SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report: September 5, 2001
EUROPEAN MICRO HOLDINGS, INC.
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(Exact Name of Registrant as Specified in Charter)
NEVADA 0-23949 65-0803752
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6073 N.W. 167TH STREET, UNIT C-25, MIAMI, FLORIDA 33015
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (305) 825-2458
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ITEM 5. OTHER EVENTS.
On September 1, 2001, European Micro Holdings, Inc. ("EMCC") announced that it
had transferred all of its ownership interest in American Micro Computer Center,
Inc. ("AMCC") to its former shareholders. These shareholders include John B.
Gallagher, Co-Chairman and Co-President to EMCC. A copy of the press release is
attached to this filing as Exhibit 99.1. A summary of the events leading up to
this action follows:
On June 29, 1999, EMCC acquired in a merger (the "MERGER") all of the
outstanding capital stock of AMCC from the former shareholders of AMCC (the
"SHAREHOLDERS"). The terms of the Merger are set forth in a Merger Agreement
(the "MERGER AGREEMENT") dated as of June 29, 1999, as amended by a letter
agreement dated as of October 2, 2000.
Pursuant to the terms of the Merger, EMCC was obligated to pay the Shareholders
the sum of: (i) the Book Value Amount; plus (ii) 1998 Normalized Earnings
Payment Amount; plus (iii) the Earn-Out Amount, as such capitalized terms are
defined in the Merger Agreement.
As a result of restrictions imposed by SouthTrust Bank, EMCC's senior lender,
EMCC was unable to perform its obligations to the AMCC Shareholders under the
Merger Agreement. As a result of EMCC's failure to perform, on or about February
20, 2001, EMCC delivered a Secured Promissory Note (each, a "NOTE") to each
Shareholder in the original principal amount of $823,712.00. Each Note evidenced
the amount due to each Shareholder for the Third Installment (as defined in the
Merger Agreement) and was secured by a Pledge and Security Agreement (the
"PLEDGE AGREEMENT") dated as of February 20, 2001. Each Note was due in full
within thirty (30) days of the satisfaction of the obligations owed by EMCC to
SouthTrust Bank.
On or about July 15, 2001, EMCC notified the AMCC Shareholders that it would be
unable to meet its obligations under each Note. On August 21, 2001, EMCC
satisfied its obligations to SouthTrust Bank. As a result, EMCC was no longer
contractually restricted from performing its obligations to the AMCC
Shareholders. On August 22, 2001, the AMCC Shareholders delivered written notice
to EMCC demanding payment of the outstanding amounts under the Notes as required
by the terms of the Pledge Agreement.
In order to settle their differences and to avoid litigation, EMCC, AMCC and the
Shareholders entered into a Release and Stock Transfer Agreement, pursuant to
which the AMCC Shareholders, among other things, (i) released EMCC from any
obligations under the Notes, (ii) released EMCC from its obligation to repay
$98,945 owed by EMCC to AMCC and (iii) released EMCC from its obligation to pay
past due salary of $37,500 and future salary to John B. Gallagher. In
consideration for these releases, EMCC transferred its ownership interest in
AMCC to the Shareholders. A copy of the Release and Stock Transfer Agreement is
attached to this filing as Exhibit 99.2.
ITEM 7. EXHIBITS.
Exhibit 99.1 - Press release dated as of September 5, 2001.
Exhibit 99.2 - Settlement and Stock Purchase Agreement dated as of
September 1, 2001 among European Micro Holdings, Inc., American Micro Computer
Center, Inc., John B. Gallagher and John P. Gallagher.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EUROPEAN MICRO HOLDINGS, INC.
Date: September 5, 2001 By: /s/ Frank Cruz
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Name: Frank Cruz
Its: Chief Operating Officer
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