Exhibit 10.3

 

INDEMNIFICATION AGREEMENT

 

This INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as of
October 25, 2013, by and between SED INTERNATIONAL HOLDINGS, INC., a Georgia
corporation (the “Corporation”), and _____________________, a member of the
Board of Directors of the Corporation (“Indemnitee”).

 

WHEREAS, Indemnitee is an Authorized Representative (as defined below);

 

WHEREAS, competent and experienced persons are reluctant to serve as Authorized
Representatives of corporations unless they are provided with adequate
protection through liability insurance and corporate indemnification against
risks of claims and actions against them arising out of their service to the
corporation;

 

WHEREAS, the Board of Directors of the Corporation (the “Board of Directors”)
has determined that in order to retain qualified persons to serve as Authorized
Representatives, it is in the best interests of the Corporation and its
shareholders that the Corporation should agree to assure such person that there
will be adequate protection through insurance and indemnification against such
risks;

 

WHEREAS, the Georgia Business Corporation Code (“GBCC”) authorizes the
Corporation to indemnify directors, officers, employees and agents, to advance
the reasonable expenses they incur as parties to and witnesses in Proceedings
(as defined below), and to enter into agreements providing for such
indemnification and advancement;

 

WHEREAS, (a) the Bylaws of the Corporation (the “Bylaws”) authorize and obligate
the Corporation to indemnify its directors to the fullest extent permitted by
law, and (b) the Corporation’s Articles of Incorporation (the “Articles”)
obligate the Corporation to indemnify and advance expenses to its directors;

 

WHEREAS, the Corporation desires to have Indemnitee serve and continue in the
future to serve as an Authorized Representative;

 

WHEREAS, in consideration for and reliance on this Agreement, and on the
condition that the Corporation enter into and perform its obligations under this
Agreement, the Indemnitee is willing to serve and continue in the future to
serve as an Authorized Representative;

 

WHEREAS, the rights of indemnification and advancement of expenses provided by
this Agreement are intended to supplement any other rights with respect to
indemnification or advancement to which Indemnitee may at any time be entitled
under the GBCC, applicable law, the Articles, the Bylaws, any agreement, a vote
of shareholders, a resolution of directors, any court order (including without
limitation pursuant to GBCC Section 14-2-854) or otherwise (“Other Rights”) and
shall not be deemed a substitute therefor, nor to diminish or abrogate any such
Other Rights of Indemnitee; and

 

WHEREAS, the parties believe it appropriate to memorialize, clarify and reaffirm
the Corporation’s indemnification and advancement obligations to Indemnitee and,
in addition, set forth the indemnification and advancement obligations contained
herein;

 

 

 

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

 

1.            Authorized Representative. For the purposes of this Agreement, the
term “Authorized Representative” shall mean: (a) a director or an officer of the
Corporation; and (b) a person who, while serving as a director or an officer of
the Corporation, is serving at the request of the Corporation as a director,
officer, employee, fiduciary or other representative of another corporation,
partnership, joint venture, trust, employee benefit plan or other entity.

 

2.            Indemnification.

 

(a)Indemnitee shall be indemnified and held harmless by the Corporation to the
fullest extent permitted by the Articles and Bylaws and the GBCC, as the same
exist or may hereafter be amended, against all liability, loss, judgments,
penalties, fines, and all amounts paid or to be paid in any settlement and all
reasonable Expenses (as hereinafter defined) actually and reasonably incurred by
Indemnitee (individually and collectively, “Liabilities”) in connection with any
present or future threatened, pending or contemplated accusation of wrongdoing,
investigation, claim, action, suit or proceeding, including discovery, whether
civil, criminal, administrative, arbitrative or investigative (individually and
collectively, “Proceedings”), including Proceedings by or in the right of the
Corporation:

 

(i)to which Indemnitee is or was a party or is threatened to be made a party by
reason of any action or inaction in Indemnitee’s capacity as an Authorized
Representative, or

 

(ii)with respect to which Indemnitee is otherwise involved by reason of the fact
that Indemnitee is or was serving as an Authorized Representative.

 

Notwithstanding the foregoing, unless the Board of Directors consents,
Indemnitee shall not be indemnified and held harmless under this Agreement with
respect to any Proceedings initiated by Indemnitee, except to enforce the
Indemnitee’s rights to indemnification and advancement of Expenses under this
Agreement or otherwise.

 

(b)Indemnification of Expenses for Partial Success; Other Partial
Indemnification. In defending against claims for which indemnification is
prohibited under Section 2(d)(iv) or by law and in any other circumstances where
indemnification may be based upon success in the defense of a Proceeding, the
Indemnitee is not required to be wholly successful in the defense of the
Proceeding to be entitled to indemnification of Expenses incurred in connection
therewith. To the extent that Indemnitee is, by reason of his or her service as
an Authorized Representative, a party to any Proceeding and is wholly
successful, on the merits or otherwise, he or she shall be indemnified to the
maximum extent permitted by law against all Expenses actually and reasonably
incurred by or on behalf of the Indemnitee in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Corporation shall indemnify the Indemnitee
against all Expenses actually and reasonably incurred by or on behalf of the
Indemnitee in connection with each successfully resolved claim, issue or matter.
For purposes of this Section and without limitation, the termination of any
claim, issue or matter in such a Proceeding by withdrawal or dismissal, with or
without prejudice, shall be deemed to be a successful result as to such claim,
issue or matter. If Indemnitee is entitled under any provision of this Agreement
to indemnification by the Corporation for some or a portion of any Liabilities
(other than Expenses) but not for the total amount thereof, the Corporation
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. If any portion of the Expenses or other Liabilities as
to which the Indemnitee is entitled to partial indemnification cannot be readily
segregated, in whole or in part, from the Expenses or Liabilities to which the
Indemnitee is not entitled to indemnification, the parties shall endeavor in
good faith to agree on an allocation between indemnifiable and non-indemnifiable
Expenses and Liabilities, in proportion to the number, relative size (in terms
of dollar amount alleged) and risk of the claims, issues and matters involved.
If the parties are unable to agree on such allocation, then either party may
commence litigation in accordance with the provisions of Section 15 of this
Agreement, and the losing party in such Proceeding, as determined by the
relevant court, shall pay the Expenses of the winning party incurred in
connection with such Proceeding.

 

 

 

 

(c)For purposes of this Agreement, the term “Expenses” is defined to include all
reasonable attorney’s fees, retainers, court costs, transcript costs, fees of
experts, investigators and consultants, witness fees, computer legal research
costs, electronic discovery costs, travel expenses, duplicating costs, printing
and binding costs, telephone charges, postage, delivery service fees and all
other disbursements or expenses customarily incurred in connection with
defending, investigating, participating or serving or preparing to serve as a
witness or party in a Proceeding. The Indemnitee understands and agrees that his
or her rights to payment, reimbursement or advancement hereunder are limited to
Expenses actually and reasonably incurred in connection such involvement with a
Proceeding or in enforcing his or her rights to Advances and indemnification of
Liabilities with regard thereto.

 

(d)The Corporation shall not be liable under this Agreement to make any payment
in connection with any claim made against the Indemnitee:

 

(i)for which payment is actually made to the Indemnitee under a valid and
collectible insurance policy, except in respect of any retention not covered,
any excess beyond the amount of payment or any obligation the Corporation may
have to provide indemnification under such policy of insurance;

 

(ii)for which the Indemnitee is indemnified by the Corporation pursuant to Other
Rights;

 

(iii)for which the Indemnitee has received indemnification or advancement of
Expenses from any other indemnitor, including any other corporation,
partnership, joint venture, trust, employee benefit plan or other entity for
which the Indemnitee is serving as an Authorized Representative at the request
of the Corporation;

 

(iv)for which the Indemnitee is finally adjudged, after exhaustion of all
appeals, to be liable to the Corporation or is subjected to permanent injunctive
relief, after exhaustion of all appeals, in favor of the Corporation for (a) the
Indemnitee’s appropriation, in violation of his or her duties, of any business
opportunity of the Corporation, (b) acts or omissions that involve intentional
misconduct or a knowing violation of law, (c) unlawful distributions pursuant to
Section 14-2-832 of the GBCC, (d) for an accounting for profits made from the
purchase or sale by the Indemnitee of securities of the Corporation within the
meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or
(e) any transaction from which Indemnitee received an improper personal benefit;
or

 

 

 

  

(v)for any settlement to which the Corporation has not given its prior written
consent or approval, which consent or approval shall not be unreasonably
withheld or delayed.

 

3.            Advances for Expenses. The Corporation agrees to pay Expenses
incurred by Indemnitee in connection with any Proceedings in advance of the
final disposition thereof (“Advances”), provided that the Corporation has
received an affirmation from the Indemnitee that his or her conduct does not
constitute behavior of the kind described in Section 14-2-856(b) of the GBCC or
in Section 2(d)(iv) of this Agreement and an undertaking from or on behalf of
Indemnitee, substantially in the form attached hereto as Annex I, to repay the
amount so advanced to the extent that it is ultimately determined that
Indemnitee is not entitled to be indemnified by the Corporation under this
Agreement or pursuant to Other Rights. The undertaking must be an unlimited
general obligation of the Indemnitee, but need not be secured, does not bear
interest and shall be accepted without reference to the financial ability of the
Indemnitee to make repayment.

 

4.            Procedure for Making Demand and the Corporation’s Response.

 

(a)Any request for payment of indemnifiable Liabilities and Advances shall be
made in writing and submitted to the Corporation at the address specified in
Section 12 hereof, and shall include an affirmation and undertaking for
Advances, if applicable, a description (based upon information then known to
Indemnitee) of the Proceeding, and copies of any demand, correspondence,
summons, complaint, order, notice of charges, indictment, information, subpoena
or other process served on or received by the Indemnitee. In the case of
Expenses and Advances, the Indemnitee shall accompany his or her request with
copies of invoices or receipts providing sufficient information for the
Corporation to determine whether such Expenses and Advances are reasonable. In
the case of a proposed settlement for which the Indemnitee seeks the
Corporation’s consent or approval, the Indemnitee shall provide such information
as shall be needed for the Corporation to determine whether the settlement is
reasonable.

 

(b)The Corporation shall pay the indemnifiable Liabilities and Advances due to
the Indemnitee, under this Agreement or pursuant to Other Rights, no later than
fifteen (15) days after receipt of the written request from Indemnitee under
Subsection 4(a).

 

(c)The Corporation acknowledges that indemnification of indemnifiable
Liabilities and payment of Advances to Indemnitee have been pre-authorized by
the Corporation as permitted by Sections 14-2-856 and 14-2-859 of the GBCC, and
that pursuant to authority exercised under these provisions, no determination
need be made by the Corporation for a specific proceeding that such
indemnification or advance of Expenses to the Indemnitee is authorized in the
circumstances because he or she has met a particular standard of conduct. It is
further the intent of this Agreement (i) that the Indemnitee shall be entitled
to receive, and the Corporation obligated to pay, Advances of reasonable
Expenses upon the Indemnitee’s submission of the Affirmation and Undertaking,
without more, and (ii) that the Indemnitee, upon compliance with his or her
obligations under this Agreement, shall be entitled to indemnification and the
Corporation shall be obligated to indemnify the Indemnitee except when and to
the extent he or she is finally adjudicated, after exhaustion of all appeals, to
be liable to the Corporation or subject to injunctive relief in favor of the
Corporation for the conduct described in Section 2(d)(iv) of this Agreement, or
Section 14-2-856(b) of the GBCC or other provisions of Section 2(d). The
Corporation’s evaluation as to (a) whether indemnification of Indemnitee is
permissible; (b) reasonableness of Expenses or and Advances to Indemnitee,
(c) the reasonableness of a proposed settlement, and (d) any other decision that
the Corporation makes regarding the Indemnitee’s rights hereunder, shall be
made, within said 15-day period as follows:

 

 

 

  

(i)If there are two or more disinterested directors, by the Board of Directors
by a majority vote of all disinterested directors (a majority of whom shall for
such purpose constitute a quorum) or by a majority of the members of a committee
of two or more disinterested directors appointed by such a vote; or

 

(ii)By special legal counsel selected, (A) if there are two or more
disinterested directors, by the Board of Directors by a majority vote of all
disinterested directors (a majority of whom shall for such purpose constitute a
quorum) or by a majority of the members of a committee of two or more
disinterested directors appointed by such a vote, or (B) if there are fewer than
two disinterested directors, by a majority vote of all directors (in which
selection directors who do not qualify as disinterested directors may
participate); or

 

(iii)By the shareholders, but shares owned by or voted under the control of a
director who at the time does not qualify as a disinterested director may not be
voted on the determination.

 

A director is “disinterested” for purposes of this Agreement if he or she is not
a party to the Proceeding at the time the vote is taken and does not have a
familial, financial, professional or employment relationship with the Indemnitee
or any other party to the Proceeding which would, under the circumstances, be
reasonably expected to exert an influence on the director’s vote.

 

(d)If a determination of permissiveness of indemnification is to be made by
special legal counsel, the Corporation shall give written notice to Indemnitee
advising Indemnitee of the identity of the special legal counsel so selected.
The Corporation shall pay any and all reasonable fees and expenses of special
legal counsel incurred by such counsel in connection with acting pursuant to
this Agreement. Upon the commencement of any contest challenging a determination
made by the special legal counsel, the special legal counsel shall be discharged
and relieved of any further responsibility in such capacity, subject to the
applicable standards of professional conduct then prevailing.

 

(e)In making any determination with respect to the rights of Indemnitee
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement, and
that such indemnification is permissible. Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion by clear
and convincing evidence. It is the parties’ intention that if the Corporation
contests Indemnitee’s right to indemnification, the question of Indemnitee’s
right to indemnification shall be for the court to decide, and neither the
failure of the Corporation (including by its directors or special legal counsel)
to have made a determination, prior to the commencement of any action pursuant
to this Agreement, that the Indemnitee is entitled to indemnification as
requested, nor an actual determination by the Corporation (including by its
directors or independent legal counsel) that Indemnitee is not entitled to
indemnification, shall be a defense to the action, shall be binding on the
Indemnitee, shall be entitled to any deference by the court, or shall create any
presumption regarding the Indemnitee’s entitlement to indemnification.
Indemnitee in an action brought in accordance with the terms of Section 5 hereof
may freely contest any determination that he or she is not entitled to
indemnification.

 

 

 

  

5.            Failure to Indemnify; Enforcement of Agreement by Indemnitee.

 

(a)If a claim for indemnification or Advances under this Agreement or pursuant
to any Other Rights is not paid in full by the Corporation within fifteen (15)
days after a written request for payment thereof has been received by the
Corporation, Indemnitee may, but is not required to, at any time thereafter
bring an action against the Corporation to recover the unpaid amount of the
claim and, if successful in whole or in part, Indemnitee also shall be entitled,
to the extent of such success, to be paid for the reasonable Expenses of
bringing and maintaining such action. For any such payment not made within such
fifteen (15) day period, the amount due shall accrue interest from the date it
is due until the date it is finally paid at a rate of one and one-half percent
(1.5%) per month.

 

(b)It shall be a defense to any such action (other than an action brought to
enforce a claim for an Advance) that Indemnitee has been finally adjudicated,
after exhaustion of all appeals, to be liable to the Corporation or subject to
injunctive relief in favor of the Corporation for the conduct described in
Section 2(d)(iv) of this Agreement, or Section 14-2-856(b) of the GBCC or other
provisions of Section 2(d) apply, or that indemnification is otherwise
prohibited by law, but the burden of proving such defense or any other defense
to the action shall be on the Corporation, and any such defenses shall be
subject to the provisions of Section 2(b).

 

(c)If the Corporation contests the Indemnitee’s right to receive an Advance, the
Indemnitee shall in any event be entitled to receive interim payments of interim
expenses pursuant to Section 3 hereof unless and until such defense may be
finally adjudicated by court order or judgment from which no further right of
appeal exists.

 

(d)If the Corporation contests the reasonableness of the full amount of the
Expenses that the Indemnitee has requested, the appropriateness of certain of
the Expenses requested or any other aspect of the Indemnitee’s entitlement to
Expenses, the Corporation shall pay, within fifteen (15) days of the request,
any portion of the Expenses that it does not contest.

 

6.            Indemnification for Expenses of Witnesses. Notwithstanding any
other provision of this Agreement, to the extent that the Indemnitee is, by
reason of his or her service as an Authorized Representative, a witness in any
Proceedings to which Indemnitee is not a party, the Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by the
Indemnitee or on his or her behalf in connection therewith and shall be entitled
to an Advance under Section 3 and enforcement of his or her rights under
Sections 4 and 5 hereof upon compliance with the requirements of those Sections
and Section 7 hereof.

 

7.            Indemnitee’s Obligations. The Indemnitee shall promptly advise the
Corporation in writing of the institution of any investigation, claim, action,
suit or proceeding which is or may be subject to this Agreement and keep the
Corporation generally informed of, and consult with the Corporation with respect
to, the status of any such investigation, claim, action, suit or proceeding. In
addition, Indemnitee shall give the Corporation such information and cooperation
as it may reasonably require and as shall be within Indemnitee’s reasonable
ability to give. The failure by Indemnitee to timely notify the Corporation of
any indemnifiable Liability shall not relieve the Corporation from any liability
hereunder unless, and only to the extent that, the Corporation did not otherwise
learn of such indemnifiable Liability and such failure results in forfeiture by
the Corporation of substantial defenses, rights or insurance coverage.

 

 

 

 

 

8.            Insurance. If, at the time of the receipt of such request, the
Corporation has directors’ and officers’ liability insurance in effect under
which coverage for the Liabilities of Indemnitee is potentially available, the
Corporation shall give prompt written notice of such Proceeding to the
applicable insurers in accordance with the procedures set forth in the
applicable policies. The Corporation shall provide to Indemnitee a copy of each
of the policies and such notice given to the insurers and, upon Indemnitee’s
request, copies of all subsequent correspondence between the Corporation and
such insurers regarding the Proceeding, promptly after the Corporation’s receipt
or delivery thereof.

 

9.            Contribution.

 

(a)To the fullest extent permitted by law, whether or not the indemnification
provided in Sections 2 hereof is available, in respect of any threatened,
pending or completed action, suit or proceeding in which the Corporation is
jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), the Corporation shall pay, in the first instance, the entire amount
of any judgment or settlement of such action, suit or proceeding without
requiring Indemnitee to contribute to such payment and the Corporation hereby
waives and relinquishes any right of contribution or indemnification it may have
against Indemnitee. The Corporation shall not enter into any settlement of any
action, suit or proceeding in which the Corporation is jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding) unless
such settlement provides for a full and final release of all claims asserted
against Indemnitee.

 

(b)Without diminishing or impairing the obligations of the Corporation set forth
in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be
required to pay all or any portion of any judgment or settlement in any
threatened, pending or completed action, suit or proceeding in which the
Corporation is jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), the Corporation shall, to the fullest extent
permitted by law, contribute to, and shall pay to or for Indemnitee in
contribution, the amount of the Expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred and paid
or payable by Indemnitee in proportion to the relative benefits received by and
the relative fault of the Corporation and all officers, directors or employees
of the Corporation, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, from the transactions and events
from which such action, suit or proceeding arose, as well as any other equitable
considerations which the Law may require to be considered. The relative fault of
the Corporation and all officers, directors or employees of the Corporation,
other than Indemnitee, who are jointly liable with Indemnitee (or would be if
joined in such action, suit or proceeding), on the one hand, and Indemnitee, on
the other hand, shall be determined by reference to, among other things, the
degree to which their actions were motivated by intent to gain personal profit
or advantage, the degree to which their liability is primary or secondary and
the degree to which their conduct was active or passive.

 

(c)The Corporation hereby agrees to fully indemnify and hold Indemnitee
harmless, to the fullest extent permitted by law, from any claims of
contribution which may be brought by officers, directors, agents or employees of
the Corporation, other than Indemnitee, and third parties who may be jointly
liable with Indemnitee.

 

 

 

 

(d)To the fullest extent permitted by law, if the indemnification provided for
in this Agreement is unavailable to Indemnitee for any reason whatsoever, the
Corporation, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes,
amounts paid or to be paid in settlement and/or for Expenses, in connection with
any claim relating to an indemnifiable event under this Agreement, in such
proportion as is deemed fair and reasonable in light of all of the circumstances
of such Proceeding in order to reflect (i) the relative benefits received by the
Corporation and Indemnitee as a result of the event(s) and/or transaction(s)
giving cause to such Proceeding, and (ii) the relative fault of the Corporation
(and its directors, officers, employees and agents) and Indemnitee in connection
with such event(s) and/or transaction(s).

 

(e)The Corporation and the Indemnitee agree that it would not be just and
equitable if contribution pursuant to this Agreement were determined by pro rata
or per capita allocation or by any other method of allocation which does not
take into account the equitable considerations referred to in this Section 9.

 

10.          Legal Fees and Expenses. It is the intent of the Corporation that
Indemnitee not be required to incur legal fees and other Expenses associated
with the interpretation, enforcement or defense of Indemnitee’s rights under
this Agreement by litigation or otherwise, because the cost and expense thereof
would substantially detract from the benefits intended to be extended to
Indemnitee hereunder. Accordingly, without limiting the generality or effect of
any other provision hereof, if it should appear to Indemnitee that the
Corporation has failed to comply with any of its obligations under this
Agreement (including its obligations under Section 3) or if the Corporation or
any other person takes or threatens to take any action to declare this Agreement
void or unenforceable, or institutes any litigation or other action or
proceeding designed to deny, or to recover from Indemnitee the benefits provided
or intended to be provided to Indemnitee hereunder, the Corporation irrevocably
authorizes the Indemnitee from time to time to retain counsel of Indemnitee’s
choice, at the expense of the Corporation as hereafter provided, to advise and
represent Indemnitee in connection with any such interpretation, enforcement or
defense, including without limitation the initiation or defense of any
litigation or other legal action, whether by or against the Corporation or any
director, officer, shareholder or other person affiliated with the Corporation.
Notwithstanding any existing or prior attorney-client relationship between the
Corporation and such counsel, the Corporation irrevocably consents to
Indemnitee’s entering into an attorney-client relationship with such counsel,
and in that connection the Corporation and Indemnitee agree that a confidential
relationship shall exist between Indemnitee and such counsel. Without respect to
whether Indemnitee prevails, in whole or in part, in connection with any of the
foregoing, the Corporation will pay and be solely financially responsible for
any and all attorneys’ and related fees and Expenses incurred by Indemnitee in
connection with any of the foregoing.

 

11.          Subrogation. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee, who shall execute all papers reasonably
required and shall do everything that may be reasonably necessary to preserve
and facilitate the Corporation’s assertion of such rights, including the
execution of such documents reasonably necessary to enable the Corporation
effectively to bring suit to enforce such rights. The Corporation’s subrogation
to the Indemnitee’s rights of recovery, including his or her rights to
indemnification or advancement from any other person or entity or under any
policy of insurance, shall be subordinate to the Indemnitee’s rights to recover
any unreimbursed or unpaid Liabilities or Expenses therefrom.

 

12.          Notices. All notices given or made pursuant to this Agreement shall
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, against receipt therefor, or (b) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All notices to the Corporation
under this Agreement shall be directed to:

 

SED International Holdings, Inc.

3505 Newpoint Place, #450

Lawrenceville, Georgia 30043

Attention: Corporate Secretary

 

 

 

 

Notices to Indemnitee shall be sent as follows:

 

________________________

________________________

________________________

________________________

 

or to such other address as either party may designate as provided in this
Section 12.

 

13.          Severability. Should any provisions of this Agreement, or any
clause hereof, be held to be invalid, illegal or unenforceable, in whole or in
part, the remaining provisions and clauses of this Agreement shall remain fully
enforceable and binding on the parties.

 

14.          Modification and Waiver. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver.

 

15.          Choice of Law; Interpretation; Venue. The validity, interpretation,
performance and enforcement of this Agreement shall be governed by the laws of
the State of Georgia. The provisions of this agreement shall be broadly
interpreted to afford indemnification and advancement of the Indemnitee to the
fullest extent permitted by the GBCC and Georgia law. The Corporation and the
Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or
proceeding arising out of or in connection with this Agreement between the
Corporation and the Indemnitee shall be brought only in the United States
District Court for the Northern District of Georgia or, if such court does not
have jurisdiction, then in the Superior Court of Gwinnett County, Georgia, and
not in any other state or federal court in the United States of America or any
court in any other country; (b) consent to submit to the exclusive jurisdiction
of the United States District Court for the Northern District of Georgia or, if
such court does not have jurisdiction, the Superior Court of Gwinnett County,
Georgia, for purposes of any action or proceeding arising out of or in
connection with this Agreement; (c) waive any objection to the laying of venue
of any such action or proceeding in the United States District Court for the
Northern District of Georgia or, if such court does not have jurisdiction, the
Superior Court of Gwinnett County, Georgia; and (d) waive, and agree not to
plead or to make, any claim that any such action or proceeding brought in the
United States District Court for the Northern District of Georgia or, if such
court does not have jurisdiction, in the Superior Court of Gwinnett County,
Georgia, has been brought in an improper or inconvenient forum.

 

16.          Duration of Agreement. All agreements and obligations of the
Corporation contained herein shall continue during the period that Indemnitee is
serving as an Authorized Representative of the Corporation and shall continue
thereafter so long as Indemnitee shall be subject to any Proceeding by reason of
his or her service as an Authorized Representative, whether or not he or she is
acting or serving in any such capacity at the time any Liability or Expense is
incurred for which indemnification can be provided under this Agreement or until
final disposition, including all appeals, of any action commenced under Section
5 or 10 hereof.

 

 

 

  

17.          Successors; Assignment.

 

(a)The Corporation shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all the business or assets of the Corporation, by agreement in
form and substance satisfactory to Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent the Corporation
would be required to perform if no such succession had taken place. This
Agreement shall be binding upon and inure to the benefit of the Corporation and
any successor to the Corporation, including any person or entity acquiring
directly or indirectly all or substantially all the business or assets of the
Corporation whether by purchase, merger, share exchange, reorganization or
otherwise (and such successor will thereafter be deemed the “Corporation” for
purposes of this Agreement). All rights and remedies of Indemnitee hereunder
shall continue to apply and shall be unaffected by any merger or other
transaction in which another person or entity shall become a successor to the
Corporation, and notwithstanding anything in this Agreement or Section
14-2-859(b) of the GBCC or any similar statute to the contrary, such successor
shall be and remain fully obligated by this Agreement after such merger or
transaction.

 

(b)This Agreement shall inure to the benefit of and be enforceable by
Indemnitee’s personal or legal representatives, executors, administrators,
successors, spouses, heirs, assigns and other successors.

 

(c)This Agreement is personal in nature and neither of the parties hereto shall,
without the prior written consent of the other, assign or delegate this
Agreement or any rights or obligations hereunder except as expressly provided in
Sections 17(a) and 17(b).

 

18.          Contract Rights Not Exclusive. The rights of indemnification as
provided in this Agreement (including, without limitation, the right to
Advances) shall be in addition to, and not in lieu of, any other rights to which
Indemnitee may at any time be entitled under the GBCC, applicable law, the
Corporations Articles or Bylaws, any agreement, a vote of shareholders or a
resolution of directors, or any Other Rights. Except as required by applicable
law, the Corporation (including any successor) shall not amend, alter or repeal
its Articles or Bylaws or any provision thereof (including, without limitation,
by merger) if the effect of doing so would be to deny, diminish or encumber any
of such rights, whether or not any Proceeding shall be pending or threatened
against or involving Indemnitee at the time of such action. No amendment,
alteration or termination of this Agreement or of any provision hereof shall
limit or restrict any right of Indemnitee under this Agreement in respect of any
action taken or omitted by such Indemnitee in Indemnitee’s role as an Authorized
Representative prior to such amendment or alteration or termination. If any
change after the date of this Agreement in any applicable law, statute or rule
expands the power of the Corporation to indemnify an Authorized Representative,
such change shall apply to the Indemnitee’s rights and the Corporation’s
obligations under this Agreement. If any change in any applicable law, statute
or rule narrows the right of the Corporation to indemnify an Authorized
Representative, such change shall have no effect on this Agreement or the
parties’ rights and obligations hereunder. No right or remedy herein conferred
is intended to be exclusive of any other right or remedy, and every other right
and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other right or
remedy.

 

 

 

  

19.          Counterparts. This Agreement may be executed in counterparts, both
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.

 

[Signature page(s) follow.]

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

  SED INTERNATIONAL HOLDINGS, INC.           By:             Name:            
Title:             INDEMNITEE:           By:             Name:    

 

 

 

 

ANNEX I

AFFIRMATION AND UNDERTAKING

 

This Undertaking is made on _____________, pursuant to the Indemnification
Agreement, dated as of October 25, 2013 (the “Indemnification Agreement”),
between SED INTERNATIONAL HOLDINGS, INC., a Georgia corporation (the
“Corporation”), and ______________ (“Indemnitee”). Capitalized terms used
herein, but not defined, shall have the meaning given such terms in the
Indemnification Agreement.

 

WHEREAS, Indemnitee has become involved in one or more Proceedings which have
arisen as a result of Indemnitee’s status as an Authorized Representative; and

 

WHEREAS, Indemnitee believes in good faith that Indemnitee is entitled to
indemnification from the Corporation; and

 

WHEREAS, Indemnitee desires that the Corporation pay any and all Expenses
(including, but not limited to, attorneys’ fees and court costs) actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in defending or
investigating any such Proceeding(s) and that such payment be made in advance of
the final disposition of such Proceeding(s) to the extent that Indemnitee has
not been previously reimbursed by insurance or indemnification; and

 

WHEREAS, the Corporation is willing to make such payments, but in accordance
with the Articles of Association and Bylaws and Section 14-2-856(c) of the GBCC,
the Corporation may make such payments only if it receives from Indemnitee an
affirmation with respect to the Indemnitee’s conduct and an undertaking to repay
if the Indemnitee is not entitled to indemnification; and

 

WHEREAS, Indemnitee is willing to give such an affirmation and undertaking.

 

NOW, THEREFORE:

 

1.          Indemnitee hereby affirms that he or she believes in good faith that
his or her conduct does not constitute behavior of the kind described in
Sections 14-2-856(b) of the GBCC.

 

2.          In regard to any payments made by the Corporation to Indemnitee
pursuant to the terms of the Indemnification Agreement, Indemnitee hereby
undertakes and agrees to repay to the Corporation any and all such amounts, if
and to the extent that it is ultimately determined that Indemnitee is not
entitled to be indemnified by the Corporation.

 

3.          The Indemnitee shall make any repayment due to the Corporation
promptly, and in any event within thirty (30) days, after (i) the final
disposition, including any appeals, of the Proceeding(s) on account of which
payments were made and (ii) notification of the ultimate determination by the
Corporation that he or she is not entitled to indemnification; provided,
however, that if either the Corporation or the Indemnitee files suit seeking a
judicial determination of the Indemnitee’s rights to indemnification, any
obligation the Indemnitee may have to repay advancements shall be tolled until
such suit is finally adjudicated, including all appeals.

 

[Signature on following page]

 

 

 

 

  INDEMNITEE:           By:             Name:             Position(s) Held With
The Corporation: