a waiver of any subsequent breach by Employee.

17. Successors and Assigns. This Agreement shall inure to the benefit of the
Subsidiary, its subsidiaries and affiliates, and their respective successors and
assigns.

18. Entire Agreement. This Agreement contains the entire agreement of the
parties and supersedes all prior agreements regarding Employee's employment by
the Subsidiary, including, but not limited to, oral discussions, letter
agreements, or any other document concerning the possibility of employment with
the Subsidiary. This Agreement may only be changed by an agreement in writing
signed by the party against whom enforcement of any waiver, changes,
modification, extension or discharge is sought. It cannot be changed orally.

19. Headings. The headings of the Sections of this Agreement are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.

20. Interest on Amounts Payable. If any amounts that are required or determined
to be paid or payable or reimbursed or reimbursable to the Employee under this
Agreement, under any other plan, agreement, policy or arrangement with the
Subsidiary are not paid promptly at the times provided herein or therein, such
amounts shall accrue interest at an annual percentage rate of ten percent (10%)
from the date such amounts were required or determined to have been paid or
payable or reimbursed or reimbursable to the Employee until such amounts and any
interest accrued thereon are finally and fully paid; provided, however, that in
no event shall the amount of interest contracted for, charged or received
hereunder exceed the maximum non-usurious amount of interest allowed by
applicable law.

21. Limitation on Payment. If the benefits provided to Employee under this
Agreement or under any other agreement with, or plan of, the Subsidiary (in the
aggregate, the "Total Payment") constitute a payment so that an excise tax (the
"Excise Tax") is due under Section 280G, Section 4999 or other provision of the
Internal Revenue Code of 1986, as amended (the "Code"), then the benefits
provided under this Agreement shall be limited to the Reduced Amount. The
"Reduced Amount" shall be the largest amount that could be received by Employee
under this Agreement such that no part of the Total Payment provided to Employee
shall be subject to the Excise Tax. The Reduced Amount shall be calculated by a
nationally recognized benefits consulting firm or accounting firm, and such
amount shall be presented to Employee for review and approval. If the amount
payable to Employee is limited to the Reduced Amount, Employee shall have the
right, in Employee=s sole discretion, to designate the portion of the Total
Payment that should be reduced or eliminated so as to avoid having the benefits
provided to Employee under this Agreement be subject to the Excise Tax.

22. Notification. If the Internal Revenue Service claims in writing that any
benefit received under this Agreement constitutes an "excess parachute payment"
under Section 280G of the Code, Employee shall notify the Subsidiary in writing
of such claim within 10 business days of the claim. Employee shall apprise the
Subsidiary of the nature of such claim and the date on which such claim is
requested to be paid. Employee shall not pay such claim prior to the expiration
of the 30-day period following the date on which Employee provides notice of the
claim to the Subsidiary (or such shorter period ending on the date that any
payment of taxes with respect to the claim is due). If the Subsidiary notifies
Employee in writing prior to the expiration of such period that it desires to
contest such claim, Employee shall (i) give the Subsidiary any information
reasonably requested by the Subsidiary relating to such claim; (ii) take such
action in connection with contesting such claim as the Subsidiary shall
reasonably request in writing from time to time; (iii) cooperate with the
Subsidiary in good faith in order to effectively contest such claim; and (iv)
permit the Subsidiary to participate in any proceedings relating to such claim;
provided, however, that the Subsidiary shall bear and pay directly all costs and
expenses (including, but not limited to, additional interest and penalties and
related legal, consulting or similar fees) incurred in connection with such
contest and shall indemnify and hold Employee harmless, on an after-tax basis,
for any Excise Tax or other tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.

23. Excise Tax Refund. If, after the receipt by Employee of an amount advanced
by the Subsidiary in connection with the contest of the Excise Tax claim,
Employee becomes entitled to receive any refund with respect to such claim,
Employee shall promptly pay to the Subsidiary the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto); provided, however, that if the amount of that refund exceeds the
amount advanced by the Subsidiary or it is otherwise determined for any reason
that additional amounts could be paid to Employee without incurring any Excise
Tax, any such amount will be promptly paid by the Subsidiary to Employee. If,
after the receipt of an amount advanced by the Subsidiary in connection with an
Excise Tax claim, a determination is made that Employee shall not be entitled to
any refund with respect to such claim and the Subsidiary does not notify
Employee in writing of its intent to contest the denial of such refund prior to
the expiration of 30 days after such determination, such advance shall be
forgiven and shall not be required to be repaid and shall be deemed to be in
consideration for services rendered after date of the termination of Employee's
employment.

24. Employee's Expenses. All costs and expenses, including reasonable legal,
accounting and other advisory fees, incurred by the Employee to prepare
responses to an Internal Revenue Service audit of, and otherwise defend, his
personal income tax return for any year that is the subject of any such audit or
an adverse determination, administrative proceeding or civil litigation arising
therefrom that is occasioned by, or related to, an audit by the Internal Revenue
Service of the Subsidiary's consolidated income tax returns are, upon written
demand by the Employee explaining the basis for the request for such
reimbursement or advancement, to be promptly advanced or reimbursed to the
Employee or paid directly, on a current basis, by the Subsidiary or its
successors.

Subject to the first paragraph of this Section 24 and except as otherwise
provided in this Agreement, if at any time during the term of this Agreement or
afterwards there should arise any litigation, hearing or arbitration as to the
interpretation or application of any term or condition of this Agreement, the
Subsidiary agrees, upon written demand by the Employee (and the employee shall
be entitled upon application to any court of competent jurisdiction, to the
entry of a mandatory injunction, without the necessity of posting any bond with
respect thereto, compelling the Subsidiary), promptly to provide sums sufficient
to pay on a current basis, either directly or by reimbursing the Employee, the
Employee's costs and reasonable attorneys' fees, including, without limitation,
expenses of investigation and disbursements for the fees and expenses of
experts, incurred by the Employee in connection with any such litigation,
hearing or arbitration; provided, however, if the Employee is not the prevailing
party in such litigation, hearing or arbitration, then Employee shall pay or
reimburse the Subsidiary for its costs and reasonable attorneys' fees,
including, without limitation, expenses of investigation and disbursements for
the fees and expenses of experts (other than Affiliates), incurred by the
Subsidiary in connection with any such litigation, hearing or arbitration,
together with all such costs and fees previously paid by the Subsidiary to or
for the benefit of Employee in connection with such litigation, hearing or
arbitration.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
as of the date first above shown.

Employee:

 

_____________________________(SEAL)

BARRY DIAMOND

 

Subsidiary:

SED INTERNATIONAL, INC.

By: ________________________________

Title:_______________________________

(CORPORATE SEAL)

EXHIBIT A

Competitors

ASI Corp.

Brightpoint, Inc.

Cellstar, Corp.

CHS Electronics, Inc.

Ingram Micro, Inc.

Merisel, Inc.

Microage, Inc.

Supercom, Inc.

Tech Data Corp.

or any of their respective Affiliates.