INDEMNIFICATION AGREEMENT
FOR DIRECTORS
OF
SED INTERNATIONAL HOLDINGS, INC.
This Indemnification Agreement ("Agreement") is made as of the ____ day
of
______________, 1999, by and between SED International Holdings, Inc., a
Georgia
corporation (the "Company"), and ____________________, a member of the Board
of
Directors of the Company (the "Indemnitee").
RECITALS
WHEREAS, the Company desires to attract and retain the services of
certain
individuals, including Indemnitee, to serve as directors of the Company; and
WHEREAS, the Company believes that Indemnitee's service as a director is
important to the Company and that the protection afforded by this Agreement
will
enhance Indemnitee's ability to discharge his or her responsibilities as a
director; and
WHEREAS, in order to induce Indemnitee to continue to serve as a
director
of the Company, the Board of Directors of the Company has determined that it
is
in its best interests of the Company for the Company to enter into this
Agreement with Indemnitee which is intended to provide to Indemnitee at all
times the broadest and most favorable possible indemnification permitted by
applicable law (whether by legislative action or judicial decision); and
WHEREAS, Indemnitee is willing, subject to certain conditions including,
without limitation, the execution and performance of this Agreement by the
Company, to continue to serve as a director of the Company;
NOW, THEREFORE, for and in consideration of the premises, the mutual
promises and covenants set forth in this Agreement, and Indemnitee's agreement
to serve or continue to serve as a director of the Company after the date of
this Agreement, the parties agree as follows:
1. SERVICE AS A DIRECTOR. Indemnitee will serve as a director of the
Company so long as he or she is duly elected and qualified to serve in such
capacity or until his or her earlier death, resignation or removal.
2. INDEMNIFICATION. (a) The Company shall indemnify and hold harmless
the
Indemnitee if and when he or she was or is made a party to, is threatened to
be
made a party to, or is otherwise involved in any manner (including without
limitation as a deponent or a witness) or is threatened to be made so
involved,
in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative (including without limitation any
proceeding brought by or in the right of the Company), formal or informal, any
appeals therefrom, and any inquiry or investigation that could lead to such an
action, suit or proceeding (each a "Proceeding"), by reason of the fact that
he
or she is or was or had agreed to become a director, officer, employee or
agent
of the Company, or is or was serving or had agreed to serve at the request of
the Company as a director, officer, partner, member, trustee, employee or
agent
(each an "Authorized Capacity") of another corporation, partnership, joint
venture, trust or other enterprise (including, without limitation, service
with
respect to employee benefit plans), or by reason of any action alleged to have
been taken or omitted in such capacity, against any and all costs, charges and
expenses (including attorneys' and others' fees), judgments, fines and amounts
paid in settlement (collectively, "Losses") actually and reasonably incurred
by
Indemnitee in connection with such Proceeding to the fullest extent permitted
by
applicable law, as currently or hereafter in force. In the event of any change
in any law, statute or rule which narrows the right of a Georgia corporation
to
indemnify its directors, such change, to the extent not otherwise required by
such law, statute or rule to be applied to this Agreement, shall have no
affect
on this Agreement or the parties' rights and obligations hereunder.
(b) In the event of payment under this Agreement, the Company
shall
be subrogated to the extent of such payment to all of the rights of recovery
of
the Indemnitee, who shall execute all papers required and shall do everything
that may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
(c) The Company 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
excess beyond the amount of payment under such insurance;
(ii) for which the Indemnitee is entitled to indemnity
and/or
payment by reason of having given notice of any circumstance which
might give rise to a claim under any policy of insurance, the
terms
of which have expired prior to the effective date of this
Agreement;
(iii) for which the Indemnitee is indemnified by the Company
otherwise than pursuant to this Agreement;
(iv) based upon or attributable to the Indemnitee gaining in
fact any personal profit or advantage to which he or she was not
legally entitled;
(v) for an accounting of profits made from the purchase or
sale by the Indemnitee of securities of the Company within the
meaning of
Section 16(b) of the Securities Exchange Act of 1934, as
amended, or similar provisions of any state statutory law; or
(vi) brought about or contributed to by the dishonesty of
the
Indemnitee seeking payment hereunder; however, notwithstanding the
foregoing, the Indemnitee shall be protected under this Agreement
as
to any claims upon which suit may be brought against him or her by
reason of any alleged dishonesty on his or her part, unless a
judgment or other final adjudication thereof adverse to Indemnitee
shall establish that he or she committed acts of active and
deliberate dishonesty with actual dishonest purpose and intent,
which acts were material to the cause of action so adjudicated.
3. CERTAIN PROCEDURES RELATING TO INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES. (a) Except as otherwise permitted or required by the Georgia
Business
Corporation Code (the "GBCC"), for purposes of pursuing his or her rights to
indemnification, the Indemnitee shall submit to the Company (to the attention
of
the Corporate Secretary) a statement of request for indemnification stating
that
he or she believes that he or she is entitled to indemnification pursuant to
this Agreement, together with such documents supporting the request as are
reasonably available to the Indemnitee and are reasonably necessary to
determine
whether and to what extent the Indemnitee is entitled to indemnification
hereunder. Upon receipt of any Indemnification Statement, the Corporate
Secretary will promptly advise the Board of Directors of the Company in
writing
that the Indemnitee has requested indemnification. The Indemnitee's
entitlement
to indemnification under SECTION 2 will be determined in accordance with the
provisions of the GBCC within 30 calendar days after receipt by the Company of
a
request for Indemnification.
(b) The Company shall advance all reasonable expenses incurred by
Indemnitee in connection with any Proceeding if Indemnitee submits to the
Company a written undertaking (the "Undertaking") substantially in the form
attached hereto as Annex I, stating that (i) he or she believes that he or she
has met the standard of conduct set forth in Section 14-2-851 of the GBCC or
that the proceeding involves conduct for which liability has been eliminated
under a provision of the Articles of Incorporation as authorized by paragraph
(4) of subsection (b) of Section 14-2-202 of the GBCC, (ii) he or she has
incurred or will incur actual expenses in connection with a Proceeding and
(ii)
if and to the extent required by law at the time of such advance, he or she
undertakes to repay such amounts advanced as to which it ultimately is
determined that the Indemnitee is not entitled to indemnification under this
Agreement. Within 45 calendar days after receipt of an Undertaking, the
Company
will, in accordance with the provisions of Article 8, Part 5 of the GBCC, make
payment of the costs, charges and expenses stated in the Undertaking. No
security will be required in connection with any Undertaking and any
Undertaking
will be accepted, and all such payments shall be made, without reference to
the
Indemnitee's ability to make repayment.
4. ENFORCEMENT. (a) If the Company determines that Indemnitee is not
entitled to indemnification under this Agreement, Indemnitee shall be entitled
to seek adjudication of his or her entitlement to indemnification in an
appropriate court in the State of Georgia.
(b) It is the Company's intent that Indemnitee not be required to
incur any expenses associated with the enforcement of his or her rights under
this Agreement. Accordingly, if in any proceeding brought under this Section 4
the Indemnitee is found to be entitled to indemnification, the Company shall
reimburse Indemnitee for all costs and expenses (including attorneys' fees)
incurred in connection with the enforcement of this Agreement.
(c) It shall be a defense to any proceeding brought under this
Section 4 (other than a proceeding brought to enforce a claim for expenses
incurred in connection with any action, suit or proceeding in advance of its
final disposition) that Indemnitee has not met the standards of conduct which
make it permissible under applicable law for the Company to indemnify
Indemnitee
for the amount claimed, but the burden of proving such defense shall be on the
Company and Indemnitee shall be entitled to receive interim payments of
interim
expenses pursuant to Section 2 hereof unless and until such defense may be
finally adjudicated by court order or judgment from which no further right of
appeal exists. It is the parties intention that if the Company 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
Company (including its Board of Directors, any committee of the Board of
Directors, independent legal counsel, or its shareholders) to have made a
determination that indemnification of Indemnitee is proper in the
circumstances
because Indemnitee has met the applicable standard of conduct required by
applicable law, nor an actual determination by the Company (including its
Board
of Directors, any committee of the Board of Directors, independent legal
counsel, or its shareholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.
5. PARTIAL INDEMNITY. If the Indemnitee is entitled under any
provisio
of this Agreement to indemnification by the Company for some or a portion of
the
costs, charges, expenses, judgments, fines and amounts paid in settlement of a
Proceeding but not, however, for the total amount thereof, the Company shall
nevertheless indemnify the Indemnitee for the portion thereof to which the
Indemnitee is entitled.
6. NONEXCLUSIVITY AND SEVERABILITY. (a) The right to indemnification
and advancement of expenses provided by this Agreement is not exclusive of any
other right to which the Indemnitee may be entitled under the Articles of
Incorporation or the Bylaws of the Company or under the GBCC, any other
statute,
insurance policy, agreement, vote of shareholders or of directors or
otherwise,
both as to actions in an Authorized Capacity and as to actions in another
capacity while holding such office, and will continue after the Indemnitee has
ceased to serve in an Authorized Capacity and will inure to the benefit of his
or her heirs, executors and administrators; PROVIDED, HOWEVER, that, to the
extent the Indemnitee otherwise would have any greater right to
indemnification or advancement of expenses under any provision of the Articles
of Incorporation or the Bylaws, as the same exist or may hereafter be amended,
the Indemnitee will be deemed to have such greater right pursuant to this
Agreement; and, PROVIDED FURTHER, that, inasmuch as it is the intention of the
Company to provide the Indemnitee with the broadest and most favorable
possible
indemnity permitted by applicable law (whether by legislative action or
judicial
decision), to the extent that the Georgia law currently or in the future
permits
(whether by legislative action or judicial decision) any greater right to
indemnification or advancement of expenses than that provided under this
Agreement, the Indemnitee will automatically, without the necessity of any
further action by the Company or the Indemnitee, be deemed to have such
greater
right pursuant to this Agreement.
(b) The Company will not adopt any amendment to the Articles of
Incorporation or Bylaws of the Company the effect of which would be to deny,
diminish or encumber the Indemnitee's rights to indemnity pursuant to the
Articles of Incorporation or the Bylaws or under the GBCC or any other
applicable law as applied to any act or failure to act occurring in whole or
in
part prior to the date upon which any such amendment was approved by the Board
of Directors or the shareholders of the Company, as the case may be.
Notwithstanding the foregoing, if the Company adopts any amendment to the
Articles of Incorporation or Bylaws the effect of which is to so deny,
diminish
or encumber the Indemnitee's rights to such indemnity, such amendment will
apply
only to acts or failures to act occurring entirely after the effective date
thereof.
(c) If any provision or provisions of this Agreement are held to
be
invalid, illegal or unenforceable for any reason whatsoever: (i) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including without limitation all portions of any paragraph of this Agreement
containing any such provision held to be invalid, illegal or unenforceable,
that
are not themselves invalid, illegal or unenforceable) will not in any way be
affected or impaired thereby and (ii) to the fullest extent possible, the
provisions of this Agreement (including without limitation all portions of any
paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) will be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
7. LIABILITY INSURANCE. The Company shall maintain director and
officer
liability insurance coverage. If at any time after the date hereof the Company
elects to change director and officer liability insurance carriers, it shall
be
a condition to such change that the new policy provide coverage for expenses
and
liability arising from or in connection with events, acts or omissions
occurring, or alleged to have occurred, prior to the date of the new policy.
8. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Georgia, without giving effect to the
principles
of conflict of laws.
9. MODIFICATION; SURVIVAL. This Agreement contains the entire
agreement
of the parties relating to the subject matter hereof and supercedes all prior
indemnification agreements, whether oral or written, between the Company and
the
Indemnitee; PROVIDED, however, that this provision shall not be construed to
affect the Company's obligations to the Indemnitee under the Articles of
Incorporation or Bylaws of the Company. This Agreement may be modified only by
an instrument in writing signed by both parties hereto. The provisions of this
Agreement will survive the death, disability or incapacity of the Indemnitee
or
the termination of the Indemnitee's service as a director of the Company or in
an Authorized Capacity of or for the Company or another entity and will inure
to
the benefit of the Indemnitee's heirs, executors and administrators.
10. AMENDMENT AND TERMINATION. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless made in writing
signed by both parties hereto.
11. CHANGE IN POSITION. Notwithstanding any change in the position(s)
shown below as held by the Indemnitee with the Company, this Agreement shall
continue in full force and effect, and a new agreement between the parties
hereto need not be executed and delivered as long as Indemnitee continues to
serve as an officer and/or member of the Board of Directors of the Company or
any subsidiary of the Company.
12. NOTICES. All notices and other communications hereunder shall be
in
writing and shall be deemed to have been duly given if delivered personally,
mailed by certified mail (return receipt requested) or sent by overnight
delivery service, cable, telegram, facsimile transmission or telex to the
parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice:
(a) if to the Company:
SED International Holdings, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Corporate Secretary
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Indemnitee:
__________________________
__________________________
__________________________
Telephone: _________________
Facsimile: _________________
Notice so given shall, in the case of notice so given by mail, be deemed to be
given and received on the third calendar day after the date postmarked; in the
case of notice so given by overnight delivery service, on the date of actual
delivery; and, in the case of notice so given by cable, telegram, facsimile
transmission, telex or personal delivery, on the date of actual transmission
or,
as the case may be, personal delivery.
(Signatures on following page)
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
SED INTERNATIONAL HOLDINGS, INC.
By:
Name:
Title:
INDEMNITEE
Name:
Title:
ANNEX I
UNDERTAKING AGREEMENT
This AGREEMENT is made and entered into as of __________________, 1999,
by
and between SED INTERNATIONAL HOLDINGS, INC., a Georgia corporation (the
"Company"), and ________________, a member of the Board of Directors of the
Company ("Indemnitee").
WHEREAS, Indemnitee has become involved in investigations, claims,
actions, suits or proceedings which have arisen as a result of Indemnitee's
service to the Company; and
WHEREAS, Indemnitee desires that the Company 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 suits or claims and that such payment be made in
advance
of the final disposition of such investigations, claims, actions, suits or
proceedings to the extent that Indemnitee has not been previously reimbursed
by
insurance; and
WHEREAS, the Company is willing to make such payments if it receives an
undertaking from the Indemnitee to repay these amounts as required by Section
14-2-853 of the Georgia Business Corporations Code (the "GBCC"); and
WHEREAS, Indemnitee is willing to give such an undertaking.
NOW, THEREFORE, for and in consideration of the premises and the mutual
promises contained herein, the parties agree as follows:
1. In regard to any payments advanced by the Company to Indemnitee
pursuant to the terms of the Indemnification Agreement dated as of
___________,
1999 between the Company and Indemnitee, Indemnitee hereby undertakes and
agrees
to repay to the Company any and all amounts so advanced promptly and in any
event within thirty (30) days after the disposition, including any appeals, of
any litigation or threatened litigation on account of which payments were
advanced; provided, however, that Indemnitee shall not be required to repay
the
amount as to which he or she is determined to be entitled to be indemnified by
the Company under Article X of the Articles of Incorporation and Article VII
of
the Bylaws of the Company and Section 14-2-850 et al. of the GBCC or other
applicable law.
2. The Indemnitee affirms his or her good faith belief that he or she
has
met the relevant standard of conduct described in Section 14-2-851 of the GBCC
or that the proceeding involves conduct for which liability has been
eliminated
under a provision of the Articles of Incorporation as authorized by paragraph
(4) of subsection (b) of Section 14-2-202 of the GBCC.
3. This Agreement shall not affect in any manner the rights which
Indemnitee may have against the Company, any insurer or any other person to
seek
indemnification for or reimbursement of any expenses referred to herein or any
judgment which may be rendered in any litigation or proceeding.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.
SED INTERNATIONAL HOLDINGS, INC.
By:
Name:
Title:
INDEMNITEE
By:
Name:
Title: