<PAGE>

                                                                   EXHIBIT 10.56

                    FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

     This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (the "First Amendment"), dated
as of November 22, 2004 (the "Effective Date"), is by and between Barry Diamond
("Employee") and SED International, Inc., a Georgia corporation (the "Company");

                                  WITNESSETH:

     WHEREAS, Employee and the Company desire to continue the employment
relationship established by the Employment Agreement dated as of November 22,
2002 between Employee and the Company (the "Agreement"), with certain
modifications to the terms of that relationship; and

     WHEREAS, Employee and the Company desire to memorialize those modifications
in this First Amendment;

     NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Agreement is hereby modified and amended as follows:

     1. Section 1 of the agreement is amended by deleting the first sentence of
the existing Section and adding the following sentence in its place:

          Employment of Employee. This agreement is effective for a period of
two (2) years commencing as of November 22, 2004, unless this Agreement is
sooner terminated pursuant to the provisions hereof.

     2. Section 2 of the Agreement is amended by deleting the first sentence of
the existing Section a and adding the following sentence in its place:

          (a) Employee's annual base salary during the term of this Agreement
shall be $200,000.00.

     3. Section 2 of the agreement is further amended by deleting section (c) in
its entirety.

     Except as modified, amended, or deleted herein, all other provisions of the
Agreement shall continue in full force and effect until the termination or
expiration of the Agreement as amended herein.

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have signed this FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT as of the date first above written.

                                        Employee:


                                        /s/ Barry Diamond                 (SEAL)
                                        ---------------------------------
                                        Barry Diamond


                                        Company:

                                        SED INTERNATIONAL, INC.


                                        By: /s/ Mark Diamond
                                            ------------------------------------
                                        Name: Mark Diamond
                                        Title: President and CEO

                                                                (CORPORATE SEAL)
<PAGE>

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 22nd day of
November, 2002 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").

                                   WITNESSETH:

     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 two
(2) years commencing as of November 22, 2002, 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 -- Wireless Division of the Subsidiary reporting to the President. In
Employee's capacity as Vice President -- Wireless 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.


                                       -1-

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     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 $186,000.00

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

          (c) Commencing on November 22, 2003 and on each November 22nd
thereafter during the term of this Agreement, the annual base salary shall be
increased (but not decreased) by an amount equal to three percent (3%) 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 second anniversary of this Agreement. The amount of insurance
coverage shall be determined by the Subsidiary or its


                                       -2-

<PAGE>

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.

          (c) 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


                                      -3-
<PAGE>

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 of 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


                                       -4-

<PAGE>

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 he 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


                                       -5-

<PAGE>

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


                                       -6-
<PAGE>

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


                                       -7-

<PAGE>

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


                                       -8-

<PAGE>

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


                                       -9-
<PAGE>

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


                                      -10-

<PAGE>

          "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


                                      -11-

<PAGE>

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.


                                      -12-
<PAGE>

     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 at 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.


                                      -13-

<PAGE>

     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


                                      -14-

<PAGE>

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


                                      -15-
<PAGE>

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


                                      -16-

<PAGE>

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.


                                      -17-

<PAGE>

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

                                        Employee:


                                        /s/ Barry Diamond                 (SEAL)
                                        ---------------------------------
                                        BARRY DIAMOND


                                        Subsidiary:

                                        SED INTERNATIONAL, INC.


                                        By: /s/ Mark Diamond
                                            ------------------------------------
                                        Title: President and COO

                                                                (CORPORATE SEAL)


                                      -18-

<PAGE>

                                    EXHIBIT A

                                   COMPETITORS

                                Brightpoint, Inc.
                                 Cellstar, Corp.
                                 Brightstar, Inc
                                 Infosonic, Inc.
                               Ingram Micro, Inc.
                                 MetroCell, Inc.
                                 Microage, Inc.
                                Tech Data Corp.

or any of their respective Affiliates.